ANNUAL REPORT 2014 - Baoviet Tokio...

ANNUALREPORT

2014

BAO VIETTOKIO MARINEAnnual Report 2014

BAO VIET TOKIO MARINE Annual Report 2014

Message from General Director

Overview - Mission - Vision - Core Value

History

Corporate Profile

Shareholders

Management Team

Products & Services

Financial Highlights

Corporate Social Responsibility

Audited Financial Statements

General information

Balance sheet

Income statement

Cash flow statement

Notes to the financial statements

02

03

04

05

06

07

08

11

12

13

14

19

23

26

28

CONTENTS

BAO VIET TOKIO MARINE Annual Report 2014 01


MESSAGE FROM GENERAL DIRECTOR

Hideki MishimaGeneral Director

First, I would like to extend my sincere gratitude to all of you for your continued trust and support to our Bao Viet Tokio Marine Insurance Company (BVTM) during the past year. Thanks to such tireless contribution of all concerned, we have a successful 2014 with the achievement of both top and bottom line business targets. And are really proud of the significant progress we have made over the whole year to realize our business plan despite the face of challenges in such a volatile market condition these days.

In 2014, by undertaking a thorough review of our business structure and working towards the philosophy of “Good Company”, we were better placed to enhance our strengths in both operation practices and corporate culture.

One of the most critical improvements we have made during the year is by following a strong team approach in servicing clients as we deeply look beyond profit to act with integrity for the benefits of our customers. In such way, cross-department co-operation strategy was set up with the involvement of all functional business unit leaders from marketing, claims, underwriting and risk management to discuss and define the best service practices that meet various demands of clients during their course of insurance. This integrated team coordinates overall response from a clients’ demand for insurance product to clients’ major loss. This is not only valuable in making customers more satisfied with our tailored comprehensive insurance schemes, high quality risk management consultancy services and more professional claims settlement procedure but also better utilizing our internal capacity & talent through enhancing employee engagement and teamwork skill.

Besides, we also maintained and developed our value added services provided to clients. During 2014, over 200 loss control surveys & risk management trainings were conducted with over 250 technical reports produced, which served as a tool to support

clients in reviewing any risk exposure and developing appropriate risk prevention measures. Moreover, an intensive risk management program with various scopes of activities such as organizing risk management seminars, producing crisis reports or risk maps were designed for our key clients with the support of experienced Tokio Marine Holding experts, which was highly appreciated by our clients as a valuable program for recognizing possible business risks and improving risk countermeasures.

As a result, in the face of numerous challenges in the market, we were pleased what we have reaped at the end of the year. Our total gross written premium reached VND 351 billion with a positive growth rate of 9.8%. At the same time, both underwriting profit and profit before tax results were beyond business plan by 7.8% each, showing our success of monitoring loss situation and operating expenses.

As I see it, 2015 is a particularly critical year as we are now entering a remarkable phase to welcome our 20th anniversary in 2016 and an aggressive mid-term business plan 2015 – 2017. To welcome this exciting milestone, I have delivered my message to all BVTM members through our corporate annual conference at the beginning of this year to stay highly focused on new corporate initiatives and constantly seeking self-improvement with positive thinking and forward looking to the market. In that sense, we are committed to not only enhancing our risk screening capacity but also pursuing bold innovation to bring about safety and a peace of mind to customers and local community through higher quality service and better-designed helpful insurance products.

As we are working to achieve this growth, I would very much appreciate your continued support. Our best days are ahead of us, and we are determined to take a definitive step to deliver a more valuable BVTM to all of you.

OVERVIEW Establshed in 1996. Bao Viet Tokio Marine (previously known as Vietnam International Assurance Company – VIA) was the first foreign insurance investment joint-venture in Vietnam with its current partners being Baoviet Holdings – a leading Finance-Insurance group in Vietnam and Tokio Marine - a leading giant insurance group in Japan. Baoviet Tokio Marine provides non-life insurance products and services for al international and domestic clients including both organizations and individuals in accordance with Viet Nam’s Law.

Mission BVTM will be the BEST QUALITY insurance company in Vietnam through providing excellent products, services & delivering satisfaction to all stake holders with sustainable growth.

Vision - Expanding business in to strengthen “Corporate Value”- Being a respected company- Being a happy place to work

Core value



HISTORY

05 AUG 1996 Vietnam International Assurance Company (VIA) was established by 3 shareholders Bao Viet (51%), Commercial Union (24.5%) and Tokio Marine (24.5%), being the very first insurer with foreign investment in Vietnam. The Company had the legal capital of USD 6,000,000 and was based in Ho Chi Minh City

19 DEC 1997 Hanoi Branch Office was established and started market penetration in the North of Vietnam

09 JAN 2002 Tokio Marine purchased the shares of Commercial Union. Since then, the capital ratio has been 49% from Tokio Marine and 51% from Bao Viet

08 OCT 2002 The Legal Capital was increased from USD 6,000,000 to USD 6,200,000

14 JAN 2009 The Chartered capital was VND 300,000,000,000. The Company acquired full business license to provide insurance services to all clients in Vietnam

25 MAY 2009 A Representative Office was established in Da Nang

04 SEP 2009 Head Office was relocated to Hanoi

10 SEP 2010 Vietnam International Assurance Company was renamed to “Baoviet Tokio Marine Insurance Joint Venture Company”

24 APR 2012 A Representative Office was established in Hai Phong

01 DEC 2013The company has changed its name from Bao Viet Tokio Marine Insurance Joint Venture Company into Bao Viet Tokio Marine Insurance Company Limited

Less than 10 people

Less than 10 people

18 people

18 people

76 people

76 people

76 people

79 people

91 people

99 people


Name

Establishment

Address - Head Office

- Branch Office

- Rep. Office

Charter capital

Capital contributors

Tokio Marine Asia Pte. Ltd

Members’ Council - Chairman - Vice-chairman - Members

Trademark

This dynamic infinity shaped figure of the symbol icon represents our ever-lasting improving and exceptional service.

At the same time this is a symbol of combination of the local expertise of Baoviet Group and global excellence of Tokio Marine, which shall be two consolidated motivations of the sustainable development of our Company.

This Logotype symbolizes our commitment for the trust, reliability and firmness. For the Logotype we applied the dark blue color, which stands for friendliness, professionalism and expertise.

Also gold color is applied to the Infinity Shaped icon, implying that prosperity and bright future shall come to and remain indefinitely with all stakeholders including our customers, business partners, employees and social community.

Bao Viet Tokio Marine Insurance Company Limited

1996

Room 601, 6th Floor, Sun Red River Building, 23 Phan Chu Trinh Street, Hoan Kiem District, Hanoi, Vietnam 19th Floor, Green Power Building, 35 Ton Duc Thang, Dist. I, Ho Chi Minh City, Vietnam- Da Nang: Room 503, 5th Floor, Thanh Loi Building, 135 Nguyen Van Linh, Thanh Khe Dist., Danang City- Hai Phong : 8th Floor, Harbour View Office Tower, 12 Tran Phu, Ngo Quyen, Hai Phong, Vietnam

VND 300,000,000,000

51 %

49%

Ms. Than Hien Anh (From 3rd April 2015) Mr. Arthur LeeMr. Hideki Mishima - General DirectorMr. Ha Vu Hien - Deputy General DirectorMr. Nguyen Anh TuanMr. Yoshinori Fukaura (From 1st December 2014)

CORPORATE PROFILE

Symbol (icon) Logotype


1. BAO VIET GROUPBao Viet has now become the leading Finance – Insurance

Group in Vietnam, providing products and services in terms of life insurance, non-life insurance, securities, banks and other financial activities.

Since its establishment in 1964 until 1994, Vietnam Insurance Corporation (known as Baoviet) was the only one insurer operating in Vietnam which provided non-life insurance services. Since the opening of the market where many other players including Bao Minh, VINARE, Bao Long, etc. gained entry into the market, Bao Viet has still kept its leading position regarding insurance business until now.

In 1996, Baoviet also became the first insurer in Vietnam that provided life insurance services.

Baoviet now has presence in all 64 provinces, providing both non-life and life insurance products as well as other financial services such as banking, securities, fund and asset management.

In 2007, Vietnam Insurance Corporation became Bao Viet Holdings. With enormous financial capability, thorough knowledge of the domestic market, and being the sole enterprise in Vietnam doing business in both life and non-life insurance, Bao Viet owns a strong and prestigious trademark in insurance - financial industry as a long-standing and trustworthy insurer to all organizations and all people from a variety of social strata.

2. TOKIO MARINE GROUPThe other shareholder of Baoviet Tokio Marine is Tokio Marine Asia Pte. Ltd., a member of Tokio Marine Group – a top-tier global insurance group engaging in life and non-life insurance, reinsurance, and takaful insurance businesses. Dating back to 1879, The Tokio Marine Insurance Company was established as the first Japanese non-life insurance company specializing in marine cargo insurance.

The Company then expanded to non-marine business and changed its name to Tokio Marine & Fire Insurance Company in 1918 before entering into the US market. Up till now the Company has accumulated a century worth of experience in the insurance industry with the expansion of operations in almost all countries worldwide. In 2002, together with Nichido Fire Company (a company established in 1914), Tokio Marine Insurance & Fire Insurance Company established Tokio Marine Holdings.

Tokio Marine Asia Pte. Ltd. was established as a subsidiary of the holdings company and operates as the Asia-Pacific Regional Head Quarter. The Tokio Marine Holdings was Japan’s first publicly owned holding company that completely integrated life and non-life insurance operations. Since then, together with retaining a focus on life and non-life insurance operations in Japan, the holding company has strengthened the group’s business portfolio and used the operations of its subsidiaries to capture synergies.

On October 1, 2004, Tokio Marine & Nichido Fire (TMNF) was formed as a result of a merger between The Tokio Marine & Fire Insurance Co., Ltd. and The Nichido Fire and Marine Insurance Co., Ltd. Since then, TMNF has been maintaining a leading role in Japanese insurance industry with a broad network of as many as 250 Claim Settling Agents throughout the world. The Tokio Marine & Nichido brand, widely recognized in Japan and overseas, and its financial strength is now being used by the holdings company as the flagship company in the insurance industry. Tokio Marine Holdings, Tokio Marine & Nichido Fire, Tokio Marine Asia and all the subsidiaries and affiliates of these entities including Baoviet Tokio Marine form the Tokio Marine Group, a top-tier global insurance group.

SHAREHOLDERS


MANAGEMENT TEAM

Mr. Ha Vu HienDeputy General Director

Ms. Than Hien AnhChairwoman

Mr. Arthur LeeVice Chairman

Mr. Yoshinori FuakuraMC Member

Ms. Phuong Tu LinhGeneral Manager

Mr. Ken KogaHCM Branch Director

Mr. Kazuhiro TamuraGeneral Manager

Mr. Makoto YamashiroGeneral Manager

Mr. Mai Hong VietGeneral Manager

Ms. Huynh Thi Ngoc TamGeneral Manager

Mr Nguyen Anh TuanMC Member

Mr. Hideki MishimaGeneral Director

Ms Duong Thi Thanh ToanChief Accountant


2. PRODUCTS a. Marine Cargo Insurance

More than 100 years of experience in Marine Cargo insurance of Tokio Marine Group enables us to perfectly understand your needs and design our Marine Cargo Insurance product, basing on standard Institute Cargo Clauses (A), (B) or (C), to best protect your cargo against physical losses, expenses and damages during transit, including but not limited to following special features:

- Stock throughput policy

- Designated worldwide master policy for Multinational transport cargo

On the other hand, the broad network of as many as 250 Claims Setting Agents throughout the world of

Tokio Marine Group allows us to provide response quickly and effectively when your goods suffer loss or damage

b. Property Insurance

We write property insurance for a wide range of customers, from smaller business owners to large corporations to provide your business with the comprehensive insurance coverage from property’s damage as well as any business interruption loss caused by fire, natural disaster, or other damage with sudden occurrence.

With a broad suite of products in the insurance industry, a team of experiment risk engineering, property underwriting and claims professionals and our property solution, we are committed to helping you prevent loss and recovery quickly and manage property risks confidently and effectively.

c. Engineering Insurance

Mechanical and electrical contracts for the construction of buildings, towers, erectors of platforms, etc. are complex projects and exposed to accidental or unforeseen loss, damage or liability during the construction or erection period, as well as equipment and electronic damage or loss. A suitable insurance cover should provide the peace of mind to the owner of the project as well as to the contractor. You can rely on our Innovative and Comprehensive Engineering Protection which is categorized into two branches:

• Project Engineering:

- Construction All Risks Insurance

- Erection All Risks Insurance

• Non Project Engineering:

- Machinery Breakdown Insurance

- Electronic Equipment Insurance

- Others

Tailor-made policies can be designed to meet your specific demands.

d. Motor Insurance

According to Vietnamese Law, Motor Insurance is a compulsory class for all the vehicles licensed to be used on public roads. With our insurance policy, your vehicles will receive the comprehensive protection including the physical damage, third party liability and also the personal accident for the motorists due to any accidents that they might cause or be involved in. Buying insurance means You will not be worry about the risks like an accident, fire which suffer and cause an injury or death. In additional, we also offer you the broader coverage with the best benefits:

- Partial Theft Coverage

- Damaged vehicles to be repaired at Authorised Nominated Garage

- Water Damage Coverage

- Car Substitution Expense while your car is kept by

- The police for accident investigation

PRODUCTS & SERVICES


e. Liability Insurance

Since the liability insurance has become increasingly popular with an increasing number of liability lawsuits being filed ever year, we have developed our Liability Insurance to provide important coverage that organizations need in today’s challenging times. This policy shall indemnify you in respect of your legal liability to someone who suffers:

• Bodily injury

• Loss of or damage to property

We will pay the amount of any court award or reasonable negotiated “out of court” settlement plus costs and expenses arising in connection with the claim and other expenses which have been incurred.

f. Personal Accident Insurance

In daily life, an accident could be just around the corner and could come at the most unexpected time. You can minimize these unforeseen events by choosing the suitable insurance coverage from our Personal Insurance products. This will ensure you and your family members, your employees, etc. to have the best protection against the unfortunate accident.

