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Annual Report

2013

BIDV INSURANCE CORPORATION

BIDV INSURANCE CORPORATION Floor 16, Block A, Vincom tower, 191 Ba Trieu Street, Hai Ba Trung district, Hanoi, VietnamTel: (84-4) 2.2200.282 / 18009456 - Fax: (84-4) 2.2200.281 - Email: [email protected]

Beyond InsuranceHotline 24/7 www.bic.vn

www.baohiemtructuyen.com.vn1800 9456

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Audited finAnciAl report

1.1. GENERAL INFORMATION

1.2. REPORT OF MANAGEMENT

1.3. INdEPENdENT AudITORs’ REPORT

1.4. AudITEd CONsOLIdATEd FINANCIAL sTATEMENTs

1.4.1. Consolidated balance sheet

1.4.2. Consolidated income statement

1.4.3. Consolidated cash flow statement

1.5 NOTEs TO ThE CONsOLIdATEd FINANCIAL sTATEMENTs

2.1. GENERAL INFORMATION

2.2. REPORT OF MANAGEMENT

2.3. INdEPENdENT AudITORs’ REPORT

2.4. AudITEd sEPARATE FINANCIAL sTATEMENTs

2.4.1. separate balance sheet

2.4.2. separate income statement

2.4.3. separate cash flow statement

2.5. NOTEs TO ThE sEPARATE FINANCIAL sTATEMENTs

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I. AudIted ConsolIdAted FInAnCIAl stAtements

II. AudIted sepArAte FInAnCIAl stAtements

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I. AudIted ConsolIdAted FInAnCIAl stAtements 31 dECEMbER 2013

1.1. CorporAtIon InFormAtIon

bIdV INsuRANCE JOINT sTOCk CORPORATION (“the Corporation”) was established on 1 October 2010 under the business Licence No.11/GPdC7/kdbh dated 1 October 2010, issued by the Ministry of Finance.

The Corporation was transformed to a share-holding entity from equitization of bIdV Insurance Company, which was a wholly-owned subsidiary of Joint stock Commercial bank for Investment and development of Vietnam (“bIdV”) and established under business License No 11GP/kdbh dated 10 April 2006 granted by the Ministry of Finance. On 5 August 2010, the Company successfully completed the Initial Public Offering of 11,682,491 shares, equivalent to 17.7% of its charter capital.

The following summarizes some key information about the entity:Registered Company namebIdV INsuRANCE JOINT sTOCk CORPORATION

Address16th Floor, A Tower, Vincom, 191 baTrieu street, hai ba Trung district, hanoi

Operating activitiesTo provide general insurance products, reinsurance, loss survey, investing activities and other business operations that are in line with prevailing laws and regulations.

The Corporation has one subsidiary as follow:

Subsidiary Address Principal activities % Directly Owned

LAO VIET INsuRANCE COMPANy

3rd Floor, LVb Tower, No 44 - Lanexang Avenue, hatsady

Village, Chanthabouly district, Vientiane, Lao PdR

General insurance products, reinsurance services, investing

activities and other business activities that are in line with

prevailing laws and regulations in Lao PdR

65%

Charter Capital

As at 31 december 2013, the Corporation’s charter capital was 660 billion VNd (31 december 2012: 660 billion VNd).

Location and branch network

The Corporation has its head office located at 16th floor, Tower A, Vincom City Towers, 191 ba Trieu street, hai ba Trung district, hanoi. As at 31 december 2013, the Corporation has twenty-two (22) branches nationwide.

Employees

The total number of employees of the Corporation as at 31 december 2013 was 628 persons (31 december 2012: 589 persons).

Board of Directors

Members of the board of directors during the year and at the date of this report are:

Name Position Date of appointment/resignation

MR. PhAM QuANG TuNG Chairman 1 October 2010

MR. TRAN XuAN hOANG deputy Chairman 1 October 2010 and resigned since

4 November 2013

Ms. Nguyen Thi Thanh Van Member 1 October 2010

Mr. Trinh Minh Tam Member1 October 2010 and resigned since

4 November 2013

Mr. Ton Lam Tung Member 4 November 2013

Mr. Le Ngoc Lam Member 4 November 2013

Ms. dang Thi hong Phuong Member 4 November 2013

Mr. dang Quang Vinh Member1 October 2010 and resigned since

4 November 2013

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Board of Supervision

Members of the board of supervision during the year and at the date of this report are:

Legal Representative

The legal representative of the Corporation during the year and at the date of this report is Mr. Ton Lam Tung - Title: General director.

Auditors

The auditor of the Corporation is Ernst & young Vietnam Limited.

Board of Management

Members of the Management during the year and at the date of this report are:

Name Position Date of appointment

Mr. Cao Cu Tri head of board 1 October 2010

Mr. Nguyen Trung kien Member 1 October 2010

Mr. Nguyen Thanh Cong Member 16 March 2012


Mr. Ton Lam Tung General director 1 May 2012

Mr. Tran Trung Tinh deputy General director 1 October 2012

Ms. Nguyen Thi Thanh Van deputy General director1 October 2010 and resigned since 20 April

2013

Mr. Vu Minh hai deputy General director 16 April 2012

Ms. doan Thi Thu huyen deputy General director 1 May 2012

Mr. Tran hoai An deputy General director 1 April 2013

1.2. report of ManagementThe Management of bIdV Insurance Joint stock Corporation (“the Corporation”) presents its report and the Corporation’s consolidated financial statements for the year ended 31 december 2013.

STATEMENT OF THE MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINAN-CIAL STATEMENTS

Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the state of affairs of the Corporation and of its consolidated results and consolidated cash flow for the year. In preparing these consolidated financial statements, the Management is required to:

• select suitable accounting policies and 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 Corporation will continue in business.

Management is responsible for ensuring that proper accounting records are kept, which disclose with reasonable accuracy at any time, and reflect truly the financial position of the Corporation and for ensuring that the account-ing records comply with the registered accounting system. It is also responsible for safeguarding the assets of the Corporation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Management confirmed that it has complied with the above requirements in preparing the accompanying consoli-dated financial statements for the year ended 31 december 2013.

sTATEMENT by MANAGEMENT

Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Corporation as at 31 december 2013 and of the consolidat-ed results of its operations and its consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting standards and system applicable to insurance companies, and with the statutory requirements relevant to preparation and presentation of financial statements.

For and on behalf of Management:

Hanoi, Vietnam - 28 February 2014

Mr. Ton Lam TungGeneral Director

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1.3. Independent AudItors’ reportTo: The shareholders of BIDV Insurance Joint Stock Corporation

We have audited the accompanying consolidated financial statements of bIdV Insurance Joint stock Corporation and its subsidiary (collectively referred to as “the Corporation”) as prepared on 28 February 2014 and set out on pages 57 to 104, which comprise the consolidated balance sheet as at 31 december 2013, the consolidated income statement and the consolidated cash flow statement for the year then ended and the notes thereto.

Management’s Responsibility

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting standards, Vietnamese Accounting system applicable to insurance companies and with the statu-tory requirements relevant to preparation and presentation of financial statements, and for such internal control as management determines is necessary to enable the preparation and presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material mis-statement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec-tiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements give a true and fair view, in all material respects, the consolidated financial position of the Corporation as at 31 december 2013 and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting standards and the Vietnamese Accounting system applica-ble to insurance companies and with the statutory requirements relevant to preparation and presentation of financial statements.

hanoi, Vietnam - 28 February 2014

Saman BandaraDeputy General Director Audit Practicing RegistrationCertificate No. 2036-2013-004-1

Le Duc LinhAuditor

Audit Practicing Registration Certificate No. 1672-2013-004-1

Công ty TNhh ERNsT & yOuNG Việt NamHà Nội, ngày 13/3/2013

1.4. AudIted ConsolIdAted FInAnCIAl stAtements1.4.1. CONsOLIdATEd bALANCE shEET (as at 31 december 2013)

Currency: VND

Code Assets Notes Ending balance Beginning balance

100 A| CURRENT ASSETS 1,464,148,058,508 1,129,206,701,858

110111112

I, Cash and cash equivalents1, Cash on hand2, Cash at banks

4 29,960,714,186 635,016,891

15,192,045,761405,322,679

14,786,723,082

120121128129

II, Short-term investments1, short-term investments in securities2, Other short-term investments3, Provision for impairment of short-term investment

51,059,287,738,000

100,507,223,405 959,570,312,500

(789,797,905)

900,089,914,036 97,059,200,387

815,828,000,000(12,797,286,351)

130131132133138139

III, Accounts receivable1, Trade receivables2, Advances to suppliers 3, deductible VAT 4, Other receivables5, Allowance for doubtful debts

6

367,309,396,403340,409,022,787

2,000,007,331 4,919,220,101

37,245,109,948 (17,263,963,764)

207,983,259,672204,563,928,648

1,309,652,5005,858,667,6346,646,422,296

(10,395,411,406)

150151152153

IV, Other current assets1, Advances2, Prepaid3, Other current assets

7,590,209,9196,074,392,076

915,941,672 599,876,171

5,941,482,3895,153,579,387

422,588,502365,314,500

200 B| NON-CURRENT ASSETS 291,620,877,026 273,410,503,367

210211212213217218219

I, Fixed assets1, Tangible fixed assets

• Costs• Accumulated depreciation

2, Intangible fixed assets• Costs• Accumulated amortisation

7

8

19,471,976,028 12,913,596,400 41,474,776,123

(28,561,179,723)6,558,379,628 6,606,599,125

(48,219,497)

14,222,134,2227,722,134,222

32,374,997,225(24,652,863,003)

6,500,000,0006,556,057,850

(56,057,850)

220221222228229

II, Long-term investments1, Long-term securities investments2, Investments in associates and joint-ventures 3, Other long-term investments4, Provision for impairment of long term investments

99,1

9,29,3

259,549,762,981 150,598,617,037

- 126,234,150,000 (17,283,004,056)

253,133,077,854170,145,833,333

23,837,143,68576,090,000,000

(16,939,899,164)

240241242243244

III, Other long-term assets1, Compulsory deposit2, Long-term deposits3, Long-term prepaid expenses 4, deferred tax assets

1012,599,138,017

6,000,000,0004,948,539,5461,231,828,056

418,770,415

6,055,291,2916,000,000,000

24,336,745 30,954,546

-

270 TOTAL ASSETS 1,755,768,935,534 1,402,617,205,225

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Currency: VND

Code Resources Notes Ending balance Beginning balance

300 A| LIABILITIES 937,638,316,842 644,189,880,626

310313314315316318319323

I. Short-term liabilities1. Trade payables2. Premium received in advance3. statutory obligations4. Payable to employees5. Accrued expenses6. Other payables7. bonus and welfare funds

11

12

1314

455,378,682,728347,913,094,195

9,121,518,359 31,530,708,78534,170,219,80314,536,202,928 12,521,889,073

5,585,049,585

275,157,115,644 186,440,201,763 9,798,119,269

14,813,951,634 27,758,733,599

22,072,958,36510,089,711,694

4,183,439,320

340341343344

III. Reserves1. unearned premium reserve2. Claim reserve3. Catastrophe reserve

18.118.218.3

482,259,634,114293,811,238,913 117,844,424,682

70,603,970,519

369,032,764,982238,964,521,669

74,944,817,505 55,123,425,808

400 B| OWNERS’ EQUITY 791,935,586,193 758,427,324,599

410411412414415416418419

I. Owners’ equity1. Charter capital2. share premium3. Treasury shares4. Financial reserve5. statutory reserves6. Retained earnings7. Foreign Exchange difference Reserve

15791,935,586,193

660,000,000,000 4,875,765,330

- 1,800,187,891

13,311,197,165 104,896,103,307

7,052,332,500

758,427,324,599 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776

91,870,693,602-

500 C| MINORITY INTERESTS 26,195,032,499 -

430 TOTAL LIABILITIES AND OWNERS’ EQUITY AND MINORITY INTERESTS 1,755,768,935,534 1,402,617,205,225

OFF BALANCE SHEET ITEMS

Ms. Phan Thi Minh Hue

Accountant of Financial and Account-ing Division

Ms. Lai Ngan Giang

Director of Financial and Ac-counting Division

Mr. Ton Lam Tung

General Director


Currency: VND

ITEMS Ending balance Beginning balance

doubtful debts written off (VNd) 2,293,099,309 2,293,099,309

Insurance policies signed but for which no obli-gations have arisen on the part of the Corpora-tion (VNd)

48,608,496,929 39,202,269,093

Foreign currencies• united states dollar (us$)• Euro (EuR)

42,940.67270.49

281,097.76287.84

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1.4.2. CONsOLIdATEd INCOME sTATEMENT

For the year ended 31 december 2013Currency: VND

Code Items Notes Current year Previous year

01 1. Gross written premiums 16.1 855,868,056,390 670,376,718,737

02 2. Reinsurance premiums assumed 16.2 83,656,928,441 83,881,976,126

030406

3. deductions• Reinsurance premiums ceded• Premium returns

16.3(354,022,977,601)(351,246,497,291)

(2,776,480,310)

(271,477,927,604)(265,217,214,654) (6,260,712,950)

08 4. Increase in unearned premium reserve 18.1 (29,534,359,172) (48,835,841,178)

09 5. Commissions on reinsurance ceded 89,933,749,470 77,395,256,583

1013

6. Other income from insurance activitiesIncome from other activities

34,339,170,083 34,339,170,083

18,451,048,467 18,451,048,467

14 7. Total operating revenues(14 = 01 + 02 + 03 + 08 + 09 + 10) 680,240,567,611 529,791,231,131

15 8. Claim expenses 17.1 (771,017,274,341) (254,393,282,386)

16 9. Claim expenses on reinsurance assumed 17.2 (20,020,626,410) (16,774,306,370)

17 10. Recoveries from reinsurance ceded 17.3 603,045,909,671 113,550,744,894

21 11. Net claim expenses on retained risks (21 = 15 + 16 + 17)

(187,991,991,080) (157,616,843,862)

23 12. Increase on claim reserve 18.2 (30,737,301,055) (7,611,976,396)

24 13. Provision for catastrophe reserve charged to the current year’s expense 18.3 (11,709,869,394) (14,483,423,018)

25 14. Other operating expenses (204,862,598,797) (159,499,304,720)

273940

Commissions expenseExpenses of reinsurance cededOther underwriting expenses

(95,791,860,453)(17,425,404,188)(91,645,334,156)

(76,111,968,663) (19,111,504,064)(64,275,831,993)

41 15. Total direct operating expenses (41 = 21 + 23 + 24 + 25)

(435,301,760,326) (339,211,547,996)

Currency: VND

Mã số Chỉ tiêu Thuyết minh Năm nay Năm trước

42 16. Operating income 244,938,807,285 190,579,683,135

44 17. Administrative expenses 19 (249,750,899,429) (198,953,844,088)

45 18. Net operating (loss) (45 = 42 + 44) (4,812,092,144) (8,374,160,953)

46 19. Financial income 20 139,929,751,583 159,797,041,103

47 20. Financial expense 21 (16,459,588,462) (43,333,646,557)

51 21. Financial profit (51 = 46 + 47)123,470,163,121 116,463,394,546

52 22. Other income 22 2,444,010,441 821,425,115

53 23. Other expenses 22 (1,089,496,836) (303,670,288)

54 24. Net other income (54 = 52 + 53) 1,354,513,605 517,754,827

55 25. share of the profit of the associate and joint venture 5,580,487,418 2,230,633,159

56 26. Profit before enterprise income tax (56 = 45 + 51 + 54+55) 125,593,072,000 110,837,621,579

60 27. Enterprise income tax 23.1 (29,191,254,911) (26,659,457,570)

61 28. Net profit for the year after enterprise income tax (61 = 56 + 60) 96,401,817,089 84,178,164,009

62 29. Net attributable to Minority interests (1,747,356,326) -

63 30. Net profit attributable to the Corporation 94,654,460,763 84,178,164,009

64 31. Earnings per share 1,444 1,295



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director


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1.4.2. CONsOLIdATEd CAsh FLOW sTATEMENT

For the year ended 31 december 2013 Currency: VND


I| CASH FLOWS FROM OPERATING ACTIVITIES

01 Net profit before tax 125,593,072,000 110,837,621,579

Adjustments for:

02 depreciation and amortisation 2,724,118,527 3,769,906,918

03 Provisions 69,118,656,504 111,819,928,239

04 un-recognized foreign exchange difference expense - 87,461,428

05 Profits from investing activities (126,959,247,816) (126,614,220,337)

07 Interest expense 21 991,208,516 766,946,046

08 Operating income before changes in working capital

71,467,807,731 100,667,643,873

09 (Increase)/decrease in receivables (129,712,075,604) 76,337,380,911

11 Increase/ (decrease) in payables 140,746,743,164 (72,846,154,846)

12 Increase in prepaid expense (1,451,736,612) (180,775,491)

13 Interest expense paid (991,208,516) (766,946,046)

14 Corporate income tax paid (27,602,744,493) (27,257,237,657)

15 Tiền chi khác từ các hoạt động khác (2,687,775,446) (11,435,387,880)

15 Increase in receivables from other activities (435,301,760,326) (339,211,547,996)

20 Net cash inflows from operating activities 49,769,010,224 64,518,522,864

II| CASH FLOWS FROM INVESTING ACTIVITIES

21 Purchase and construction of fixed assets and other long-term assets

(6,851,958,359) (9,522,289,281)

22 Proceeds from disposals of fixed assets and other long-term assets

- 1,493,536

25Payments for investments in other entities/ payment for acquisition of a subsidiary, net of cash acquired

(1,300,134,668,657) (2,628,657,330,869)

Currency: VND


26Proceeds from sale of investments in other entities/disposal of a subsidiary 1,209,446,539,454 2,510,265,876,483

27 Interest and dividends received 120,528,265,153 126,612,726,801

30 Net cash flows from investing activities 22,988,177,591 (1,299,523,330)

III. CASH FLOWS FROM FINANCING ACTIVITIES

sale/ (Purchase) treasury shares 15 6,557,533,810 (362,295,144)

Payment of finance lease liabilities - (542,138,757)

dividends paid (64,546,053,200) (64,923,388,000)

40 Net cash flows from financing activities (57,988,519,390) (65,827,821,901)

50 Net cash flows 14,768,668,425 (2,608,822,367)

60Cash and cash equivalents at the beginning of the year

15,192,045,761 17,800,852,232

61 Impact of exchange rate fluctuation- 15,896

70 Cash and cash equivalents at the end of the year 4 29,960,714,186 15,192,045,761



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director


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1.5. notes to tHe ConsolIdAted FInAnCIAl stAtements As at 31 december 2013 and for the year then ended

1.5.1 CORPORATION INFORMATION

bIdV INsuRANCE JOINT sTOCk CORPORATION Corporation (“the Corporation”) was established on 1 October 2010 under the business Licence No.11/GPdC7/kdbh dated 1 October 2010, issued by the Ministry of Finance.










General insurance products, rein-surance services, investing activi-ties and other business activities

that are in line with prevailing laws and regulations in Lao PdR

65%

1.5.2. bAsIs OF PREPARATION

Accounting standards and system

Charter Capital



The Corporation has its head office located at 16th floor, Tower A, Vincom City Towers, 191 ba Trieu street, hai ba Trung district, hanoi. As at 31 december 2013, the Corporation has twenty-two (22) branches nation-wide.

Employees


The consolidated financial statements of bIdV Insurance Joint stock Corporation, which are expressed in Vietnam dong (“VNd”), are prepared in accordance with the Viet-namese 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 poli-cies for insurance enterprises, the accounting framework applied for enterprises in decision 15/2006/QĐ-bTC dated 20 Mar 2006, in accordance with 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 Viet-namese Standards on Accounting (Series 1);

• Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Viet-namese Standards on Accounting (Series 2);

• Decision No. 234/2003/QD-BTC dated 30 December

2003 on the Issuance and Promulgation of Six Viet-namese Standards on Accounting (Series 3);

• Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Viet-namese Standards on Accounting (Series 4); and

• Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Viet-namese Standards on Accounting (Series 5).

The accompanying consolidated balance sheet, consoli-dated income statement, consolidated cash flow statement and related notes, including their utilisation are not de-signed for those who are not informed about Vietnam’s ac-counting principles, procedures and practices and further-more are not intended to present the consolidated financial position and consolidated results of operations and consoli-dated cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

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Applied accounting documentation system

Fiscal year

Accounting currency

Basis of consolidation

The Corporation’s applied accounting documentation system is the Journal Ledger system.

The Corporation’s fiscal year applicable for the preparation of its consolidated financial statements starts on 1 January and ends on 31 december.

The consolidated financial statements are prepared in VNd which is also the Corporation’s accounting currency.

