ANNUAL REPORT 2010 SAIGON SECURITIES incorporation SSI

CASH DERIVATIVES DIFFERENCIATING Securities Services Investment BankingAsset ManagementPrincipal Investments & TreasuryResearch & Investment Advisory 02060810122428323638 Management Stru

CASH

DERIVATIVES DIFFERENCIATING

Securities Services

Investment BankingAsset ManagementPrincipal Investments & TreasuryResearch & Investment Advisory

02060810122428323638

Management StructureInformation Technology

OperationsHuman Resources Management

Risk ManagementCorporate ResponsibilitiesAudited Financial Reports

Other DataNetwork Distribution

42545758606466114122

Solutions-led: We are focused on the outcome of making our customers successful, and we prioritise their individual needs over existing products or processes

Skilled: We are experts in our industry and in our markets, and will continually enhance our professional skills to provide the highest standards of service to our customers

Inventive: We empower and encourage our people to find new creative ways to bring success to SSI and its customers

INVESTMENT BANKING PROACTIVE The Business of Success

SSI operates based on the vision “The Business of Success”

At the heart of all our products and services is a drive for making success happen We help unlock opportunities in financial markets, and turn it into prosperity and growth

We put all our resources and ideas behind bringing success to our clients, our people, our shareholders and the communities

we operate in

Connecting capital to opportunities

SSI’s reason for existence is to connect capital to opportunities

This purpose unifies all businesses that come under the SSI brand, and will guide any future diversification that the brand

may undertake

MISSION

CAPITAL

mESSAgE

Dear fellow shareholders,

In the previous report, published at the beginning of 2010,

we emphasized that despite Vietnam’s optimistic long term growth prospects, SSI had maintained its conservative view regarding the economy in the post-crisis era The impact upon the economy from macroeconomic policies and the concern about a return of high inflation had called for prudence in the economy’s growth As we expected, although the growth of GDP in 2010 reached 6.78%, which is higher than target, the challenges, resulting from inflation, exchange rate, interest rate levels as well as the return on investment capital, have remained

In 2010, the total capital raised through the stock market tripled, compared to that of 2009 but the concerns about macroeconomic policies, exchange rate and inflation have negatively influenced the performance of the stock market

VN-Index was closed at 484.66 points in the last trading session of the year, 2.04% decline YoY The market liquidity shrunk by 1.1% compared to 2009, partly due to more conservative investment of foreign investors

In this difficult market environment, SSI did not achieve the business target set at the beginning of 2010, although the company maintained the best operating securities firm in the industry Revenue in 2010 hit VND 1,503.4 billion, 34% higher than that of 2009 but 5% lower than target Profit before tax reached VND 902.8 billion, 5.5% decline YoY and 25% lower than target

Although the 2010 business target was missed, we have achieved a lot; in particular:

• Securities Services continued to lead the market in the foreign institution segment, acquiring 30% market share

of trading value and returned to the top position for market share in Hochiminh Stock Exchange (HOSE) from June

2010 We continued to have the highest brokerage revenue

in the market

• Investment Banking achieved record high revenue of VND 119 billion with 206 new contracts in 2010, and continues to lead the market This result was partly due to the continuous effort

in introducing new products and services

• Despite the difficulties in raising capital in the market, SSI Asset Management Company has successfully increased AUM by VND 760 billion, of which VND 360 billion was for the Member fund investing overseas SSI’s Vision Fund (SSIVF) continues to be one of the safest domestic funds in 2010

• Principal Investment and Treasury business had always performed with the safety and effectiveness principle, investing prudently in value stocks in defensive sectors whilst still capturing the market opportunities

• Research reports from SSI Research and Investment Advisory continue to be highly regarded by our clients, especially foreign institutions in Vietnam 2010 is the first year that the Research and Investment Advisory department has signed a long term advisory contract with Daiwa Vietnam Mother Growth Fund in Vietnam

In November 2010, SSI has successfully organized the,

“Gateway to Vietnam 2010”, conference, the annual event with the objective of connecting capital with investment opportunities With the theme, “Driving growth through the private sector”, the conference attracted over 600 domestic and foreign investors and provided them with a comprehensive view regarding the potential of the market and the private economy

In 2010, SSI was amongst the Top 10 private companies who contributed the largest amounts of tax to the Government, and

2010 was also the year that SSI began to implement the plan to build permanent schools combined with places to shelter from storms and floods in Ha Tinh province, included in the, “leaves protecting tattered ones”, charity programme

Chairman’s Message

SSI perseveres with prudence

in investment and value

benefits of investors and shareholders at the highest level

Coming to the year of 2011, we recognise that the monetary tightening policy will continue to be promoted However, the pressure on inflation has been occurring in the early days of the year Therefore, we believe that there will be many difficulties

in investment capital, inflation, interest and exchange rates in the business environment during 2011 Facing these economic forecasts, SSI perseveres with prudence in investment and value investment, to protect the benefits of investors and shareholders at the highest level We also believe in the success of investing for the future and we are committed to continue the mission of connecting capital with investment opportunities and we are faithful to the mission of an advisor, a market-maker, a fund manager, a financial investment institution and a co-investor

We appreciate the contributions of all employees in the previous year with high dedication, creativeness and solidarity

We are grateful to our valued shareholders, clients and partners who have always supported SSI in the past years And on behalf of all SSI’s staff members, I commit that SSI will gain improvements in performance in 2011 to continue

to bring benefits to shareholders, clients and contribute to the development of the economy and the prosperity of society