The coverage can be included all cases of injury caused by accident for:

• Death or Permanent Disablement

• Temporary Disablement

• Medical Expenses

g. Workers’ Compensation Insurance

Almost every company from small size with a few loyal employees to large chains with many employees at any level, workers’ compensation insurance is always necessary. This insurance does not only provide the compensation to your staff but also protect you, the employer, from the legal liability against your employee benefits. For this reason, our Workers’ Compensation Insurance is designed to indemnify for death or disability arising from the bodily injury caused by accident or disease in the course of employment.

In additional, we help you reduce your workers’ compensation costs by providing the Safety Training for the employees and keep the indemnification costs in line with the best practices for growing your workforce.

h. Trade Credit Insurance

Together with Marine Cargo Insurance, Trade Credit Insurance is the protector for manufacturing and trading companies during transactions with their customers. While Marine Cargo Insurance covers the physical loss/damages to the cargo during transit and before reaching the buyer, Trade Credit Insurance protects the sellers from non-payment exposures. This insurance works much more efficiently than traditional methods of seller-protectors such as L/C due to its simplicity and wider protection.

i. Miscellaneous Insurance

Other than our main insurance products, many different types of insurance now are available in our Miscellaneous

Insurance category which gives you an additional security to your existing insurance.

Miscellaneous Insurance provides the diversified coverage such as:

- Office Multi Risk Insurance,

- Money Insurance,

- Fidelity Insurance,

- Golfer Insurance, Etc.

PRODUCTS & SERVICES


2. SERVICESThe company has a Specialized Risk Engineering Team for property risk. This team is fully backed up and supported by Risk Engineering Service of Tokio Marine Asia Pte. Ltd. Apart from risk assessment service, the team also offers Loss Control Report for the Insureds both in English or Vietnam languages.

Safety Training course will be operated by Safety Engineers, who have experience safety management in various fields including hands-on experience with chemical industry, paint manufacturing, food industry, pharmaceutical, steel manufacturing, furniture manufacturing and semi-conductor & electronics industries.

a. Risk Survey:

As an added-value service, we regularly conduct risk surveys to help our customers identify risk exposures that may exist in their premises, whereby giving appropriate recommendations for the loss prevention and mitigation purpose.

PRODUCTS & SERVICES

b. Safety Training:

The purpose of the basic safety courses is to increase safety awareness for everyone working in your factory of the various existing on-site hazards, and how to recognize and avoid them.

c. Loss Prevention Training/Seminars:

The purpose of Loss Prevention seminars is to enhance the awareness of property loss prevention within an organization and to provide assistance to the insured in achieving risk improvement.


1.01%

30.96%

2010 2011 2012 2013 2014

229,452 263,358303,395 320,550

351,918400,000

300,000

200,000

100,000

4.12%

6.80%

7.90%

5.16%

31.06%

4.20%

8.79%

FINANCIAL HIGHLIGHTS

1. 2014 Result

2. GWP BY LINE IN 2014 (%)

3. 5 - YEAR GWP

No Index 2014 2013 +/-

1

2

345

Gross revenueTotal operating revenue (*)Financial revenueOther incomeExpenseInsurance related expenseFinancial activities expenseManagement expenseOther expenseProfit before TaxCorporate Income TaxProfit after Tax

222,364,115,672182,429,804,66039,474,897,534

459,413,478147,826,701,04173,561,730,9634,429,767,629

69,797,925,85937,276,590

74,537,414,63116,661,667,52657,500,580,517

224,143,408,589177,044,415,27146,127,805,364

971,187,954138,348,103,76965,498,190,9214,990,431,000

66,063,352,2791,796,129,569

85,795,304,82021,011,503,03364,465,279,905

-0.79%3.04%

-14.42%-52.70%

6.85%12.31%-11.23%

5.65%-97.92%-13.12%-20.70%-10.80%

(*) including: (1) Gross written premium, (2) Reinsurance premium assumed, (3) Deduction, (4) Movement in unearned premium reserve, (5) Commissions on reinsurance ceded, (6) Other income from insurance business


CORPORATE SOCIAL RESPONSIBILITY

Initiated by the Red Cross Vietnam since 2013, the project has become popular countrywide with valuable sponsorship received from over 120 organizations & individuals at home and abroad, especially high-level government bodies & officials.

The Company donated VND 100 million (US$ 5,000) to the project in which 10 poorest minority households in the border district of Son La northern province were the beneficiaries. Sharing at the co-operation signing ceremony, Mr. Ha Vu Hien – General Director of Bao Viet Tokio Marine expressed the company’s high appreciation of social value of the project which was believed to contribute to the poverty & hunger reduction & elimination of the nation.

As part of our corporate philosophy to become “Good Company”, Bao Viet Tokio Marine Insurance always seek what lies beyond profit and one of which is to contribute to local society to enhance local peoples’ lives. In 2014, the company co-operated with the Vietnam Red Cross Organization to implement the Cow Bank Project which aims to provide breeding cows to needy farmers of poor households in border districts throughout the country.

A field trip to visit and deliver cows to the beneficiaries was also made on 14-15 November 2014 by representatives from the Company as well as Red Cross Organization of Son La province. The voluntary team also delivered new blankets & jackets contributed by all Bao Viet Tokio Marine staffs to poor disadvantaged households in the village. Local authorities expressed their deepest thanks to the support from the Company which provided sustainable means of living to their local farmers and encouraging extra resources to all children in the village.

The project was successfully conducted with strong support from local authority and Vietnam Red Cross organization as well as enthusiastic contribution from all staffs of the Company.


AUDITED FINANCIAL STATEMENTS

CONTENTS

General information

Report of the members’ council

Independent auditors’ report

Balance sheet

Income statement

Cash flow statement

Notes to the financial statements

14 - 15

16

17 - 18

19 - 22

23 - 25

26 - 27

28 - 72

31 December 2014



GENERAL INFORMATIONTHE COMPANYBao Viet Tokio Marine Insurance Company Limited (“BVTM”) formally was a joint-venture among Bao Viet Holdings, Commercial Union Assurance Company PLC and The Tokio Marine and Fire Insurance Co., Ltd (“TMF”). The Company was established under the Investment Licence No. 1639/GP issued by the Ministry of Planning and Investment on 5th August 1996 and subsequent amendments.The latest amendment No. 65/GP/KDBH issued by the Ministry of Finance on 01 July 2013 to amend the name of Company from Baoviet Tokio Marine Insurance Joint Venture Company to Baoviet Tokio Marine InsuranceCompany Limited (“BVTM”).

Table below illustrates the parties’ contribution to the legal and invested capital of the Company as of 31 December 2014:

Main activities of the Company are to provide general insurance products, reinsurance, loss survey, investing activities and other business operations that are in line with prevailing laws and regulations.

Head office and the Branch

Head office is located at Room 601, 6th Floor, The Sun Red River Bulding, 23 Phan Chu Trinh, Hoan Kiem District, Hanoi. The branch is located at Room 03, 19th Floor, Green Power Building, 35 Ton Duc Thang, District 1, Hochiminh City.

Employees

Total number of employees of the Company as at 31 December 2014 is 99 people (as at 31 December 2013: 99people).

Name of the Party

Bao Viet Holdings


Total

Amount in VND

153,000,000,000

147,000,000,000

300,000,000,000

Percentage

51%

49%

100%


GENERAL INFORMATION

MEMBERS’ COUNCIL

The members of Members’ Councilfor the year ended 31 December 2014 and at the date of this report are:

LEGAL REPRESENTATIVE

The legal representative of the Company for the year ended 31 December 2014 and at the date of this report is Mr. Hideki Mishima, General Director of the Company.

AUDITORS

Ernst & Young Vietnam Limited is the auditor of the Company.

Name

Ms. Than Hien Anh

Mr Duong Duc Chuyen

Mr Arthur Lee

Mr. Yoshinori Fukaura

Mr. Naoki Yamada

Mr Junichiro Hirao

Mr Ha Vu Hien

Mr Nguyen Anh Tuan

Mr Hideki Mishima

Chairwoman

Chairman

Vice Chairman

Member

Member

Member

Member

Member

Member

Proposed for appointment on 15 January 2015 (*)

Appointed on 04 November 2010 Resigned on 15 January 2015 (*)

Appointed on 13 June 2011

Appointed on 01 Dec 2014

Appointed on 1 Apr 2014Resigned on 1 Dec 2014

Appointed on 01 July 2009Resigned on 1 Apr 2014

Appointed on 16 September 2003

Appointed on 20 March 2006

Appointed on 11 July 2013

Position Date of appointment/Resignation

THE BOARD OF MANAGEMENT

The members of the Board of Management for the year ended 31 December 2014 and at the date of this report are:

(*) in accordance with the Resolution of Members’ Council dated 15 January 2015

Name

Mr Hideki Mishima

Mr Ha Vu Hien

Ms Duong Thi Thanh Toan

General Director

Deputy General Director

Chief Accountant

Appointed on 11 Jul 2013

Appointed on 16 Sep 2003

Appointed on 01 Apr 2011

Position Date of appointment/Resignation


REPORT OF THE MEMBERS’ COUNCILThe Members’ Council of Bao Viet Tokio Marine Insurance Company Limited (“the Company”) is pleased to present its report and the Company’s financial statements for the year ended 31 December 2014.


THE BOARD OF MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS

The Company’s Board of Management is responsible for the financial statements of each financial year which give a true and fair view of the state of affairs of the Company and of the Company’s results and cash flows for the year. In preparing those financial statements, the management is required to:

» select suitable accounting policies and then apply them consistently;» make judgements and estimates that are reasonable and prudent;» state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and» prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue its business.

The Board of Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the financial position of the Company and to ensure that the accounting records comply with the applied accounting system. It is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Management confirmed that it has complied with the above requirements in preparing the accompanying financial statements for the year ended 31 December 2014.

APPROVAL OF THE FINANCIAL STATEMENTS

We hereby approve the accompanying financial statements which give a true and fair view of the financial position of the Company as at 31 December 2014 and of the results of its operations and its cash flows for the year then ended in accordance with the Vietnamese Accounting Standards, Vietnamese Enterprise Accounting Systemapplied for general insurance company and with the relevant statutory requirements relevant to the preparation and presentation of financial statements.

Mr. Arthur LeeVice Chairman

Hanoi, Vietnam27 March 2015


INDEPENDENT AUDITORS’ REPORT


To: The Members’ Council Bao Viet Tokio Marine Insurance Company Limited

We have audited the accompanying financial statements of Bao Viet Tokio Marine Insurance Company Limited (“the Company”) as prepared on 27 March 2015 and set out on page 06 to 58 which comprise the balance sheet as at 31 December 2014, the income statement and the 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 financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting Systemapplicable to insurance companies and with the statutory 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 financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 financial statements.

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


INDEPENDENT AUDITORS’ REPORTOpinion

In our opinion, the financial statements give a true and fair view, in all material respects, the financial position of the Company as at 31 December 2014 and of the results of its operations and its cash flows for the year then ended in accordance with the Vietnamese Accounting Standards,Vietnamese Enterprise Accounting System applied for general insurance company and with the relevant statutory requirements relevant to the preparation and presentation of financial statements.