The consolidated financial statements comprise the fi-nancial statements of the Corporation (the parent com-pany) and its subsidiary which is Lao Viet Insurance Com-pany for the year ended 31 december 2013 (collectively referred to as the “Corporation”).

The subsidiary is fully consolidated from 2 August 2013, being the date on which the parent company obtains control, and continues to be consolidated until the date that such control ceases. Control exists when the parent company 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 subsidiary are prepared for the same reporting year as the parent company, us-

ing consistent accounting policies.

All intra-group balances, income and expenses and un-realized gains or losses arising from intra-group transac-tions, are eliminated in full.

Minority interests represent the portion of profit or loss and net assets not held by the Corporation and are pre-sented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders’ equity.

Cash and cash equivalents comprises cash on hand; cash at banks and short-term, highly liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.

1.5.3. suMMARy OF sIGNIFICANT ACCOuNTING POLICIEs

Cash and cash equivalents

Receivables

Tangible fixed assets

Receivables comprise of trade receivables and other receiv-ables that are initially recognized at cost and subsequently are recognized at cost.

Provision for impairment of receivables will be made based on their overdue ages. For undue receivables but those were owned by indebted economic organizations which fall bankrupt or are undergoing dissolution pro¬cedures, debt-ors are missing, have absconded, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or have deceased, these undue receivables should be es-

timated the irrecoverable loss for appropriating the provi-sion. The increase or decrease to the provision balance is recorded as the administrative expense in the consolidated income statement.

The Corporation adopts the provision policy as promul-gated by the Ministry of Finance in Circular 228/2009/TT-bTC dated 07 december 2009 (“Circular 228”) and Circular 89/2013/TT-bTC dated 28 June 2013 (“Circular 89”) which provides the amendments and supplements to Circular 228. details on the basis of provisioning are as follows:

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 as-set to working condition for its intended use.

Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs is

charged to the consolidated income statement.

When assets are sold or retired, their cost 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.

Intangible fixed assets

Intangible fixed assets are stated at cost less accumulated amortisation.

The cost of an intangible fixed asset comprises of its pur-chase price and any directly attributable costs of bringing the asset to working condition for its intended use.

Expenditure for additions, improvements and renewals are

capitalised and expenditure for maintenance and repairs is charged to the consolidated income statement.

When assets are sold or retired, their cost 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.

Receivables overdue Allowance rate

From 6 months to less than one year 30%

From one to two years 50%

From two to three years 70%

Over three years 100%

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Depreciation and amortisation

Borrowing costs

Prepaid expenses

Business combinations and goodwill

depreciation and amortisation of fixed assets and intangible assets is calculated on a straight-line basis over the es-timated useful lives of these assets, which are as follows:

borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

borrowing costs are recorded as expense during the period in which they are incurred.

Prepaid expenses are reported as short-term or long-term prepaid expenses on the balance sheet and amortised over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses.

business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity in-struments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and li-abilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination.

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost the busi-ness combination over the Corporation’s interest in the net fair value of the acquiree’s identifiable assets, liabili-

ties and contingent liabilities. If the cost of a business combination is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated income statement. After ini-tial recognition, goodwill is measured at cost less any ac-cumulated amortization. Goodwill is amortized over 10-year period on a straight-line basis.

buildings 8 - 25 years

Office equipments 3 - 7 years

Motor vehicles 6 - 10 years

Other tangible fixed assets 5 years

Accounting software 3 - 5 years

Land use right with indefinite term No amortization

Investments

Investment in securities

Other long-term investments

Provision for diminution in value of investment

The Corporation’s investments in securities include invest-ments in equity securities and debt securities. Investments are categorised as short term and long term as follows:

• short-term investments comprise quoted and unquoted shares, government bonds, and corporate bonds, which are maturing within 12 months or intended to be held for not more than one year.

• Long-term investments include government bonds and corporate bonds which are intended to be held

for more than one year.

All investments in securities (debts securities and equity securi-ties) are initially recognised at cost and subsequently are rec-ognized at cost during the holding period.

Investments in securities are subject to review for impairment. Provision for impairment is recorded when carrying value of the securities is higher than its market value at reporting date. Any impairment losses are recognized in the Corporation’s consolidated income statement.

Other long term investments represent the Corporation’s capital investments in other enterprises where the Corpora-tion either owns less than 20% of voting right and is foun-dation shareholder; or strategic partner; or has significant influence on the process of preparation and making deci-sions on enterprise’s financial and operating policies under agreements with to have its personnel in the enterprise’s board of directors/ board of Management.

The investments are initially recognized at cost and subse-quently are recognized at cost during the holding period.

Other investments are subject to review for impairment. Any impairment losses are recognized in the Corporation’s consolidated income statement.

Provision for impairment of investment securities is made for individual stock when the market value is lower than original cost. Provision amount for marketable securities is the difference between the original cost and market value of those securities at the balance sheet date in accordance with Circular 228 and Circular 89. Any increase or decrease in balance of provision is recognised to operating expens-es for the year.

The market prices of listed securities are determined based on the price on stock markets (which are the average prices on hanoi stock Exchange and the closing prices on ho Chi Minh City stock Exchange) as at 31 december 2013.

The market values of unlisted shares which have been reg-istered in the unlisted public companies market (uPCom) is the average price of the trading market at the date of provision.

The market values of unlisted shares which have not been registered in the unlisted public companies market (uP-Com) is the average of public price quotations of at least three (03) reputed and large securities companies in the market.

For other securities that have no market prices for purpose of making provision of impairment, the Corporation con-siders to use book value of securities.

Provision for impairment of other long-term investments is made when the investees are suffering from loss (except for the expected loss identified in the business plan before the investment). Accordingly, provision is the disparity between parties’ actual investment into investees and actual owner’s equity multiplied (x) by the ratio of the Corporation’s invest-ment compared with total investment by parties.

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Repurchase agreements

Technical reserves

Payables and accruals

Employee benefits

securities sold under agreements to repurchase at a specific date in the future are not derecognized from the con-solidated financial statements. The corresponding cash received is recognized in the balance sheet as a liability. The difference between the sale price and repurchase price is amortized to the consolidated income statement over the term of the agreement using the interest rate stipulated in the contract.

The technical reserves include (1) unearned premium reserve, (2) claims reserve and (3) catastrophe reserve. The re-serving methodologies are based on Circular 125/2012/TT-bTC dated 30 July 2012 issued by the Ministry of Finance. details of such reserving methodologies are as follows:

1| Unearned premium reserve

The Corporation applied the daily basis to calculate unearned premium reserve for all types of insurance and reinsur-ance businesses, following the formula:

Payables and accruals are recognised for the amount to be paid in the future for goods and services received, wheth-er or not billed to the Corporation.

Post-employment benefits

Post-employment benefits are paid to retired employees of the Corporation by the social insurance agency which belongs to the Ministry of Labour, Invalids and social Affairs. The Corporation is required to contribute to these post-employment benefits by paying social insurance premiums to the social insurance agency at the rate of 17% of employee basic salaries on a monthly basis. The Corporation has no further obligation concerning post-employment benefits for its employees other than this.

Unemployment insurance fund

According to social Insurance Law and decree No. 127/2008/Nd-CP dated 12 december 2008 by the Government, the unemployment insurance fund is implemented from 1 January 2009, to which, employees contribute 1% of their salary, employers contribute 1% of salary of their employees participating in the unemployment insurance, and the Govern-ment contributes 1% of salary of all those participating in the unemployment insurance from the state budget.

2| Claims reserve

Claim reserve includes the reserve for outstanding claims and for claims incurred but not reported.

• Outstanding claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable, which is either notified to the insurer or requested for payment but is still unresolved at the end of the fiscal year after deducting the amount recover-able from reinsurers; and

• Reserve for incurred but not reported claims for which the insurer is liable (IbNR) is established based on the formula in Circular 125/2012/TT-bTC issued by the Min-istry of Finance on 30 July 2012.

3| 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 according to Circular 125/2012/TT-bTC dated 30 July 2012 issued by the Ministry of Finance.

On 28 december 2005, the Ministry of Finance issued decision 100/2005/Qd-bTC governing the publication of four new ac-counting standards, one of which is Vietnamese Accounting standard (“VAs”) 19-Insurance Contract. Following the issu-ance of this standard, starting from January 2006, the provi-sion of catastrophe reserve is no longer required since it repre-sents “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 en-terprises, the Corporation has elected to adopt the policy of providing for the catastrophe reserve at 2% of total retained premium for each line of business.

Transactions in currencies other than the Company’s report-ing currency of [VNd/usd] 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 buying exchange rate announced by the commercial bank where the Company maintains bank accounts at the balance sheet date. All real-ised and unrealised foreign exchange differences are taken to the income statement.

The exchange differences arising when converting the Fi-nancial statements of an overseas office into the currency of Vietnamese accounting shall be cumulatively and sepa-rately expressed on the balance sheet until the overseas of-fice is liquidated, and then the exchange differences shall be recorded into the financial income or financial expense of the enterprise.

Retained premiums * Remaining day of insurance policy

Number of coverage daysunearned premium reserve =

Transactions in foreign currencies

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Treasury shares

Appropriation of net profits

Revenue recognition

Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit/ (loss) upon purchase, sale, issuance or cancellation of the Corporation’s own equity instruments.

Net profit after tax is available for appropriation to inves-tors/shareholders after approval by the appropriate level of authority in the annual general meeting, and after mak-ing appropriation to reserve funds and remuneration to board of directors in accordance with the Corporation’s Charter and Vietnam’s regulatory requirements.

The Corporation maintains the following reserve funds which are appropriated from the Corporation’s net profit as proposed by the board of directors and subject to ap-proval by shareholders at the annual general meeting:

• statutory reserve fund is set in order to supplement the Corporation’s charter capital and ensure its sol-vency. This fund shall be supplemented each year by deducting 5% of the Corporation’s annual profit after tax until it equals to 10% of the Corporation’s charter capital based on Circular 46/2007/Nd-CP dated 22 March 2007 by Ministry of Finance.

• bonus and welfare fund is set aside for the purpose of pecuniary rewarding and encouraging, common ben-efits and improvement of the employees’ benefits.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Corporation and the revenue can be reliably measured. The following spe-cific recognition criteria must also be met before revenue is recognised:

1| Gross written premium

Gross written premiums are recognized in accordance with 125/2012/TT/bTC issued by the Ministry of Finance on 30 July 2012 (“Circular 125”) on financial regime appli-cable to insurers, reinsurers, insurance brokers and foreign non-life insurance branches. 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 in-sured; 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. If the

Corporation and its customers mutually agree a method of insurance premium payment on an instalment basis, only the insurance premium which is due in accordance with the instalment contract shall be taken to revenue for the period. Prepaid premium before due date is recorded as “Premium received in advance” in the consolidated bal-ance sheet as at the balance sheet date.

2| Interest

Revenue is recognised as the interest accrues (taking into ac-count the effective yield on the asset) unless recovery is in doubt.

3| Dividends

Income is recognised when the Corporation’s entitle-ment as an investor to receive the dividend in cash is es-tablished. If Corporation is entitled to receive dividend in shares or bonus share, only the number of shares received will be reflected in the share portfolio of the Corporation.

1| Claim expense

Claim expense is recognized at the point of time when the claim documents are completed and approved by author-ized persons. In case that the final claim amount has not been finalized but the Corporation is certain that the loss is within its insured liabilities and has paid an advance to the customer as per their request, such advance would also be recognized as claim expense. Any claim that is not yet ap-proved by authorized persons is considered as an outstand-ing claim and included in claim reserve.

2| Commission expense

Commission expense is recognized when incurred. Com-mission expense is calculated at percentage of gross written

premium and recognize in the consolidated income state-ment. The percentage of commission over the gross written premium for specific line of insurance is stipulated in Circu-lar 124/2012/TT-bTC dated 30 July 2012 issued by Ministry of Finance.

3| Other general administrative expenses

Other general and administrative expense is recognized on accrual basis.

4| Leased assets

Rentals paid under operating leases are charged to the con-solidated income statement on a straight-line basis over the term of the lease.

1| Reinsurance ceded

Reinsurance premium ceded under treaty reinsurance agreements are recognized when gross written premiums within the scope of the treaty agreements are recognized.

Reinsurance premium ceded under facultative reinsurance agreements is recognized when the facultative reinsurance agreement has been entered into by the Corporation and when gross written premiums within the scope of the facul-tative agreements are recognized.

Reinsurance recovery is recognized when there is evidence of liability on the part of the reinsurer.

Reinsurance commission is recognized when there is a cor-responding reinsurance premium ceded.

2| Reinsurance assumed

Reinsurance assumed under treaty arrangement:

• Income and expenses relating to reinsurance as-sumed 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 rein-surance assumed under treaty arrangements but for which the cedants have not sent their statement of accounts are estimated based on the historical experience and the Cor-poration’s own estimate taking into account.

Reinsurance assumed under facultative arrangement:

• Reinsurance premium assumed is recognized when the facultative reinsurance agreement has been en-tered into by the Corporation and a statement of account (for each facultative reinsurance agreement) has been re-ceived from the cedants;

• Claim expenses for reinsurance assumed is recog-nized when there is evidence of liability of the Corporation and when a statement of account has been sent to the Cor-poration; and

• Reinsurance commission is recognized when the reinsurance premium is ceded and when a statement of ac-count has been sent to the Corporation.

Expense recognition

Recognition of reinsurance activities

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Taxation

Current tax

Current tax assets and liabilities for the current and prior years 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 by the balance sheet date.

Current income tax is charged or credited to the consoli-dated income statement, except when it relates to items recognised directly to equity, in which case the 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 Corporation to set off current tax assets against current tax liabilities and when the Corporation intends to settle its current tax as-sets and liabilities on a net basis.

Deferred tax

deferred tax is provided using the balance sheet liability method on temporary differences at the consolidated balance sheet date between the tax base of assets and liabilities and their carrying amount for consolidated fi-nancial reporting purpose.

deferred tax liabilities are recognised for all taxable tem-porary 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 associ-ated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be con-trolled and it is probable that the temporary differ-ence will not reverse in the foreseeable future.

deferred tax assets are recognised for all deductible tem-porary 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 deduct-ible temporary difference which arises from the ini-tial 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 temporarily differences as-sociated with investments in subsidiaries, associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foresee-able future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is re-viewed 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 bal-ance 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 is 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 recog-nised 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 Corporation to set off cur-rent tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation author-ity on either the same taxable entity or when the Corpora-tion intends either settle current tax liabilities and assets on

a net basis or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

The preparation of the consolidated financial statements requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and as-sumptions 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.

In accordance with the Vietnamese Accounting system for insurance companies, 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.

Use of estimates

Off-balance sheet items

1.5.4. CAsh ANd CAsh EQuIVALENTs khoản tương đương tiền

Ending balance (VND) Beginning balance (VND)

Cash on hand 635,016,891 405,322,679

In which:VNdForeign currency

547,650,62887,366,263

405,322,679 -

Cash at banks 29,325,697,295 14,786,723,082


20,970,836,0838,354,861,212

8,924,383,461 5,862,339,621

29,960,714,186 15,192,045,761

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1.5.5. shORT-TERM INVEsTMENTs


short-term securities investments 100,507,223,405 97,059,200,387

Listed sharesunlisted sharesCorporate bonds [5.1]

50,169,080,4055,438,143,000

44,900,000,000

35,349,293,751 34,709,906,636 27,000,000,000

Other short-term investments 959,570,312,500 815,828,000,000

Term deposits in VNdTerm deposits in usd

20,970,836,0838,354,861,212

8,924,383,461 5,862,339,621

Allowance for diminution of short-term investments value (789,797,905) (12,797,286,351)

Net value of short-term investments 1,059,287,738,000 900,089,914,036

Issuer Term Coupon 31 December 2013 (VND)

Vietnam Electricity Construction Joint Stock Corporation 2 năm 14,0% 4,900,000,000

Construction and Materials Trading Joint Stock Company 2 năm 11,9% 40,000,000,000

44,900,000,000

Corporate bonds


Trade receivables 340,409,022,787 204,563,928,648

Receivable from direct insurance activities

Receivable from inward reinsurance

Receivable from outward reinsurance• Recoverable from settled claims (*)• Commission receivables from reinsurance ceded

Receivables from financial activities

Other trade receivables

50,011,061,216

33,090,434,612

212,066,099,874141,500,717,809

70,565,382,065

40,381,006,259

4,860,420,826

45,816,539,578

32,705,945,259 84,875,444,85341,709,311,055

43,166,133,798

37,440,146,577

3,725,852,381

Advances to suppliers 2,000,007,331 1,309,652,500

deductible VAT 4,919,220,101 5,858,667,634

Other receivables (**) 37,245,109,948 6,646,422,296

Total receivables 384,573,360,167 218,378,671,078

Allowance for doubtful debts (17,263,963,764) (10,395,411,406)

Net trade and other receivables 367,309,396,403 207,983,259,672

1.5.6. ACCOuNTs RECEIVAbLEs

• (*) Reinsurance ceded receivable included the claim recoveries from Boston Reinsurance Corporation with total amount of LAK 27,581,706,279 equivalent to VND 67,575,180,384 for the loss incurred on 17 April 2013 under the policy No. 011246663 for the insured Lao Air.

• (**) The amount as at 31 December 2013 included the overdue principal of one bond which ma-tured on 15 December 2013 with total amount of VND 30,000,000,000.

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1.5.7. TANGIbLE FIXEd AssETs

1.5.8. INTANGIbLE FIXEd AssETs

Computer software (VND) Land use right (VND) Total (VND)

CostsBeginning balanceAdditionsdecreaseClosing balance

56,057,85065,000,000

(14,458,725)106,599,125

6,500,000,000--

6,500,000,000

6,556,057,85065,000,000

(14,458,725)6,606,599,125

Accumulated amortisationBeginning balanceIncrease for the yeardecrease for the yearClosing balance

(56,057,850)(6,620,372)14,458,725

(48,219,497)

----

(56,057,850)(6,620,372)14,458,725

(48,219,497)

Net book valueBeginning balanceClosing balance

-58,379,628

6,500,000,0006,500,000,000

6,500,000,0006,558,379,628

Building (VND) Office equipments (VND) Motor vehicles (VND) Other tangible fixed assets (VND) Total (VND)

CostsBeginning balanceAdditions

• Newly purchased • Other increase

decrease• Other decrease (*)

Ending balance

2,300,000,000-----

2,300,000,000

6,620,139,5393,726,321,5171,500,370,4262,225,951,091

(5,415,847,183)(5,415,847,183)4,930,613,873

23,118,328,7589,659,757,2465,160,194,5564,499,562,690

(76,705,200)(76,705,200)

32,701,380,804

336,528,9281,463,501,592

196,998,9101,266,502,682(257,249,074)(257,249,074)

1,542,781,446

32,374,997,22514,849,580,355

6,857,563,8927,992,016,463

(5,749,801,457)(5,749,801,457)

41,474,776,123

Accumulated depreciationBeginning balanceIncreasedepreciation for the yearOther increasedecreaseOther decrease (*)Ending balance

(78,728,030)(89,938,644)(89,938,644)

---

(168,666,674)

(5,688,301,759)(1,951,629,263)

(221,261,076)(1,730,368,187)

3,837,102,2053,837,102,205

(3,802,828,817)

(18,710,324,375)(4,786,004,903)(2,343,885,519)(2,442,119,384)

28,414,41328,414,413

(23,467,914,865)

(175,508,839)(1,046,714,362)

(62,412,916)(984,301,446)

100,453,834100,453,834

(1,121,769,367)

(24,652,863,003)(7,874,287,172)(2,717,498,155)(5,156,789,017)

3,965,970,4523,965,970,452

(28,561,179,723)

Net book valueBeginning balanceEnding balance

2,221,271,9702,131,333,326

931,837,7801,127,785,056

4,408,004,3839,233,465,939

161,020,089421,012,079

7,722,134,22212,913,596,400

(*) during the year, the Corporation has reclassified those assets that no longer satisfy recognition crite-ria of fixed assets as required by Circular 45/2013/TT-bTC to long-term prepaid expenses.