My sincere thank you,

Ho Chi Minh 15 March 2011Chairman cum CEO

NguyEN Duy huNg

Being the transitional year following the year 2009 with the

message of New vision And Brand Expression , in 2010, SSI launched a new plan of, From vision to Actions, as the

preparation for the new development period of the Company

With the, “From vision to Actions” plan, 2010 witnessed

many significant reforms in SSI with the aim of achieving short-term and long-term goals In the short-term, SSI had taken action with a lot of systematic solutions to maintain the leading position across all business lines SSI had also provided customers with the most suitable products, services and solutions in accordance with the market situation; at the same time, the Company focused upon the in-depth investment activities in information technology infrastructure, operations, completing personnel organization systems, strengthening compliance control activities, risk-management mechanisms and improved the financial management level

In the long-term, SSI aims to continue developing its key strengths in the role of the leading financial intermediary institution in consultancy, brokerage, market-making and asset management In particular, all SSI’s business units had fully accomplished in-depth procedures to be prepared for the new development period:

• The Securities Services was divided into two business units

of Institutional Brokerage and Retail Brokerage including the chain of all branches The Research and Investment Advisory was merged into the Institutional Brokerage to strenghthen the No 1 position as Institutional Broker and at the same time, the Individual Research was set up to fulfil the increase in demand of the typical customers in this market segment

• The Investment Banking had re-organised the structure and recruited new senior personnel in order to serve the needs of enterprise customers operating in basic fields

of the economy and to diversify the products to suit the requirements of domestic and foreign investors, to strengthen and expand M&A advisory

• SSI Asset Management Company had also focused upon improving human resources and technology to satisfy the diverse needs of funds with different investment objectives and to prepare the infrastructure for mutual funds In 2010, SSI had also made an important decision to gradually reduce proprietary activities and the entire investment portfolio would be partially and then fully transferred to the SSIAM to confirm the entirely transparent policy in all business activities when providing products or services to customers

1999-2000 2001 2002 2004 2005 2006 2007 2008 2009 2010

30/01/2009: Chartered capital reached VND 1,533,334,710,000SSI was awarded the “Best Broker in Vietnam” and the

“Best Equity House

in Vietnam” These awards were presented

by the famous Finance Asia for the second consecutive year

12/2009: The establishment of Nha Trang branch

01/2008: The establishment of Hong Bang Transaction Office

SSI received the “Best Broker in Vietnam”, presented by the prestigious Finance Asia magazine

03/03/2008: Chartered capital reached VND 1,199,998,710,00016/04/2008: Chartered capital reached VND 1,366,666,710,00005/2008: The establishment of Vung Tau branch

02/2007: The establishment of Tran Binh Trong (Hanoi) branch

04/2007: The establishment of Nguyen Cong Tru (Ho Chi Minh City) branch

05/2007: The establishment of Hai Phong branch

06/2007: The establishment of 3/2 Transaction Office

07/2007: Chartered capital reached VND 799,999,170,00003/08/2007: The establishment of SSIAM Co Ltd

29/10/2007: SSI was officially listed on

Ho Chi Minh City Stock Exchange Center (now known as the

Ho Chi Minh City Stock Exchange Department)

02/2006: Chartered capital reached VND 120,000,000,00005/2006: Chartered capital reached VND 300,000,000,00009/2006: Chartered capital reached VND 500,000,000,00015/12/2006: SSI’s stock is listed on the Hanoi Stock Exchange Center

02/2005: Chartered capital was raised to VND 26,000,000,000

5 main operations:

investment advisory services, securities services, principal investment, securities depository and investment portfolio management

06/2005: SSI raised chartered capital to VND 52,000,000,000

6 services inclusive of underwriting service

04/2004: Chartered capital reached VND 23,000,000,000

09/07/2002: SSI 02/2001: Chartered

capital reached VND 9,000,000,00007/2001: Chartered

30/12/1999: SSI was founded

Its head office was based in Ho Chi Minh City with two main operations: Securities services and investment advisory

04/2004: Chartered capital reached VND 23,000,000,000

09/07/2002: SSI established its branch

in Hanoi expanding its networks to Northern areas

9,000,000,00007/2001: Chartered capital was raised to VND 20,000,000,000

4 main operations as follows: investment advisory services, securities services, principal investment and securities depository

operations: Securities services and investment advisory

The initial chartered capital was VND6,000,000,000

EQUITIES CHALLENGES SKILL

DEvELOpmENT

mILESTONES

01/2010: The establishment

of Quang Ninh branch

SSI is in the list of the Top

10 companies contributing the highest amount of tax to the Government

SSI has been awarded the

“Best Broker in Vietnam”

and the “Best Equity House in Vietnam” These awards were presented by Finance Asia for the third consecutive year SSI is the first company to receive the

“Best Investment Bank” in Vietnam prize

SSI Asset Management Ltd

(SSIAM) was honored to be the first asset management company to win the “Best Vietnam Onshore Fund House” presented by the Asian Investor

03/03/2010: Chartered capital reached VND 1,755,558,710,00018/05/2010: Chartered capital reached VND 3,511,117,420,00009/2010: The establishment

of My Dinh branch (Hanoi)

KEy

BuSINESS uNITS

SSI provides a variety of financial products and services to every type of institutional, individual, domestic and foreign customer:

Basic products and services include securities accounts opening, Securities services, order trading services, cash transactions, securities depository, OTC

transactions consultancy and support

Financial corporate investment services and support for customers in securities trading were developed based upon the real demand of users and the

Company’s risk management policy

E-trading services which includes, Smart Trading, Web Trading, Contact Center and SMS effectively supporting clients with convenience and high speed

Market summaries, business sector analysis, scrutiny of stock reports, on-site visits to companies and workshops on investment opportunities.

Continuously improve the quality of basic products and services to better support and satisfy customers’ needs Continue research into customers’ demand, transaction history, the development of products and services in the market in order to create more efficient corporate financial investment services

Remain the leader in effectively applying the latest technology in e-trading products and services, focusing upon the convenience, user friendliness, high speed, safety and efficiency for the clients

Widening the portfolio of stocks for investment consultancy and researching and producing categorised analysis for individual customers.