Ernst & Young Vietnam Limited

Nguyen Thi Phuong HoaAuditorAudit Practising RegistrationCertificate No. 2937-2014-004-1

Nguyen Xuan DaiDeputy General Director Audit Practising Registration Certificate No. 0452-2013-004-1



BALANCE SHEET as at 31 December 2014B01-DNPNT

Currency: VND

ASSETS

A. CURRENT ASSETS

I. Cash and cash equivalents1. Cash2. Cash equivalents

II. Short-term investments1. Other short-term investments

III. Account receivables1. Trade receivables1.1. Gross premium receivables1.2. Other trade receivables2. Other receivables3. Allowance for doubtful debts

IV. Inventory1. Inventory

V. Other current assets 1. Prepaid expense1.1. Deferred commission1.2. Other prepaid expenses2. VAT deductible3. Other current assets

VI. Reinsurance assets1. Reinsurance assets from unearned premium reserve2. Reinsurance assets from claim reserve

Notes

4

5

6

7

16.4

16.6

31 December 2014

811,892,057,634

43,863,954,61714,516,454,61729,347,500,000

244,011,499,676244,011,499,676

78,720,244,58578,659,463,06955,100,915,57823,558,547,491

125,458,589(64,677,073)

--

8,171,367,6187,536,166,8336,231,162,8341,305,003,999

104,400,174530,800,611

437,124,991,138

63,497,185,866

373,627,805,272

31 December 2013 (restated)

934,165,632,727

73,456,768,57016,523,761,12456,933,007,446

207,016,490,026207,016,490,026

72,824,421,36572,752,153,00263,568,592,4989,183,560,504

88,256,158(15,987,795)

--

3,300,926,9461,093,363,329

-1,093,363,329

100,745,1572,106,818,460

577,567,025,820

63,361,003,388

514,206,022,432

Code

100

110111112

120128

130131131.1131.2135139

140141

150151151.1151.2152158

190191192


ASSETS

B. NON-CURRENT ASSETS

I. Long-term receivables1. Other long-term receivables 1.1. Statutory deposit

II. Fixed assets1. Tangible fixed assets Cost Accumulated depreciation 2. Intangible fixed assets Cost Accumulated depreciation

III. Long-term investments1. Other long-term investments2. Provision for long-term investment

IV. Other non-current assets1. Long-term prepaid expense 2. Other non-current assets

TOTAL ASSETS

Notes

8

99.1

9.2

10

11

31 December 2014

386,407,696,481

8,009,687,5008,009,687,5008,009,687,500

2,679,222,0652,261,300,0608,820,074,138

(6,558,774,078)417,922,005

4,848,594,344(4,430,672,339)

369,886,530,618369,886,530,618

-

5,832,256,2984,454,037,8981,378,218,400

1,198,299,754,115


353,089,108,295

7,901,250,0007,901,250,0007,901,250,000

4,244,941,5023,418,946,4899,295,206,423

(5,876,259,934)825,995,013

4,848,594,344(4,022,599,331)

334,474,556,545334,836,053,554

(361,497,009)

6,468,360,2486,468,360,248

-

1,287,254,741,022

Code

200

210218218.1

220221222223227228229

250258259

260261268

270

BALANCE SHEET as at 31 December 2014


Currency: VND

RESOURCES

A. TOTAL LIABILITIES

I. Current liabilities1. Trade payables1.1. Insurance payables1.2. Other trade payables2. Tax and other statutory obligations 3. Payables to employees4. Other payables5. Unearned commission6. Bonus and welfare fund7. Technical reserves7.1. Unearned gross premium reserve7.2. Gross claim reserves7.3. Catastrophe reserves

II. Non-current liabilities1. Deferred tax liabilities2. Unearned revenue

B. OWNERS’ EQUITY

I. Capital1. Contributed chartered capital 2. Foreign exchange differences3. Compulsory funds4. Retained earnings

TOTAL LIABILITIES AND OWNERS’ EQUITY

Notes

12

13

1415

16.316.516.7

17

31 December 2014

770,841,872,723

762,644,243,16756,241,376,09252,329,891,406

3,911,484,6869,567,527,4086,205,662,627

108,907,521,70414,473,762,1277,566,027,802

559,682,365,407103,479,455,100422,904,058,28333,298,852,024

8,197,629,5566,312,785,1941,884,844,362

427,457,881,392

427,457,881,392300,000,000,00031,520,800,00027,535,626,47368,401,454,919

1,198,299,754,115


857,291,541,089

850,347,192,19652,145,894,13149,269,143,8312,876,750,300

10,398,197,9564,740,863,619

98,110,689,077-

7,623,671,406677,327,876,00797,490,751,123

551,227,166,25528,609,958,629

6,944,348,8935,937,618,6061,006,730,287

429,963,199,933

429,963,199,933300,000,000,00031,520,800,00024,660,597,44773,781,802,486

1,287,254,741,022

Code

300

310312312.1312.2314315319319.1323329329.1329.2329.3

330335338

400

410411416419421

440

BALANCE SHEET as at 31 December 2014B01-DNPNT


OFF BALANCE SHEET ITEMS

BALANCE SHEET as at 31 December 2014

31 December 2014

6,319,281.00

6,994,211,376

3,591,677,778

31 December 2013

5,465,600.65

6,720,258,169

2,196,552,686

ITEMS

1. Foreign currencies - United States dollar (US$)

2. Insurance policies signed but for which no obligations have arisen on the part of the Corporation (VND)

3. Ceded Insurance policies signed but for which no obligations have arisen on the part of the Corporation (VND)

Preparer Ms Pham Thu Trang


Chief AccountantMs Duong Thi Thanh Toan

General DirectorMr Hideki Mishima


for the year ended 31 December 2014

Unit: VND

ITEMS

1. Total operating income2. Revenue from real estate investment3. Finance income4. Other incomes5. Total direct operating expenses 6. Cost of real estate investment7. Finance expense8. General and administrative expenses9. Other expenses10. Profit before corporate income tax (50=10+11+12+13-20-21-22-23-24)11. Current corporate income tax12. Deferred corporate tax expense13. Net profit for the year after corporate income tax (60=50-51-52)

Current year

182,429,804,660-

39,474,897,534459,413,478

73,561,730,963-

4,429,767,62969,797,925,859

37,276,590

74,537,414,63116,661,667,526

375,166,588

57,500,580,517

Previous year (restated)

177,044,415,271-

46,127,805,364971,187,954

65,498,190,921-

4,990,431,00066,063,352,2791,796,129,569

85,795,304,82021,011,503,033

318,521,882

64,465,279,905

Code

10111213202122232450 515260

INCOME STATEMENT

PART I: COMPREHENSIVE INCOME STATEMENT

B02-DNPNT


INCOME STATEMENT

Currency: VND

PART II: OPERATIONAL INCOME STATEMENTfor the year ended 31 December 2014

ITEMS

1. Insurance revenue (01 = 01.1 + 01.2 - 01.3) In which: Direct written premiums Reinsurance premium assumed Increase in un-earned premium reserve

2. Reinsurance premium assumed (02 = 02.1 - 02.2) In which: Reinsurance premium ceded Increase in ceded premium reserve

3. Net insurance premiums (03 = 01 - 02) 4. Commission on reinsurance ceded and other insurance incomes (04 = 04.1 + 04.2) In which: Commission on reinsurance ceded Other income from insurance activities

5. Total net revenue from insurance business(10= 03 + 04)6. Claim expenses (11 = 11.1 - 11.2) In which: Claim expenses Claim expense reductions

7. Recoveries from reinsurance ceded 8. Increase/(decrease) in Direct and assumed claim reserve 9. Increase/(decrease) in ceded claim reserve 10. Net claim expenses (15 = 11 - 12 + 13 - 14)11. Increase in catastrophe reserve

Current year

345,929,425,782

315,564,718,86636,353,410,8935,988,703,977

195,485,500,777

195,621,683,255136,182,478

150,443,925,005

31,985,879,655

24,160,111,0107,825,768,645

182,429,804,660339,901,920,090

341,156,465,1771,254,545,087

296,326,721,350

(128,323,107,972)(140,578,217,160)

55,830,307,9284,688,893,395


308,340,658,087

278,457,614,09642,092,618,16412,209,574,173

170,079,221,391

181,032,172,62410,952,951,233

138,261,436,696

38,782,978,575

31,283,070,0197,499,908,556

177,044,415,271232,740,244,188

232,740,244,188-

187,593,872,814

184,553,477,493180,523,469,24549,176,379,6224,185,541,789

Code

01 01.101.201.3

02

02.102.2

0304

04.104.2

10

11

11.111.2

1213

141516


Currency: VND

PART II: OPERATIONAL INCOME STATEMENTfor the year ended 31 December 2014

ITEMS

12. Other operating expenses (17 = 17.1 + 17.2) In which: Commission expense Other underwriting expenses

13. Total direct operating expenses (18 = 15 + 16 + 17)14. Gross insurance operating profit (19=10 - 18)15. Finance income16. Finance expense17. Profit from financial activities (25 = 23 - 24)18. General and administrative expenses 19. Net operating income (19 + 25 - 26) 20. Other income21. Other expenses22. Net other profit/(loss) (40 = 31 - 32)23. Profit before corporate income tax (50= 30 + 40)24. Current corporate income tax25. Deferred corporate income tax26. Net profit for the year after corporate income tax(60 = 50 - 51 - 52)

Current year

13,042,529,640

8,778,498,6374,264,031,003

73,561,730,963108,868,073,69739,474,897,5344,429,767,629

35,045,129,90569,797,925,85974,115,277,743

459,413,47837,276,590

422,136,888

74,537,414,63116,661,667,526

375,166,588

57,500,580,517


12,136,269,510

8,616,323,5113,519,945,999

65,498,190,921111,546,224,35046,127,805,3644,990,431,000

41,137,374,36466,063,352,27986,620,246,435

971,187,9541,796,129,569(824,941,615)

85,795,304,82021,011,503,033

318,521,882

64,465,279,905

Code

17 17.117.2

18 19232425263031324050 515260

INCOME STATEMENT






CASH FLOW STATEMENT for the year ended 31 December 2014

Currency: VND

ITEMS Notes

I. CASH FLOWS FROM OPERATING ACTIVITIESReceipt on premium and commissionReceipt on outstanding premium and commissionReceipt on recoveries from reinsurer and co-insurerOther receiptsPayment of claimsPayment of commission Payments to suppliersPayments to employeesPayments of taxes & other dutiesPayments to othersPayment in advance to employees and suppliers

Net cash inflows from operating activities II. CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of investmentInterests receivedReceipt on disposal of fixed assetsReceipt of interests on current accountsInvestments made during the yearPurchase of fixed assets

Net cash flow from investing activities III. CASHFLOW FROM FINANCIAL ACTIVITIES Payment of dividends

Current year

-

397,761,927,116

286,871,524,28024,413,650,509

(347,959,020,614)(168,012,380,251)(34,389,616,980)(29,434,710,055)(41,610,274,810)(19,999,762,263)

(141,811,019)

67,499,525,913

689,361,931,484

7,767,808,719400,000,00034,329,755

(737,907,247,158)(115,940,000)

(40,459,117,200)

(57,216,123,176)

Previous year

-

366,031,101,542

173,345,318,26723,100,846,031

(279,198,866,157)(127,164,525,080)(38,662,741,492)(28,368,241,579)(49,717,049,189)(15,236,014,645)

(323,481,930)

23,806,345,768

775,003,335,33131,203,676,284

28,450,000149,559,703

(741,603,968,869)(1,124,448,580)

63,656,603,869

(84,222,361,392)

Code

0102

03

0405060708091011

20

21222324252630

36

B03-DNPNT


for the year ended 31 December 2014

Currency: VND

ITEMS Notes

Net cash flow from financial activities Net cash flows Cash and cash equivalents at the beginning of the yearImpact of exchange rate fluctuation Cash and cash equivalents at the end of the year

Current year

(57,216,123,176)(30,175,714,463)

73,456,768,570582,900,510

43,863,954,617

Previous year

(84,222,361,392)3,240,588,246

70,305,517,205(89,336,881)

73,456,768,570

Code

405060 6170

CASH FLOW STATEMENT






NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2014 and for the year then ended B09-DNPNT

1. CORPORATE INFORMATION

Baoviet Tokio Marine Insurance Company Limited (“BVTM”) formally was a joint-venture among Bao Viet Holdings, Commercial Union Assurance Company PLC and The Tokio Marine and Fire Insurance Co., Ltd (“TMF”). The Company was established under the Investment Licence No. 1639/GP issued by the Ministry of Planning and Investment on 5th August 1996 and subsequent amendments. The latest amendment No. 65/GP/KDBH issued by the Ministry of Finance on 01 July 2013 to amend the name of Company from Baoviet Tokio Marine Insurance Joint Venture Company to Baoviet Tokio Marine Insurance Company Limited (“BVTM”).

Table below illustrates the parties’ contribution to the legal and invested capital of the Company as of 31 December 2014:

Main activities of the Company are to provide general insurance products, reinsurance, loss survey, investing activities and other business operations that are in line with prevailing laws and regulations.

Head office and the Branch

Head office is located at Room 601, 6th Floor, The Sun Red River Bulding, 23 Phan Chu Trinh, Hoan Kiem District, Hanoi. The branch is located at Room 03, 19th Floor, Green Power Building, 35 Ton Duc Thang, District 1, Hochiminh City.

Employees

Total number of employees of the Company as at 31 December 2014 is 99people (as at 31 December 2013: 99people).

Results

The net profit for the year ended 31 December 2014 was57,500,580,517VND (the net profit for the year ended 31 December 2013was 64,465,279,905VND).

Name of the Party

Bao Viet Holdings


Total

Amount in VND

153,000,000,000

147,000,000,000

300,000,000,000

Percentage

51%

49%

100%


as at 31 December 2014 and for the year then ended

NOTES TO THE FINANCIAL STATEMENTS

2. BASIS OF PREPARATION

2.1. Accounting standards and system

The financial statements of the Company, which are expressed in Vietnam dong (“VND”), are prepared in accordance with the Vietnamese Accounting System for non-life insurance companies issued by the Ministry of Finance in Circular 232/2012/TT-BTC (Circular 232) dated 28 December 2013 and the accounting framework applied for enterprises in Decision 15/2006/QĐ-BTC dated 20 March 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 Vietnamese Standards on Accounting (Series 1);» Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 2);» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 3); » Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Standards on Accounting (Series 4); and» Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Standards on Accounting (Series 5).

The accompanying balance sheet, related income statement and cash flow statement and their utilisation are not designed for those who are not informed about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations in accordance with accounting principles and practices generally accepted in countries other than Vietnam.

2.2. Registered accounting documentation system

The registered accounting documentation system is the journal ledger system.

2.3. Fiscal year

The Company’s fiscal year starts on 1 January and ends on 31 December.

2.4. Accounting currency

The Company maintains its accounting records in Vietnam Dong (“VND”).

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1. Changes in accounting policies and disclosures

The accounting policies adopted by the Company in preparation of the financial statements are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2013 except for the changes in the accounting policies related to non-life insurance activities as follows:

Circular 232/2012/TT-BTC guides applicable accounting for non-life insurance, reinsurance and branch of foreign non-life insurance enterprises.