1.5.9. LONG-TERM INVEsTMENTs


1. Long-term securities investments• Listed shares• Corporate bonds

[9.1]

150,598,617,037 452,783,704

150,145,833,333

170,145,833,333

- 170,145,833,333

2. Investment in associates and joint-ventures -

23,837,143,685

3. Other long-term investments• Term-deposit• Other long-term investments

[9.2]

126,234,150,00050,144,150,00076,090,000,000

76,090,000,000-

76,090,000,000

Total long-term investments 276,832,767,037 270,072,977,018

Provision for impairment of long-term investments [9.3] (17,283,004,056) (16,939,899,164)

Net value of financial long-term investments 259,549,762,981 253,133,077,854

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Other long-term investments include equity investments with details as follow:

Provision for long – term investment

Provision for long-term investment is the provision for the holding of Green Indochina development JsC’ shares:

Investees%

ownedNumber of

sharesUnit cost Amount (VND)

Green Indochina Development JSC 4.24% 1,000,000 26,090 26,090,000,000

Vinaconex – Viettel Finance JSC 5% 5,000,000 10,000 50,000,000,000

6,000,000 76,090,000,000


Green Indochina Development JSC (17,283,004,056) (16,939,899,164)

Tổng dự phòng giảm giá đầu tư dài hạn (17,283,004,056) (16,939,899,164)

Long-term securities investments

Long-term securities investments include investments in bonds with the details as follow:

Issuer Term Annual rate Ending balance (VND)

Bank of Investment and Development of Vietnam 3 years 9.55% 30,145,833,333

Parent Company – Housing and Urban Develop-ment Corp

3 years 11.9% 50,000,000,000


Vietnam Prosperity Bank 3 years 10.0% 50,000,000,000

150,145,833,333

under the prevailing regulation, the Corporation has to maintain statutory insurance deposit equivalent to 2% of its legal capital.


Payables relating to writing of direct insurance 87,806,540,954 12,791,747,413

Reinsurance assumed payables 10,441,415,626 12,907,267,659

Reinsurance ceded payables 246,409,488,360 159,502,884,398

Other 3,255,649,255 1,238,302,293

347,913,094,195 186,440,201,763

1.5.10. COMPuLsORy dEPOsITs

1.5.11. TRAdE PAyAbLEs

1.5.12. sTATuTORy ObLIGATIONs


Value added tax 18,486,541,873 6,684,584,933

Enterprise income tax (Note 23.2) 8,872,798,378 4,968,020,319

Other taxes 4,171,368,534 3,161,346,382

31,530,708,785 14,813,951,634

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1.5.13. ACCRuEd EXPENsE


Premium payables under Excess of Loss (“XOL”) contracts 5,362,910,416 4,500,000,000

Reinstated premium payables under Excess of Loss contracts 2,681,091,441 9,581,169,909

Compulsory fire and explosion and civil liabilities expense 2,051,468,477 1,222,000,000

Other(*) 4,440,732,594 6,769,788,456

14,536,202,928 22,072,958,365

(*) Others mostly include the accrued expenses for advertising, training, rental activities and audit fee.

1.5.15. OWNERs’ EQuITy

1.5.14. OThER PAyAbLEs


Payables for salary allowance 180,783,680 708,004,734

Received deposit, mortgage 1,352,121,926 1,788,909,800

Others 10,988,983,467 7,592,797,160

12,521,889,073 10,089,711,694

Charter capital (VND) Share premium (VND) Treasury shares (VND) Financial reserve (VND) Statutory reserve (VND) Retained earnings (VND) Foreign exchange difference reserve (VND) Total (VND)

Balance at 1 January 2012 660,000,000,000 2,271,699,140 (6,215,238,666) 1,800,187,891 4,853,369,576 87,188,437,793 - 749,898,455,734

Payment for 2011 dividend - - - - - 84,178,164,009 - 84,178,164,009

Profit for the year - - - - - (65,000,000,000) - (65,000,000,000)Appropriation to statutory reserve fund of profit for 2012

- - - - 4,208,908,200 (4,208,908,200) - -

Purchase of treasury shares - - (362,295,144) - - - (362,295,144)

Appropriation to bonus and Welfare funds - - - - - (10,000,000,000) - (10,000,000,000)

Remuneration to board of directors - - - - - (287,000,000) - (287,000,000)

Balance at 31 December 2012 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776 91,870,693,602 - 758,427,324,599

Balance at 1 January 2013 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776 91,870,693,602 - 758,427,324,599

Payment of 2012 dividends - - - - - 94,654,460,763 - 94,654,460,763

Profit for the year - - - - - (65,000,000,000) - (65,000,000,000)

Appropriation to statutory reserve for 2013 - - - - 4,248,919,389 (4,248,919,389) - -

sale of treasury shares - 2,604,066,190 6,577,533,810 - - - - 9,181,600,000

Appropriation to bonus and Welfare funds - - - - - (11,500,000,000) - (11,500,000,000)

Foreign Exchange difference Reserve due to business consolidation of subsidiaries

- - - - - - 7,052,332,500 7,052,332,500

Other decrease in the year - - - - - (821,631,669) - (821,631,669)

Remuneration to board of directors - - - - - (58,500,000) - (58,500,000)

Balance at 31 December 2013 660,000,000,000 4,875,765,330 - 1,800,187,891 13,311,197,165 104,896,103,307 7,052,332,500 791,935,586,193

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1.5.16. REVENuE FROM INsuRANCE busINEss

Gross written premiums

Reinsurance premiums assumed

Product Current year (VND) Previous year (VND)

Health and Personal Accident 82,698,813,247 65,830,887,659

Property and Damages 205,626,915,961 173,653,971,966

Cargo 53,428,008,426 33,466,369,392

Automobile 325,882,815,750 244,023,989,220

Fire 97,305,232,498 80,629,290,423

Liability 5,985,684,522 3,690,943,159

Business Risk 7,175,424,294 1,475,864,157

Aviation (*) 34,063,753,809 6,045,645,978

Hull and owner’s liability 39,339,745,280 51,153,175,891

Financial and credit risk 4,361,662,603 10,406,580,892

Agriculture - -

855,868,056,390 670,376,718,737


Health and Personal Accident 110,749,479 573,050,865


Cargo 3,248,419,191 3,903,840,963

Automobile 1,073,968,337 2,875,858,971

Fire 6,595,518,803 4,827,909,601

Liability 273,147,603 584,287,882

Business Risk 2,790,873,046 992,444,521

Aviation 3,175,555,551 4,846,787,627

Hull and owner’s liability 747,998,284 836,204,637

Financial and credit risk 12,338,600 -

Agriculture 896,292,104 313,662,907

83,656,928,441 83,881,976,126

(*) It included gross written premiums of VNd 13,684,064,304 under the policy No. 01120944 with the insured Lao Airlines and VNd 7,380,065,964 and VNd 4,634,350,476 under policy No. 011339546 and 011339547, in respectively

with the insured Vietnam Airlines Corporation.

(*) It included claim expenses with total amount of LAk 175,203,600,000 equivalent to VNd 429,248,820,000 for the loss incurred on 16 October 2013 under the policy No. 011339546 with the insured Lao Airlines and LAk 27,191,985,537 equivalent to VNd

66,620,364,566 for the loss incurred on 17 April 2013 under the policy No. 011246663 with the insured Lao Air.

Reinsurance premiums ceded


Health and Personal Accident 1,199,531,662 726,634,202


Cargo 36,454,794,345 23,251,954,020

Automobile 649,010,054 2,070,421,348

Fire 61,015,621,167 47,493,997,250

Liability 3,344,030,105 1,755,566,551

Business Risk 8,884,033,241 2,244,894,358

Aviation (*) 34,529,711,711 2,423,513,011


Financial and credit risk 699,310,029 9,360,800,320

Agriculture - -

351,246,497,291 265,217,214,654

(*) It included reinsurance premium ceded of VNd 13,491,670,159 under the policy No. 01120944 with the insured Vietnam Airlines Corporation and VNd 5,491,748,593 and VNd 4,171,008,120 under policy No. 011339546 and No.

011339547 in respectively with the insured Lao Airlines.




Cargo 13,750,570,122 23,971,485,150

Automobile 115,450,332,355 102,909,404,834

Fire 67,658,270,599 44,577,160,972

Liability 770,450,487 520,079,331

Business risk 2,817,555,225 2,486,216,480

Aviation (*) 506,416,454,326 320,863,102

Hull and ship owner’s liability 7,164,588,403 19,646,375,890

Financial and credit risk - 24,683,046

Agriculture - -

771,017,274,341 254,393,282,386

1.5.17. CLAIM EXPENsEs

Gross claim expenses

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Claim expenses on reinsurance assumed

Recoveries from reinsurance ceded




Cargo 72,629,530 118,797,242

Automobile 754,105,063 881,584,463

Fire 5,923,494,963 5,791,035,410

Liability 76,734,581 -

Business risk 58,116,862 -

Aviation 34,810,478 80,399,468

Hull and ship owner’s liability 2,071,264,859 70,917,908

Financial and credit risk 0 -

Agriculture 887,011,873 60,644,445

20,020,626,410 16,774,306,370




Cargo 9,274,508,987 21,470,353,729

Automobile 256,780,810 479,784,512

Fire 43,289,363,057 42,588,824,164

Liability 610,265,844 245,765,583

Business risk 2,604,049,609 2,263,529,040

Aviation (*) 503,859,873,136 338,256,433


Financial and credit risk - -

Agriculture - -

603,045,909,671 113,550,744,894

(*) It included reinsurance recoveries from the reinsurers with total amount of LAk 175,115,998,200 equivalent to VNd 429,034,195,590 for the loss incurred on 16 October 2013 under the policy No. 011339546 with the insured Lao Airlines; and the amount of LAk

27,164,793,542 equivalent to VNd 66,553,744,178 for the loss incurred on 17 April 2013 under the policy No. 011246663 with the insured Lao Air.

Claim reserves




Cargo 1,515,049,942 1,011,086,828

Automobile 171,021,663,091 131,038,393,223

Fire 20,793,366,265 17,149,739,258

Liability 2,096,285,839 1,943,487,540

Business risk 531,663,190 57,946,562

Aviation 2,076,174,350 5,705,064,922


Financial and credit risk 1,733,800,250 145,248,761

Agriculture - -

293,811,238,913 238,964,521,669




Cargo 7,665,586,434 1,707,376,190

Automobile 20,847,638,540 14,805,311,125

Fire 13,144,403,244 34,039,796,204

Liability 3,968,670,919 578,352,258

Business risk 240,932,425 300,474,078

Aviation 1,721,135,961 24,990,225



Agriculture 1,670,650,000 -

117,844,424,682 74,944,817,505

The change in unearned premium reserve taken to expenses charged to the consolidated income statement for the year ended 31 december 2013 was VNd 29,534,359,172.

1.5.18. TEChNICAL REsERVEs

Unearned premium reserve

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Claim reserves include:

• Outstanding claim reserves were calculated based on loss estimate for each individual large claim, for which the Corporation is liable, which is either notified to the Corporation or requested for payment but is still unresolved as at 31 december 2013 after deducting the corresponding reinsurance recoveries. such reserves amounted to VNd 719,801,761,973 as at 31 december 2013, in which, the amount recoverable from reinsurers relating to these outstanding claims amounted to VNd 621,928,860,068;

• Reserves for claims incurred but not reported as at 31 december 2013, amounted to VNd 19,971,522,777.

The increase in claim reserve of VNd 30,737,301,055 was charged to the consolidated income statement on a net basis, i.e. after deducting the corresponding reinsurance recoveries.

details of the catastrophe reserve provided as at 31 december 2013 are presented as follows:

The catastrophe reserve expense charged to the income statement for the period ended 31 december 2013 was VNd 11,709,869,394.

Catastrophe reserve




Cargo 2,102,847,388 1,683,681,578

Automobile 36,008,731,522 27,044,321,679

Fire 5,194,748,741 4,321,212,741

Liability 547,371,723 459,963,503

Business Risk 138,025,667 51,819,434

Aviation 1,067,810,525 268,546,944


Financial and credit risk 675,405,790 280,384,724

Agriculture 27,335,729 9,409,887

70,603,970,519 55,123,425,808

(*) In 2012, the Corporation had trusted investment contracts which mostly came from bIdV. All these contracts were matured in 2012.

1.5.19. AdMINIsTRATIVE EXPENsEs

1.5.20. FINANCIAL INCOME

1.5.21. FINANCIAL EXPENsEs

Current year (VND) Previous year (VND)

Employees expenses 141,079,124,940 117,694,210,350

Depreciation expenses 2,724,118,527 3,769,906,918

Expenses for external services 81,286,817,970 58,427,462,242

Tool and equipment expense 14,293,480,094 9,554,633,488

Non-deductible value added tax 2,680,892,939 1,182,155,164

Provision for doubtful debt 2,222,695,629 2,562,308,970

Other expenses 5,463,769,330 5,763,166,956

249,750,899,429 198,953,844,088


Interest income from deposits at banks 92,412,757,247 131,664,955,429

Interest income from bonds 24,981,602,928 20,215,132,683

Dividends income 6,154,159,100 2,513,434,880

Foreign exchange gains 12,274,861,262 3,560,585,716

Gain on securities trading 4,100,131,848 1,842,707,236

Other financial income 6,239,198 225,159

139,929,751,583 159,797,041,103


Interest expense 991,208,516 766,946,046

Foreign exchange losses 11,745,387,889 3,328,619,205

Loss on securities trading 180,190,751 3,067,528,933

Interest expense of investments trusted (*)

Provision for investment impairment - 27,213,850,001

Other financial expenses 2,632,380,812 7,383,719,562

Chi phí hoạt động tài chính khác 910,420,494 1,572,982,810

16,459,588,462 43,333,646,557

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Current Enterprise Income Tax

1.5.22. OThER INCOME ANd EXPENsEs

1.5.23. ENTERPRIsE INCOME TAX


Other incomeProceeds on disposal of assetsOther income

6,463,6362,437,546,805

2,444,010,441

113,596,295 707,828,820

821,425,115

Other expensesExpenses on disposal of assetsOther expenses

-(1,089,496,836)

(45,193,059) (258,477,229)

(1,089,496,836) (303,670,288)

Net other income 1,354,513,605 517,754,827


Current Enterprise Income Tax 29,610,025,326 26,659,457,570

Deferred Enterprise Income Tax (418,770,415) -

Enterprise Income Tax Expense 29,191,254,911 26,659,457,570

1,354,513,605 517,754,827

The Corporation is subject to paying Corporate Income Tax (“CIT”) at the rate of 25% of its taxable profits.

The Corporation’s tax returns are subject to examination by the tax authorities. because the application of tax laws and regulations 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.

The current enterprise income tax payable is determined based on taxable income for the year. Taxable profit distin-guishes from accounting profit reported on consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible for tax purpose. The Corporation’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date.

The reconciliation between accounting profit and taxable profit is presented below:

significant transactions with related companies during the year were as follows:


Accounting profit before tax 125,593,072,000 110,837,621,579

Adjustments to increase 4,857,516,459 544,276,741

Non-deductible expenses 4,857,516,459 544,276,741

Adjustments to decrease (6,154,159,100) (2,513,434,880)

Tax exempt dividend income (6,154,159,100) (2,513,434,880)

Estimated current taxable profit 124,296,429,359 108,868,463,440

Estimated Current Enterprise Income Tax expense 28,881,229,410 26,659,457,570


Enterprise Income Tax payable at beginning of the year 4,968,020,319 5,565,800,406

Adjustment of tax payables for prior year 728,795,916 -

Other increase in business combination 1,897,497,226 -

Enterprise Income Tax paid during the year (27,602,744,493) (27,257,237,657)

Enterprise Income Tax payable at the end of the year 8,872,798,378 4,968,020,319

1.5.24. TRANsACTIONs WITh RELATEd PARTIEs

Company Relationship Transaction Amount (VND)

JOINT STOCk COMMERCIAL BANk OF INVESTMENT AND DEVELOP-MENT OF VIETNAM (BIDV)

Parent Gross written premium64,526,814,617

Interest income from term deposit 61,105,851,672

bond interest income 5,635,753,424

Office rental expense 10,627,692,579

Claim expense 2,756,006,304

Commission expense 10,292,577,040

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BIDV LEASING COMPANY (BLC Affiliate Gross written premium 1,051,464,583

THE BANk OF INVESTMENT AND DEVELOPMENT OF CAMBODIA (BIDC)

Affiliate Interest income from term deposit 3,030,688,887

date were as follows:

Apart from amounts as mentioned above, members of Management are not entitled to any other benefits.

Related company Relationship Description Receivables VND

PayablesVND

JOINT STOCk COMMERCIAL BANk OF INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV)

Parent Current account 20,235,075,576 -

Term deposit 540,000,000,000 -

Interest from term deposit 12,573,734,724 -

BIDV bonds 50,145,833,333 -

BIDV bond interest receivables 1,988,493,150 -

Compulsory deposit at BIDV 6,000,000,000 -

Premium receivables 914,777,189 -

Commission payables - 2,188,499,998

Office rental payables - 53,120,704


Affiliate Term deposit 45,000,000,000 -Interest from term deposit -

Total 1,619,449,999 2,241,620,702

Remuneration to members of Management Current year (VND) Previous year (VND)

Salaries and bonus 3,564,036,141 2,916,029,570

Other benefits 556,111,000 455,000,000

4,120,147,141 3,371,029,570

1.5.25. sEGMENT INFORMATION The primary segment reporting format is determined to be business segments as the Corporation risks and rates of return are affected predominantly by differences on geo-graphical where the products and services are rendered.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. segment revenue, segment expense and seg-ment result include transfers between business segments. Those transfers are eliminated in preparation of the consoli-dated financial statements.

The Corporation’s geographical segments are based on the location of the Corporation’s assets. sales to external cus-tomers disclosed in geographical segments are based on the geographical location of its customers

The following table presents operating result of the Corpo-ration’s operating segments for the year ended 31 decem-ber 2013:

Foreign market Domestic market Adjustments and

eliminations Total

Gross written premium 63,605 792,263 - 855,868

Reinsurance premium assumed 580 102,679 (19,602) 83,657

deductions (37,043) (336,582) 19,602 (354,023)

(Increase)/decreasein unearned premium reserve and mathematical reserve

344 (29,878) - (29,534)

Commissions on reinsurance ceded 4,525 88,508 (3,099) 89,934

Other income from insurance activities 269 34,070 - 34,339

Total operating revenues 32,280 651,060 (3,099) 680,241

Claim expenses (514,717) (256,300) - (771,017)

Claim expenses for reinsurance assumed (18) (34,993) 14,990 (20,021)

Recoveries from reinsurance ceded 508,307 112,037 (17,298) 603,046

(Increase)/decrease on claim reserve (4,069) (28,976) 2,308 (30,737)

Provision for catastrophes reserve charged to current year’s expense (543) (11,167) - (11,710)

Other operating expenses (4,598) (203,364) 3,099 (204,863)

Total direct expenses for insur-ance activity

(15,638) (422,763) 3,099 (435,302)

Gross operating profit 16,642 228,296 - 244,939

General administration expenses (15,645) (234,106) - (249,751)

Finance profit 4,894 118,576 - 123,470

Gain from associates - - 5,580 5,580

Other profit (14) 519 850 1,355

Profit before tax 5,877 113,286 6,430 125,593

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The following table presents financial position of the Corporation’s operating segments as at 31 december 2013:

Foreign market Domestic marketAdjustments and

eliminations Total

Assets

Cash and cash equivalents 7,539 22,422 - 29,961

Trade receivable 105,406 277,531 (15,628) 367,309

Financial investment 109,167 1,244,330 (34,660) 1,318,837

Fixed assets 2,949 16,523 - 19,472

Other assets 6,012 14,178 - 20,190

Total Assets 231,073 1,574,984 (50,288) 1,755,769

Liabilities

short-term liabilities 114,753 356,254 (15,628) 455,379

Insurance technical reserves 41,478 440,782 - 482,260

Total Liabilities 156,231 797,036 (15,628) 937,639

Owners’ Equity 74,842 777,948 (60,855) 791,935

Minority Interests - - 26,195 26,195

Total liabilities and Owners’ equity 231,073 1,574,984 (50,288) 1,755,769

1.5.26. CONTINGENT LIAbILITIEs

Foreign contractor withholding tax

The Corporation has not provided for the potential foreign contractor withholding taxes from the offshore payments of reinsurance premiums ceded to overseas reinsurers from countries without double Tax Treaty with Vietnam for the pe-riod from 1 Jan 2005 to 31 december 2008. The potential tax risks relating to these issues are VNd1.6 billion for foreign contractor withholding tax.

For the year 2009, the Corporation has sufficiently made provision for potential tax obligation relating to reinsurance premium ceded to overseas reinsurer. however, for years 2010 up to date, the Corporation only accounted for the FCT on reinsurance premiums ceded to overseas reinsurers from countries without double Tax Treaty with Vietnam or from countries with double Tax Treaty with Vietnam but the reinsurers have not submitted adequate supporting documents.