SSI provides a variety of financial advisory services, including:

Corporate finance advisory: business evaluation, corporate financial restructuring, Mergers and Acquisitions (M&A), business dissolution and

division, etc.

Capital raising advisory in domestic and foreign capital markets, including equity capital market and debt capital market: equitisation IPO advisory, stock

issuance advisory and underwriting (IPO and other issuances), stock listing advisory, corporate restructuring advisory and derivatives products.

Focusing upon large scale companies with prestige and stable development in core sectors of the economy Diversifying services of capitals, debts, hybrid, structured to satisfy the demand of domestic and foreign investors Strengthening and expanding the M&A advisory, coordinating with international investment banking partners to best capture international M&A opportunities

Concentrating upon human resources and the efficient development of supporting tools in order to improve the quality of SSI’s professional investment banking services that are adapted to meet international standards.

SSIAM provides individual customers with a variety of asset management products and fund management services:

Fund management includes middle and long term onshore and offshore fund management

Portfolio management includes full and specific portfolio management services for institutional and individual, domestic and foreign customers

Assets management for high-income clients

Efficent value-added services for investors.

Strengthen and develop successful factors to maintain competitive advantages to achieve goals Develop differentiated investment strategies to create additional Asset Management products and services in order to attract a greater number

of domestic and foreign institutional clients Coordinating with Securities Services to market assets management products to individual customers with high value assets Preparing for the opportunities from Mutual Funds.

Our research products includes:

Company report: initiating company report, periodic and event-based company update report

Market reports: focusing on the analysis of macroeconomics and the stock market for each day/week/month

SSI 30 reports: analysing and forecasting the trend of the whole market by using an index calculated from the 30 largest companies in the market

in terms of market capitalisation

Sector Watch: a deeply analysed, objective opinion regarding the development of each sector which includes recommendation for institutional

and individual clients when restructuring their investment portfolio

Other reports such as Technical reports, Due Diligence reports and customised packages of reports.

The Research and Investment Advisory department will be divided into two separate divisions to create the most suitable products for different customer groups, including:

• Research and Investment advisory services for institutional clients

• Research and Investment advisory services for individual customers Increasing the number of listed companies under coverage and launching a greater number new research products.

Securities Services

Investment Banking

SSI Asset management (SSIAm)

research and Investment Advisory

Capital structure

prOFIT rATIOS 2008 2009 2010

Profit after tax/Total assets (ROA) 4.46% 11.36% 7.80%

profit after Tax Net revenue

(VND billion) (VND billion)

Total Assets Chartered Capital

1,600 1,400 1,200 1,000 800 600 400 200

10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000

1,000 900 800 700 600 500 400 300 200 100

Business

ENvIrONmENT

& prOSpECTS

GDP growth rate in 2010 reached 6.78%, higher than the year’s target of 6.5% and the growth rate in the second half of the year was much more positive than the same period last year

The industrial and services sector exhibited a good growth rate

Exports rose by 25.5% to USD 71.63 billions, higher than the 20.1% rise of imports to USD 84 billions FDI disbursement stood at USD 11 billions, 10% higher than last year’s figure

Export turnover (except that of crude oil) continued to increase

at high growth rate (26.8%) with half of the turnover being from goods with high and stable global demand such as rice, seafood and consumer staples

Domestic consumption posted a good growth rate (24.5%) thanks to the demand of the country’s young population In

2010, Vietnam became a medium income country and demand for consumer goods and services is expected to increase rapidly in the coming years

yet the economy still faces many challenges

Besides the achievements, Vietnam’s economy still faces many challenges, reflected by the downgrade of Vietnam’s credibility with international organisations owing to issues related to inflation, foreign exchange reserve, country debt, balance

of payment deficit, trade deficit… Expectations for a year of breakthrough growth rate in parallel with the recent recovery

of the world economy did not happen but was substituted by the slow recovery and the economy’s intrinsic issues which revealed the inefficiency of state-owned enterprises, low return

on invested capital and recurring inflation

Below are SSI’s research & Investment Advisory’s views about several issues of the economy in 2010

Inflation not yet controlled

Inflation seemed to be tame in the first 8 months of the year

as the government held back the price increases of some utilities and imported inflation was moderate However, beginning in September 2010, CPI inflation escalated, owing

to the sharp rise in global commodity and food prices Other

causes included the pro-growth policy of the Government, some seasonal effects and the depreciation of the VND against USD, which itself weakened owing to the continued easing policies of the US Federal Reserve

For the whole year, CPI increased by 11.75% Goods items with higher than 10% price increases included food and restaurant services (16.18%), housing and construction materials (15.74%) and education (19.38%), amongst which, food has the greatest impact owing to its predominant weight in the CPI basket The figures show the Government’s strong measures to curb inflation towards the end of 2010 required more time to be effective

policy shift from pro-growth to macro stability:

Fiscal policy faces challenges Interest rate: As a result of the CPI spike since the end of Q3

2010, the Government shifted its policy from pro-growth

to macro stability The shift was appropriate but put a lot of challenges to fiscal policy At the end of the year, high demand for funds and low liquidity in some of the small banks pushed

up interest rates, especially in short-term maturity, to over 17.5% and even higher at some points In addition to that, with the rise of the price of gold, people rushed to buy gold to fight inflation instead of saving, which impacted upon the liquidity

of the banks Interest rate competition pushed up interest rates even further, preventing enterprises from obtaining funds

As a result of regulatory pressures upon banks to increase charter capital, 2010 has overall, been a difficult year for their performance The weak market sentiment and high interest rates have also negatively affected the real estate sector and has been preventing major expansion plans in many other industries