On 28 December 2012, the Ministry of Finance issued Circular 232/2012/TT-BTC guiding accounting regime for non-life insurers, reinsurers and branch of foreign non-life insurers “Circular 232”. The Circular took effect from 01 January 2014 and replaced the guidance relevant to non-life insurers in Decision 1296/TC/QD/CDKT of Ministry of Finance dated 31 December 1996 and Decision 150/2001/QD-BTC dated 31 December 2001 amending and supplementing accounting regime for insurers in Decision 1296/TC/QD/CDKT.


According to Circular 232/2012/TT-BTC, accounting principles and policies applied to insurance operations have significant changes as follows:

i) Insurance commission

Non-life insurers have to record commission income and expense incurred in period by business line and by insurance activity (direct insurance, inward and outward reinsurance). At the end of accounting period, unallocated commission income and expense corresponding to ceded unearned premium and direct unearned premium shall be calculated based on unearned premium reserve estimation method registered with the Ministry of Finance.

Commission expense which incurred, however was not accounted in income statement shall be recorded in “short-term prepaid expense”. Commission on reinsurance ceded which incurred, but was not accounted in income statement shall be recorded in “Unearned commission”.

Assumed commission receivables from reinsurers are not recorded in account “Trade receivables”. These receivables are debited in account “Trade payables” to net-off the ceded premium for reinsurers.

Ceded commission payables to reinsurers are not recorded in account “Trade payables”. These payables are credited in account “Trade receivables” to net-off the assumed premium from reinsurers.

ii) Technical reserve

Non-life insurance companies are not entitled to offset technical reserve arising from direct insurance and inward reinsurance with reserve on ceded reinsurance. Accordingly, separately presented on balance sheet, unearned premium reserve, direct and reinsurance claim reserve for reported cases and incurred but not report cases (IBNR), catastrophe reserves are presented as liabilities; ceded unearned premium reserve and reinsurance ceded claim reserve are presented as reinsurance assets.

iii) Insurance expense recognition

Insurance expense includes all incurred expenses relating to insurance business such as product design and development, marketing, loss survey, claim, technical reserve establishment, expense to collect salvages and sub-rogation, risk assessment, acquisition cost (commission, selling expense, agent support and management expense, agent recruitment, etc.) other expenses such as contribution to policyholder protection fund, and other funds as required by the authorities.

In addition, due to the changes in the presentation of items on financial statement of non-life insurance entity, the Company has adjusted and restated some items on financial statements to comply with Circular 232/2012/TT-BTC. Balance and movement in unearned premium reserve and claim reserve have disclosed separately between direct/inward insurance and ceded insurance activities on Balance sheet and Income statement. Detailed changes are disclosed in Note 32.

3.2. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments with an original maturity of three months or less which are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.

NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2014 and for the year then ended


3.3. Financial investments

3.3.1. Short-term investments

Short-term investments comprise of term deposits at banks, which are matured within 12 months or intended to be held for not more than one year.

3.3.2. Long-term investments

Long-term investments comprise of:

Trusted investment in Bao Viet Fund Management Company (“BVF”)

Investments made through trusted investment management contracts with BVF are presented in the financial statements based on the notice of the period end investment portfolios from BVF at the reporting date. According to this:» Short-term investments comprise of term deposits at banks, which will mature within 12 months or intended to be held for no more than one year; and;» Long-term investments include listed and over-the-counter shares, government T-bills, Government and corporate bonds, loans and trusted loans, termed deposits at banks and other investments, which are intended to be held for more than one year.

Equity investment in Bao Viet Securities Investment Fund (“BVF1”) and Vietnam National Reinsurance Company (“Vinare”)

The investments in BVF1 and Vinareare initially recognized at cost and subsequently recognized at cost.

Periodically, investments in securities are subject to review for impairment. Any impairment losses are recognized in the Company’s income statement.

Provision for diminution in value of investments

Listed securities

For listed securities that are carried at cost in accordance with Vietnamese Accounting Standards, if there is objective evidence that their market value is lower than book value, the provision amount is measured as the difference between the securities’ carrying amount and the closing market value as of the balance sheet date in accordance with the following formula given in Circular 228/2009/TT-BTC issued by the Ministry of Finance on 7 December 2009 as follow:



Provision amount = x _Number of impaired

securities at 31 December 2014

Unit carrying value of

securities

Unit carrying value of

securities


Actualowners’ equity

Unlisted securities

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

Equity investments in other entities

For equity investments in other entities and other long-term investments, a provision for devaluation is set up if the investees are suffering from loss (except where such loss is already included in their business plans prior to the investment).

The amount of provision for each investment shall not exceed the invested capital and is calculated according to the following formula given in Circular 228 as follow:

3.4. Receivables

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

Provision for impairment of trade receivables and other 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 procedures, debtors are missing, have absconded, are prosecuted, detained or tried by law enforcement bodies, are serving sentences or have deceased, 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 administration expense in the income statement.

The Company uses the provision policy regulated by the Ministry of Finance in Circular 228/2009/TT-BTC dated 07 December 2009. Details are as follows:

From 6 months to less than one yearFrom one to two yearsFrom two to three yearsOver three years

30%50%70%100%

The basis for setting up the provision is the positive difference between the investors’ actual capital contributions and the actual amount of owners’ equity in the investee’s financial statements at the balance sheet date.


Provision amount = x_Investment capital of the Company

Actual capital contributions of investors in the investee

Actual capital contributions of

investors in the investee

Allowance rateReceivables ging


Office equipmentsMotor vehiclesSoftware

3 - 7 years6 - 10 years3 - 5 years

3.5. Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation.

The cost of a tangible fixed asset comprises of its purchase price and any directly attributable costs of bringing the tangible fixed asset to working condition for its intended use.

Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and expenditures for maintenance and repairs are charged to the income statement as incurred.

When tangible fixed assets are sold or liquidated, their costs and accumulated depreciation are removed from the balance sheet and any gain or loss resulting from their disposal is included in theincome statement.

3.6. Intangible fixed assets Intangible fixed assets are stated at cost less accumulated amortisation.

The cost of an intangible fixed asset comprises of its purchase price and any directly attributable costs of preparing the intangible fixed asset for its intended use.

Expenditures for additions, improvements are added to the carrying amount of the assets and other expenditures are charged to the income statement as incurred.

When intangible fixed assets are sold or liquidated, their costs and accumulated amortisation are removed from the balance sheet and any gain or loss resulting from their disposal is included in the income statement.

3.7. Depreciation and amortisation

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

3.8. Technical reserves

The reserves of the Company include: (i) unearned premium reserve, (ii) claim reserve and (iii) catastrophe reserve. The calculation methods for reserves are in accordance with Circular 125/2012/TT-BTC (“Circular 125”) dated 30 July 2012 issued by the Ministry of Finance.

Details on the reserve calculation methods are as follows:

(i) Unearned premium reserve

The Company applied the daily basis to calculate unearned premium reserve for all types of insurance. This method is in accordance with Official Letter No.13674 TC/BH dated 26 December 2003 approved by Ministry of Finance and in accordance with Circular 125.

(ii) Claim reserves

Claim reserves include reserve for outstanding claims and for claims incurred but not reported (“IBNR”).




» Outstanding claim reserve: determined 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 recoverable from reinsurers in accordance to Circular 125.

» Reserve for incurred but not reported claims for which the insurer is liable (“IBNR reserve”): is established based on the formula in Circular 125 as follow:

(iii) Catastrophe reserve

Catastrophe reserveis accrued annually until such reserve reaches 100% of the net written premium of the current fiscal year and is calculated at 3% of net written premiums. On 28 December 2005, the Ministry of Finance issued Decision 100/2005/QD-BTC governing the publication of four new accounting standards, one of which is Vietnamese Accounting Standard (“VAS”) 19 - Insurance Contract. Following the issuance of this Standard, starting from January 2006, the provision of catastrophe reserve is no longer required since it represents “possible claims under contracts that are not in existence at the reporting date”. However, since the Ministry of Finance has not issued detailed guidance for the implementation of VAS 19 and in accordance with the provision set out in Decree 46/2007/ND-CP issued by the Government of Vietnam on 27 March 2007 regarding financial regulations for insurance enterprises. The company still allocates catastrophe reserve on the financial statements for the financial year ended at 31 December 2014.

3.9. Payables and accruals

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


Reserve for payment of

losses which have incurred

but not yet reported for the

current fiscal year

Indemnity for losses arising in the current

fiscal yearTotal indemnity for losses arising in the last 3

consecutive fiscal years

Net operating revenue of

the previous fiscal year

Average delay in reporting claims of

previous fiscal year

Total indemnity for claims

incurred but not reported as at the end of last 3 consecutive

fiscal years

Net operating revenue of

current fiscal year


current fiscal year

x x x=


3.10. Employee benefits

Post-employment benefits

Post-employment benefits are paid to retired employees of the Company by the social insurance agency which belongs to the Ministry of Labour, Invalids and Social Affairs. The Company is required to contribute to these post-employment benefits by paying social insurance premiums to the social insurance agency at the rate of 18% of employee basic salaries on a monthly. The Company has no further obligation concerning post-employment benefits for its employees other than this. Unemployment benefits

According to Social Insurance Law No.71/2006/QH11 issued in 29 Jun 2006 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 Government contributes 1% of salary of all those participating in the unemployment insurance from the State budget. Vietnam Social Insurance Agency is responsible for the collection, distribution and management of the fund.

3.11. Foreign currency transactions

Transactions in currencies other than the Company’s reporting currency of (VND) are recorded at the exchange rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denominated in foreign currencies are translated at average buying rate announced by the banks where the Company maintains bank accounts at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the income statement.

3.12. Revenue recognition

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

Gross written premium

Gross written premiums are recognized in accordance with Circular 125. Specifically, gross written premium is recognized as revenue when incurred insurance liability for the insurance buyers with 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 Company and the insured for delayed payment of insurance premium. Prepaid premium before due date is recorded as “Advance revenue” in the balance sheet as at the balance sheet date.

Interest

Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless collectability is in doubt.

Dividends

Income is recognised when the Company’s entitlement as an investor to receive the dividend in cash is established. If the Company receive the dividend in the form of share or the company is entitled to receive bonus share, only record the number of share entitled will be reflected in the share portfolio of the Company.




3.13. Expense recognition

Claim expense

Claim expenseis recognized at the point of time when the claim documents are completed and approved by authorized persons. In case that the final claim amount has not been finalized but the Company is certain that the loss is within its insured liabilities and has paid an advance to the customer as per their request, such advance would also be recognized as claim expenses. Any claim that is not yet approved by authorized persons is considered an outstanding claim and included in claims reserve.

Commission expense

Commission expense which incurred, however was not accounted in income statement shall be recorded in “short-term prepaid expense”.Commission expenses are calculated as the percentages of premium revenue and are recognized in the income statement. Commission is calculated for all products with specific percentages for each type of products, and in accordance with Circular 124/2012/TT-BTC issued by the MoF on 30 July 2012.

Other administration expense

Other administration expense is recognized when incurred.

3.14. Recognition of insurance activities

(i) Reinsurance ceded

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

Reinsurance premiums ceded under facultative reinsurance agreement is recognized when the facultative reinsurance agreement has been entered into by the Company and when gross written premiums within the scope of the facultative 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 corresponding reinsurance premium ceded. At the end of accounting period, the part of reinsurance commission which is not included in income and expense of period corresponding to unearned premium of reinsurance ceded shall be determined and allocated in the subsequent periods based on registered method for unearned premium reserve.

(ii) Reinsurance assumed

Reinsurance assumed under treaty arrangement:» Income and expenses relating to reinsurance assumed under treaty arrangements are recognized when the statement of account is received from the cedants. As at the reporting date, income and expenses relating to reinsurance assumed under treaty arrangements for which the cedants have not sent their statement of accounts have been estimated based on statistical data and based on the cedants’ own estimate.

Reinsurance assumed under facultative arrangement:» Reinsurance premium assumed is recognized when the facultative reinsurance agreement has been entered into by the Company and a statement of account (for each facultative reinsurance agreement) has been received from the cedants;» Company and when a statement of account has been sent to the Company;



» Reinsurance commission is recognized when the reinsurance premium is ceded and when a statement of account has been sent to the Company. At the end of accounting period, the part of reinsurance commission which is not included in income and expense of period corresponding to unearned premium of reinsurance assumed shall be determined and allocated in the subsequent periods based on registered method for unearned premium reserve..

3.15. Taxation

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as at the balance sheet date.

Current income tax is charged or credited to the income statement, except when it relates to items recognised directly to equity, in which case the deferred current income tax is also dealt with in equity.

Current income tax assets and liabilities are offset when there is a legally enforceable right for the Company to set off current tax assets against current tax liabilities and when the Company intends to settle its current tax assets and liabilities on a net basis.

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount for financial reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognized for all deductible temporary differences carried forward unused tax credit and unused tax losses, to the extent that it is probable that future taxable profits will be available against which these deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilized.

The carrying amount of deferred income tax assets is audited at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Previously unrecognised deferred income tax assets are re assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date.

Deferred tax is charged or credited to the income statement, except when it relates to items recognised directly to equity, in which case the deferred tax is also dealt with in the equity account.

Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Company to set off current tax assets against current tax liabilities and when they relate to income taxes levied on the same taxable entity by the same taxation authorityand the Company intends to settle its current tax assets and liabilities on a net basis.




3.16. Uses of estimate

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities. These estimates and assumptions also affect the income and expenses and the resultant provisions. Such estimates are necessarily based on assumptions about several factors involving varying degrees of judgment and uncertainty and actual results may differ resulting in future changes in such provisions.

3.17. Off-balance sheet items

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 balance sheet until the premium is collected or the policies become effective.