Capital and operating lease commitments

31 December 2013 (VND)

Operating lease commitments 7,364,454,716

In which:• Within one year• From 2 years to 5 years• More than 5 years

566,561,7956,797,892,921

-7,364,454,716

1.5.27. EARNINGs PER shARE

1.5.28. RIsk MANAGEMENT FRAMEWORk

basic earnings per share (“EPs”) amounts is calculated by dividing net profit after tax for the year attributable to ordinary shareholders of the Corporation by the weighted average number of ordinary share outstanding during the year.

The following reflects the income and share data used in the basic earnings per share computation:

The primary objective of the Corporation’s risk and finan-cial management framework is to protect the Corpora-tion’s shareholders from events that hinder the sustainable achievement of financial performance objectives. The board of directors and Management recognise the importance of having efficient and effective risk management systems in place.

The Corporation has established a risk management func-tion which agreed clear terms of reference from the board of directors. This is supplemented with a clear organisation-

al structure with documented delegated authorities and responsibilities from the board of directors to the Manage-ment and other senior management. A policy framework has been developed and implemented which sets out the risk profiles for the Corporation, risk management; con-trol and business conduct standards for the Corporation’s operations. Each policy has a member of the Manage-ment charged with overseeing compliance with the policy throughout the Corporation.

Current year Previous year

Net profit after tax attributable to ordinary equity hold-ers for basic earnings (VND) 3,564,036,141 2,916,029,570

Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share (unit)

556,111,000 455,000,000

EPS (VND) 4,120,147,141 3,371,029,570

Governance framework

The Corporation leases office premises under an operating lease. Future rental amounts due under operating leases as at 31 december 2013 were as follows:

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The primary insurance activity carried out by the Corpo-ration is the assumption of risk of loss from persons or or-ganisations that are directly subject to the risk. such risks may relate to property, liability, accident, health, finan-cial or other perils that may arise from an insurable event. As such the Corporation is exposed to the uncertainty surrounding the timing and severity of claims under the contract. The Corporation also has exposure to market risk through its insurance and investment activities.

The Corporation manages its insurance risk through un-derwriting limits, approval procedures for transactions that involve new products or those exceed set limits, risk diversification, pricing guidelines, reinsurance and moni-toring of emerging issues.

The primary capital management objective of the Corpo-ration is to maintain a strong capital base to support the development of its business and to comply with regulatory capital requirements at all times. The Corporation recognis-es the impact on shareholders returns of the level of equity capital employed and seek to maintain a prudent balance.

Regulatory capital requirements arise from the operations of the Corporation require the Corporation to hold assets sufficient to cover liabilities and satisfy the solvency mar-gin requirements in Vietnam. The principal solvency re-quirements that apply to the Corporation is those set out

in Circular 125 issued by the Ministry of Finance.

The tables below summarise the minimum regulatory sol-vency margin for the Corporation and the solvency capital held against each of them. Regulators are primarily inter-ested in protecting the rights of policyholders and moni-tor them closely to ensure that the insurance subsidiar-ies are satisfactorily managing affairs for their benefit. At the same time, regulators are also interested in ensuring that the Corporation maintain appropriate solvency posi-tion to meet unforeseen liabilities arising from economic shocks or natural disasters.

The solvency ratio of the Corporation is calculated based on the relevant regulators promulgated by the Ministry of Finance in Vietnam, which is an indicator of

the overall solvency position of the relevant insurance operations.

Risk management objectives, policies and processes for management of insurance risk

Capital management and regulatory framework

Corporation Solvency Capital

(VND million)

Minimum Solvency Margin(VND million)

SolvencyMargin Ratio

31 December 2013 713,020 152,467 468%

31 December 2012 715,124 120,695 593%

Underwriting strategy

Reinsurance strategy

Insurance risk

The Corporation’s underwriting strategy seeks the diversity for products, distribution channel and focus on the most profit-able products to ensure a balanced mix of business portfolio and is based on a large portfolio of similar risks over a number of years and, as such, reduces the variability of the outcome.

The Corporation reinsures a portion of the insurance risks it underwrites in order to control its exposures to losses and protect its capital, through treaty and facultative reinsur-ance arrangements. These reinsurance agreements transfer part of the risk and limit the exposure from each insured. The amount of each risk retained depends on the Corpora-tion’s evaluation of the specific risk, subject in certain cir-cumstances, to maximum limits based on characteristics of coverage. under the terms of the reinsurance agreements, the reinsurer agrees to reimburse the ceded amount in the

event the claim is paid. however, the Corporation remains liable to its policyholders with respect to ceded insurance if any reinsurer fails to meet the obligations it assumes.

Ceded reinsurance contains credit risk, and to minimise such risk, only those reinsurers meeting the Corporation’s credit rating standard, either assessed from public rating in-formation or internally investigations, will be used.

Assumptions, changes in assumptions and sensitivity analysis

The process used to determine the assumptions is intended to result in estimates of the most likely outcome. The sourc-es of data used as inputs for the assumptions are internal, based on detailed studies that are carried out regularly. The assumptions are checked to ensure that they are consistent with other observable information. There is more emphasis on current trends, and where there is insufficient historical information, prudent assumptions are used.

The nature of the business makes it very difficult to predict with certainty the outcome of any particular claim and the ultimate cost. Each notified claim is assessed on a consoli-dated case by case basis with due regard to the circumstanc-es, information available from loss adjusters and historical evidence of similar claims. Case estimates are reviewed reg-ularly and are updated as and when new information arises. The impact of many of the items affecting the ultimate costs of the loss is difficult to estimate. The provisions are based on information currently available. however, the ultimate li-abilities may vary as a result of subsequent developments.

1.5.29. MANAGEMENT OF INsuRANCE ANd FINANCIAL RIsk

The Corporation issues contracts that transfer insurance risk or financial risk or both. The following gives details of the Cor-poration’s main products and the ways in which it manages the associated risks.

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The key method in calculating the claim reserves is based on Circular No 125/2012/TT-bTC dated 30 July 2012 issued by the Ministry of Finance. details of such reserving methodologies are as follows:


• Outstanding claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable, which is either notified to the insurer or requested for payment but is still unresolved at the end of the fiscal year, in accordance to the Circular No 125/2012/TT-bTC; and

• Reserve for incurred but not reported claims for which the insurer is liable (IbNR).

The Corporation is calculating the reserve for incurred but not reported claims based on the following formula:

The Corporation issues general insurance contracts such as cargo, hull, aviation, engineering, fire, health and per-sonal accident, general indemnity and automobile. Risks under general insurance contracts usually cover twelve month duration.

The Corporation is exposed to risk of accumulation in view of the economic development across the country and flow of foreign investment in manufacturing and real estates, especially in the major economic hubs such as ho Chi Minh City, hanoi, hai Phong, da Nang and dong Nai.

For general insurance contracts the most significant risks arise from climate changes and natural disasters. Viet-nam has suffered heavily from catastrophes loss such as tropical typhoon, river flood, flash flood, heavy rain and

landslide. It is expected that tropical typhoon will affect Vietnam regularly with the high severity and insured losses. In view of the exposures, the general insurance has arranged the reinsurance protection for the fire, en-gineering, motor, marine hull & cargo, fishing vessels portfolios against the catastrophe events to minimize the risks.

For longer tail claims that take over a year to settle; there is also inflation risk. These risks do not vary significantly in relation to the location of the risk insured by the gen-eral insurance, type of risk insured and by industry.

The above risk exposure is mitigated by diversifying across a large portfolio of insurance products, distribu-tion channels and selecting the low insurance products.

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 three years

x

Indemnity for losses arising in the current

fiscal year

x

Net operating revenue of cur-

rent fiscal ye

x

Average delay in making

claims of cur-rent fiscal year

Total indemnity for losses arising in the last three years

Net operating revenue of the previous fiscal

year


claims of previ-ous fiscal year

The variability of risks is improved by careful selection and implementation of underwriting strategies, which are de-signed to ensure that risks are diversified in terms of type of risk and level of insured benefits. This is largely achieved through diversification across industry sectors. Further, strict claim review policies to assess all new and ongoing claims, regular detailed review of claims handling procedures and frequent investigation of possible fraudulent claims are all policies and procedures put in place to reduce the risk expo-sure of the general insurance. The general insurance further enforces a policy of activity managing and promptly pursu-ing claims, in order to reduce its exposure to unpredictable future developments that can negatively impact the busi-ness. Inflation risk is mitigated by taking expected inflation

into account when estimating insurance contract liabilities.

The Corporation has also limited its exposure by imposing maximum claim amounts on certain contracts as well as the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g. typhoon and flood damages).

The purpose of these underwriting and reinsurance strate-gies is to limit exposure to catastrophes based on the gen-eral insurance’s risk appetite as decided by management. The management may decide to increase or decrease the maximum tolerances based on market conditions and other factors.

Financial risk

The Corporation’s principal financial liabilities comprise trade and other payables. The main purpose of these finan-cial liabilities is to finance the Corporation’s operations. The Corporation has loan and other receivables, trade and other receivables, and cash and short-term deposits that arise di-rectly from its operations. The Corporation does not hold or issue derivative financial instruments.

The Corporation is exposed to market risk, credit risk and liquidity risk.

Risk management is integral to the whole business of the Corporation. The Corporation has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The man-agement continually monitors the Corporation’s risk man-agement process to ensure that an appropriate balance be-tween risk and control is achieved.

Management reviews and agrees policies for managing each of these risks which are summarized below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity price risk. Financial instru-ments affected by market risk include loans and borrow-ings, deposits and available-for-sale investments.

The sensitivity analyses in the following sections relate to

the position as at 31 december 2013 and 31 december 2012.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial in-struments in foreign currencies are all constant.

In calculating the sensitivity analyses, management as-sumed that the statement of the balance sheet relates to available-for-sale debt instrument; the sensitivity of the rel-evant income statement item is the effect of the assumed changes in respective market risks. This is based on the fi-nancial assets and financial liabilities held at 31 december 2013 and 31 december 2012.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Corporation’s expo-sure to market risk for changes in interest rate relates pri-marily to the Corporation’s cash, short-term deposits and corporate bonds.

The Corporation manages interest rate risk by looking at the competitive structure of the market to obtain rates which are favourable for its purposes within its risk management limits.

A sensitivity analysis is not performed for interest rate risk as the Corporation’s exposure to interest-rate risk is minimal at reporting date.

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Foreign currency risk

Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctua-tions in exchange rates between VNd and other curren-cies in which the Corporation conducts business may affect its financial condition and results of operations.

The foreign current risk facing the Corporation mainly comes from movements in the usd/VNd exchange rates. The Corporation seeks to limit its exposure to foreign currency risk by minimising its net foreign cur-rency position.

Major of the Corporation financial assets are denomi

nated in VNd which mitigates the foreign currency risk. With assets denominated in foreign currency, most of them are in usd.

during the year, foreign exchange rate between VNd and usd fluctuated from 20,828 to 21,036 VNd/usd.

The table below indicates the effect of a reasonably pos-sible movement of the usd rate against the VNd, with all other variables held constant, on the consolidated income statement and statement of financial position of the Corporation:

Equity price risk

The Corporation’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty about future values of the investment securities. The Cor-poration manages equity price risk by placing a limit on equity investments and prediction analysis of market. The Corporation’s board of Management reviews and ap-proves significant equity investment decisions.

At the reporting date, the exposure to listed equity secu-rities at fair value was VNd 58,481,618,000 (31 de

cember 2012: VNd 35,349,293,751). A decrease of 10% on the stock market index could have an impact of ap-proximately VNd (1,841,992,514) (31 december 2012: VNd (2,994,964,679)) on the Corporation’s profit after tax, depending on whether or not the decline is signif-icant or prolonged. An increase of 10% in the value of the listed securities would increase Corporation’s profit after tax by VNd 227,686,884 (31 december 2012: VNd 2,190,154,861).

Change in variables Impact on profit before tax

(VND)Impact on equity after tax (VND)

31 December 2013

+10% (5,996,392,780) (3,331,702,781)

-10% 5,996,392,780 3,331,702,781

31 December 2012

+10% (5,379,875,132) (4,034,906,349)

-10% 5,379,875,132 4,034,906,349

Currency: VND million

Past due but not impaired Past due and impairedProvision for impairment< 90 ngày 91–180

days181–360

days> 360days

As at 31 December 2013

Receivables from original insurance activities 19,075 5,769 5,947 18,207 15,164

Receivables from financial activities 8,091 - - 3,000 2,100

Total 27,166 5,769 5,947 21,207 17,264


Receivables from original insurance activities

29,949 2,772 3,404 8,921 8,895

Receivables from financial activities - - 3,000 1,500

Total 29,949 2,772 3,404 11,921 10,395

Credit risk

Credit risk is the risk that counterparty will not meet its ob-ligations under a financial instrument or customer contract, leading to a financial loss. The Corporation is exposed to credit risk from its operating activities (primarily for trade receivables from original insurance and reinsurance activi-ties) and from its financing activities, including deposits at banks and other financial instruments.

Trade receivables

The trade receivables, which subject to credit risk, include trade receivables come from original insurance and reinsurance ac-tivities, advances to customers and other receivable amounts subject to credit risk. Customer credit risk is managed by the Corporation based on its established policy, procedures and control relating to customer credit risk management.

The most significant of reinsurance receivables are reinsur-ance recoveries. To mitigate the risk of the counterparties

not paying the amount due, the Corporation has estab-lished certain business and financial guidelines for reinsurer approval, incorporating ratings by major agencies and con-sidering currently available market information. The Cor-poration also periodically reviews the financial stability of reinsurers from public and other sources and the settlement trend of amounts due from reinsurers.

Bank deposits and other financial instruments

The Corporation’s bank balances are mainly maintained with well-known banks in Vietnam. The Corporation evaluates the concentration of credit risk in respect to bank deposit is as low.

The Corporation’s management evaluate all financial assets are neither past due nor impaired as they related to recog-nized and creditworthy counterparties except for the fol-lowing receivables which are past due and impaired as at 31 december 2013.

Liquidity risk

The Corporation has to meet daily calls on its cash resources, notably from claims arising on its insurance contracts and early surrender of policies for surrender value. There is there-fore a risk that cash will not be available to settle liabilities when due at a reasonable cost. The Corporation manages this risk by monitoring and setting an appropriate level of

operating funds to settle these liabilities. Investment port-folios are also structured with regard to the liquidity re-quirement of each underlying fund, and early surrender penalties and market adjustment clauses are used to defray costs of unexpected cash requirements.

Provisions for impairment of the receivables were made under the Circular 228 and Circular 89.

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On demand Less than 1 year From 1 to 5 years Total

31 December 2013

Financial liabilities

Insurance payables 91,048,428,393 - - 91,048,428,393

Reinsurance payables 7,840,363,050 249,011,761,516 - 256,852,124,566

Accrued expenses 14,536,202,928 - - 14,536,202,928

Other payables 92,941,926,841 - - 92,941,926,841

206,366,921,212 249,011,761,516 - 455,378,682,728


31 December 2012





Other payables 67,882,257,809 - - 67,882,257,809

108,027,571,303 167,129,544,341 - 275,157,115,644

Currency: VNd

Đơn vị: đồng Việt Nam

1.5.30. suPPLEMENT NOTE ON FINANCIAL AssETs ANd FINANCIAL LIAbILITIEs PER CIRCuLAR 210

On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-bTC providing guidance for the adop-tion in Vietnam of the International Financial Reporting standards on presentation and disclosures of financial instru-ments (“Circular 210”) with effectiveness from financial years beginning on or after 1 January 2011. Circular 210 pro-vides the definitions of financial assets, financial liabilities and derivative financial instruments, equity instruments as well as presentation and disclosures of financial instruments.

As Circular 210 only requires the presentation and disclosure of financial instruments, the definitions of financial as-

Contractual maturity

The table below summarizes the maturity profile of the Corporation’s financial liabilities based on contractual undis-counted payments as at the reporting dates:

sets, financial liabilities and other relevant definitions as shown in Note 30 are applicable for preparing this note only. The assets, liabilities and equities of the Corporation still are recognized and accounting in accordance with the Vietnamese Ac-counting standards and Vietnamese Accounting system applicable for insurance companies and comply with the relevant statutory requirements.

Financial assets

Financial assets within the scope of Circular 210 include cash and short-term deposits, trade and other receivables, loan receivables, quoted and unquoted financial instruments.

According to Circular 210, for the purpose of disclosure in the consolidated financial statements, financial assets are classi-fied as appropriate into one of the following categories:

Financial asset recognized at fair value through profit or loss statements that satisfies either of the following conditions:

being classified as held for trading. A financial asset will be classified as securities held for trading if:

Tài sản tài chính được phân loại vào nhóm nắm giữ để kinh doanh. Tài sản tài chính được phân loại vào nhóm chứng khoán nắm giữ để kinh doanhhợp nhất, nếu:

• It is purchased or created mainly for the purpose of resale/redemption in a short term;

• There is an evidence that such instrument is traded for the purpose of gaining short-term profits; or,

• It is a derivative financial instrument (except derivative financial instruments identified as financial guarantee con-tracts or effective hedging instruments).

Held-to-maturity investments are non-derivative financial assets with fixed or identifiable payments and fixed maturity pe-riods which an entity has the intent and ability to hold until the date of maturity, with the exceptions of:

• Financial assets that, upon initial recognition, were categorized as such recognized at fair value through profit or loss statements;

• Financial assets already categorized as available for sale;

• Financial assets that meet the definitions of loans and receivables.

Loans and receivables are non-derivative financial assets with fixed or identifiable payments and not listed on the market, with the exceptions of:

• The amounts the entity has the intent to immediately sell or will sell in a near future which are classified as assets held for trading, and like those which, upon initial recognition, the entity categorized as such recognized at fair, value through profit or loss statements;

• The amounts categorized by the entity as available for sale upon initial recognition; or,

• The amounts whose holders cannot recover most of the initial investment value not due to credit quality impair-ment and which are categorized as available for sale.

Available-for-sale assets are non-derivative financial assets determined as available for sale or not classified as:

• Loans and receivables;

• held-to-maturity investments;

• Financial assets recognized at fair value through profit or loss statements.


Financial liabilities within the scope of Circular 210 include trade and other payables, loans and borrowings.

According to Circular 210, for the purpose of disclosure in the consolidated financial statements, financial liabilities are clas-sified as appropriate into one of the following categories:

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Financial liability recognized at fair value through profit or loss statements that satisfies either of the following conditions:

being classified as held for trading. A financial liability will be classified as securities held for trading if:

• It is purchased or created mainly for the purpose of resale/redemption in a short term;


• It is a derivative financial instrument (except derivative financial instruments identified as financial guaran-tee contracts or effective hedging instruments).

Financial liabilities measured at amortised cost, include financial liabilities that were not categorized as financial li-abilities at fair value through profit or loss statements.Offsetting of financial assets and financial liabilities

This table below presents carrying amount and fair value of the Corporation’s assets as at 31 December 2013 and as at 31 December 2012:

(*) For these items, of which the active market information was not available to determine their fair value at the reporting date, their carrying amounts were used instead.

Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Carrying amount Fair value

31 December 2013 31 December 2012 31 December 2013 31 December 2012

Cost (VND) Provision (VND) Cost (VND) Provision (VND) VND VND

Financial assets

Fair value through Profit and Loss 50,621,864,110 (627,797,905) 35,349,293,754 (4,197,954,161) 49,994,066,205 31,151,339,593

• Listed shares 50,621,864,110 (627,797,905) 35,349,293,754 (4,197,954,161) 49,994,066,205 31,151,339,593

Loan and receivables 1,539,189,506,001 (17,263,963,764) 1,237,352,504,408 (10,395,411,406) 1,521,925,542,237 1,226,957,093,002

Trade receivable 333,832,400,379 (15,163,963,764) 167,579,145,524 (8,895,411,406) 318,668,436,615 158,683,734,118Receivable from related parties 6,576,622,409 - 36,984,783,124 - 6,576,622,409 36,984,783,124Other receivable 44,164,337,380 (2,100,000,000) 13,814,742,430 (1,500,000,000) 42,064,337,380 12,314,742,430unlisted bonds (*) 195,045,833,333 - 197,145,833,330 - 195,045,833,333 197,145,833,330short term deposits 959,570,312,500 - 821,828,000,000 - 959,570,312,500 821,828,000,000

Available for sale 5,438,143,000 (162,000,000) 34,709,906,636 (8,599,332,190) 5,276,143,000 26,110,574,446

• unlisted shares (*) 5,438,143,000 (162,000,000) 5,438,143,000 (161,999,999) 5,276,143,000 5,276,143,001• Investment in bIdV Finance Investment Corporation (*) - - 29,271,763,636 (8,437,332,191) - 20,834,431,445

Other long-term investment 126,234,150,000 (17,283,004,056) 99,927,143,685 (16,939,899,164) 108,951,145,944 82,987,244,521

• Long- term deposit 50,144,150,000 - - 50,144,150,000

• Investment in Vinaconex-Viettel Finance Joint stock Corporation 50,000,000,000 - 50,000,000,000 - 50,000,000,000 50,000,000,000

• Investment in Lao Viet Insurance Company - - 23,837,143,685 - - 23,837,143,685

• Investment in Green Indochina development JsC (*) 26,090,000,000 (17,283,004,056) 26,090,000,000 (16,939,899,164) 8,806,995,944 9,150,100,836

Cash and cash equivalents 29,960,714,186 - 15,192,045,761 - 29,960,714,186 15,192,045,761

Total 1,751,444,377,297 (35,336,765,725) 1,422,530,894,244 (40,132,596,921) 1,716,107,611,572 1,382,398,297,323

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This table below presents carrying amount and fair value of the Corporation’s financial liabilities as at 31 December 2013 and as at 31 December 2012:


31 December 2013VND

31 December 2012VND

31 December 2013VND

31 December 2012VND


Loans and borrowings - - - -

Trade payables 339,008,640,626 183,992,249,585 339,008,640,626 183,992,249,585

Payable to related parties 8,904,453,568 2,447,952,178 8,904,453,568 2,447,952,178

Accrued expense 14,536,202,928 22,072,958,365 14,536,202,928 22,072,958,365

Other payables 92,929,385,606 66,643,955,516 92,929,385,606 66,643,955,516

Total 455,378,682,728 275,157,115,644 455,378,682,728 275,157,115,644

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following method and assumption are used to estimate the fair values:

• Cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

• Fair value of listed shares is determined based on the price on stock markets (which are the average prices on hanoi stock Exchange and the closing prices on ho Chi Minh City stock Exchange) as at 31 december 2013.

• Fair value of unlisted shares which have been registered in the unlisted public companies market (uPCom) is the average price of the trading market as at 31 december 2013.

• Fair value of unlisted shares which have not been registered in the unlisted public companies market (uPCom) is the average of public price quotations of at least three (03) reputed and large securities companies in the market.

1.5.32. EVENTs AFTER ThE CONsOLIdATEd bALANCE shEET dATE

1.5.31. APPROVAL FOR IssuANCE

There has not been any a matter or circumstance that has arisen since the balance date that has affected or may significantly affect the operations of the Corporation, the results of those operations or the state of affairs of the Corporation in subsequent periods.

The consolidated financial statements as at 31 december 2013 and for the year then ended were authorised for issuance by the Corporation’s General director on 28 February 2014.


Accountant of Financial and Accounting Division

Ms. Lai Ngan Giang

Director of Financial and Accounting Division

Mr. Ton Lam Tung

General Director


II. AudIted sepArAte FInAnCIAl stAtements 31 dECEMbER 2013

2.1. CorporAtIon InFormAtIon

bIdV INsuRANCE JOINT sTOCk CORPORATION (“the Corporation”) was established on 1 October 2010 under the business Licence No.11/GPdC7/kdbh dated 1 October 2010, issued by the Ministry of Finance.










General insurance products, reinsurance services, investing

activities and other business activities that are in line with

prevailing laws and regulations in Lao PdR

65%

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Charter Capital



The Corporation has its head office located at 16th floor, Tower A, Vincom City Towers, 191 ba Trieu street, hai ba Trung district, hanoi. As at 31 december 2013, the Corporation has twenty-two (22) branches nationwide.

Employees


Board of Directors

Members of the board of directors during the year and at the date of this report are:


MR. PhAM QuANG TuNG Chairman 1 October 2010

MR. TRAN XuAN hOANG deputy Chairman 1 October 2010 and resigned since

4 November 2013

Ms. Nguyen Thi Thanh Van Member 1 October 2010

Mr. Trinh Minh Tam Member1 October 2010 and resigned since

4 November 2013

Mr. Ton Lam Tung Member 4 November 2013

Mr. Le Ngoc Lam Member 4 November 2013

Ms. dang Thi hong Phuong Member 4 November 2013

Mr. dang Quang Vinh Member1 October 2010 and resigned since

4 November 2013

Board of Supervision

Members of the board of supervision during the year and at the date of this report are:

Legal Representative

The legal representative of the Corporation during the year and at the date of this report is Mr. Ton Lam Tung - Title: General director.

Auditors

The auditor of the Corporation is Ernst & young Vietnam Limited.

Board of Management

Members of the Management during the year and at the date of this report are:

Name Position Date of appointment

Mr. Cao Cu Tri head of board 1 October 2010

Mr. Nguyen Trung kien Member 1 October 2010

Mr. Nguyen Thanh Cong Member 16 March 2012


Mr. Ton Lam Tung General director 1 May 2012

Mr. Tran Trung Tinh deputy General director 1 October 2012

Ms. Nguyen Thi Thanh Van deputy General director1 October 2010 and resigned since 20 April

2013

Mr. Vu Minh hai deputy General director 16 April 2012

Ms. doan Thi Thu huyen deputy General director 1 May 2012

Mr. Tran hoai An deputy General director 1 April 2013

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2.2. report oF MANAGEMENTManagement is responsible for the separate financial statements of each financial year which give a true and fair view of the state of affairs of the Corporation and of its separate results and separate cash flow for the year. In preparing these separate financial statements, the Management is required to:

STATEMENT OF THE MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINAN-CIAL STATEMENTS

Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the state of affairs of the Corporation and of its consolidated results and consolidated cash flow for the year. In preparing these consolidated financial statements, the Management is required to:

• select suitable accounting policies and 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 going concern basis unless it is inappropriate to presume that

the Corporation will continue in business.

Management is responsible for ensuring that proper accounting records are kept, which disclose with reasonable accuracy at any time, and reflect truly the financial position of the Corporation and for ensuring that the account-ing records comply with the registered accounting system. It is also responsible for safeguarding the assets of the Corporation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Management confirmed that it has complied with the above requirements in preparing the accompanying separate financial statements for the year ended 31 december 2013.

sTATEMENT by MANAGEMENT

Management does hereby state that, in its opinion, the accompanying separate financial statements give a true and fair view of the financial position of the Corporation as at 31 december 2013 and of the separate results of its opera-tions and its separate cash flows for the year then ended in accordance with the Vietnamese Accounting standards and system applicable for insurance companies, and with the statutory requirements relevant to preparation and presentation of financial statements.

For and on behalf of Management:


Mr. Ton Lam TungGeneral Director

2.3. Independent AudItors’ reportTo: The shareholders of BIDV Insurance Joint Stock Corporation

We have audited the accompanying separate financial statements of bIdV Insurance Joint stock Corporation (“the Corporation”) as prepared on 28 February 2014 and set out on pages 112 to 159, which comprise the separate balance sheet as at 31 december 2013, the separate income statement and the separate cash flow statement for the year then ended and the notes thereto.

Management’s Responsibility

Management is responsible for the preparation and fair presentation of these separate financial statements in accordance with Viet-namese Accounting standards, Vietnamese Accounting system applicable to insurance companies and with the statutory require-ments relevant to preparation and presentation of financial statements, and for such internal control as management determines is necessary to enable the preparation and presentation of separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these separate financial statements based on our audit. We conducted our audit in accordance with Vietnamese standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the separate financial statements are free from material mis-statement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstate-ment of the separate financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers in-ternal control relevant to the entity’s preparation and fair presentation of the separate financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the separate financial statements give a true and fair view, in all material respects, the separate financial position of the Corporation as at 31 december 2013 and of the separate results of its operations and its separate cash flows for the year then ended in accordance with the Vietnamese Accounting standards and the Vietnamese Accounting system applicable to insurance companies and with the statutory requirements relevant to preparation and presentation of financial statements.

users of these separate financial statements should read them together with the consolidated financial statements of the Corpo-ration and its subsidiary as at 31 december 2013 and for the financial year then ended in order to obtain full information on the consolidated financial position, consolidated results of operations and consolidated cash flows of the Corporation as a whole.


Saman BandaraDeputy General Director Audit Practicing RegistrationCertificate No. 2036-2013-004-1

Le Duc LinhAuditor

Audit Practicing Registration Certificate No. 1672-2013-004-1

Ernst & young Vietnam Limited

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2.4. AudIted sepArAte FInAnCIAl stAtements2.4.1. sEPARATE bALANCE shEET (as at 31 december 2013)

Currency: VND

Code RESOURCES Notes Ending balance Beginning balance

100 A| SHORT-TERM LIABILITIES 1,307,181,843,022 1,129,206,701,858

110111112

I. Cash and cash equivalents1. Cash on hand2. Cash on banks

4 22,422,009,742547,650,628

21,874,359,114

15,192,045,761 405,322,679

14,786,723,082

120121128129

II. Short-term investments1. short-term investments in securities2. Other short-term investments3. Provision for impairment of short-term

investment

5 1,000,717,425,500100,507,223,405901,000,000,000

(789,797,905)

900,089,914,036 97,059,200,387 815,828,000,000

(12,797,286,351)

130131132133138139

III. Accounts receivable1. Trade receivables2. Advances to suppliers 3. deductible VAT4. Other receivables5. Allowance for doubtful debts

6 277,531,126,769247,812,937,447

2,000,007,3314,514,418,386

37,216,835,375(14,013,071,770)

207,983,259,672204,563,928,648

1,309,652,5005,858,667,6346,646,422,296

(10,395,411,406)

150151152153

IV. Other current assets1. Advances2. Prepaid3. Other current assets

6,511,281,0115,449,144,121

547,126,890515,010,000

5,941,482,3895,153,579,387

422,588,502365,314,500

200 B| NON-CURRENT ASSETS 267,802,065,694 275,329,379,682

210211212213217218219

I. Fixed assets1. Tangible fixed assets

• Costs• Accumulated depreciation

2. Intangible fixed assets Nguyên giá• Costs• Accumulated amortisation

7

8

16,522,663,4009,964,283,772

32,979,460,493(23,015,176,721)

6,558,379,6286,606,599,125

(48,219,497)

14,222,134,2227,722,134,222

32,374,997,225(24,652,863,003)

6,500,000,0006,556,057,850

(56,057,850)

220221222223

228229

II. Long-term investments• Long-term securities investments• Investments in subsidiaries• Investments in associates and joint-

ventures• Other long-term investments• Provision for impairment of long term

investments

99.19.29.2

9.39.4

243,612,849,277150,145,833,333

34,660,020,000-

76,090,000,000(17,283,004,056)

255,051,954,169170,145,833,333

-25,756,020,00076,090,000,000

(16,939,899,164)

Currency: VND

Currency: VND


240241242243244

III. Other long-term assets1. Compulsory deposit 2. Long-term deposits3. Long-term prepaid expenses4. deferred tax assets

107,666,553,017

6,000,000,00015,954,546

1,231,828,056418,770,415

6,055,291,2916,000,000,000

30,954,546 24,336,745

-

270 TOTAL ASSETS 1,574,983,908,716 1,404,536,081,540


300 A| LIABILITIES 797,036,220,021 644,189,880,626

310313314315316318319323

I. Short-term liabilities1. Trade payables2. Premium received in advance3. statutory obligations4. Payable to employees5. Acrued expenses 6. Other payables7. bonus and welfare funds

11

12

1314

356,254,708,324269,808,825,754

7,400,850,524 16,628,914,66831,799,561,51314,536,202,928 10,495,303,352

5,585,049,585

275,157,115,644 186,440,201,763 9,798,119,269

14,813,951,634 27,758,733,599

22,072,958,36510,089,711,694

4,183,439,320

340 II. Reserves 440,781,511,697 369,032,764,982

341343344

1. unearned premium reserve2. Claim reserve3. Catastrophe reserve

18.118.218.3

268,843,241,922 105,647,632,910

66,290,636,865

238,964,521,66974,944,817,505

55,123,425,808

400 B| OWNERS’ EQUITY 777,947,688,695 760,346,200,914

410411412414415416418

I. Owners’ equity• Charter capital • share premium• Treasury shares• Financial reserve • statutory reserves• Retained earnings

15777,947,688,695

660,000,000,000 4,875,765,330

- 1,800,187,891

13,311,197,165 97,960,538,309

760,346,200,914 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776

93,789,569,917

430 TOTAL LIABILITIES AND OWNER’S EQUITY 1,574,983,908,716 1,404,536,081,540

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Currency: VND

Items Ending balance Beginning balance

doubtful debts written off (VNd) 2,293,099,309 2,293,099,309

Insurance policies signed but for which no obli-gations have arisen on the part of the Corpora-tion (VNd)

48,588,799,997 39,202,269,093

Foreign currencies• united states dollar (us$)• Euro (EuR)

42,480.11270.49

281,097.76287.84

OFF BALANCE SHEET ITEMS



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director


2.4.2. sEPARATE INCOME sTATEMENT

For the year ended 31 december 2013

Currency: VND


01 1. Gross written premiums 16.1 792,263,387,574 670,376,718,737

02 2. Reinsurance premiums assumed 16.2 102,679,393,371 83,881,976,126

030406

3. deductions• Reinsurance premiums ceded• Premium returns

16.3(336,582,228,127) (333,958,823,366)

(2,623,404,761)

(271,477,927,604) (265,217,214,654)

(6,260,712,950)

08 4. Increase in unearned premium reserve 18.1 (29,878,720,253) (48,835,841,178)

09 5. Commissions on reinsurance ceded 88,507,963,297 77,395,256,583

1013

6. Other income from insurance activities• Income from other activities

34,069,658,259 34,069,658,259

18,451,048,467 18,451,048,467

14 7. Total operating revenues(14 = 01 + 02 + 03 + 08 + 09 + 10)

651,059,454,121 529,791,231,131

15 8. Claim expenses 17.1 (256,300,228,559) (254,393,282,386)

16 9. Claim expenses on reinsurance assumed 17.2 (34,992,702,221) (16,774,306,370)

17 10. Recoveries from reinsurance ceded 17.3 112,037,262,017 113,550,744,894

21 11. Net claim expenses on retained risks(21 = 15 + 16 + 17)

(179,255,668,763) (157,616,843,862)

23 12. Increase on claim reserve 18.2 (28,976,451,532) (7,611,976,396)

24 13. Provision for catastrophe reserve charged to the current year’s expense 18.3 (11,167,211,057) (14,483,423,018)

25 14. Other operating expenses• Commissions expense• Expenses of reinsurance ceded • Other underwriting expenses

(203,363,503,891) (94,292,765,547) (17,425,404,188) (91,645,334,156)

(159,499,304,720)(76,111,968,663)(19,111,504,064)(64,275,831,993)

41 15. Operating income (41 = 21 + 23 + 24 + 25) (422,762,835,243) (339,211,547,996)

42 16. Operating income (42 = 14 + 41) 228,296,618,878 190,579,683,135

44 17. Administrative expenses 19 (234,106,098,436) (198,953,844,088)

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45 18. Net operating (loss) (45 = 42 + 44) (5,809,479,558) (8,374,160,953)

46 19. Financial income 20 133,432,394,245 159,797,041,103

47 20. Financial expense 21 (14,856,654,199) (43,333,646,557)

51 21. Financial profit (51 = 46 + 47) 118,575,740,046 116,463,394,546

52 22. Other income 22 1,371,705,329 821,425,115

53 23. Other expenses 22 (852,295,654) (303,670,288)

54 24. Net other income (54 = 52 + 53) 519,409,675 517,754,827

56 26. Profit before enterprise income tax(56 = 45 + 51 + 54 + 55) 113,285,670,163 108,606,988,420

60 27. Enterprise income tax 23.1 (28,307,282,382) (26,659,457,570)

61 28. Net profit for the year after enterprise income tax (61 = 56 + 60) 84,978,387,781 81,947,530,850



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director

2.4.2. sEPARATE CAsh FLOW sTATEMENT

For the year ended 31 december 2013

Currency: VND


I| CASH FLOWS FROM OPERATING ACTIVITIES

01 Net profit before tax 113,285,670,163 108,606,988,420

Adjustments for:

02 depreciation and amortisation 2,318,549,996 3,769,906,918

03 Provisions 63,702,023,525 111,819,928,239

04 un-recognized foreign exchange difference expense - 87,461,428

05 Profits from investing activities (120,528,265,153) (124,383,587,178)

07 Interest expense 21 991,208,516 766,946,046

08 Operating income before changes in work-ing capital

59,769,187,047 100,667,643,873

09 (Increase)/ decrease in receivables (77,035,491,651) 76,337,380,911

11 Increase/ (decrease) in payables 72,154,865,460 (72,846,154,846)

12 Increase in prepaid expense (1,332,029,699) (180,775,491)

13 Interest paid (991,208,516) (766,946,046)

14 Corporate income tax paid (27,461,914,493) (27,257,237,657)

15decrease/(Increase) in receivables from other activities

1,434,761,419 (11,435,387,880)

20 Net cash inflows from operating activities 26,538,169,567 64,518,522,864

II| CASH FLOWS FROM INVESTING ACTIVITIES

21 Purchase and construction of fixed assets and other long-term assets (6,332,304,646) (9,522,289,281)

22 Proceeds from disposals of fixed assets and other long-term assets - 1,493,536

25Payments for investments in other entities/ payment for acquisition of a subsidiary, net of cash acquired

(1,257,167,426,157) (2,628,657,330,869)

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26 Proceeds from sale of investments in other entities/disposal of a subsidiary

1,181,651,779,454 2,510,265,876,483

27 Interest and dividends received 120,528,265,153 126,612,726,801

30 Net cash flows from investing activities 38,680,313,804 (1,299,523,330)

III. CASH FLOWS FROM FINANCING ACTIVITIES

sale/ (Purchase) treasury shares 15 6,557,533,810 (362,295,144)

Payment of finance lease liabilities - (542,138,757)

dividends paid (64,546,053,200) (64,923,388,000)

40 Net cash flows from financing activities (57,988,519,390) (65,827,821,901)

50 Net cash flows 7,229,963,981 (2,608,822,367)

60Cash and cash equivalents at the beginning of the year

15,192,045,761 17,800,852,232

61 Impact of exchange rate fluctuation - 15,896

70Cash and cash equivalents at the end of the year

4 22,422,009,742 15,192,045,761

Currency: VND



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director

2.5. notes to tHe sepArAte FInAnCIAl stAtements As at 31 december 2013 and for the year then ended

2.5.1 CORPORATION INFORMATION

bIdV INsuRANCE JOINT sTOCk CORPORATION (“the Corporation”) was established on 1 October 2010 under the business Licence No.11/GPdC7/kdbh dated 1 October 2010, issued by the Ministry of Finance

The Corporation was transformed from equitization of bIdV Insurance Company, which was a wholly-owned subsidi-ary of Joint stock Commercial bank for Investment and development of Vietnam (“bIdV”) and established under busi-ness License No 11GP/kdbh dated 10 April 2006 granted by the Ministry of Finance. On 5 August 2010, the Company successfully completed the Initial Public Offering of 11,682,491 shares, equivalent to 17.7% of its charter capital.









General insurance products, rein-surance services, investing activi-ties and other business activities

that are in line with prevailing laws and regulations in Lao PdR

65%

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2.5.2. bAsIs OF PREPARATION

Accounting standards and system

Charter Capital

As at 31 december 2013, the Corporation’s charter capital was 660 billions VNd (31 december 2012: 660 bil-lions VNd).


The Corporation has its head office located at 16th floor, Tower A, Vincom City Towers, 191 ba Trieu street, hai ba Trung district, hanoi. As at 31 december 2013, the Corporation has twenty-two (22) branches nationwide

Employee

Total number of employees of the Corporation as at 31 December 2013 was 628 persons (31 December 2012: 589 persons).

The separate financial statements of bIdV Insurance Joint stock Corporation, which are expressed in Vietnam dong (“VNd”), are prepared in accordance with 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 insur-ance enterprises, the accounting framework applied for en-terprises in decision 15/2006/QĐ-bTC dated 20 Mar 2006, in accordance with 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 Viet-namese standards on Accounting (series 1);

• decision No. 165/2002/Qd-bTC dated 31 december 2002 on the Issuance and Promulgation of six Vietnam-ese standards on Accounting (series 2);

• decision No. 234/2003/Qd-bTC dated 30 december

2003 on the Issuance and Promulgation of six Vietnam-ese 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 Viet-namese standards on Accounting (series 5).

The accompanying separate balance sheet, separate income statement, separate cash flow statement and related notes, including their utilisation are not de-signed for those who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the separate financial position and separate results of operations and separate cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

Applied accounting documentation system

Fiscal year

Accounting currency

Cash and cash equivalents

Receivables

The Corporation applied accounting documentation system is the Journal Ledger system.