OvErvIEW

ECONOmy IN 2010

Vietnam GDP growth rate in the second half of 2009 and 2010

yoy grouwth rate 2h2009 2h2010

The aforementioned concerns had caused State bank of Vietnam (SBV) to initiate measures to support liquidity; notably the increased activities of the open market operation in the closing months of 2010 and the beginning of 2011

Exchange rate: VND was amongst the poorest performing

currencies in the emerging markets during 2010, when most

of the Asian currencies strengthened on the back of the declining USD The adjustment, on two separate occasions, to the exchange rate were attempts to close the spread between the official exchange rate and the unofficial market rate, which was under pressure from the balance of payment deficit

The fluctuations in the exchange rate, in the unofficial market, reflected speculation in light of the continued high trade deficit and low impact of increased FDI disbursement on trade deficit

as Vietnam had commenced investment abroad Gold price and spiking CPI inflation also did not help the exchange rate

Besides, the error term in the balance of payment was striking, and caused investors, those without sufficient information, to assume trade deficit

Although the depreciation of the VND has continued to be

a major boost for the export sector, it also causes a negative impact upon Vietnam foreign debt, both at government and enterprise level

vIETNAmESE STOCK mArKET pErFOrmANCE IN 2010 The stock market has endured a year of many ups and downs

2010 was a year with many ups and downs in the Vietnamese Stock Market, affected by international and domestic economic situations The truth is completely different from the optimistic forecasts of organisations and experts at the end of 2009

During 2010, the market price index stood still for a long period

At the end of the trading session on 31 December 2010, the VN-Index reached 484.66 points, a decrease of 2.04% over the same period in 2009 The lowest point of the VN-Index was set

on 25 August 2010; however, this had increased about 80% in comparison to the lowest point of 2009 at 235.5 points The peak of the Index was 549.51 points set on 6 May 2010, lower than the peak of 2009 at 624.10 points, decreased by 12%

For some periods during this year, the VN-Index did not reflect the real situation of the market when the increase of some blue-chips had retained the “green colour” of the market Due

to this fact, many investors tended to turn their attention to the HNX-Index when the Hanoi Stock Exchange (HNX) reflected more accurately the supply-demand relationship in the market

With the increase of the VN-Index trading sessions to 136 and the HNX-Index trading sessions to 117 (as at 31/12), total market transaction value at the end of 2010 was VND 620,312.3 billion, equivalent ot 20,578.5 million shares traded

114,000 billion and included VND 83,000 billion from stock issues The remainder was from bonds and other forms(1) This fact is proof that the stock market has become the main capital raising channel for companies

Owing to the low liquidity in the capital market and high interest rates on deposits, most of the issued stocks in the market were focused upon existing stockholders with high discount rates, sometimes as high as 50% There were many large IPOs in the market but they were not successful and did not attract many investors, such as: Da Nhim – Ham Thuan – Da Mi Hydropower Company, Vietnam Electric Equipment Cooperation, Vietnam Industrial Construction Cooperation, Hochiminh State Financial Investment Company, PV Gas…

Treasury market was low in liquidity but witnessed many success

Even though there were many difficulties in the market, the primary market has accomplished considerable achievements The total of successfully issued state bonds (SB) reached the record of nearly VND 110,000 billion, the amount of companies’ bonds (CB) was more than VND 47,000 billion At the same time, Vietnam has successfully issued USD 1 billion

of treasury into the international market Quality of the products

in SB market was highly valued by the State Treasury, which accelerated the issue of bulk bonds with about 40 new bonds, in which there were many codes valued from VND 3,000 to 4,000 billion

The annual interest rates of Government bonds ranged from 10% to 12% During the first six months of the year it was similar to bank deposit interest rates; for the last six months,

it was relatively lower than bank interest rates However, foreign investors did not pay much attention to the bond market and after 2009, they have not returned to the Vietnamese bond market owing to the uncertainty of the value of the VND in comparison to the USD

Strengthening corporate governance practices

Since the establishment of the Enterprise Laws (2005) and the Security Laws (2007), 2010 would mark a significant development with the first criminal prosecution of insider trading

in public stocks and in some high profile corruption indictments

in the SOE sector This indicates that the Government is quite serious regarding its objective of improving corporate governance amongst the country’s SOEs and public companies.SSI’s Research and Investment Advisory believes this is a good sign for the stock market and additional similar events will strengthen the confidence of both domestic and foreign investors in Vietnam

(1) According to Vietnam Investment Review, No 04 (944) January 10th 2011 – “From July 01, IPO conditions would be more difficult”

VN-Index

VN Index & Daily Trading Value

600 500 400 300 200 100

Deposit growth YTD

Credit growth YTD

Deposit growth and Credit growth

hOSE hNX Total of hose & hNX

vN-Index

volume

of trading (mil of shares)

value of trading (bil vND) hNXIndex

volume

of trading (mil of shares)

value of trading (bil vND)

volume

of trading (mil of shares)

value of trading (bil vND)

dispensing with the “gambling” criteria previously seen The market portfolio was highly differentiated, creating opportunities for institutional investors to buy stocks and a greater number of new investors appeared, representing high value

For listed stocks, according to statistical figures, there were massive new listings of companies in 2010 Total new listed companies in Vietnam Stock Market reached 189 enterprises, with 113 companies on the HNX and 76 companies on HOSE

There were 92 new listed stocks on the UPCOM exchange

In view of the efficiency of raising capital through the stock market, the growth of capital raised in 2010, through that means was three times more than in 2009, reaching VND