3.18. Appropriation of net profits

Based on approval of the appropriate level of authority/Members’ Council, net profit after tax shall be considered as dividend to investors/shareholders. Dividend shall be paid after consideration of any deduction of profit not for dividend and after making funds in accordance with the Company’s Charter and Vietnam’s regulatory requirements.

The Company establishes statutory reserve fund as per requirement of the Decree 46/2007/ND-CP dated 22 March 2007 issued by the Government. Company deduct 5% of its annual after-tax profit for setting up the compulsory reserve fund. That fund is at most equal to 10% of the enterprise’s charter capital.

Every year, the Company establishes Bonus and welfare fund. This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and improvement of the employees’ benefits.

4. CASH AND CASH EQUIVALENTS


CashCash on handIn which: VND Foreign currencyCash in bankIn which: VND Foreign currencyCash equivalentsIn which: VND Foreign currency

31 Dec 2014VND

14,516,454,61719,230,789

19,230,789-

14,497,223,828

8,801,334,9115,695,888,917

29,347,500,000

24,000,000,0005,347,500,000

43,863,954,617

31 Dec 13VND

16,523,761,12431,076,789

31,076,789-

16,492,684,335

11,714,297,4134,778,386,922

56,933,007,446

46,398,007,44610,535,000,00073,456,768,570


5. OTHER SHORT-TERM INVESTMENTS

6. ACCOUNT RECEIVABLES

Short-term deposits balance as at 31 December 2014 denominated in VND have due date less than one (1) year and earn interest at ranging from3.35% to7% p.a. Short-term deposits denominated in USD have due date less than one (1) year and earn interest at rangingfrom 0.22% to 0.25% p.a depending on initial term.

Short-term deposits balance as at 31 December 2014 denominated in VND have due date less than one (1) year and earn interest at ranging from3.35% to7% p.a. Short-term deposits denominated in USD have due date less than one (1) year and earn interest at rangingfrom 0.22% to 0.25% p.a depending on initial term.



Term deposits at banks Term deposits in VND Term deposits in USD Other short-term investments

Trade receivables Gross premium written receivables Reinsurance assumed receivables Reinsurance ceded receivables Claim recoveries from co insurer Claim setling agents receivables Accrued interest Other trade receivablesOther receivable from customers Claim setling agents receivables Accrued interest Other receivablesOther receivables Total receivablesProvision for doubtful debtsNet trade receivables

31 Dec 2014VND

244,011,499,676128,090,000,000115,921,499,676244,011,499,676

31 Dec 2014VND

55,100,915,57831,690,560,0011,575,938,5029,421,713,156

300,581,4539,501,876,123

2,608,206,5562,039,787

23,558,547,4911,915,877,559

21,406,695,622235,974,310125,458,589

78,784,921,658(64,677,073)

78,720,244,585

31 Dec 13VND

207,016,490,026115,070,921,25191,945,568,775

207,016,490,026

31 Dec 13VND

63,568,592,49830,964,879,1531,488,217,817

10,936,875,941336,260,474

18,125,995,5381,716,363,575

-9,183,560,5041,325,207,0787,710,588,111

147,765,31588,256,158

72,840,409,160(15,987,795)

72,824,421,365


7. OTHER CURRENT ASSETS

7.1. Deferred Commission


8. COMPULSORY DEPOSITS

Insurance deposit is deposit denominated in USD. Under the prevailing regulation, the Company has to maintain statutory insurance deposit equivalent to 2% of its legal capital.

Deferred CommissionOther short-term prepaid expense Office and Apartment Rental fee Prepaid Insurance fee Tools & Equipments Other short-term prepaid expenseVAT DeductibleOther current asset Staff advance Sundries deposit

Opening balanceUnallocated commision during the yearAllocated commision during the yearClosing balance

31 Dec 2014VND

6,231,162,8341,305,003,999

407,665,91039,464,35737,748,305

820,125,427104,400,174530,800,61197,568,611

433,232,0008,171,367,618

31 Dec 2014VND

-10,662,850,046(4,431,687,212)

6,231,162,834

31 Dec 2013VND

-1,093,363,329

379,696,73450,602,73024,947,575

638,116,290100,745,157

2,106,818,460360,604,810

1,746,213,6503,300,926,946

31 Dec 2013VND

----


9. FIXED ASSETS

9.1. Tangible fixed assets



Cost:As at 01 Jan 2014AdditionsDisposalAs at 31 Dec 2014Accumulated depreciation:As at 01 Jan 2014Charge for the yearDisposalAs at 31 Dec 2014Net book value:As at 01 Jan 2014As at 31 Dec 2014

Cost:As at 01 Jan 2014Additions during the yearDisposalAs at 31 Dec 2014Accumulated depreciation:As at 01 Jan 2014Charge for the yearDisposalAs at 31 Dec 2014Net book value:As at 01 Jan 2014 As at 31 Dec 2014

Office equipmentVND

3,781,738,199105,400,000

-3,887,138,199

2,268,109,987625,411,888

-2,893,521,875

1,513,628,212993,616,324

Motor vehiclesVND

5,513,468,224-

(580,532,285)4,932,935,939

3,608,149,947637,634,541

(580,532,285)3,665,252,203

1,905,318,2771,267,683,736

Total VND

9,295,206,423105,400,000

(580,532,285)8,820,074,138

5,876,259,9341,263,046,429(580,532,285)6,558,774,078

3,418,946,4892,261,300,060

SoftwareVND

4,848,594,344--

4,848,594,344

4,022,599,331408,073,008

-4,430,672,339

825,995,013417,922,005

9.2. Intangible fixed assets


9.2. Intangible fixed assets

10. LONG-TERM INVESTMENTS

10.1. Trusted investment in BaoViet Fund Management Company (“BVF”)


Cost:As at 01 Jan 2014Additions during the yearDisposalAs at 31 Dec 2014Accumulated depreciation:As at 01 Jan 2014Charge for the yearDisposalAs at 31 Dec 2014Net book value:As at 01 Jan 2014 As at 31 Dec 2014

Total VND

4,848,594,344--

4,848,594,344

4,022,599,331408,073,008

-4,430,672,339

825,995,013417,922,005

1. Other long-term investments Term deposit Trusted investments in BVF Other equity investments in BVF1 Other equity investments in Vinare2. Provision for long-term investmentNet value of long-term investments

31 Dec 2014VND

369,886,530,61840,000,000,000

326,456,530,618-

3,430,000,000-

369,886,530,618

Notes

10.1

10.2

31 Dec 2013VND

334,836,053,55451,000,000,000

273,441,884,1456,964,169,4093,430,000,000(361,497,009)

334,474,556,545

Details of the Company’s long term investments as at 31 December 2014are as follows:

Investment portfolio as per report of BVF Cash at bank Term deposit BondsTotal investment portfolio

31 Dec 2014VND

317,919,285170,600,000,000155,538,611,333326,456,530,618

31 Dec 2013VND

436,406,293173,220,000,00099,785,477,852

273,441,884,145


10.2. Provision for long-term investments



Provision for the diminution in value of long-term investment investments are made in accordance with Circular 228/2009/TT-BTC dated 7 December 2009 and Circular 89/2013/TT-BTC amended and supplemented on Circular 228/2009/TT-BTC issued by the Ministry of Finance on 28 June 2013.

11. OTHER NON-CURRENT ASSETS

12. TRADE PAYABLES

Long term-prepaid expense Renovation expense Tools and equipments Other prepaid expenseOther Non-current asset Office and Apartment rental deposit Claim agent deposit Taxi deposit Water depositTotal investment portfolio

Trade payables Direct insurance payable Outward reinsurance premium payable Premium co-insurance outwards payable Other payablesOther trade payables TMA IT Advisory fee Audit fee Survey fee payable Assessment fee for Financial Risk and Credit Policies Reserved funds for fired and explosion compulsory fund and TPL compulsory of motor fundOther payables

31 Dec 2014VND

4,454,037,8981,603,373,658

576,824,8052,273,839,4351,378,218,4001,337,668,400

32,000,0008,000,000

550,0005,832,256,298

31 Dec 2014VND

52,329,891,4062,003,035,461

46,357,557,2243,913,219,369

56,079,3523,911,484,6862,362,324,600

190,000,000270,753,700

227,082,100

124,674,501736,649,785

56,241,376,092

31 Dec 2013VND

6,468,360,2482,196,847,6451,256,145,1173,015,367,486

---

-6,468,360,248

31 Dec 2013VND

49,269,143,8311,871,029,998

42,453,778,7204,944,335,113

-2,876,750,3001,332,469,392

180,000,000365,477,000

245,527,000

134,498,253618,778,655

52,145,894,131


13. TAXES AND OTHER STATUTORY OBLIGATIONS

14. OTHER PAYABLES

15. UNEARNED COMMISSION


Value added taxEnterprise income taxPersonal income taxForeign withholding taxTotal

Paid during the year

VND(14,137,066,109)(17,434,539,416)(3,223,962,450)(1,151,851,979)

(35,947,419,954)

Arising during the year

VND13,903,858,90616,661,667,5263,380,106,6131,171,116,361

35,116,749,406

Balance as at 31 Dec 2013

VND1,598,409,8344,823,864,090

41,316,2883,934,607,744

10,398,197,956

Balance as at 31 Dec 2014

VND1,365,202,6314,050,992,200

197,460,4513,953,872,1269,567,527,408

Social insurance payablesPayables on repo contracts at BVF

Opening balanceUnallocated commision during the yearAllocated commision during the yearClosing balance

31 Dec 2014VND

26,070,942108,881,450,762108,907,521,704

31 Dec 2014VND

-22,836,197,636(8,362,435,509)14,473,762,127

31 Dec 2013VND

30,895,99598,079,793,08298,110,689,077

31 Dec 2013VND

----

16. T

ECH

NIC

AL

RES

ERVE

S

16.1

. Une

arne

d pr

emiu

m re

serv

es

31 D

ec 2

014

31 D

ec 2

014

31 D

ec 2

013

31 D

ec 2

013

as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

Une

arne

d pr

emiu

m re

serv

esC

laim

rese

rves

Ope

ning

bal

ance

Allo

catio

n/(re

vers

al)

durin

g th

e ye

arC

losi

ng b

alan

ce

Net

rese

rves

for

dire

ct in

sura

nce

and

inw

ard

rein

sura

nce

34,1

29,7

47,7

3537

,021

,143

,823

Net

une

arne

d pr

emiu

m re

serv

es fo

r di

rect

insu

ranc

e an

d in

war

d re

insu

ranc

e 32

,873

,124

,795

1,25

6,62

2,94

034

,129

,747

,735

Res

erve

s fo

r out

war

d re

insu

ranc

e63

,361

,003

,388

514,

206,

022,

432

Une

arne

d pr

emiu

m re

serv

es

for o

utw

ard

rein

sura

nce

52,4

08,0

52,1

55

10,9

52,9

51,2

3363

,361

,003

,388

Res

erve

s fo

r dire

ct

insu

ranc

e an

d in

war

d re

insu

ranc

e 97

,490

,751

,123

551,

227,

166,

255

Une

arne

d pr

emiu

m

rese

rves

for d

irect

in

sura

nce

and

inw

ard

rein

sura

nce

85,2

81,1

76,9

50

12,2

09,5

74,1

7397

,490

,751

,123

Net

rese

rves

for

dire

ct in

sura

nce

and

inw

ard

rein

sura

nce

39,9

82,2

69,2

3449

,276

,253

,011

Net

une

arne

d pr

emiu

m re

serv

es fo

r di

rect

insu

ranc

e an

d in

war

d re

insu

ranc

e 34

,129

,747

,735

5,85

2,52

1,49

939

,982

,269

,234

Res

erve

s fo

r out

war

d re

insu

ranc

e63

,497

,185

,866

373,

627,

805,

272

Une

arne

d pr

emiu

m re

serv

es

for o

utw

ard

rein

sura

nce

63,3

61,0

03,3

88

136,

182,

478

63,4

97,1

85,8

66

Res

erve

s fo

r dire

ct

insu

ranc

e an

d in

war

d re

insu

ranc

e 10

3,47

9,45

5,10

042

2,90

4,05

8,28

3

Une

arne

d pr

emiu

m

rese

rves

for d

irect

in

sura

nce

and

inw

ard

rein

sura

nce

97,4

90,7

51,1

23

5,98

8,70

3,97

710

3,47

9,45

5,10

0

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

45

16.2

. Cla

im re

serv

es

31 D

ec 2

014

31 D

ec 2

013

as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

Uni

t:VN

D

(*) C

laim

rese

rves

incl

ude:

1. O

utst

andi

ng c

laim

rese

rve,

whi

ch, a

s at

31

Dec

embe

r 201

4, w

ere

prov

ided

for b

ased

on

loss

est

imat

e fo

r eac

h in

divi

dual

cla

im, f

or w

hich

the

Com

pany

is li

able

, whi

ch is

ei

ther

not

ified

to th

e C

ompa

ny o

r req

uest

ed fo

r pay

men

t but

is s

till u

nres

olve

d as

at 3

1 D

ecem

ber 2

014.

The

net

am

ount

of c

ase

rese

rves

as

at 3

1 D

ecem

ber 2

014

are

VND

41

,866

,310

,317

in w

hich

the

gros

s cl

aim

s pa

yabl

e fo

r pol

icy

hold

ers

are

VND

423

,188

,834

,033

and

coi

nsur

ance

reco

verie

s an

d th

e re

insu

ranc

e ar

e VN

D 7

,694

,718

,444

and

VN

D 3

73,6

27,8

05,2

72 re

spec

tivel

y.

2. R

eser

ve fo

r cla

ims

incu

rred

but n

ot re

porte

d as

at 3

1 D

ecem

ber 2

014,

am

ount

ed to

VN

D 7

,409

,942

,694

.