The Corporation’s fiscal year applicable for the preparation of its separate financial statements starts on 1 January and ends on 31 december.

The separate financial statements are prepared in VNd which is also the Corporation’s accounting currency.

Cash and cash equivalents comprises cash on hand; cash at banks and short-term, highly liquid investments with an origi-nal maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.

Receivables comprise of trade receivables and other receivables that are initially recognized at cost and subsequently are recognized at cost.

Provision for impairment of receivables will be made based on their overdue ages. For undue receivables but those were owned by indebted economic organizations which fall bankrupt or are undergoing dissolution pro¬cedures, debtors are missing, have absconded, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or have de-ceased, these undue receivables should be estimated the irrecoverable loss for appropriating the provision. The increase or decrease to the provision balance is recorded as the administrative expense in the separate income statement.

The Corporation adopts the provision policy as promulgated by the Ministry of Finance in Circular 228/2009/TT-bTC dated 07 december 2009 (“Circular 228”) and Circular 89/2013/TT-bTC dated 28 June 2013 (“Circular 89”) which provides the amendments and supplements to Circular 228. details on the basis of provisioning are as follows:

Receivables overdue Allowance rate

From 6 months to less than one year 30%

From one to two years 50%

From two to three years 70%

Over three years 100%

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Tangible fixed assets

Intangible fixed assets

Depreciation and amortisation

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 as-set to working condition for its intended use.

Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs is

charged to the separate income statement.

When assets are sold or retired, their cost 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.

Intangible fixed assets are stated at cost less accumulated am-ortisation.

The cost of an intangible fixed asset comprises of its pur-chase price and any directly attributable costs of bringing the asset to working condition for its intended use.

Expenditure for additions, improvements and renewals are

capitalised and expenditure for maintenance and repairs is charged to the separate income statement.

When assets are sold or retired, their cost 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.

depreciation and amortisation of fixed assets and intangible assets is calculated on a straight-line basis over the estimated useful lives of these assets, which are as follows:

Prepaid expenses

Prepaid expenses are reported as short-term or long-term prepaid expenses on the balance sheet and amortised over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses.

Borrowing costs

borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. borrowing costs are recorded as expense during the period in which they are incurred.

buildings 8 - 25 years

Office equipments 3 - 7 years

Motor vehicles 6 - 10 years

Other tangible fixed assets 5 years

Accounting software 3 - 5 years

Land use right with indefinite term No amortization

Investments

Investment in securities


The Corporation’s investments in securities include invest-ments in equity securities and debt securities. Investments are categorised as short term and long term as follows:

• short-term investments comprise quoted and unquot-ed shares, government bonds, and corporate bonds, which are maturing within 12 months or intended to be held for not more than one year.

• Long-term investments include government bonds and corporate bonds which are intended to be held for more than one year.

All investments in securities (debts securities and equity securities) are initially recognised at cost and subsequently are recognized at cost during the holding period.

Investments in securities are subject to review for impair-ment. Provision for impairment is recorded when carrying value of the securities is higher than its market value at re-porting date. Any impairment losses are recognized in the Corporation’s separate income statement.

Other long term investments represent the Corporation’s capital investments in other enterprises where the Corpora-tion either owns less than 20% of voting right and is foun-dation shareholder; or strategic partner; or has significant influence on the process of preparation and making deci-sions on enterprise’s financial and operating policies under agreements with to have its personnel in the enterprise’s board of directors/ board of Management.

The investments are initially recognized at cost and subse-quently are recognized at cost during the holding period.

Other investments are subject to review for impairment. Any impairment losses are recognized in the Corporation’s separate income statement.

Provision for diminution in value of investment

Provision for impairment of investment securities is made for individual stock when the market value is lower than original cost. Provision amount for marketable securities is the difference between the original cost and market value of those securities at the balance sheet date in accordance with Circular 228 and Circular 89. Any increase or decrease in balance of provision is recognised to operating expenses for the year.

The market prices of listed securities are determined based on the price on stock markets (which are the average prices on hanoi stock Exchange and the closing prices on ho Chi Minh City stock Exchange) as at 31 december 2013.

The market values of unlisted shares which have been regis-tered in the unlisted public companies market (uPCom) is the average price of the trading market at the date of provision.

The market values of unlisted shares which have not been registered in the unlisted public companies market (uP-

Com) is the average of public price quotations of at least three (03) reputed and large securities companies in the market.

For other securities that have no market prices for purpose of making provision of impairment, the Corporation consid-ers to use book value of securities.

Provision for impairment of other long-term investments is made when the investees are suffering from loss (except for the expected loss identified in the busi-ness plan before the investment). Accordingly, provision is the disparity between parties’ actual investment into investees and actual owner’s equity multiplied (x) by the ra-tio of the Corporation’s investment compared with total investment by parties.

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Investment in subsidiaries

Repurchase agreements

Payables and accruals

Employee benefits

Investments in subsidiaries over which the Company has control are carried at cost.

distributions from accumulated net 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 consid-ered a recovery of investment and are deducted to the cost of the investment.

securities sold under agreements to repurchase at a specific date in the future are not derecognized from the separate financial statements. The corresponding cash received is recognized in the separate balance sheet as a liability. The difference between the sale price and repurchase price is amortized to the separate income state-ment over the term of the agreement using the interest rate stipulated in the contract.

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 Corporation.

Post-employment benefits

Post-employment benefits are paid to retired employees of the Corporation by the social insurance agency which belongs to the Ministry of Labour, Invalids and social Affairs. The Corporation is required to contribute to these post-employment benefits by paying social insurance premiums to the social insurance agency at the rate of 17% of employee basic salaries on a monthly basis. The Corporation has no further obligation concerning post-employment benefits for its employees other than this.

Unemployment insurance fund

According to social Insurance Law and decree No. 127/2008/Nd-CP dated 12 december 2008 by the Govern-ment, the unemployment insurance fund is implemented from 1 January 2009, to which, employees contribute 1% of their salary, employers contribute 1% of salary of their employees participating in the unemployment in-surance, and the Government contributes 1% of salary of all those participating in the unemployment insurance from the state budget.

Technical reserves

The technical reserves include (i) unearned premium reserve, (ii) claims reserve and (iii) catastrophe reserve. The reserving methodologies are based on Circular 125/2012/TT-bTC dated 30 July 2012 issued by the Ministry of Finance. details of such

reserving methodologies are as follows:

1| Unearned premium reserveThe Corporation applied the daily basis to calculate unearned premium reserve for all types of insurance and reinsurance businesses, following the formula:

2| Claims reserve


• Outstanding claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable, which is either notified to the insurer or requested for payment but is still unresolved at the end of the fiscal year after deducting the amount recover-able from reinsurers; and

• Reserve for incurred but not reported claims for which the insurer is liable (IbNR) is established based on the formula in Circular 125/2012/TT-bTC issued by the Min-istry of Finance on 30 July 2012.

3| 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 according to Circular 125/2012/TT-bTC dated 30 July 2012 issued by the Ministry of Finance.

On 28 december 2005, the Ministry of Finance issued de-cision 100/2005/Qd-bTC governing the publication of four new accounting standards, one of which is Vietnamese Ac-counting 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 pro-vision set out in decree 46/2007/Nd-CP issued by the Gov-ernment of Vietnam on 27 March 2007 regarding financial regulations for insurance enterprises, the Corporation has elected to adopt the policy of providing for the catastro-phe reserve at 2% of total retained premium for each line of business.

Retained premiums * Remaining day of insurance policy

Number of coverage daysunearned premium reserve =

The Corporation follows the guidance under Vietnamese Accounting standard No. 10 “The Effects of Changes in Ex-change Rates” (the “VAs 10”) and Circular 179/2012/TT-bTC providing guidance on recognition, measurement, treat-

ment for foreign exchange differences issued by the Ministry of Finance on 24 October 2012 (“Circular 179”) in relation to foreign currency transactions as applied consistently in prior year.

Transactions in foreign currencies

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Transactions in currencies other than the Company’s re-porting currency of [VNd/usd] are recorded at the ex-change rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denomi-nated in foreign currencies are translated at buying ex-change rate announced by the commercial bank where

the Company maintains bank accounts at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the income statement.

Treasury shares

Appropriation of net profits

Revenue recognition

Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit/ (loss) upon purchase, sale, issuance or cancellation of the Corporation’s own equity instruments.

Net profit after tax is available for appropriation to investors/shareholders after approval by the appropriate level of authority in the annual general meeting, and after making appropriation to reserve funds and remuneration to board of directors in accordance with the Corporation’s Charter and Vietnam’s regulatory requirements.

The Corporation maintains the following reserve funds which are appropriated from the Corporation’s net profit as proposed by the board of directors and subject to approval by shareholders at the annual general meeting:

• statutory reserve fund is set in order to supplement the Corporation’s charter capital and ensure its solvency. This fund shall be supplemented each year by deducting 5% of the Corporation’s annual profit after tax until it equals to 10% of the Corporation’s charter capital based on Circular 46/2007/Nd-CP dated 22 March 2007 by Ministry of Finance.

• bonus and welfare fund is set aside for the purpose of pecuniary rewarding and encouraging, common ben-efits and improvement of the employees’ benefits.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Corporation and the revenue can be reliably measured. The follow-ing specific recognition criteria must also be met be-fore revenue is recognised:

1| Gross written premium

Gross written premiums are recognized in accord-

ance with 125/2012/TT/bTC issued by the Ministry of Finance on 30 July 2012 (“Circular 125”) on financial re-gime applicable to insurers, reinsurers, insurance bro-kers and foreign non-life insurance branches. specifi-cally, 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 insur-ance premium. If the Corporation and its customers mutu-ally agree a method of insurance premium payment on an instalment basis, only the insurance premium which is due in accordance with the instalment contract shall be taken to revenue for the period. Prepaid premium before due date is recorded as “Premium received in advance” in the separate balance sheet as at the balance sheet date.

2| Interest

Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless recovery is

in doubt.

3| Dividends

Income is recognised when the Corporation’s entitlement as an investor to receive the dividend in cash is established. If Corporation is entitled to receive dividend in shares or bonus share, only the number of shares received will be re-flected in the share portfolio of the Corporation.

1| Claim expense

Claim expense is recognized at the point of time when the claim documents are completed and approved by author-ized persons. In case that the final claim amount has not been finalized but the Corporation is certain that the loss is within its insured liabilities and has paid an advance to the customer as per their request, such advance would also be recognized as claim expense. Any claim that is not yet ap-proved by authorized persons is considered as an outstand-ing claim and included in claim reserve.

2| Commission expense

Commission expense is recognized when incurred. Com-mission expense is calculated at percentage of gross written

premium and recognize in the separate income statement. The percentage of commission over the gross written pre-mium for specific line of insurance is stipulated in Circular 124/2012/TT-bTC dated 30 July 2012 issued by Ministry of Finance

3| Other general administrative expenses

Other general and administrative expense is recognized on accrual basis

4| Leased assets

Rentals paid under operating leases are charged to the separate income statement on a straight-line basis over the term of the lease.

1| Reinsurance ceded

Reinsurance premium ceded under treaty reinsurance agreements are recognized when gross written premiums within the scope of the treaty agreements are recognized.

Reinsurance premium ceded under facultative reinsurance agreements is recognized when the facultative reinsurance agreement has been entered into by the Corporation and

when gross written premiums within the scope of the facul-tative agreements are recognized.

Reinsurance recovery is recognized when there is evidence of liability on the part of the reinsurer.

Reinsurance commission is recognized when there is a cor-responding reinsurance premium ceded.

Expense recognition

Recognition of reinsurance activities

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2| Reinsurance assumed

Reinsurance assumed under treaty arrangement:

• Income and expenses relating to reinsurance as-sumed 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 but for which the cedants have not sent their statement of accounts are esti-mated based on the historical experience and the Corporation’s own estimate taking into account.

Reinsurance assumed under facultative arrangement:

• Reinsurance premium assumed is recognized when the facultative reinsurance agreement has

been entered into by the Corporation and a state-ment of account (for each facultative reinsurance agreement) has been received from the cedants;

• Claim expenses for reinsurance assumed is rec-ognized when there is evidence of liability of the Corporation and when a statement of account has been sent to the Corporation; and

• Reinsurance commission is recognized when the reinsurance premium is ceded and when a state-ment of account has been sent to the Corporation.

Taxation

Current tax

Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authori-ties. The tax rates and tax laws used to compute the amount are those that are enacted by 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 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 Cor-poration to set off current tax assets against current tax liabilities and when the Corporation intends to settle its current tax assets and liabilities on a net basis.

Deferred tax

deferred tax is provided using the balance sheet liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount for separate financial reporting purpose.

deferred tax liabilities are recognised for all taxable tem-porary 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 associ-ated with investments in subsidiaries and associates, and interests in joint ventures where timing of the reversal of the temporary difference can be con-trolled and it is probable that the temporary differ-

ence will not reverse in the foreseeable future.

deferred tax assets are recognised for all deductible tempo-rary differences, carried forward unused tax credit and un-used 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 rec-ognition 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 temporarily differences asso-ciated with investments in subsidiaries, associates, and interests in joint ventures, deferred tax assets are rec-ognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is re-viewed at each balance sheet date and reduced to the ex-tent that it is no longer probable that sufficient taxable prof-it 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 prob-able that future taxable profit will allow the deferred tax as-sets 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 is 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 le-gally enforceable right for the Corporation to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority on ei-ther the same taxable entity or when the Corporation intends either settle current tax liabilities and assets on a net basis or to realise the assets and settle the liabilities simultane-ously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

The preparation of the separate financial statements requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and assump-tions also affect the income and expenses and the resultant provisions. such estimates are necessarily based on assump-tions about several factors involving varying degrees of judgment and uncertainty and actual results may differ resulting in future changes in such provisions.

In accordance with the Vietnamese Accounting system for insurance companies, insurance policies that have been signed but for which no obligations have arisen on the part of the insurers are not recorded in the separate balance sheet until the premium is collected or the policies become effective.

Use of estimates

Off-balance sheet items

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2.5.4. CAsh ANd CAsh EQuIVALENTsương đương tiền


Cash on hand 547,650,628 405,322,679

In which: VNd 547,650,628 405,322,679

Cash at banks 21,874,359,114 14,786,723,082


20,970,836,083903,523,031

8,924,383,461 5,862,339,621

22,422,009,742 15,192,045,761

2.5.5. shORT-TERM INVEsTMENTs


short-term securities investments 100,507,223,405 97,059,200,387

• Listed shares• unlisted shares• Corporate bonds [5,1]

50,169,080,4055,438,143,000

44,900,000,000

35,349,293,751 34,709,906,636 27,000,000,000

Other short-term investments 901,000,000,000 815,828,000,000

• Term deposits in VNd• Term deposits in usd

901,000,000,000 -

795,000,000,000 20,828,000,000

Allowance for diminution of short-term investments value

(789,797,905) (12,797,286,351)

Net value of short-term investments 1,000,717,425,500 900,089,914,036

Issuer Term Coupon 31 December 2013 (VND)

Vietnam Electricity Construction Joint Stock Corporation 2 years 14,0% 4.900.000.000

Construction and Materials Trading Joint Stock Company 2 years 11,9% 40.000.000.000

44.900.000.000

Corporate bonds


Trade receivables 247,812,937,447 204,563,928,648

Receivable from direct insurance activities

Receivable from inward reinsurance

Receivable from outward reinsurance• Recoverable from settled claims• Commission receivables from reinsurance ceded

Receivables from financial activities

Other trade receivables

37,839,478,711

41,914,641,689

131,012,947,275 61,734,514,063 69,278,433,212

32,289,989,321

4,755,880,451

45,816,539,578

32,705,945,259

84,875,444,85341,709,311,05543,166,133,798

37,440,146,577

3,725,852,381

Advances to suppliers 2,000,007,331 1,309,652,500

deductible VAT 4,514,418,386 5,858,667,634

Other receivables (*) 37,216,835,375 6,646,422,296

Total receivables 291,544,198,539 218,378,671,078

Allowance for doubtful debts (14,013,071,770) (10,395,411,406)

Net trade and other receivables 277,531,126,769 207,983,259,672

2.5.6. ACCOuNTs RECEIVAbLE

(*) The amount as at 31 december 2013 included the overdue principal of one bond which matured on 15 december 2013 with total amount of VNd 30,000,000,000.

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2.5.7. TANGIbLE FIXEd AssETs

2.5.8. INTANGIbLE FIXEd AssETs

Computer software (VND) Land use right (VND) Total (VND)


• Newly purchased• Other increase

Closing balance

56,057,85065,000,000

(14,458,725)106,599,125

6,500,000,000--

6,500,000,000

6,556,057,85065,000,000

(14,458,725)6,606,599,125

Accumulated amortisationBeginning balance• Increase for the year• decrease for the yearClosing balance

(56,057,850)(6,620,372)14,458,725

(48,219,497)

----

(56,057,850)(6,620,372)14,458,725

(48,219,497)

Net book valueBeginning balanceClosing balance

-58,379,628

6,500,000,0006,500,000,000

6,500,000,0006,558,379,628

Buildings (VND) Office equipments (VND) Motor vehicles (VND) Other tangible fixed assets(VND) Total (VND)


• Newly purchased• Other increase

decrease• Other decrease (*)

Ending balance

2,300,000,000- ----

2,300,000,000

6,620,139,539 1,074,520,169 1,058,165,624

16,354,545 (5,415,847,183) (5,415,847,183) 2,278,812,525

23,118,328,758 5,160,194,556 5,160,194,556

- (76,705,200) (76,705,200)

28,201,818,114

336,528,928 119,550,000 119,550,000

- (257,249,074) (257,249,074) 198,829,854

32,374,997,225 6,354,264,725 6,337,910,180

16,354,545 (5,749,801,457) (5,749,801,457)

32,979,460,493

Accumulated depreciationBeginning balanceIncrease depreciation for the year Other increasedecreaseOther decrease (*)Ending balance

(78,728,030) (89,938,644) (89,938,644)

- -

(168,666,674)

(5,688,301,759) (158,747,639) (142,393,094)

(16,354,545) 3,837,102,205 3,837,102,205

(2,009,947,193)

(18,710,324,375)

(2,062,658,788) (2,062,658,788)

- 28,414,413 28,414,413

(20,744,568,750)

(175,508,839) (16,939,098) (16,939,098)

- 100,453,833 100,453,833

(91,994,104)

(24,652,863,003)

(2,328,284,169) (2,311,929,624)

(16,354,545) 3,965,970,451 3,965,970,451

(23,015,176,721)

Net book valueBeginning balanceEnding balance

2,221,271,9702,131,333,326

931,837,780268,865,332

4,408,004,3837,457,249,364

161,020,089106,835,750

7,722,134,2229,964,283,772

(*) during the year, the Corporation has reclassified those assets that no longer satisfy recognition crite-ria of fixed assets as required by Circular 45/2013/TT-bTC to long-term prepaid expenses.

2.5.9. LONG-TERM INVEsTMENTs


1. Long-term securities investments 9.1 150,145,833,333 170,145,833,333

2. Investment in subsidiaries 9.2 34,660,020,000 -3. Investment in associates andjoint-ventures

9.2 - 25,756,020,000

4. Other long-term investments 9.3 76,090,000,000 76,090,000,000

Total long-term investments 260,895,853,333 271,991,853,333

Provision for impairment of long-term investments 9.4 (17,283,004,056) (16,939,899,164)

Net value of financial long-term investments 243,612,849,277 255,051,954,169

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Long-term securities investments

Long-term securities investments include investments in bonds with the details as follow:

Issuer Term Annual rate Ending balance (VND)


Parent Company – Housing and Urban Develop-ment Corp

3 years 11.9% 50,000,000,000


Vietnam Prosperity Bank 3 years 10.0% 50,000,000,000

150,145,833,333


Other long-term investments include equity investments with details as follow:

Investment in subsidiaries, joint-ventures and associates

Investees%

ownedNumber of

shares Unit cost Amount (VND)

Green Indochina Development JSC 4.24% 1,000,000 26,090 26,090,000,000

Vinaconex – Viettel Finance JSC 5% 5,000,000 10,000 50,000,000,000

6,000,000 76,090,000,000

This is the investment in Lao – Viet Insurance Company. Following the Foreign Investment Certificate No. 146/bkh/ĐTRNN granted by the Ministry of Investment and Planning of Vietnam on 19 June 2008, the Corporation invested usd 1,530,000 to enter into a joint venture in Lao PdR to establish Lao - Viet Insurance Joint Venture Company (“LVI”) with the operating period of 50 years, of which the Corporation owns 51% of the total char-ter capital. In previous years, since the Corporation ac-counted for the investment in LVI using equity method, the Corporation has recognized the share of profit/ (loss) from LVI on proportionate basis.