Current account balance

mACrOECONOmICS Inflation is the major risk factor for 2011

Vietnam CPI has been quite volatile due to heavy food &

foodstuff component (39.93%) in the CPI basket and it is difficult to anchor expectations Continued rising commodities prices (in parallel with prices of world commodities), unstable weather affecting food supply, pending hikes in the domestic price of coal and electricity power and expected further depreciation of the VND are among the major drivers for 2011 inflation Exchange rate will also be a factor on inflation rate as demand for imported materials and consumption continue to rise; at the same time, maintaining stable exchange rate and regaining confidence in the VND remains a challenge for the authority

In terms of fiscal policy, it is apparent that the Government would follow the belt tightening policy, for example, diminish unnecessary investment projects, reduce budget expenditures, restrain the budget overspending to 5% Public investment is always an important motivation for economic growth, we can easily realise that the tightening fiscal policy, a strong step

to curb the inflation rate, would have considerable effects on the development of the whole economy The tightening fiscal and monetary policies will create many challenges for the development of the economy

Following the many difficulties of 2010, inflation pressure persisted at the start of 2011 Fiscal policy will continue to face challenges in 2011, especially in supporting the growth target

of the country at 7.0%-7.5%, which is higher than the growth

of GDP in 2010

With inflation being a foreseeable challenge, monetary policy

is still aimed at macro stability However, it’s difficult to predict when inflation will be sufficiently controlled to enable a shift

in policy; and as long as the interest rate is at a high level, enterprises will find it difficult to obtain funds or will obtain funds at high cost, whilst still suffering from the rising price

of input materials Growth is likely to be the priority towards the end of the year At the moment, avoiding persistant high inflation and curbing a recurrence during the year requires the authorities to implement prudent monetary policy

SSI’s Research & Investment Advisory believes interest rates

will maintain a high level for a period of time before declining;

however, at which level this occurs will depend very much

upon SBV’s measures and the overall health of the banking system and the Government’s ability to perform the budget reduction plan

Exchange rate: On 11th February, SBV predictably raised the

interbank rate from 18,932 VND/USD to 20,693 VND/USD, with the trading band lowered from +/-3% to +/-1% This considerable adjustment (of over 9%) was a tough measure

by SBV to close the gap between the official market and the unofficial market and make the official rate a better reflection

of the market equilibrium This gap, between the two market rates, had been over-stretched during the last 2 months.The exchange rate issue has been solved to some extent, right from the beginning of the year This move re-established confidence in the currency and encouraged an expectation for

a stable exchange rate for some time to come However, trade deficit still lingers on with the demand for USD at the end of the year and the possibility of an increased foreign exchange reserve This will be closely watched by the authorities so that more necessary adjustments can be carried out during the year.SSI’s Research and Investment Advisory believes, trade deficit pressure in 2011 will be eased thanks to the expected increase in foreign remittances and inflows from ODA, FDI and FII disbursement The fact that products from Dung Quat oil refinery will be marketed country-wide and exports will benefit from the weakened VND can contribute to an expectation of

a lower level of trade deficit in 2011 compared to 2010 This, combined with the adjustment of foreign exchange rate, will help reduce the pressure on the balance of payments

Challenge on growth expectation

The Government has set growth targets for 2011 at 7.0%-7.5%, which is higher than the growth rate of 2010 SSI’s Research and Investment Advisory believes GDP growth can hardly reach 7% Growth motivations for 2011 are:

(1) The continued recovery in global consumption in 2011 will help support exports Imports will most likely rise but less

so than in previous years, as the Dung Quat oil refinery

is now operating at full capacity and its products will be marketed throughout the domestic market.

2011

ECONOmIC OuTLOOK

2011 Market Outlook:

Facing many challenges

and instabilities before

a permanent growth

• Vietnam will hardly achieve the expected GDP growth rate in the beginning of 2011 Exports will continue at the similar rate as in 2010 and trade deficit will stabilise

Whereas, investment and consumption will be negatively affected by the tightening monetary and fiscal policy

• CPI will most likely remain at a high level due to the pressure of inflation in the world, as well as the depreciation of VND

• SSI’s Research and Investment Advisory believes that the significant exchange rate adjustment of the SBV is necessary, however, it will take time for the authority departments to reduce the gap between the listed exchange rate and the exchange rate in the free market

• The interest rates will be maintained at high level in the first part of the year In the short term, the orientation for the monetary and fiscal policies will still tighten in order

to restrain the inflation rate, and growth will be considered once the economy is in a stable situation

SSI’s Research & Investment Advisory main market predictions, based upon the above assumptions are as follows:

• Average P/E ratio in 2011 might decrease from the current rate of about 10x to 8x – according to the estimation of SSI’s Research & Investment Advisory after removing the impact of some high market capitalisation stocks, which was driven to a high price level due to the trading of some foreign index funds

2011 Economic Outlook

• Revenue and net profit growth in 2011, of the companies

in our coverage (except bank and insurance stocks), is estimated to be 12% and 9% respectively (in 2010 the revenue and net profit growth of these companies was 38% and 16% respectively) The companies will likely face many difficulties in 2011, with the largest challenge coming from high input expenditures, which affect the profit margin while there are not many positive trends in the consumption market

• VN-Index will continue to be volatile and will most likely deeply decrease before a return

However, the real situation could be more positive than the base scenario suggested by SSI’s Research & Investment Advisory, in particular:

• The macroeconomic situation becomes stabilised due to the decrease in inflation rate thanks to the decrease in the selling prices of food and other products The SBV will maintain the current interest rate and can reduce the rate gradually The exchange rate also becomes stabilised, the gap between the official exchange rate and the exchange rate in the free market will likely be narrowed

If these context happens, the Vietnamese Stock Market might enter into a recovery period and maintain the growth rate of 20-25% in comparison to 2010

(2) Foreign investments will most likely return to Vietnam with

the global economic recovery and more available indirect

investments from developed countries to emerging and

frontier markets.