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

Ope

ning

bal

ance

Allo

catio

n/(re

vers

al)

durin

g th

e ye

arC

losi

ng b

alan

ce

Net

cla

im re

serv

es

for d

irect

insu

ranc

e an

d in

war

d re

insu

ranc

e 32

,991

,135

,575

4,03

0,00

8,24

837

,021

,143

,823

Cla

im re

serv

es

for o

utw

ard

rein

sura

nce

333,

682,

553,

187

180,

523,

469,

245

514,

206,

022,

432

Cla

im re

serv

es fo

r di

rect

insu

ranc

e an

d in

war

d re

insu

ranc

e

366,

673,

688,

762

184,

553,

477,

493

551,

227,

166,

255

Net

cla

im re

serv

es

for d

irect

insu

ranc

e an

d in

war

d re

insu

ranc

e 37

,021

,143

,823

12,2

55,1

09,1

8849

,276

,253

,011

Cla

im re

serv

es

for o

utw

ard

rein

sura

nce

514,

206,

022,

432

(140

,578

,217

,160

)37

3,62

7,80

5,27

2

Cla

im re

serv

es fo

r di

rect

insu

ranc

e an

d in

war

d re

insu

ranc

e55

1,22

7,16

6,25

5

(128

,323

,107

,972

)42

2,90

4,05

8,28

3

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

46


16.3. Unearned premium reserves for direct insurance and inward reinsurance

16.4. Unearned premium reserves for outward reinsurance

16.5 . Claim reserves for direct insurance and inward reinsurance



Product category

Health Insurance and Personal Accident InsuranceProperty and Damages InsuranceCargo InsuranceAutomobile InsuranceFire InsuranceMarine Hull and P&I InsuranceLiability InsuranceBusiness Risk InsuranceFinancial Risk and Credit Insurance

Product category


Product category


31 Dec 2014VND

18,540,503,86855,820,769,4737,683,318,8757,873,830,797

566,244,1551,218,288,6785,886,850,6564,210,582,7791,679,065,819

103,479,455,100

31 Dec 2014VND

830,611,63949,923,528,9352,187,052,317

5,147,806414,489,016

1,187,324,5553,319,658,7694,000,053,6401,629,319,189

63,497,185,866

31 Dec 2014VND

8,602,064,264322,003,829,43931,882,800,3302,403,859,165

--

23,620,417,07871,088,007

34,320,000,000422,904,058,283

31 Dec 2013VND

16,060,197,85857,053,966,6184,655,959,2527,288,328,508

506,316,2892,467,397,3264,162,519,6563,185,454,7632,110,610,853

97,490,751,123

31 Dec 2013VND

743,208,48050,965,357,6831,601,191,171

35,943,277400,128,742

2,376,046,4232,178,145,0173,027,538,3642,033,444,231

63,361,003,388

31 Dec 2013VND

6,148,033,130475,500,920,31736,654,616,7913,347,781,923

240,003,53591,350,000

706,460,5592,150,000,000

26,388,000,000551,227,166,255


16.6. Claim reserves for outward reinsurance

16.7. Catastrophe reserve

Product category


Product category


Opening balanceProvision expenses during the yearProvision used during the yearClosing balance

31 Dec 2014VND

23,730,193313,831,726,56510,872,522,807

---

15,330,000,00067,533,607

33,502,292,100373,627,805,272

31 Dec 2014VND

7,525,968,6043,935,409,762

12,988,159,0337,040,980,334

205,773,355105,628,593

1,351,616,66146,266,65999,049,023

33,298,852,024

31 Dec 2014VND

28,609,958,6294,688,893,395

-33,298,852,024

31 Dec 2013VND

34,950,679463,813,783,82122,322,612,332

740,000-

90,436,500145,634,100

2,042,500,00025,755,365,000

514,206,022,432

31 Dec 2013VND

6,209,860,9023,577,398,373

10,923,902,1386,320,863,104

196,317,96398,914,519

1,162,679,72224,520,69695,501,212

28,609,958,629

31 Dec 2013VND

24,424,416,8404,185,541,789

-28,609,958,629


Catastrophe reserve is accrued annually and calculated at 3% of Net written premiums. Total amount provision for catastrophes reserves charged to current year’s expense is VND 4,688,893,395(2013 – VND 4,185,541,789).

17. O

WN

ERS’

EQ

UIT

Y

Prev

ious

yea

r:As

at 0

1 Ja

n 20

13

- Div

iden

ds p

aid

for t

he y

ear 2

012

- Pro

fit fo

r the

yea

r- A

ppro

pria

tion

of p

rofit

tost

atut

ory

rese

rve

fund

- App

ropr

iatio

n of

pro

fit to

bon

us a

nd w

elfa

re fu

ndA

s at

31

Dec

201

3C

urre

nt y

ear:

As a

t 01

Jan

2014

- D

ivid

ends

pai

d fo

r the

yea

r 201

3- P

rofit

for t

he y

ear

- App

ropr

iatio

n of

pro

fit to

stat

utor

y re

serv

e fu

nd (*

)- A

ppro

pria

tion

of p

rofit

to b

onus

and

wel

fare

fund

As

at 3

1 D

ec 2

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2014

49


18. REVENUE

18.1. Gross written premiums

18.2. Reinsurance assumed premiums

Gross written premiumsDeductions on gross written premiumPremiumReinsurance assumed premiumsDeductions on assumed premiumsCeded PremiumMovement unearned gross premium for period

Product category


Product category

Health Insurance and Personal Accident InsuranceProperty and Damages InsuranceCargo InsuranceFire InsuranceLiability InsuranceBusiness Risk Insurance

Current yearVND

320,013,748,143(4,449,029,277)

315,564,718,86636,353,410,893

-36,353,410,893(5,988,703,977)

345,929,425,782

Current yearVND

45,841,401,411121,113,927,55386,517,876,58324,016,142,4171,232,196,9772,498,019,324

13,906,465,76313,818,913,8116,619,775,027

315,564,718,866

Current yearVND

104,027,34331,848,432,7982,384,435,633

-1,331,717,119

684,798,00036,353,410,893

Previous yearVND

286,252,868,577(7,795,254,481)

278,457,614,09645,554,055,653(3,461,437,489)42,092,618,164

(12,209,574,173)308,340,658,087

Previous yearVND

40,137,287,679102,759,876,11975,884,508,54023,214,451,3141,171,783,5546,209,502,344

11,373,900,8899,843,415,5127,862,888,145

278,457,614,096

Previous yearVND

27,712,88740,402,205,9161,478,475,435

2,413,18025,060,746

156,750,00042,092,618,164



19. REINSURANCE PREMIUMS CEDED

20. COMMISSION ON REINSURANCE CEDED

20.1. Commission on reinsurance ceded

Product category

Commission on reinsurance cededOther revenue from insurance activities

Product category


Current yearVND

24,160,111,0107,825,768,645

31,985,879,655

Current yearVND

9,217,13817,810,229,5242,190,929,205

1,496,026112,766,379176,504,658911,964,525

1,677,584,9791,269,418,576

24,160,111,010

Previous yearVND

31,283,070,0197,499,908,556

38,782,978,575

Previous yearVND

13,780,03623,187,599,8732,317,319,183

10,753,915220,835,216811,521,461

1,119,617,9951,606,884,1881,994,758,152

31,283,070,019

Product category


Current yearVND

2,075,172,005141,028,647,38520,093,749,050

12,234,764917,017,233

2,274,216,8568,940,284,920

13,778,846,3776,501,514,665

195,621,683,255

Previous yearVND

1,880,898,477129,424,271,26820,539,953,148

48,910,337892,552,392

5,823,513,6185,244,645,7909,503,224,2517,674,203,343

181,032,172,624




20.2. Other revenue from insurance activities

Claim settling agentincomeHandling charge incomeOther income

Current yearVND

5,618,549,7451,557,549,864

649,669,0367,825,768,645

Previous yearVND

5,570,720,9371,929,187,619

-7,499,908,556


21. CLAIM EXPENSES

Direct claim expenses and claim expenses on inward reinsurance Direct claim expense Claim expense on inward reinsuranceRecovery from third party, recovery from 100% compensated goods Recovery from reinsurance ceded Increase/ (Decrease) in gross claim reserve and reinsurance assumed claim reserveIncrease/ (Decrease) in outward reinsurance claim reserve

Current yearVND

341,156,465,177338,119,831,882

3,036,633,295

1,254,545,087296,326,721,350

(128,323,107,972)

(140,578,217,160)55,830,307,928

Previous yearVND

232,740,244,188208,739,552,22024,000,691,968

-187,593,872,814

184,553,477,493

180,523,469,24549,176,379,622

21.1. Direct claim expense

Product category


Current yearVND

17,340,892,739266,276,895,55738,886,859,849

7,116,904,939126,036,840124,579,360223,552,990

2,398,170,5985,625,939,010

338,119,831,882

Previous yearVND

14,329,733,726162,435,440,48915,300,966,0819,863,147,632

829,858,9073,866,571,642

10,450,5701,995,557,664

107,825,509208,739,552,220


22. FINANCE INCOME

Interest income from deposits Gains from trusted investment in BVFDividend received from VinareGain from investment in BVF1Revaluation foreign exchange gains for year endRevaluation foreign exchange gains during the year

Current yearVND

10,594,687,07225,443,691,7071,029,500,000

230,867,8541,658,909,926

517,240,97539,474,897,534

Previous yearVND

17,239,805,49425,729,384,522

921,600,000 -

1,321,617,318915,398,030

46,127,805,364

21.3. Recovery from reinsurance ceded

Product category


Current yearVND

45,952,376263,032,847,02325,374,254,693

740,000-

123,333,5667,689,891

2,278,262,0685,463,641,733

296,326,721,350

Previous yearVND

248,189,587174,678,423,811

2,037,844,62838,927,601

4,860,865,9363,728,873,336

-1,895,779,781

104,968,134187,593,872,814

21.2. Claim expenses on reinsurance assumed

Product category

Health Insurance and Personal Accident InsuranceProperty and Damages InsuranceCargo InsuranceFire InsuranceLiability Insurance

Current yearVND

6,292,0703,030,049,311

(8,200,086)-

8,492,0003,036,633,295

Previous yearVND

3,142,01019,326,505,331

92,143,5054,578,901,122

-24,000,691,968




23. FINANCE EXPENSE

25. OTHER INCOMES AND EXPENSES

24. ADMINISTRATION EXPENSES


Repo and management feeRevaluation foreign exchange losses during the yearOther finance expense (*)Reversal of provision expenses from investment impairment

Gain from disposal assetsOther incomes

Loss from disposal assetsOther expenses

Net other (loss)/profit

SalariesDepreciation expensesOut-sourcing expenses

Current yearVND

3,693,154,217397,710,419700,400,002

(361,497,009)4,429,767,629

Current yearVND

363,636,36495,777,114

459,413,478(1,916,618)

(35,359,972)(37,276,590)422,136,888

Current yearVND

35,142,890,0761,671,119,437

32,983,916,34669,797,925,859

Previous yearVND

5,947,049,998523,785,427

-

(1,480,404,425)4,990,431,000

Previous yearVND

8,454,545962,733,409971,187,954

- (1,796,129,569)(1,796,129,569)

(824,941,615)

Previous yearVND

32,441,324,2301,748,821,633

31,873,206,41666,063,352,279

(*) Other finance expense is loss from Vinashin bond received from trusted investment portfolio in BVF. The Company determined that it cannot be receivable and recorded in finance expense in this year.




26.1. Deferred Corporate Income Tax Expense

Deferred tax liabilitiesNet deferred income tax charge to Income statement

31 Dec 2014VND

6,312,785,194

31 Dec 2013VND

5,937,618,606

Current yearVND

375,166,588

375,166,588

Previous yearVND

318,521,882

318,521,882

26. CORPORATE INCOME TAX

The statutory CIT rate applicable to the Company is 22% of taxable profits.

Balance sheet Income statement

ITEMS

Net accounting profit before taxAdjustments to increase/(decrease) accounting profit Adjustments to increase Non - deductible expense Other adjustment increased accounting profitAdjustments to decrease Income from business activities not subject to CIT Other adjustment decreased accounting profitEstimated current taxable profitEstimated Current CIT expenses CIT payable at beginning of the yearCIT paid during the yearCIT payable at the end of the year

Current yearVND

74,537,414,631

3,932,240,4293,932,240,429

-(2,734,802,672)(1,029,500,000)(1,705,302,672)75,734,852,38816,661,667,5264,823,864,090

(17,434,539,416)4,050,992,200

Previous yearVND

85,795,304,820

4,927,476,5304,529,609,275

397,867,255(6,676,769,217)

(921,600,000)(5,755,169,217)84,046,012,13321,011,503,0338,999,833,492

(25,187,472,435)4,823,864,090

26.2. Current Corporate Income Tax

The current tax payable is based on taxable profit for the year. Taxable profit of the Company for the year differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date.

Reconciliation between the current tax expense and the accounting profit/loss for the year is presented below. The Company’s tax returns are subject to examination by the tax authorities. Therefore amounts reported in the financial statements could be changed at a later date upon final determination by the tax authorities.