On 2 August 2013, the Corporation increased its invest-ment in LVI with additional amount of usd 420,000 un-der the revised Foreign Investment Certificate No.146/bkh/ĐTRNN-ĐC1 granted by the Ministry of Investment and Planning of Vietnam, leading to the increase of the Corporation’s percentage direct ownership in LVI to 65% which gave the Corporation the controlling power of LVI, making LVI a subsidiary of the Corporation. For the pur-pose of preparing the separate financial statements, the Corporation accounted for this investment using cost method.

Provision for long - term investment

Provision for long-term investment is the provision for the holding of Green Indochina development JsC’ shares:

Investees Ending balance (VND) Beginning balance (VND)

Green Indochina Development JSC (17,283,004,056) (16,939,899,164)

(17,283,004,056) (16,939,899,164)

under the prevailing regulation, the Corporation has to maintain statutory insurance deposit equivalent to 2% of its legal capital.

Movement during the yearBeginning

balance (VND)Ending balance (VND)

Payableof the year (VND)

Paid (VND)

Value added tax 6,684,584,933 49,759,682,546 (49,939,049,886) 6,505,217,593

Enterprise income tax 4,968,020,319 28,726,052,797 (27,461,914,493) 6,232,158,623

Other taxes 3,161,346,382 11,557,538,468 (10,827,346,398) 3,891,538,452

14,813,951,634 90,043,273,811 (88,228,310,777) 16,628,914,668

2.5.10. COMPuLsORy dEPOsITs

2.5.11. TRAdE PAyAbLEs

2.5.12. sTATuTORy ObLIGATIONs


Payables relating to writing of direct insurance 15,682,805,233 12,791,747,413

Reinsurance assumed payables 16,898,050,762 12,907,267,659

Reinsurance ceded payables 233,973,541,086 159,502,884,398

Other payables 3,254,428,673 1,238,302,293

269,808,825,754 186,440,201,763

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2.5.13. ACCRuEd EXPENsE


Premium payables under Excess of Loss (“XOL”) contracts 5,362,910,416 4,500,000,000

Reinstated premium payables under XOL contracts 2,681,091,441 9,581,169,909

Compulsory fire and explosion and civil liabilities expense

2,051,468,477 1,222,000,000

Others (*) 4,440,732,594 6,769,788,456

14,536,202,928 22,072,958,365

(*) Others mostly include the accrued expenses for advertising, training, rental activities and audit fee.

2.5.15. OWNERs’ EQuITy

1.5.14. OThER PAyAbLEs


Payables for salary allowance 36,984,142 708,004,734

Received deposit, mortgage 1,352,121,926 1,788,909,800

Others 9,106,197,284 7,592,797,160

10,495,303,352 10,089,711,694

Charter capital (VND) Share premium (VND) Treasury shares(VND) Financial reserve (VND) Statutory reserves(VND) Retained Earnings (VND) Total (VND)

Balance at 1 January 2012 660,000,000,000 2,271,699,140 (6,215,238,666) 1,800,187,891 4,853,369,576 87,188,437,793 749,898,455,734

Payment for 2011 dividend - - - - - 84,178,164,009 84,178,164,009

Profit for the year - - - - - (65,000,000,000) (65,000,000,000)

Appropriation to statutory reserve fund of profit for 2012 - - - - 4,208,908,200 (4,208,908,200) -

Purchase of treasury shares - - (362,295,144) - - (362,295,144)

Appropriation to bonus and Welfare funds - - - - - (10,000,000,000) (10,000,000,000)

Remuneration to board of directors - - - - - (287,000,000) (287,000,000)

Other increase - - - - - 1,918,876,315 1,918,876,315

Balance at 31 December 2012 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776 93,789,569,917 760,346,200,914

balance at 1 January 2013 660,000,000,000 2,271,699,140 (6,577,533,810) 1,800,187,891 9,062,277,776 93,789,569,917 760,346,200,914

Payment of 2012 dividends - - - - - 84,978,387,781 84,978,387,781

Profit for the year - - - - - (65,000,000,000) (65,000,000,000)

Appropriation of profit to statutory reserves for 2013 - - - - 4,248,919,389 (4,248,919,389) -

sale of treasury shares - 2,604,066,190 6,577,533,810 - - - 9,181,600,000

Appropriation to bonus and Welfare funds - - - - - (11,500,000,000) (11,500,000,000)

Remuneration to board of directors - - - - - (58,500,000) (58,500,000)

Balance at 31 December 2013 660,000,000,000 4,875,765,330 - 1,800,187,891 13,311,197,165 97,960,538,309 777,947,688,695

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2.5.16. REVENuE FROM INsuRANCE busINEss

Gross written premiums




Cargo 53,292,562,675 33,466,369,392

Automobile 308,374,615,659 244,023,989,220

Fire 96,513,811,512 80,629,290,423

Liability 4,392,177,277 3,690,943,159

Business Risk 4,985,523,559 1,475,864,157

Aviation (*) 17,051,169,849 6,045,645,978


Financial and credit risk 1,550,214,287 10,406,580,892

Agriculture - -

792,263,387,574 670,376,718,737

(*) It included gross written premiums of VNd 13,684,064,304 under the policy No. 01120944 with the insured named Vietnam Airlines Corporation.

Reinsurance premiums assumed




Cargo 3,307,608,129 3,903,840,963

Automobile 1,328,138,766 2,875,858,971

Fire 7,209,792,632 4,827,909,601

Liability 273,147,603 584,287,882

Business Risk 4,344,349,110 992,444,521

Aviation 3,511,080,996 4,846,787,627

Hull and owner’s liability 1,756,165,800 836,204,637

Financial and credit risk 12,338,600 -

Agriculture 896,292,105 313,662,907

102,679,393,371 83,881,976,126


Health and Personal Accident 1,199,531,662 726,634,202


Cargo 36,454,794,345 23,251,954,020

Automobile 705,101,724 2,070,421,348

Fire 61,015,661,915 47,493,997,250

Liability 2,355,403,339 1,755,566,551

Business Risk 8,884,033,241 2,244,894,358

Aviation (*) 19,281,600,439 2,423,513,011


Financial and credit risk 699,310,028 9,360,800,320

Agriculture - -

333,958,823,366 265,217,214,654

(*) It included reinsurance premium ceded of VNd 13,491,670,159 under the policy No. 01120944 with the insured Vietnam Airlines Corporation.




Cargo 12,639,802,499 23,971,485,150

Automobile 109,556,827,124 102,909,404,834

Fire 67,658,270,599 44,577,160,972

Liability 770,450,487 520,079,331

Business risk 2,817,555,225 2,486,216,480

Aviation 660,326,512 320,863,102


Financial and credit risk - 24,683,046

Agriculture - -

256,300,228,559 254,393,282,386

2.5.17. CLAIM EXPENsEs

Gross claim expenses

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Claim expenses on reinsurance assumed




Cargo 492,629,530 118,797,242

Automobile 759,433,519 881,584,463

Fire 5,170,103,859 5,791,035,410

Liability 76,734,581 -

Business risk 58,116,862 -

Aviation 12,935,579,859 80,399,468

Hull and ship owner’s liability 2,071,264,859 70,917,908


Agriculture 887,011,872 60,644,445

34,992,702,221 16,774,306,370

Thu bồi thường nhượng tái bảo hiểm




Cargo 9,379,105,027 21,470,353,729

Automobile 256,924,164 479,784,512

Fire 43,289,363,057 42,588,824,164

Liability 610,265,844 245,765,583

Business risk 2,604,049,609 2,263,529,040

Aviation 12,608,206,930 338,256,433



Agriculture - -

112,037,262,017 113,550,744,894




Cargo 1,496,925,058 1,011,086,828

Automobile 153,517,258,586 131,038,393,223

Fire 20,711,379,274 17,149,739,258

Liability 1,775,749,472 1,943,487,540

Business risk 135,260,346 57,946,562

Aviation 136,313,926 5,705,064,922



Agriculture - -

268,843,241,922 238,964,521,669

The change in unearned premium reserve taken to expenses charged to the separate income statement for the year ended 31 december 2013 was VNd 29,878,720,253.

2.5.18. dỰ PhÒNG NGhIỆP VỤ

Dự phòng phí bảo hiểm

Dự phòng bồi thường




Cargo 7,665,586,434 1,707,376,190

Automobile 12,835,555,193 14,805,311,125

Fire 13,066,879,148 34,039,796,204

Liability 438,465,919 578,352,258

Business risk 240,932,425 300,474,078

Aviation 1,559,241,475 24,990,225



Agriculture 1,670,650,000 -

105,647,632,910 74,944,817,505

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Claim reserves include:

• Outstanding claim reserves were calculated based on loss estimate for each individual large claim, for which the Corporation is liable, which is either notified to the Corporation or requested for payment but is still unresolved as at 31 december 2013 after deducting the corresponding reinsurance recoveries. such reserves amounted to VNd 296,015,122,025 as at 31 december 2013, in which, the amount recoverable from reinsurers relating to these outstanding claims amounted to VNd 210,274,677,646;

• Reserves for claims incurred but not reported as at 31 december 2013, amounted to VNd 19,907,188,531. The increase in claim reserve of VNd 28,976,451,532 was charged to the separate income statement on a net basis, i.e. after deducting the corresponding reinsurance recoveries.

details of the catastrophe reserve provided as at 31 december 2013 are presented as follows:

The catastrophe reserve expense charged to the income statement for the period ended 31 december 2013 was VNd 11,167,211,057.

Catastrophe reserve

Product Ending balance (VND) Beginning balance (VND)



Cargo 2,084,516,708 1,683,681,578

Automobile 33,222,219,995 27,044,321,679

Fire 5,172,542,338 4,321,212,741

Liability 506,161,907 459,963,503

Business Risk 60,159,255 51,819,434

Aviation 529,734,225 268,546,944


Financial and credit risk 568,330,134 280,384,724

Agriculture 27,335,729 9,409,887

66,290,636,865 55,123,425,808

(*) In 2012, the Corporation had trusted investment contracts which mostly came bIdV. All these contracts were matured in 2012.

2.5.19. AdMINIsTRATIVE EXPENsEs

2.5.20. FINANCIAL INCOME

2.5.21. FINANCIAL EXPENsEs


Employees expenses 133,318,854,114 117,694,210,350

Depreciation expenses 2,318,549,996 3,769,906,918

Expenses for external services 73,743,985,301 58,427,462,242

Tool and equipment expense 13,904,681,884 9,554,633,488

Non-deductible value added tax 2,680,892,939 1,182,155,164

Provision for doubtful debt 3,017,660,364 2,562,308,970

Other expenses 5,121,473,838 5,763,166,956

234,106,098,436 198,953,844,088


Interest income from deposits at banks 88,327,335,835 131,664,955,429

Interest income from bonds 24,981,602,928 20,215,132,683

Dividends income 6,154,159,100 2,513,434,880

Foreign exchange gains 9,894,677,336 3,560,585,716

Gain on securities trading 4,068,379,848 1,842,707,236

Other financial income 6,239,198 225,159

133,432,394,245 159,797,041,103


Interest expense 991,208,516 766,946,046

Foreign exchange losses 10,142,489,430 3,328,619,205

Loss on securities trading 180,190,751 3,067,528,933

Interest expense of investments trusted (*) - 27,213,850,001

Provision for investment impairment 2,632,380,812 7,383,719,562

Other financial expenses 910,384,690 1,572,982,810

Chi phí hoạt động tài chính khác 14,856,654,199 43,333,646,557

16,459,588,462 43,333,646,557

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Current Enterprise Income Tax

2.5.22. OThER INCOME ANd EXPENsEs

2.5.23. ENTERPRIsE INCOME TAX


Other incomeProceeds on disposal of assetsOther income

6,463,6361,365,241,693

113,596,295 707,828,820

1,371,705,329 821,425,115

Other expensesExpenses on disposal of assetsOther expenses

- (852,295,654)

(45,193,059) (258,477,229)

(852,295,654) (303,670,288)

Net other income 519,409,675 517,754,827



Deferred Enterprise Income Tax (418,770,415) -

Enterprise Income Tax Expense 28,307,282,382 26,659,457,570

The Corporation is subject to paying Corporate Income Tax (“CIT”) at the rate of 25% of its taxable profits.

The Corporation’s tax returns are subject to examination by the tax authorities. because the application of tax laws and regulations is susceptible to varying interpretations, amounts reported in the separate financial statements could be changed at a later date upon final determination by the tax authorities.

The current enterprise income tax payable is determined based on taxable income for the year. Taxable profit distin-guishes from accounting profit reported on separate income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible for tax purpose. The Corporation’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date.

significant transactions with related companies during the year were as follows

The reconciliation between accounting profit and taxable profit is presented below:


Accounting profit before tax 113,285,670,163 108,606,988,420

Adjustments to increase 4,857,516,459 544,276,741

Non-deductible expenses 4,857,516,459 544,276,741

Adjustments to decrease (6,154,159,100) (2,513,434,880)

Tax exempt dividend income (6,154,159,100) (2,513,434,880)

Estimated current taxable profit 111,989,027,522 106,637,830,281

Estimated Current Enterprise Income Tax expense 27,997,256,881 26,659,457,570


Enterprise Income Tax payable at beginning of the year 4,968,020,319 5,565,800,406

Adjustment of tax payables for prior year 728,795,916 -

Enterprise Income Tax paid during the year (27,461,914,493) (27,257,237,657)

Enterprise Income Tax payable at the end of the year 6,232,158,623 4,968,020,319

2.5.24. TRANsACTIONs WITh RELATEd PARTIEs


JOINT STOCk COMMERCIAL BANk OF INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV)

Parent Gross written premium 64,526,814,617

Interest income from term deposit 61,105,851,672

bond interest income 5,635,753,424

Office rental expense 10,627,692,579

Claim expense 2,756,006,304

Commission expense 10,292,577,040

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BIDV LEASING COMPANY (BLC) Affiliate Gross written premium 1,051,464,583


Affiliate Interest income from term deposit 3,030,688,887

LAO VIET INSURANCE COMPANY subsidiaryAssumed reinsurance premium 47,079,976,279

Assumed reinsurance commission 8,531,387,869

Amounts due to and due from related companies at the separate balance sheet date were as follows:

Related company Relationship DescriptionReceivables

VNDPayables

VND

JOINT STOCk COM-MERCIAL BANk OF INVESTMENT AND DEVELOPMENT OF VIETNAM (BIDV)

Parent Current account 20,235,075,576 -

Term deposit 540,000,000,000 -


BIDV bonds 50,145,833,333 -

BIDV bond interest receivables 1,988,493,150 -

Compulsory deposit at BIDV 6,000,000,000 -

Premium receivables 914,777,189 -

Commission payables - 2,188,499,998

Office rental payables - 53,120,704

THE BANk OF INVEST-MENT AND DEVELOP-MENT OF CAMBODIA (BIDC)

AffiliateTerm deposit 45,000,000,000 -


LAO VIET INSURANCE COMPANY

subsidiary Ceded premium payable - 281,565,634

Ceded commission receivable 51,172,621 -

Assumed premium receivable 8,706,814,343 -

Assumed commission payable - 1,840,056,285

Assumed claim payable - 4,572,393,220

Recoveries from reinsurance ceded 176,321,346 -

Total 687,411,672,281 8,935,635,841

Remuneration to members of Management

Other directors’ interestsApart from amounts as mentioned above, members of Management are not entitled to any other benefits.


Salaries and bonus 2,916,029,570

Other benefits 556,111,000 455,000,000

4,120,147,141 3,371,029,570

2.5.25. INFORMATION ON sEGMENT REPORTING

2.5.26. CONTINGENT LIAbILITIEs

According to VAs 28, the reportable segments are defined as follows:

• A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of related products or ser-vices and that is subject to risks and returns that are dif-ferent from those of other business segments;

• A geographical segment is a distinguishable compo-nent of an enterprise that is engaged in providing prod-ucts or services within a particular economic environ-ment and that is subject to risks and returns that are different from those of components operating in other economic environments.

In the view of the Corporation, its member companies pro-vide same non-life insurance products, operate in the same economic, use the same processes and underwriting chan-nels that are standardized designed by The Corporation.

besides, the companies engaged in the same business risk, legal environment and have no other economic benefit with entities in other economic environment and the geographi-cal segment does not affect the scope of providing insur-ance service of those companies. Therefore, the Corporation does not have reportable segments which fit the definition of segmental disclosures as require by VAs 28.

Foreign contractor withholding tax

The Corporation has not provided for the potential foreign contractor withholding taxes from the offshore payments of reinsurance premiums ceded to overseas reinsurers from countries without double Tax Treaty with Vietnam for the period from 1 Jan 2005 to 31 december 2008. The po-tential tax risks relating to these issues are VNd1.6 billion for foreign contractor withholding tax.

For the year 2009, the Corporation has sufficiently made provision for potential tax obligation relating to reinsur-ance premium ceded to overseas reinsurer. however, for years 2010 up to date, the Corporation only accounted for the FCT on reinsurance premiums ceded to overseas reinsurers from countries without double Tax Treaty with Vietnam or from countries with double Tax Treaty with Vietnam but the reinsurers have not submitted adequate supporting documents.

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Capital and operating lease commitments

The Corporation leases office premises under an operating lease. Future rental amounts due under operating leases as at 31 december 2013 were as follows:

31 December 2013 (VND)

Operating lease commitments 6,965,697,648

In which:• Within one year• From 2 years to 5 years• More than 5 years

167,804,7276,797,892,921

-6,965,697,648

1.5.27. RIsk MANAGEMENT FRAMEWORk

The primary objective of the Corporation’s risk and finan-cial management framework is to protect the Corpora-tion’s shareholders from events that hinder the sustain-able achievement of financial performance objectives. The board of directors and Management recognise the importance of having efficient and effective risk man-agement systems in place.

The Corporation has established a risk management function which agreed clear terms of reference from the board of directors. This is supplemented with a clear or-

ganisational structure with documented delegated au-thorities and responsibilities from the board of directors to the Management and other senior management. A policy framework has been developed and implement-ed which sets out the risk profiles for the Corporation, risk management; control and business conduct stand-ards for the Corporation’s operations. Each policy has a member of the Management charged with overseeing compliance with the policy throughout the Corporation.

The primary insurance activity carried out by the Corpo-ration is the assumption of risk of loss from persons or or-ganisations that are directly subject to the risk. such risks may relate to property, liability, accident, health, finan-cial or other perils that may arise from an insurable event. As such the Corporation is exposed to the uncertainty surrounding the timing and severity of claims under the contract. The Corporation also has exposure to market risk through its insurance and investment activities.

The Corporation manages its insurance risk through un-derwriting limits, approval procedures for transactions that involve new products or those exceed set limits, risk diversification, pricing guidelines, reinsurance and moni-toring of emerging issues.

Risk management objectives, policies and processes for management of insurance risk

Governance framework

Capital management and regulatory framework

Underwriting strategy

Reinsurance strategy

The primary capital management objective of the Corpo-ration is to maintain a strong capital base to support the development of its business and to comply with regulatory capital requirements at all times. The Corporation recognis-es the impact on shareholders returns of the level of equity capital employed and seek to maintain a prudent balance.

Regulatory capital requirements arise from the operations of the Corporation require the Corporation to hold assets sufficient to cover liabilities and satisfy the solvency margin requirements in Vietnam. The principal solvency require-ments that apply to the Corporation is those set out in Cir-cular 125 issued by the Ministry of Finance.

The tables below summarise the minimum regulatory sol-vency margin for the Corporation and the solvency capital held against each of them. Regulators are primarily inter-ested in protecting the rights of policyholders and moni-tor them closely to ensure that the insurance subsidiaries are satisfactorily managing affairs for their benefit. At the same time, regulators are also interested in ensuring that the Corporation maintain appropriate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.

The Corporation’s underwriting strategy seeks the diversity for products, distribution channel and focus on the most profit-able products to ensure a balanced mix of business portfolio and is based on a large portfolio of similar risks over a number of years and, as such, reduces the variability of the outcome.

The Corporation reinsures a portion of the insurance risks it underwrites in order to control its exposures to losses and protect its capital, through treaty and facultative reinsur-ance arrangements. These reinsurance agreements transfer part of the risk and limit the exposure from each insured. The amount of each risk retained depends on the Corpora-tion’s evaluation of the specific risk, subject in certain cir-cumstances, to maximum limits based on characteristics of coverage. under the terms of the reinsurance agreements, the reinsurer agrees to reimburse the ceded amount in the

event the claim is paid. however, the Corporation remains liable to its policyholders with respect to ceded insurance if any reinsurer fails to meet the obligations it assumes.

