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Monthly ReportMonthly ReportJuly 2010July 2010

2010.07.30

Investment ,Finance and Accounting

Cathay Life (VN)

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I. This month activities

II. Finance market news

III. Vietnam Interest rate and FX

trend

IV. Business Result

V. Next month plan

Outline Outline

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1.This month activities1.This month activities

Internal and External Accounting report (P&L, Tax reports.Q2 P&L reportNew Cash management at Customer service to comply with internal audit report

The Budget performance: Alert departments has been over

against budget. Approval report must be prepared accordingly.The innovation & incentive program: Program has launched, encouraging the idea contribution from our staff

The Profit center project: the 6-month report has been released out to BOD, in which investment income has been allocated by branch office.

Accounting & FinanceAccounting & Finance

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1.This month activities1.This month activities

Enhance cash yield: Control amount/period of time deposits and seek possibility to earn higher interest rateNew counterparties for TD: BIDV 、 ACB 、 and Sacombank have been approved!Bonds management: Update market value/accrued interest periodically and seek opportunity to invest in other bonds Market watch: Follow up the evolution of financial market and seek opportunity to create other asset class

Investment Investment

II. Finance Market NewsII. Finance Market News

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I.Goldman Sachs bank and a penalty of $550 milI.Goldman Sachs bank and a penalty of $550 mil

**History**History

- G.S was accused of misstating and omitting facts in disclosure documents for “collateralized debt obligation (CDO)” product in 2007 by Securities and Exchange Commission (SEC)

- G.S was accused of misstating and omitting facts in disclosure documents for “collateralized debt obligation (CDO)” product in 2007 by Securities and Exchange Commission (SEC)

*Causes*Causes

-CDO is a deal between G.S and Paulson & Co., a Hedge fund. Paulson created the CDOs equity in 2007 and G.S sold to investors

-CDO is a deal between G.S and Paulson & Co., a Hedge fund. Paulson created the CDOs equity in 2007 and G.S sold to investors

II. Finance Market NewsII. Finance Market News

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I.Goldman Sachs bank and a penalty of $550 milI.Goldman Sachs bank and a penalty of $550 mil

**History **History

- Beside Paulson bet against this equity, it will get money if price reducing of this equity -> Paulson’s interest were sharply conflicting

- Beside Paulson bet against this equity, it will get money if price reducing of this equity -> Paulson’s interest were sharply conflicting - However G.S misrepresented to investors that ACA (an independent selection agent) had reviewed the mortgage package underlying the credit default obligations, and failed to disclose about Paulson & Co., roles

- However G.S misrepresented to investors that ACA (an independent selection agent) had reviewed the mortgage package underlying the credit default obligations, and failed to disclose about Paulson & Co., roles

II. Finance Market NewsII. Finance Market News

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I.Goldman Sachs bank and a penalty of $550 milI.Goldman Sachs bank and a penalty of $550 mil

**Result**Result- Paulson & Co., earned USD 1bil - G.S was paid USD 15 mil in the deal with Paulson - Paulson & Co., earned USD 1bil - G.S was paid USD 15 mil in the deal with Paulson - G.S has to pay a penalty USD 550mil in which: USD100 mil pay to ABN Amro USD150 mil pay to IKB Deutche Industriebank AG USD 300 mil to US government

- G.S has to pay a penalty USD 550mil in which: USD100 mil pay to ABN Amro USD150 mil pay to IKB Deutche Industriebank AG USD 300 mil to US government

II. Finance Market NewsII. Finance Market News

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II. Finance Market NewsII. Finance Market News

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II.AIG II.AIG *New CEO in Asia*New CEO in Asia-AIA New CEO Mr. Mark Tucker replace for Mr. Mark Wilson- AIA has been looking for investors to separate from AIG

-AIA New CEO Mr. Mark Tucker replace for Mr. Mark Wilson- AIA has been looking for investors to separate from AIG

** A Compensation USD725 mil** A Compensation USD725 mil- AIG agreed to pay USD 725mil to settle a long-running securities fraud lawsuit led by 3 Ohio public pension funds.- The lawsuit began Oct 2004, involved allegations that AIG engaged in accounting fraud, bid-rigging and stock price manipulation from Oct 1999 to April 2005

- AIG agreed to pay USD 725mil to settle a long-running securities fraud lawsuit led by 3 Ohio public pension funds.- The lawsuit began Oct 2004, involved allegations that AIG engaged in accounting fraud, bid-rigging and stock price manipulation from Oct 1999 to April 2005

III. The Market: Interest RatesIII. The Market: Interest RatesIII. The Market: Interest RatesIII. The Market: Interest Rates

Average Rate (for enterprises)

Group of Banks Currency Demand 3M 6 M 12 M

SOCBsVND 2.80 11.10 11.10 10.80

USD 0.25 1.00 1.00 1.00

JSCBsVND 3.30 11.10 11.20 10.90

USD 0.65 1.00 1.00 1.00

Interest rate is still on the down trend. -According to an agreement from Banking Association, banks committed to set deposit rate to a maximum 11.2%.

(Consequence) Help banks improve their profit structure, however some banks plan to slash lending rate as well.