(3) Domestic consumption will continue to lead growth, with

the rise of the middle-income population and the country’s

younger generation which will continue to focus upon

spending, rather than saving.

Nonetheless, with the rising trend of inflation in the first quarter

of 2011, monetary and fiscal tightening policies will cause negative effects on the growth rate in the short term, however,

we still believe that these policies are necessary for

a stable development in the future

2011 mArKET OuTLOOK: FACINg mANy ChALLENgES AND INSTABILITIES BEFOrE A pErmANENT grOWTh

In our base-case market scenario, SSI’s Research and Investment Advisory has made the following major fundamental assumptions:

Performance Business

pErFOrmANCE

BuSINESS pErFOrmANCE

The Vietnamese Stock Market, during 2010, is recognised

as having many upturns and downturns and results were not as positive as forecasted Our Securities Services was still able to maintain the market’s leading position with very steady steps The revenue for Securities Services business was VND 288 billion; an increase of 45% compared to

2009 This is the highest revenue of the division since the foundation of SSI

Maintained the No 1 position in foreign investors’

brokerage market share and won back the leading position in terms of brokerage market share on HOSE

in the last six months of 2010.

In contrast to the volatile situation of market shares in other securities companies, our Securities Services still maintained a stable transaction value thanks to our foreign institutions and individual customers with regular, large transactions The Brokerage market share of SSI is around 10% on HOSE and 4% on HNX and particularly from October 2010, this market share rose to around 12%

on HOSE In terms of brokerage market share for foreign investors only, SSI accounted for more than 30% of the total market share

The spectrum of customers has grown steadily in both quantity of accounts and value of transactions

As at the end of 2010, there were 54,000 accumulated accounts which had been opened at SSI, including 300 accounts of domestic and 250 accounts of foreign institutional customers

With the advantage of a strong brand and financial resources, SSI continues to attract the attention of foreign institutional and individual customers with large transaction values The total transaction value of domestic investors was more than VND 53,032 billion, mainly from individual customers with large transaction values and some domestic institutional customers such as listed companies, insurance companies and investment funds The total transaction value of foreign investors was more than VND 27,445 billion, from SSI’s long-established and new customers, some of the largest global financial institutions such as Deutsche Bank London, Vaneck, KITMC, Daiwa, Templeton, Horizon, Credit Suisse, Lion Capital, Prudential VN, Société Générale, Morgan Stanley, HSBC, Manulife VN The most outstanding event in 2010, from our foreign customers, was the emergence of ETF trading from international financial institutions and due to these transactions, the liquidity of the stock market was considerably improved since October til present

A variety of products and services to effectively meet the complexity of individual customers’ needs

Placing the focus upon the individual market segment, SSI continued to research widely and to develop our services which are divided into three main groups: basic services, financial services and online services

For basic services, we offer our customers new additional

functions in account opening, listed securities depository, stock-owners management and payment services Value brought to customers was primarily in the reduction of waiting times and simplified trading procedures together with the consistent quality of services provided throughout the whole system

OuTSTANDINg FIgurES AND EvENTS

• REMAIN thE lEAdER IN thE foREIgN INstItutIoNAl BrOKErAgE SECTOr WITh mOrE ThAN 30% OF ThE TOTAL mArKET ShArE

• WINNINg bAck thE No 1 posItIoN IN tERMs of BrOKErAgE mArKET ShArE ON hOSE FrOm JuNE 2010

• hIghEst bRokERAgE REvENuE IN thE MARkEt

• thE ssI sEcuRItIEs sERvIcEs hAs WoN thE “bEst BrOKEr IN vIETNAm” AWArD, prESENTED By FINANCE ASIA FOr ThE ThIrD CONSECuTIvE yEAr

350

50.39

255.85

121.16 197.19

288

2006 2007 2008 2009 2010

(vND billion)

SECurITIES SErvICES SEC

SECURITIES SERVICES SECur

SECURITIES SERVICES urITIES SE SECURITIES SERVICES ITIES SE ICES SECURITIES SERVICES ICES

for individual clients

In a situation where the competition is becoming increasingly fierce, not only from domestic but also from the penetration

of foreign securities companies, SSI’s Retail brokerage sector clearly defined the development strategy utilising specific steps

Broadening the spectrum of customers, based upon the diversification of products and services that are categorised for each individual client market segment is the most important

strategy upon which SSI is focused Understanding that the individual client is a complicated market segment with

a variety of demands, SSI takes careful steps to address market segmentation, existing actions analysis and future demand predictions for each group This policy has led to the development of categorised service packages for each customer and risk management to minimise the loss for our customers and for the Company

We aim to create a perfect customer strategy which is reflected

in the combination of the basic services, the best financial products, the convenience and preferences in the trading method together with the value-added services These are the core values that help SSI to satisfy existing customers to the maximum and to attact new customers

Completing the standardised retail operating system for the Securities Services to meet the diverse needs of the

increasing spectrum of customers with additional products and services is an important strategy of SSI in order to maintain its position Researching advanced operation models

in the world and comparing them with our current situation and conditions in order to select and successfully apply, step by step, the model into SSI is our plan and goal for the upcoming period This model will provide our customers with the right services at the right time, improve the performance

of the Company, minimise the risk and create the outstanding and long-term competitive advantage

Improving and developing the modern online trading system to

attract new and active market segment, besides the traditional customers With the forecast on the trend of the market as well

as the demand of the active segment, SSI continues to introduce new versions of the Web Trading with many pre-eminent functions such as orders with conditions, investment portfolio management by selected strategy, warning… to provide the convenience, simple user-friendly interface, optimum speed for the investors In addition, SSI will develop the application for portable devices such as mobile phones, iPads that support investors and enable quick trading any time, at any place