Ceded reinsurance contains credit risk, and to minimise such risk, only those reinsurers meeting the Corporation’s credit rating standard, either assessed from public rating in-formation or internally investigations, will be used.

The solvency ratio of the Corporation is calculated based on the relevant regulators promulgated by the Ministry of Finance in Vietnam, which is an indicator of the overall solvency position of the relevant insurance operations.

Corporation Solvency Capital (VND million)

Minimum Solvency Margin (VND million)

SolvencyMargin Ratio

31 December 2013 657,684 135,140 487%

31 December 2012 715,124 120,695 593%

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The Corporation issues contracts that transfer insurance risk or financial risk or both. The following gives details of the Corporation’s main products and the ways in which it manages the associated risks.

2.5.28. MANAGEMENT OF INsuRANCE ANd FINANCIAL RIsk

Assumptions, changes in assumptions and sensitiv-ity analysisThe process used to determine the assumptions is in-tended to result in estimates of the most likely outcome. The sources of data used as inputs for the assumptions are internal, based on detailed studies that are carried out regularly. The assumptions are checked to ensure that they are consistent with other observable infor-mation. There is more emphasis on current trends, and where there is insufficient historical information, pru-dent assumptions are used.

The nature of the business makes it very difficult to pre-dict with certainty the outcome of any particular claim and the ultimate cost. Each notified claim is assessed on a separate case by case basis with due regard to the circumstances, information available from loss adjusters and historical evidence of similar claims. Case estimates are reviewed regularly and are updated as and when new information arises. The impact of many of the items affecting the ultimate costs of the loss is difficult to esti-mate. The provisions are based on information currently available. however, the ultimate liabilities may vary as a result of subsequent developments.

The key method in calculating the claim reserves is based on Circular No 125/2012/TT-bTC dated 30 July 2012 is-sued by the Ministry of Finance. details of such reserving

methodologies are as follows:


• Outstanding claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable, which is either notified to the insurer or requested for payment but is still unre-solved at the end of the fiscal year, in accordance to the Circular No 125/2012/TT-bTC; and

• Reserve for incurred but not reported claims for which the insurer is liable (IbNR).

The Corporation is calculating the reserve for incurred but not reported claims based on the following formula:

Insurance risk

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 three years

x

Indemnity for losses arising in the current

fiscal year

x

Net operating revenue of cur-rent fiscal year

x


claims of cur-rent fiscal year

Total indemnity for losses arising in the last three years

Net operating revenue of the previous fiscal

year


claims of previ-ous fiscal year

The Corporation issues general insurance contracts such as cargo, hull, aviation, engineering, fire, health and personal ac-cident, general indemnity and automobile. Risks under gen-eral insurance contracts usually cover twelve month duration.

The Corporation is exposed to risk of accumulation in view of the economic development across the country and flow of foreign investment in manufacturing and real estates, espe-cially in the major economic hubs such as ho Chi Minh City, hanoi, hai Phong, da Nang and dong Nai.

For general insurance contracts the most significant risks arise from climate changes and natural disasters. Vietnam has suffered heavily from catastrophes loss such as tropical typhoon, river flood, flash flood, heavy rain and landslide. It is expected that tropical typhoon will affect Vietnam regularly with the high severity and insured losses. In view of the ex-posures, the general insurance has arranged the reinsurance protection for the fire, engineering, motor, marine hull & car-go, fishing vessels portfolios against the catastrophe events to minimize the risks.

For longer tail claims that take over a year to settle; there is also inflation risk. These risks do not vary significantly in rela-tion to the location of the risk insured by the general insur-ance, type of risk insured and by industry.

The above risk exposure is mitigated by diversifying across a large portfolio of insurance products, distribution channels and selecting the low insurance products. The variability of risks is improved by careful selection and implementation of

underwriting strategies, which are designed to ensure that risks are diversified in terms of type of risk and level of in-sured benefits. This is largely achieved through diversification across industry sectors. Further, strict claim review policies to assess all new and ongoing claims, regular detailed review of claims handling procedures and frequent investigation of possible fraudulent claims are all policies and procedures put in place to reduce the risk exposure of the general insurance. The general insurance further enforces a policy of activity managing and promptly pursuing claims, in order to reduce its exposure to unpredictable future developments that can negatively impact the business. Inflation risk is mitigated by taking expected inflation into account when estimating in-surance contract liabilities.

The Corporation has also limited its exposure by imposing maximum claim amounts on certain contracts as well as the use of reinsurance arrangements in order to limit exposure to catastrophic events (e.g. typhoon and flood damages).

The purpose of these underwriting and reinsurance strate-gies is to limit exposure to catastrophes based on the gen-eral insurance’s risk appetite as decided by management. The management may decide to increase or decrease the maxi-mum tolerances based on market conditions and other fac-tors.

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Financial risk

The Corporation’s principal financial liabilities comprise trade and other payables. The main purpose of these finan-cial liabilities is to finance the Corporation’s operations. The Corporation has loan and other receivables, trade and other receivables, and cash and short-term deposits that arise di-rectly from its operations. The Corporation does not hold or issue derivative financial instruments.

The Corporation is exposed to market risk, credit risk and liquidity risk.

Risk management is integral to the whole business of the Corporation. The Corporation has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The man-agement continually monitors the Corporation’s risk man-agement process to ensure that an appropriate balance between risk and control is achieved.

Management reviews and agrees policies for managing each of these risks which are summarized below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity price risk. Financial instru-ments affected by market risk include loans and borrow-ings, deposits and available-for-sale investments.

The sensitivity analyses in the following sections relate to the position as at 31 december 2013 and 31 december 2012.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial in-struments in foreign currencies are all constant.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash

flows of a financial instrument will fluctuate because of changes in market interest rates. The Corporation’s expo-sure to market risk for changes in interest rate relates pri-marily to the Corporation’s cash, short-term deposits and corporate bonds.

The Corporation manages interest rate risk by looking at the competitive structure of the market to obtain rates which are favourable for its purposes within its risk management limits.

A sensitivity analysis is not performed for interest rate risk as the Corporation’s exposure to interest-rate risk is minimal at reporting date.

Foreign currency risk

Foreign currency risk is the risk of loss resulting from chang-es in foreign currency exchange rates. Fluctuations in ex-change rates between VNd and other currencies in which the Corporation conducts business may affect its financial condition and results of operations.

The foreign current risk facing the Corporation mainly comes from movements in the usd/VNd exchange rates. The Corporation seeks to limit its exposure to foreign cur-rency risk by minimising its net foreign currency position.

Major of the Corporation financial assets are denominated in VNd which mitigates the foreign currency risk. With as-sets denominated in foreign currency, most of them are in usd.

during the year, foreign exchange rate between VNd and usd fluctuated from 20,828 to 21,036 VNd/usd.

The table below indicates the effect of a reasonably possible movement of the usd rate against the VNd, with all other variables held constant, on the separate income statement and statement of financial position of the Corporation:

Change in variables Impact on profit before tax (VND)

Impact on equity (VND)

31 December 2013

+10% (3,710,918,654) (2,783,188,990)

-10% 3,710,918,654 2,783,188,990

31 December 2012

+10% (5,379,875,132) (4,034,906,349)

-10% 5,379,875,132 4,034,906,349

Equity price risk

The Corporation’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty about future values of the investment securities. The Cor-poration manages equity price risk by placing a limit on equity investments and prediction analysis of market. The Corporation’s board of Management reviews and ap-proves significant equity investment decisions.

At the reporting date, the exposure to listed equity se-curities at fair value was VNd 58,481,618,000 (31 de-cember 2012: VNd 35,349,293,751). A decrease of 10% on the stock market index could have an impact of ap-proximately VNd (1,841,992,514) (31 december 2012: VNd (2,994,964,679)) on the Corporation’s profit after tax, depending on whether or not the decline is signifi-cant or prolonged. An increase of 10% in the value of the listed securities would increase Corporation’s profit after tax by VNd 227,686,884 (31 december 2012: VNd 2,190,154,861).

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Corporation is ex-posed to credit risk from its operating activities (primarily for trade receivables from original insurance and reinsur-ance activities) and from its financing activities, including deposits at banks and other financial instruments.

Trade receivables

The trade receivables, which subject to credit risk, in-clude trade receivables come from original insurance and reinsurance activities, advances to customers and other receivable amounts subject to credit risk. Customer credit risk is managed by the Corporation based on its established policy, procedures and control relating to customer credit risk management.

The most significant of reinsurance receivables are rein-surance recoveries. To mitigate the risk of the counter-parties not paying the amount due, the Corporation has established certain business and financial guidelines for reinsurer approval, incorporating ratings by major agen-cies and considering currently available market informa-tion. The Corporation also periodically reviews the finan-cial stability of reinsurers from public and other sources and the settlement trend of amounts due from reinsurers.

Bank deposits and other financial instruments

The Corporation’s bank balances are mainly maintained with well-known banks in Vietnam. The Corporation eval-uates the concentration of credit risk in respect to bank deposit is as low.

The Corporation’s management evaluate all financial as-sets are neither past due nor impaired as they related to recognized and creditworthy counterparties except for the following receivables which are past due and im-paired as at 31 december 2013.

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Currency: VNd million

Past due but not impaired Past due and impaired

Provision for impairment

< 90 days 91–180days

181–360days

> 360days

As at 31 December 2013Receivables from original insurance activities 17,483 1,469 4,265 13,609 11,913

Receivables from financial activities 3,000 2,100

Total 17,483 1,469 4,265 16,609 14,013


Receivables from original insurance activities 29,949 2,772 3,404 8,921 8,895

Receivables from financial activities - - 3,000 1,500

Tổng 29,949 2,772 3,404 11,921 10,395

Provisions for impairment of the receivables were made under the Circular 228/2009/TT-bTC issued by the Ministry of Finance on 7 december 2009 (“Circular 228”) and Circular 89/2013/TT-bTC bTC issued by the Ministry of Finance on 28 June 2013 which provides the amendments and supplements to Circular 228

Liquidity risk

The Corporation has to meet daily calls on its cash resources, notably from claims arising on its insurance contracts and early surrender of policies for surrender value. There is therefore a risk that cash will not be available to settle liabilities when due at a reasonable cost. The Corporation manages this risk by monitoring and setting an appropriate level of operating funds to settle these liabilities. Investment portfolios are also structured with regard to the liquidity require-ment of each underlying fund, and early surrender penalties and market adjustment clauses are used to defray costs of unexpected cash requirements.

Contractual maturity

The table below summarizes the maturity profile of the Corporation’s financial liabilities based on contractual undis-counted payments as at the reporting date:



Nợ phải trả tài chính

Phải trả về bảo hiểm 18,935,919,207 - - 12,791,747,413

Phải trả về tái bảo hiểm 7,680,952,768 167,129,544,341 - 172,410,152,057

Chi phí phải trả 14,536,202,928 - - 22,072,958,365

Các khoản phải trả khác 71,910,994,341 - - 67,882,257,809

113,064,069,244 167,129,544,341 - 275,157,115,644








Other payables 67,882,257,809 - - 67,882,257,809

108,027,571,303 167,129,544,341 - 275,157,115,644


2.5.29. suPPLEMENT NOTE ON FINANCIAL AssETs ANd FINANCIAL LIAbILITIEs PER CIRCuLAR 210

On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-bTC providing guidance for the adoption in Vietnam of the International Financial Reporting stand-ards on presentation and disclosures of financial instruments (“Circular 210”) with effectiveness from financial years begin-ning on or after 1 January 2011. Circular 210 provides the def-initions of financial assets, financial liabilities and derivative financial instruments, equity instruments as well as presenta-tion and disclosures of financial instruments.

As Circular 210 only requires the presentation and disclosure of financial instruments, the definitions of financial assets, financial liabilities and other relevant definitions as shown in Note 29 are applicable for preparing this note only. The assets, liabilities and equities of the Corporation still are rec-ognized and accounting in accordance with the Vietnamese Accounting standards and Vietnamese Accounting system applicable for insurance companies and comply with the rel-evant statutory requirements.

Financial assets

Financial assets within the scope of Circular 210 include cash and short-term deposits, trade and other receivables, loan re-ceivables, quoted and unquoted financial instruments.

According to Circular 210, for the purpose of disclosure in the separate financial statements, financial assets are classified as appropriate into one of the following categories:

Financial asset recognized at fair value through profit or loss statements that satisfies either of the following conditions:

being classified as held for trading. A financial asset will be clas-sified as securities held for trading if:

• It is purchased or created mainly for the purpose of re-sale/redemption in a short term;


• It is a derivative financial instrument (except derivative financial instruments identified as financial guarantee contracts or effective hedging instruments).

Held-to-maturity investments are non-derivative financial assets with fixed or identifiable payments and fixed maturity periods which an entity has the intent and ability to hold until the date of maturity, with the exceptions of:

• Financial assets that, upon initial recognition, were cat-egorized as such recognized at fair value through profit or loss statements;

• Financial assets already categorized as available for sale;

• Financial assets that meet the definitions of loans and receivables.

Loans and receivables are non-derivative financial assets with fixed or identifiable payments and not listed on the market, with the exceptions of:

• The amounts the entity has the intent to immediately sell or will sell in a near future which are classified as as-sets held for trading, and like those which, upon initial recognition, the entity categorized as such recognized at fair, value through profit or loss statements;

• The amounts categorized by the entity as available for sale upon initial recognition; or,

• The amounts whose holders cannot recover most of the initial investment value not due to credit quality impair-ment and which are categorized as available for sale.

Available-for-sale assets are non-derivative financial assets determined as available for sale or not classified as:

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• Loans and receivables;

• held-to-maturity investments;

• Financial assets recognized at fair value throug profit

or loss statements Nợ phải trả tài chính


Financial liabilities within the scope of Circular 210 in-clude trade and other payables, loans and borrowings.

According to Circular 210, for the purpose of disclosure in the separate financial statements, financial liabilities are classified as appropriate into one of the following categories:

Financial liability recognized at fair value through profit or loss statements that satisfies either of the following conditions:

being classified as held for trading. A financial liability will be classified as securities held for trading if:

• It is purchased or created mainly for the purpose of

This table below presents carrying amount and fair value of the Corporation’s assets as at 31 December 2013 and as at 31 December 2012:

(*) For these items, of which the active market information was not available to determine their fair value at the re-porting date, their carrying amounts were used instead of.


31 December 2013 31 December 2012 31 December 2013 31 December 2012

Cost (VND) Provision (VND) Cost (VND) Provision (VND) VND VND

Financial assets

Fair value through Profit and Loss 50,169,080,405 (627,797,905) 35,349,293,754 (4,197,954,161) 49,541,282,500 31,151,339,593

• Listed shares 50,169,080,405 (627,797,905) 35,349,293,754 (4,197,954,161) 49,541,282,500 31,151,339,593

Loan and receivables 1,387,590,031,872 (14,013,071,770) 1,237,352,504,408 (10,395,411,406) 1,373,576,960,102 1,226,957,093,002

Trade receivable 247,812,937,447 (11,913,071,770) 167,579,145,524 (8,895,411,406) 235,899,865,677 158,683,734,118Receivable from related parties - - 36,984,783,124 - - 36,984,783,124Other receivable 43,731,261,092 (2,100,000,000) 13,814,742,430 (1,500,000,000) 41,631,261,092 12,314,742,430unlisted bonds (*) 195,045,833,333 - 197,145,833,330 - 195,045,833,333 197,145,833,330short term deposits 901,000,000,000 - 821,828,000,000 - 901,000,000,000 821,828,000,000

Available for sale 5,438,143,000 (162,000,000) 34,709,906,636 (8,599,332,190) 5,276,143,000 26,110,574,446

• unlisted shares 5,438,143,000 (162,000,000) 5,438,143,000 (161,999,999) 5,276,143,000 5,276,143,001

• Investment in bIdV Finance Investment Corporation (*) - - 29,271,763,636 (8,437,332,191) - 20,834,431,445

Other long-term investment 110,750,020,000 (17,283,004,056) 101,846,020,000 (16,939,899,164) 93,467,015,944 84,906,120,836

• Investment in Vinaconex-Viettel Finance Joint stock Corporation 50,000,000,000 - 50,000,000,000 - 50,000,000,000 50,000,000,000

• Investment in Lao Viet Insurance Company 34,660,020,000 - 25,756,020,000 - 34,660,020,000 25,756,020,000

• Investment in Green Indochina development JsC (*) 26,090,000,000 (17,283,004,056) 26,090,000,000 (16,939,899,164) 8,806,995,944 9,150,100,836

Cash and cash equivalents 22,422,009,742 (32,085,873,731) 1,424,449,770,559 (40,132,596,921) 1,544,283,411,288 1,384,317,173,638

Total 1,576,369,285,019 (35,336,765,725) 1,422,530,894,244 (40,132,596,921) 1,716,107,611,572 1,382,398,297,323

resale/redemption in a short term;


• It is a derivative financial instrument (except derivative financial instruments identified as financial guarantee contracts or effective hedging instruments).

Financial liabilities measured at amortised cost, include fi-nancial liabilities that were not categorized as financial li-abilities at fair value through profit or loss statements.

Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount reported in the separate balance sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously

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This table below presents carrying amount and fair value of the Corporation’s financial liabilities as at 31 December 2013 and as at 31 December 2012:


31 December 2013(VND)





Loans and borrowings - - - -

Trade payables 269,808,825,754 183,992,249,585 269,808,825,754 183,992,249,585

Payable to related parties - 2,447,952,178 - 2,447,952,178

Accrued expense 14,536,202,928 22,072,958,365 14,536,202,928 22,072,958,365

Other payables 71,909,679,642 66,643,955,516 71,909,679,642 66,643,955,516

Total 356,254,708,324 275,157,115,644 356,254,708,324 275,157,115,644

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following method and assumption are used to estimate the fair values:

• Cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

• Fair value of listed shares is determined based on the price on stock markets (which are the average prices on hanoi stock Exchange and the closing prices on ho Chi Minh City stock Exchange) as at 31 december 2013.

• Fair value of unlisted shares which have been registered in the unlisted public companies market (uPCom) is the average price of the trading market as at 31 december 2013.

• Fair value of unlisted shares which have not been registered in the unlisted public companies market (uPCom) is the average of public price quotations of at least three (03) reputed and large securities companies in the market.

2.5.30. CORREsPONdING FIGuREs

In previous year, the Corporation has classified the investment in Lao-Viet Insurance Company (LVI) as “Investment in joint-ventures and associates” and accounted for it using equity method and recognized its share of profit/ (loss) of LVI on the income statement..

In 2013, following the increase investment in LVI and since the Management assessed the Corporation have controls on this com-pany, the Corporation therefore reclassified this investment as “Investment in subsidiaries” instead of “Investment in joint-ventures and associates”. As a result of these changes, in addition to the consolidated financial statements, the Corporation, for the first time, has prepared the separate financial statements to present its separate financial position and the separate results of its operations the year then ended 31 december 2013 and accounted for this investment using cost method in the separate financial statement. The Corporation has adjusted the corresponding figure accordingly. details of such adjustments are as follows:

Extracted from balance sheet as at 31 December 2012

Extracted from Income statement for the year ended 31 December 2012

31 Dec 2012 (Previously presented)

VND

AdjustmentsVND

31 Dec 2012 (Presented on this separate

financial statement(VND)

Long-term investments (Previously presented) Adjustments 31 dec 2012

Retained earnings (Presented on this sepa-rate financial statement)

1,918,876,315 93,789,569,917

For the period ended 31 Dec 2012

(Previously presented)VND

Điều chỉnhVNĐ

For the period ended 31 Dec 2012

(Presented on this separate financial statement)

VND

share of the profit of the associate and joint venture 2,230,633,159 (2,230,633,159) -

2.5.31. EVENTs AFTER ThE sEPARATE bALANCE shEET dATE

2.5.32. APPROVAL FOR IssuANCE

There has not been any a matter or circumstance that has arisen since the balance date that has affected or may significantly affect the operations of the Corporation, the results of those operations or the state of affairs of the Corporation in subsequent periods.

The separate financial statements as at 31 december 2013 and for the year then ended were authorised for issuance by the Cor-poration’s General director on 28 February 2014.



Ms. Lai Ngan Giang


Mr. Ton Lam Tung

General Director

Annual Report

2013

BIDV INSURANCE CORPORATION

BIDV INSURANCE CORPORATION Floor 16, Block A, Vincom tower, 191 Ba Trieu Street, Hai Ba Trung district, Hanoi, VietnamTel: (84-4) 2.2200.282 / 18009456 - Fax: (84-4) 2.2200.281 - Email: [email protected]

Beyond InsuranceHotline 24/7 www.bic.vn

www.baohiemtructuyen.com.vn1800 9456

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