(Outlook) Since the government is still trying to reduce the deposit interest rate, the deposit rate would be even lower in the future.1010

III. The Market: FX RatesIII. The Market: FX RatesIII. The Market: FX RatesIII. The Market: FX Rates

Trend of USD/VND3.4%17,491-18544

5.4%17,034-17961

(Reason) the rumor is that a scarcity of dollars would happen because of maturing loans.

(Outlook) the rumor is going on and the government is trying to improve the trade deficit . VND may keep depreciating slightly.

Notes: time series up to 21/7/2010

VND depreciated a little bit But generally speaking, it’s still stable.

-Official rate : 18544;

-Unofficial rate :around 19074;

-Black market: 19210

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IV. Business Result –Profit and LossIV. Business Result –Profit and LossIV. Business Result –Profit and LossIV. Business Result –Profit and Loss

Mar Apr May Jun YTD

Revenues 15,986 16,803 16,223 17,842 98,693

Expenses 18,223 18,307 19,125 18,580 104,704

Profits (2,236) (1,504) (2,902) (738) (6,011)

Budget 2010 (1,957) (1,916) (1,375) (2,277) (10,296)

Actual / Budget 2010 58%

0

50,000

100,000

150,000

Mar Apr May Jun YTD

-15,000

-10,000

-5,000

0 Revenues

Expenses

Profits

Budget2010

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IV. Business Result-Gross PremiumIV. Business Result-Gross PremiumIV. Business Result-Gross PremiumIV. Business Result-Gross Premium

Mar Apr May Jun YTD

Actual 2010 4,988 6,200 5,489 7,322 32,059

Budget 2010 7,215 7,419 8,063 8,403 43,687

Actual 2009 2,296 3,056 2,394 3,604 21,183

Actual / Budget 2010

Actual 2010 / Actual 200973%

151%1313

IV. Business Result-Sale ExpensesIV. Business Result-Sale ExpensesIV. Business Result-Sale ExpensesIV. Business Result-Sale Expenses

Mar Apr May Jun YTD

Actual 2010 4,698 5,125 5,709 4,989 27,523

Budget 2010 4,765 4,395 4,165 5,144 26,239

Actual 2009 1,326 4,127 3,105 4,585 18,867

Actual / Budget 2010

Actual 2010 / Actual 2009

105%

146%

0

1,000

2,000

3,000

4,000

5,000

6,000

Mar Apr May Jun

Actual 2010 Budget 2010 Actual 2009

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IV. Business Result-Administrative IV. Business Result-Administrative ExpensesExpenses

IV. Business Result-Administrative IV. Business Result-Administrative ExpensesExpenses

Mar Apr May Jun YTD

Actual 2010 8,796 8,944 9,698 8,547 52,569

Budget 2010 9,527 9,415 9,357 9,413 55,895

Actual 2009 8,720 7,257 8,705 8,013 45,635

Actual / Budget 2010

Actual 2010 / Actual 2009

94%

115%1515

IV. Business Result-Profit and Loss IV. Business Result-Profit and Loss by locationby location

IV. Business Result-Profit and Loss IV. Business Result-Profit and Loss by locationby location

Items HCM HN DN CT DNAI

Gross Premium 10.05 15.53 2.40 3.08 0.99

Direct expenses 8.68 12.87 1.94 2.16 0.80

Indirect expenses 16.22 21.15 4.29 5.14 2.23

Sale exp. Ratio 109% 115% 122% 101% 144%

Mngt exp. Ratio 76% 53% 82% 64% 80%

Ratio expense/sale (sua)

Ratio expense/sale (sua)

109%

115%

122%

101%

144%

76%

53%

82%

64%

80%

HCM

HN

DN

CT

DNAI

Mngt exp. Ratio

Sale exp. Ratio

% Sale exp: Sale exp /FYP

%Mngt exp: Admin. exp/ total revenue

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IV. Business Result-Profit and Loss IV. Business Result-Profit and Loss by locationby location

IV. Business Result-Profit and Loss IV. Business Result-Profit and Loss by locationby location

Items H.O. HCM HN DN CT DNAI

Gross Premium - 10.05 15.53 2.40 3.08 0.99

Investment 64.48 0.75 1.17 0.13 0.08 0.02

Total revenues 64.48 10.80 16.70 2.53 3.16 1.01

Direct expenses - 8.68 12.87 1.94 2.16 0.80

Indirect expenses 31.23 16.22 21.15 4.29 5.14 2.23

Total expenses 31.23 24.90 34.02 6.23 7.30 3.03

Profits 33.25 -14.1 -17.3 -3.7 -4.1 -2.02

Sale exp. ratio - 109% 115% 122% 101% 144%

Mngt exp. ratio 48% 76% 53% 82% 64% 80%

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Next month planNext month plan

Survey one more bank for salary payment

The Budget performance: Pay attention to monitor the 2010 budget as some departments has been over against budget.

The innovation & incentive program: Following up and update to BOD the staff contributions.Universal life product: Set-up the accounting process

Budget 2011 : Working on the plan and the template.

Accounting & FinanceAccounting & Finance

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Next month planNext month plan

Assessing the possibility to buy new bonds.Keep following the progress of fund management company with ICC.Keep following up financial market and hold monthly topic presentation regarding investment issueKeep enhancing cash yield.

Investment Investment

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The EndThe End