27. COMMITMENTS AND CONTINGENCIES

Operating lease commitments

The Company has contractual commitments for the rental of offices and apartment as follows:

28. TRANSACTIONS WITH RELATED PARTIES

Significant transactions with some related companies during the year were as follows:

Commitments for the rental of offices and apartment Less than 1 years From 1 to 5 years

AmountVND

7,552,853,788104,895,000

7,657,748,788

Transaction

Dividend paid from the financial year 2013 resultConsultancy fee of ITOther revenueDividend paid from the financial year 2013 resultReinsurance inward premiumsReinsurance inward commissionReinsurance inward Claim expenseReinsurance outward premiumsReinsurance outward CommissionClaim recovery reinsurance outwardHandling charge Claims Settling Agent FeeReinsurance outward premiumsReinsurance outward CommissionClaim recovery reinsurance outward

Company

Tokio Marine Asia Pte.Ltd

Bao Viet Holdings

Bao Viet General Insurance Corporation

The Tokio Marine and Nichido Fire Insurance Co Ltd

Relation

Joint-Owner

Joint-Owner

Owned by Bao Viet Holdings

Indirect investment via Tokio Marine Asia Pte.Ltd

AmountVND

28,064,564,5274,133,398,000

95,777,114

29,210,056,9573,658,539,233

723,098,091157,350,417

40,796,198,58210,790,029,07610,682,495,858

5,019,169

5,165,104,48352,204,650,3498,310,470,590

234,007,550,488




29. RISK MANAGEMENT FRAMEWORK

29.1. Governance framework

The primary objective of the Company’s risk and financial management framework is to protect the Company’s shareholders from events that hinder the sustainable achievement of financial performance objectives. The Members’ Council and Board of Management recognise the importance of having efficient and effective risk management systems in place.

The Company has established a risk management function which agreed clear terms of reference from the Members’ Council and other committee. This function is supplemented with a clear organisational structure with documented delegated authorities and responsibilities from the Members’ Councilto Board of Management and other senior management. A policy framework has been developed and implemented which sets out the Company’s risk profiles; risk management; control and business conduct standards for the Company’s operations. Each policy will be overseen bya member of the Board of Managementon its compliance throughout the Company.

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

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

The Company manages its insurance risk through underwriting limits, approval procedures for transactions that involve new products or those exceed set limits, risk diversification, pricing guidelines, reinsurance and monitoring of emerging issues.

29.3. Capital management and regulatory framework The primary capital management objective of the Company 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 Company recognises 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 Company require the Company to hold assets sufficient to cover liabilities and satisfy the solvency margin requirements in Vietnam. The principal solvency requirements that apply to the Company is those set out in Circulars 125 issued by the Ministry of Finance.

The tables below summarise the minimum regulatory solvency margin for the Company and the solvency capital held against each of them. Regulators are primarily interested in protecting the rights of policyholders and monitor 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 Company maintain appropriate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.

The solvency ratio of the Company is calculated based on the relevant regulations promulgated by the Ministry of Finance in Vietnam, which is an indicator of the overall solvency position of the insurance operations.

31 December 201431 December 2013

SolvencyMargin Ratio

1,165.45%903.00%

Minimum Solvency MarginVND million

34,13940,069

Company Solvency CapitalVND million

397,875361,820



29.4. Underwriting strategy

The Company’s underwriting strategy seeks diversity 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.

29.5. Reinsurance strategy

The Company 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 reinsurance 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 Company’s evaluation of the specific risk, subject in certain circumstances, to maximum limits based on characteristics of coverage. Under the terms of the reinsurance agreements, the reinsurer agrees to pay the claim amount in the event the claim is paid. However, the Company 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 Company’s credit rating standard, either assessed from public rating information or internally investigations, will be used.

30. MANAGEMENT OF INSURANCE AND FINANCIAL RISK

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

30.1. Insurance risk

30.1.1. General insurance contracts

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 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 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 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 estimate. The provisions are based on information currently available. However, the ultimate liabilities may vary as a result of subsequent developments.

The key method is based on Circular 125. Details of such reserving methodologies are as follows:

Claim reserve includes the reserve for outstanding claims and for claims incurred but not reported.» Outstanding claim reserve is established based on the estimated claim payments for each claim for which the insurer is liable, which is either notified to the insurer or requested for payment but is still unresolved at the end of the fiscal year, in accordance to the Circular 125; and» Reserve for incurred but not reported claims for which the insurer is liable (IBNR).




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

The Company issues general insurance contracts such as Health insurance and personal accident insurance, Property and damages insurance, Cargo insurance automobile insurance, Fire insurance, Liability insurance, Business risk insurance, Marine hull and P&I insurance, Financial risk and credit insurance. Risks under general insurance contracts usually cover twelve month duration.

The Company 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 and Da Nang.

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 exposures, the general insurance has arranged the reinsurance protection for the fire, engineering, 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 general insurance, type of risk insured and by industry.

The above risk exposure is mitigated by diversification across a large portfolio of insurance contracts. 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 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 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 insurance contract liabilities.

The Company 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 strategies is to limit exposure to catastrophes based on the general insurance risk appetite as decided by management. The management may decide to increase or decrease the maximum tolerances based on market conditions and other factors.

Reserve for payment of

losses which have incurred

but not yet reported for the

current fiscal year

Indemnity for losses arising in

the current fiscal year

Total indemnity for losses

arising in the last three

years

Net operating

revenue of the previous fiscal year


previous fiscal year

Total indemnity for claims

incurred but not reported at the end of the last

three years

Net operating revenue

of current fiscal year


current fiscal year

x x x=



30.2. Financial risk

Transactions in financial instruments may result in the Company assuming financial risks. These include market risk, credit risk and liquidity risk. Each of these financial risks is described below, together with a summary of the ways in which the Company manages these risks.

30.2.1. Market risk

Market risk can be described as the risk of change in fair value of a financial instrument due to changes in interest rates, equity prices and foreign currency exchange rates.

Equity price risk

The Company’s listed equity securities are susceptible to market price risk arising from uncertainty about future values of the investment securities. The Company manages equity price risk by placing a limit on equity investments. The Company’s Board of Management reviews and approves all equity investment decisions.

Foreign currency risk

Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between VND and other currencies in which the Company conducts business may affect its financial condition and results of operations. The foreign currency risk facing the Company mainly comes from movements in the USD/VND exchange rates. The Company seeks to limit its exposure to foreign currency risk by minimising its net foreign currency position.

Major of the Company financial assets are denominated in VND which mitigates the foreign currency risk. With assets denominated in foreign currency, most of them are in USD.

30.2.2. Credit risk

The Company’s portfolio of fixed maturity investments (included its deposit arrangement with commercial banks) is subject to credit risk. This risk is defined as the potential loss in market value resulting from adverse changes in borrowers or counterparties’ ability to repay the debts. The Company’s objective is to earn competitive relative returns by investing in a diversified portfolio of investments. Management has a credit policy in place. Limits are established to manage credit quality and concentration risk.

The Company also has insurance and reinsurance receivables, and other receivable amounts subject to credit risk. The most significant of these are reinsurance recoveries. To mitigate the risk of the counterparties not paying the amount due, the Company has established certain business and financial guidelines for reinsurer approval, incorporating ratings by major agencies and considering currently available market information. The Company also periodically reviews the financial stability of reinsurers from public and other sources and the settlement trend of amounts due from reinsurers.




Details on credit quality by classes of assets for all financial assets exposed to credit risk as at 31 December 2014 are as follows:

Not yet due: financial assets or the loans with interest or principal payments not yet past due and there is no evidence of impairment.

Past due but not individually impaired: financial assets with past due interest and principal payments but the Company believes that these asset are not impaired as they are secured by collaterals and has confidence in the customer’s credit worthiness and other credit enhancements.

Individually impaired: debt instruments and loans to customers for which the Company considers that interests and principals are not able to be recovered under the terms of the contracts.

Details on credit quality by classes of assets for all financial assets exposed to credit risk as at 31 December 2013 are as follows:

Financial instrumentsCash and cash equivalentsInsurance receivablesOther receivables from customersFinancial investment Fixed maturity investments

Financial instrumentsCash and cash equivalentsInsurance receivablesOther receivables from customersFinancial investmentFixed maturity investments

TotalVND

43,863,954,61755,100,915,578

23,558,547,491

570,150,111,009

570,150,111,009692,798,987,284

TotalVND

73,456,768,57063,656,848,656

9,183,560,504

480,021,967,878

480,021,967,878626,319,145,608

Individually impaired

VND

-185,766,569

--

-

185,766,569

Individually impaired

VND

-28,182,626

--

-

28,182,626

Past-due but not individually

impairedVND

--

--

--

Past-due but not individually

impairedVND

--

--

--

NotyetdueVND

43,863,954,61754,915,149,009

23,558,547,491

570,150,111,009

570,150,111,009692,613,220,715

NotyetdueVND

73,456,768,57063,628,666,030

9,183,560,504

480,021,967,878

480,021,967,878626,290,962,982

30.2

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risk

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The

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t 31

Dece

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as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

31 D

ecem

ber 2

014

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

tsIn

sura

nce

rece

ivab

les

Oth

er re

ceiv

able

s fro

m c

usto

mer

sFi

nanc

ial I

nves

tmen

t

Fixe

d m

atur

ity in

vest

men

tsTo

tal

Fina

ncia

l lia

bilit

ies

Trad

e pa

yabl

esO

ther

pay

able

s an

d ac

crue

d ex

pens

es

Tota

lVN

D

43,8

63,9

54,6

1755

,100

,915

,578

23,5

58,5

47,4

9157

0,15

0,11

1,00

957

0,15

0,11

1,00

969

2,79

8,98

7,28

4

52,3

29,8

91,4

063,

911,

484,

686

56,2

41,3

76,0

92

No

mat

urity

dat

eVN

D - - - - - - - - -

Mor

e th

an o

ne y

ear

VND - - - - - - - - -

Up

to o

ne y

ear

VND

43,8

63,9

54,6

1754

,915

,149

,009

23,5

58,5

47,4

9157

0,15

0,11

1,00

957

0,15

0,11

1,00

969

2,61

3,22

0,71

5

52,3

29,8

91,4

063,

911,

484,

686

56,2

41,3

76,0

92

Ove

rdue

VND -

185,

766,

569 - - -

185,

766,

569 - - -

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

62

The

follo

wing

tabl

e in

dica

tes c

ontra

ctua

l mat

urity

of t

he in

com

e-ea

rnin

g fin

ancia

l ass

ets a

nd fin

ancia

l liab

ilitie

sbas

ed o

n co

ntra

ctua

l und

iscou

nted

pay

men

ts a

s at 3

1 De

cem

ber 2

013

31 D

ecem

ber 2

013

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

tsIn

sura

nce

rece

ivab

les

Oth

er re

ceiv

able

s fro

m c

usto

mer

sFi

nanc

ial I

nves

tmen

t

Fixe

d m

atur

ity in

vest

men

tsTo

tal

Fina

ncia

l lia

bilit

ies

Trad

e pa

yabl

esO

ther

pay

able

s an

d ac

crue

d ex

pens

es

Tota

lVN

D

73,4

56,7

68,5

7063

,656

,848

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9,

183,

560,

504

480,

021,

967,

878

480,

021,

967,

878

626,

319,

145,

608

49,2

69,1

43,8

312,

876,

750,

300

52,1

45,8

94,1

31

No

mat

urity

dat

eVN

D - - - - - - - - -

Mor

e th

an o

ne y

ear

VND - - - - - - - - -

Up

to o

ne y

ear

VND

73,4

56,7

68,5

7063

,628

,666

,030

9,

183,

560,

504

480,

021,

967,

878

480,

021,

967,

878

626,

290,

962,

982

49,2

69,1

43,8

312,

876,

750,

300

52,1

45,8

94,1

31

Ove

rdue

VND -

28,1

82,6

26 - - -

28,1

82,6

26

- - -

as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

63



31. SUPPLEMENTARY 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 Standards on presentation and disclosures of financial instruments (“Circular 210”) with effectiveness from financial years beginning on or after 1 January 2011. Circular 210 provides the definitions of financial assets, financial liabilities and derivative financial instruments, equity instruments as well as presentation and disclosures of financial instruments.

The Circular 210 only regulates the presentation and disclosure of financial instruments, the definitions of financial assets, financial liabilities and other relating definitions as shown below are applied solely for preparation of this note. The assets, liabilities and equities of the Company still are recognized and accounting in accordance with the Vietnamese Accounting Standards and Vietnamese Enterprise Accounting Systemapplicable for insurance companies and comply with the relevant statutory requirements.

Financial assets

Financial assets of the Company, within the scope of Circular 210, include cash and short-term deposits, trade and other receivables and quoted financial instruments.For the purpose of disclosure in the notes to the financial statements, financial assets are classified as appropriate into either of the following categories:

» Financial asset at fair value through profit or loss

Financial asset at fair value through profit or loss is finance assetthat satisfies either of the following conditions:a/ Being classified as held for trading. A financial asset will be classified as securities held for trading if:(i) It is purchased or created mainly for the purpose of resale/redemption in a short term;(ii) There is an evidence that such instrument is traded for the purpose of gaining short-term profits; or,(iii) It is a derivative financial instrument (except derivative financial instruments identified as financial guarantee contracts or effective hedging instruments).b) Upon initial recognition, it is designated by the Company as at fair value through profit or loss.

» Held-to-maturity investments

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:a/ Financial assets that, upon initial recognition, were categorized as such recognized at fair value through profit or loss;b/ Financial assets already categorized as available for sale;c/ Financial assets that meet the definitions of loans and receivables.

» Loans and receivalbes: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than: a) those that the entity intends to sell immediately or in the near term, which shall be classified as held for trading, and those that the entity upon initial recognition designates as at fair value through profit or loss;b) those that the entity upon initial recognition designates as available for sale; orc) those for which the holder may not recover substantially all of its initial investment, other than because of credit deterioration, which shall be classified as available for sale.




» Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets determined as available for sale or not classified as:a/ Loans and receivables;b/ Held-to-maturity investments;c/ Financial assets recognized at fair value through profit or loss.

Financial liabilities

Financial liabilities of the Company, within the scope of Circular 210, include trade and other payables. For the purpose of disclosure in the notes to the financial statements, financial liabilities are classified as appropriate either of the following categories:

» Financial liability at fair value through profit or loss

Financial liability at fair value through profit or loss is a financial liability that satisfies either of the following conditions:a) Being classified as held for trading. A financial liability will be classified as securities held for trading if:(i) It is purchased or created mainly for the purpose of resale/redemption in a short term;(ii) There is an evidence that such instrument is traded for the purpose of gaining short-term profits; or,(iii) It is a derivative financial instrument (except derivative financial instruments identified as financial guarantee contracts or effective hedging instruments).b) Upon initial recognition, it is designated by the Company as at fair value through profit or loss.

» Financial liabilities at amortised cost

Financial liabilities measured at amortised cost include financial liabilities that were not categorized as financial liabilities at fair value through profit or loss.

Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount reported in the 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.

Set o

ut b

elow

is a

com

paris

on b

y cl

ass

of th

e ca

rryin

g am

ount

s an

d fa

ir va

lue

of th

e C

ompa

ny’s

finan

cial

inst

rum

ents

that

are

car

ried

in th

e fin

anci

al s

tate

men

ts a

s at

31

Dec

embe

r 201

4:

The

fair

valu

e of

the

finan

cial

ass

ets

and

liabi

litie

s ar

e in

clud

ed a

t the

am

ount

at w

hich

the

inst

rum

ent c

ould

be

exch

ange

d in

a c

urre

nt tr

ansa

ctio

n be

twee

n w

illing

par

ties,

oth

er

than

in a

forc

ed o

r liq

uida

tion

sale

.

The

follo

win

g m

etho

d an

d as

sum

ptio

n w

ere

used

to e

stim

ate

the

fair

valu

es:

»Cas

h an

d sh

ort-t

erm

dep

osits

, tra

de re

ceiv

able

s, tr

ade

paya

bles

and

oth

er c

urre

nt lia

bilit

ies

appr

oxim

ate

thei

r car

ryin

g am

ount

s la

rgel

y du

e to

the

shor

t-ter

m m

atur

ities

of t

hese

in

stru

men

ts.

»Fai

r val

ue o

f ava

ilabl

e-fo

r-sal

e fin

anci

al a

sset

s is

der

ived

from

quo

ted

mar

ket p

rices

in a

ctiv

e m

arke

ts.

»Whe

re th

ere

is n

o ob

serv

able

mar

ket v

alue

, and

it is

not

pos

sibl

e to

det

erm

ine

the

fair

valu

e, th

e fin

anci

al a

sset

s an

d lia

bilit

ies

are

carri

ed a

t cos

t.

as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

Fixe

d m

atur

ity in

vest

men

ts

Loan

and

rece

ivab

les

Insu

ranc

e re

ceiv

able

sO

ther

rece

ivab

les

from

cus

tom

ers

Cas

h an

d ca

sh e

quiv

alen

ts

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ncia

l lia

bilit

ies

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e pa

yabl

eO

ther

cur

rent

liab

ilitie

s

VND

570,

150,

111,

009

570,

150,

111,

009

55,1

61,6

97,0

94

23,5

58,5

47,4

9143

,863

,954

,617

692,

734,

310,

211

52,3

29,8

91,4

063,

911,

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686

56,2

41,3

76,0

92

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lVN

D57

0,15

0,11

1,00

9 57

0,15

0,11

1,00

9 55

,161

,697

,094

23

,558

,547

,491

43,8

63,9

54,6

1769

2,73

4,31

0,21

1

52,3

29,8

91,4

063,

911,

484,

686

56,2

41,3

76,0

92

Prov

isio

n fo

r im

pairm

ent

VND - -

(64,

677,

073) - -

(64,

677,

073) - - -

Accr

ued

inte

rest

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D - - - 21

,406

,695

,622

-21

,406

,695

,622

- - -

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tVN

D57

0,15

0,11

1,00

9 57

0,15

0,11

1,00

9 55

,226

,374

,167

2,

151,

851,

869

43,8

63,9

54,6

1767

1,39

2,29

1,66

2

52,3

29,8

91,4

063,

911,

484,

686

56,2

41,3

76,0

92

Car

ryin

g va

lue

Fair

valu

e

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

66

Set o

ut b

elow

is a

com

paris

on b

y cl

ass

of th

e ca

rryin

g am

ount

s an

d fa

ir va

lue

of th

e C

ompa

ny’s

finan

cial

inst

rum

ents

that

are

car

ried

in th

e fin

anci

al s

tate

men

ts a

s at

31

Dec

embe

r 201

3:

Fixe

d m

atur

ity in

vest

men

ts

Loan

and

rece

ivab

les

Insu

ranc

e re

ceiv

able

sO

ther

rece

ivab

les

from

cus

tom

ers

Cas

h an

d ca

sh e

quiv

alen

ts

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ncia

l lia

bilit

ies

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e pa

yabl

eO

ther

cur

rent

liab

ilitie

s

VND

480,

021,

967,

878

480,

021,

967,

878

63,6

40,8

60,8

62

9,18

3,56

0,50

473

,456

,768

,570

626,

303,

157,

814

49,2

69,1

43,8

312,

876,

750,

300

52,1

45,8

94,1

31

Tota

lVN

D48

0,02

1,96

7,87

8 48

0,02

1,96

7,87

8 63

,640

,860

,862

9,

183,

560,

504

73,4

56,7

68,5

7062

6,30

3,15

7,81

4

49,2

69,1

43,8

312,

876,

750,

300

52,1

45,8

94,1

31

Prov

isio

n fo

r im

pairm

ent

VND - -

(15,

987,

794) - -

(15,

987,

794) - - -

Accr

ued

inte

rest

VN

D - - - 7,

710,

588,

111 -

7,71

0,58

8,11

1 - - -

Cos

tVN

D48

0,02

1,96

7,87

8 48

0,02

1,96

7,87

8 63

,656

,848

,656

1,

472,

972,

393

73,4

56,7

68,5

7061

8,60

8,55

7,49

7

49,2

69,1

43,8

312,

876,

750,

300

52,1

45,8

94,1

31

Car

ryin

g va

lue

Fair

valu

e

as a

t 31

Dec

embe

r 201

4 an

d fo

r the

yea

r the

n en

ded

NOTE

S TO

THE

FIN

ANC

IAL

STAT

EMEN

TS

BAO

VIE

T TO

KIO

MAR

INE

Annu

al Re

port

2014

67



32. RESTATEMENT OF COMPARATIVE FIGURES

In 2014, due to requirements to present financial statements of general insurance companies in accordance with Circular 232/2012/TT-BTC issued by Ministry of Finance, the Company has made adjustments to restate some figures of opening balance. Details of adjustments were presented as follows:

Extracted from Balance sheet

Notes

[1][2][3][4]

Notes

[5][6][7]

Adjustment accordance with

Circular 232

572,265,746,431 (5,402,024,546)577,567,025,820

100,745,157 -

7,901,250,000 (7,901,250,000)

572,265,746,431


Circular 232

572,265,746,431

671,019,866,333 1,006,730,287

(99,760,850,189)

572,265,746,431

31 December 2013 (As previously

stated)

361,899,886,296 78,226,445,911

- 3,200,181,789

353,089,108,295 -

14,369,610,248

714,988,994,591


stated)

285,025,794,658

179,327,325,863 5,937,618,606

99,760,850,189

714,988,994,591


934,165,632,727 72,824,421,365

577,567,025,820 3,300,926,946

353,089,108,295 7,901,250,000 6,468,360,248

1,287,254,741,022


857,291,541,089

850,347,192,196

6,944,348,893 -

1,287,254,741,022

ASSETS

A. CURRENT ASSETSIII. Account receivablesIV. Reinsurance assetsV. Other current assetB. NON-CURRENT ASSETSI. Long-term receivablesIV. Other non-current assets TOTAL ASSETS

RESOURCES

A. TOTAL LIABILITIESI. Current liabilitiesII.Non-current liabilities Technical reserves TOTAL LIABILITIES AND OWNERS’ EQUITY




Details description of adjustments was as follows:

[1] Account receivables

[2] Reinsurance assets

According to Circular 232/2012/TT-BTC of reinsurance assets are separately disclosure reflect the assets of reinsurance activities.

[3] Other current assets

(*) Premium Receivable from assumed reinsurance will be offset with commission payables from assumed reinsurance as follows:

(**) Commission from ceded reinsurance will be offset with Premium Payable from ceded reinsurance as follows:

Account receivablesReinsurance assumed receivables (*)Reinsurance ceded receivables (**)VAT Deductible

Other current assetsVAT Deductible

Premium Receivable from assumed reinsurancecommission payables from assumed reinsuranceReinsurance assumed receivables

Commission from ceded reinsurancePremium Payable from ceded reinsuranceReinsurance ceded receivables


10,936,875,94118,125,995,538

-29,062,871,479


100,745,157100,745,157

31 December 2013

11,196,006,790(259,130,849)

10,936,875,941

31 December 2013

23,168,144,078(5,042,148,540)18,125,995,538

Adjustments in accordance with

Circular 232

(259,130,849)(5,042,148,540)

(100,745,157)(5,402,024,546)


Circular 232

100,745,157100,745,157

31 December 2013 (previously stated)

11,196,006,79023,168,144,078

100,745,15734,464,896,025


--



[5] Current liabilities

[4] Non-current assets

Insurance deposit is deposit denominated in USD. According to Circular 232/2012/TT-BTC, insurance deposit is recorded in long - term receivables and no longer in other non -current assets.

(*) Premium Receivable from assumed reinsurance will be offset with commission payables from assumed reinsurance as follows:

Current liabilitiesReinsurance assumed payables (*)Reinsurance ceded payables (**)Technical reservesUnearned revenue


-42,453,778,720

677,327,876,007-

719,781,654,727


Circular 232

(259,130,849)(5,042,148,540)

677,327,876,007(1,006,730,287)

671,019,866,333


259,130,84947,495,927,260

-1,006,730,287

48,761,788,396

(**) Commission from ceded reinsurance will be offset with Premium Payable from ceded reinsurance as follows:

Commission payables from assumed reinsurancePremium Receivable from assumed reinsuranceReinsurance assumed payables

Premium Payable from ceded reinsuranceCommission from ceded reinsuranceReinsurance ceded payables

31 December 2013

259,130,849(259,130,849)

-

31 December 2013

47,495,927,260(5,042,148,540)42,453,778,720

[6] Non-current liabilities

Non-current liabilitiesUnearned revenue


1,006,730,287719,781,654,727


Circular 232

1,006,730,287671,019,866,333


-48,761,788,397


The detailed explanation of comparative figures of opening balance presented in income statement was as follows:

[1] Insurance revenue according to Circular 232/2012/TT-BTC includes premium deduction/returns and reinsurance premium assumed

Gross written premiumsDeductions on gross written premiumPremiumReinsurance assumed premiumsDeductions on assumed premiumsCeded PremiumMovement unearned gross premium for period

Previous yearVND

286,252,868,577(7,795,254,481)

278,457,614,09645,554,055,653(3,461,437,489)42,092,618,164

(12,209,574,173)

[7] Technical reserve

According to the Circular 232/2012/TT-BTC the technical reserve is recorded in current liabilities.

Extracted from income statement

Notes

[1]

[1][1]

[2]

[2]

[2]

[3]

[3][4][4]


Circular 232

(7,795,254,481)

(3,461,437,489)(11,256,691,970)

12,209,574,173

10,952,951,233

(1,256,622,940) (4,030,008,248)

184,553,477,493

180,523,469,245 (2,231,515,900)

2,231,515,900


stated)

286,252,868,577

45,554,055,653 11,256,691,970

- -

1,256,622,940 4,030,008,248

-

- 2,231,515,900

63,831,836,379


278,457,614,096

42,092,618,164 -

12,209,574,173

10,952,951,233

- -

184,553,477,493

180,523,469,245 -

66,063,352,279

RESOURCES

Gross written premiumReinsurance Assumed premiumRefund/DeductionIncrease in Unearned Gross and Assumed Premium ReservesIncrease Unearned ceded premium reserveIncrease in Unearned premium reserveIncrease in Claim reserveDecrease in Direct and reinsurance assumed claim reserve Decrease in reinsurance ceded claim reserveSelling expensesAdministration expense




[2] Increase in unearned premium reserve was reclassified as follows:

[3] Decrease in claim reserve was reclassified as follows:

[4] Administration expense:

The adjustment is reclassification Selling expense to Administration expense amounted VND 2,231,515,900 according to the Circular 232/2012/TT-BTC.

33. EVENTS AFTER THE BALANCE SHEET DATE

There have been no significant events occurring after the balance sheet date which would require adjustments or disclosures to be made in the financial statements. 34. APPROVAL FOR ISSUANCEThe financial statements as at 31 December 2014 and for the year then ended were authorised for issuance by the Company’s General Directoron 27 March 2015.

Decrease in Direct and reinsurance assumed claim reserve Decrease in reinsurance ceded claim reserveDecrease in claim reserve

Increase in Unearned Gross and Assumed Premium ReservesIncrease Unearned ceded premium reserveIncrease unearned premium reserve

VND

12,209,574,17310,952,951,2331,256,622,940

VND

184,553,477,493180,523,469,245

4,030,008,248






ANNUALREPORT

2014

ANNUAL REPORT 2014 - Baoviet Tokio...

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