The foundation for the success of the above strategies is continuously improving the skills and capacity of the Securities Services staff by performing internal training courses, experience study trips at SSI’s international strategic partners’ sites, provide all the best conditions for staff’s service attitude and creative abilities

service and product that we offered to clients were created with the maximum benefit in mind, and beside the speed of the services provided at the right time and for the right demand, we also consider the protection for all of our clients from fluctuations in the market

together with “pre-eminent customer development and customer care” and the “optimum trading system”

These three strategies have created the comprehensive strengths that help SSI maintain its outstanding position

We developed a pre-eminent customer management

system which aims to increase the satisfaction of

existing clients and to effectively attract new customers

SSI carefully researched the demand and characteristics

of each type of customers and divided these clients into groups based on specific criteria We have built perfect development and customer care strategies with products and services for the most simple needs and provided other outstanding value-added services

The differentiated and outstanding products were shown

in a variety of business areas; companies with different market value and especially the products were created and designed to the specific orders of the clients

The optimum trading system with high and accurate processing speed was also one of the strategies focused

upon by the institutional brokerage sector SSI continues

to study and apply new technologies and to build a new system with all necessary functions to support and help the institutional investors perform trading, using the market information in the most effective way

Develop the retail system and diversify the products

Financial and corporate securities investment services were

developed based upon the combination between our clients’

needs and the risk management policy for both our clients and

SSI This policy had brought us positive results in terms of both

revenue and client numbers

Our online services have strongly attracted the attention of

clients in the active segment with their high speed and user

friendly interface Besides the online order placing service,

utilising the Token (Smart Trading) with a limited number of

customers, SSI introduced the provision of online order placing

through our website (Web Trading) with many new functions

and unlimited transaction option Apart from placing orders,

our customers can also use the cash transfer or cash advance

services, and in the near future, all conditioned orders can

be placed through our website The Contact Center service

(customer care center) is the central division of our online

services With various updated functions, the Contact Center

has truly satisfied our clients with different services, such

as order placing, cash transfer, market summary, securities

transaction account statements…

Together with basic products, we also provide our customers

with other value-added services such as direct consulting

services, providing information before and during the

transaction process; workshops to introduce investment

opportunities; company visits to learn about the activities

of listed companies

New branches and transaction offices opened

In 2010, SSI continued expanding by opening a new branch

in My Dinh, Hanoi, bringing the total number of branches

and transaction offices to 11 Besides increasing the total

number of offices, the Company focused upon improving the

performance of each branch by developing the retail operating

model, ensuring consistency in the performance standards of

the whole system

COmpETITIvE ADvANTAgES

For more than 10 years, since its foundation and development,

through the upturns and downturns of the stock market,

SSI has always maintained its position as the leading securities corporation in Vietnam SSI is a reliable partner for domestic and foreign investors seeking investment opportunities in Vietnam and has outstanding competitive advantages compared to competitors

Institutional brokerage

All of our long-established and new customers confirmed

that SSI has the competitive advantages in corporate

access as well as seeking potential investment opportunities It is not easy for foreign investors to source

information about Vietnamese firms and SSI has effectively provided valuable information about these companies, helping our investors to access actual performance

of these firms and have supported large deals which subsequently became successful transactions

SSI’s Analysing reports are highly appreciated by foreign

institutions and this is also a competitive advantage that attracts and secures institutional investors The reports offer objective analysis and reviews on macro-economic situations, the performance of companies and have become effective tools to support investment decisions

Our professional, young, dynamic, experienced and

well-qualified staff are trained overseas and are always

ready to support and consult with our customers

Retail brokerage

Along with our competitive advantages in the institutional brokerage sector, SSI still firmly maintains and confirms its leading position in the Retail brokerage market segment underpinned by our own strengths

It has been confirmed that the strong brand in the field

of operation with solid financial resources is a remarkable

advantage for SSI when compared with other securities companies Most of our investors feel comfortable

in conducting transactions with SSI because of the Company’s sufficient financial capacity and transparency

SSI has the largest capital and has always reached the highest revenue in the market

In addition, the macro-economic and fundamental

analysing reports are very effective tools to support

individual investors when making investment decisions

With objective analysis and accurate predictions, we have attracted the attention of many individual investors and this has created the unique characteristics in SSI’s reports

When problems occurred in the market and individual investors were suffering from serious financial losses

in their investment, the risk management policy of SSI

to protect investors and minimise the risk of financial products to the lowest level has become a strength to

attract individual clients Understanding the very complex and fluctuating demands of individual clients, every

Securities Services

Examples include the first convertible bond issuance at the end of 2009 for Hoang Anh Gia Lai, Hoa Phat, the first public takeover bid by Hung Vuong JSC of AnGiang Fishery Import and Export JSC, etc.

The range of services provided by SSI has become increasing diversified and has international-standard quality in order to add as much value as possible to our clients, including advisory of fund raising via direct and indirect investment from domestic as well as international market

Maintaining the leading position in the face of fierce competition in the market

Despite the small size of Vietnam’s investment banking market, the competition is fierce; with almost 100 local securities firm as well as international investment banks such as JP Morgan, Goldman Sachs and Credit Suisse etc Aside from the services allowed by regulation are still limited, some services do not have clear guidance from the authority This, coupled with the changes

in macro factors (inflation, interest rate), impacted negatively upon investors’ investment decisions

2010 was a successful year for our Investment Banking business with revenue growing 200% to VND 119 billions compared to VND 59.3 billions in 2009

IPO/SPO advisory, underwriting and M&A advisory services led the growth in revenue during 2010 In particular, the total number of advisory contracts in the year reached 206:

• IPO/SPO advisory for non-bank corporates with

total face value of issuance of about VND 2,873 billions, which accounted for 8.8% of the market issuance Some large names include Dabaco Vietnam (DBC-HNX), PetroVietnam Low Pressure Gas Distribution Joint Stock Company PV GAS D (PGD-HOSE), Quoc Cuong Gia Lai (QCG-HOSE), Intresco (ITC-HOSE), etc We maintain our leading position in this service segment

• Convertible bond issuance advisory (non-bank sector):

The total issuance value in the contracts advised is VND 4,603 billions Some of our clients include Hoang Anh Gia Lai JSC (HAG-HOSE), Tasco JSC (HUT-HNX), Transimex-Saigon (TMS-HOSE), Dai Thien Loc JSC (DTL-HOSE) etc

In this service segment, we are proud to have the most effective operations compared to peers

• Private placement advisory achieved outstanding results

with over VND 7,000 billions raised successfully One of the most successful deals was the private placement of VND 1,175 billions for Hoang Anh Land JSC at the issuance price which met well the company’s expectations

• SSI is always in the list of the top M&A advisory firms in Vietnam We have advised for many M&A deals in 2010

We were also the advisor for the first public takeover bid by Hung Vuong JSC (HVG-HOSE) of An Giang Fishery Import-Export JSC (AGF-HOSE), which opens a new development path for the Vietnam M&A industry

OuTSTANDINg AChIEvEmENTS

• MAINtAININg thE MARkEt lEAdERshIp posItIoN IN vIETNAm INvESTmENT BANKINg INDuSTry

• AchIEvINg “bEst EquIty housE IN vIEtNAM” AWARd

IN 2010 (SECOND yEAr AFTEr ThE AWArD IN 2009) AND

“BEST INvESTmENT BANK IN vIETNAm” AWArD, ThE FIrST FOr A vIETNAmESE COmpANy grANTED By ThE prESTIgIOuS FINANCE ASIA

Source: SSC, SSI

SSI hSC TLS SBS ACBS FpTS vpBS KEvS BvSC vNĐs

6 5 4 3 2 1 0

7 8 9

10 8.76 6.35

3.94 3 0.89 0.75

• Corporate capital restructuring advisory: With the

commitment to support our clients for the long term,

SSI has been successful in helping to develop their

brand name, raising enterprise scale from a potential

company to a large corporation This list includes

such names as Hoang Anh Gia Lai JSC (HAG-HOSE),

Quoc Cuong Gia Lai JSC (QCG-HOSE), Elcom

(ELC-HOSE) and Dabaco Vietnam JSC (DBC-HNX)

• Listing advisory: SSI advised 20 companies to list

their shares on the stock market with a total value of

listed shares close to VND 5,000 billions

Strengthening corporate capital advisory and M&A

advisory business in a sluggish market

• In 2010, corporate capital advisory business was

given special attention In the very high potential

private sector, SSI has been the top choice for

many companies to help them with restructuring

their organisation, building capital–raising

structures and business plans and building brand

name development plans in order to maximise

the enterprise value We provide service with our

commitment to work with our clients for the long

term, from a small company until they become

a large corporation This service segment also

benefits other service segments such as IPO/

SPO advisory, listing advisory and the investment

activities of SSI Asset Management Company

• 2010 was also a rewarding year for M&A advisory

business with quite a good number of successful

deals Quiet but efficient, M&A engagements

consulted by SSI have brought many effective results

to enterprises A sluggish market with low trading

volume had opened up opportunities for domestic

M&A activities, both on OTC and listed markets and

inbound as well as outbound M&A activities With

the establishment of an M&A specialist team, the

employment of experienced foreign experts and

a network of foreign investors, SSI’s M&A advisory

segment has become the core of investment banking

business in 2010 and 2011

COmpETITIvE ADvANTAgE

• SSI has created a firm foundation in the market as

the leader in investment banking activities Reputation

and quality of the services has been reaffirmed by the

preference of many large clients, such as HAG, PVF,

CTG, etc and the award granted by the well-known

publication Finance Asia

• We have a team of highly skilled investment bankers, who have gained qualifications from highly reputable domestic and foreign universities combined with years of experience, working in large domestic and foreign corporations Together with appropriate development strategies, create a distinctive competitive advantage for SSI in its business activities

• With our widespread domestic and foreign network

of partners, SSI’s Investment Banking is proud to be successfully connecting capital to Vietnam enterprises over the recent years

DEvELOpmENT STrATEgy

Maintain leadership position in advisory segment

• SSI will focus upon providing professional and value-added services such as corporate capital advisory, M&A advisory, IPO/SPO advisory and underwriting, with large companies as target market or those with efficient business structures We consider factors such as contract value and client reputation

to be more important, compared to the number of contracts signed

• Continue to design more suitable products for domestic and foreign investors’ demands and for customers’ financial ability and to take advantage of capital flow in the international market

Increase emphasis in M&A activities, especially when the acquirer is a foreign investor and increase coordination with foreign players in the same industry

• Private sector will continue to play a vital role in Vietnam M&A activities Based upon our track record, SSI will continue to strengthen its relationship and corporate access

in this sector

• With the advantage of local knowledge, extensive experience and good connection with domestic private companies, SSI will increase its emphasis upon developing relationships with foreign partners, especially banks, in order to capture cross border M&A deals

Continously invest in human resources and continue to operate according to merchant bank model

Human resources is the most important factor in creating value and competitive advantages in Finance in general and in the Investment Banking Business in particular Understanding the development of the industry, SSI focuses upon developing its human resources, combining both technical skills and soft skills of a world class investment banker with distinctive local knowledge

Investment Banking

2010 hung vuong Corporation (hvg - hOSE)

An giang Fisheries Import Export Joint Stock Company

(AgF - hOSE) m&A advisory deal (public offering in stock exchange)

Acquirer: hvg Acquiree: AgF Deal size: vND 135 billion (uS$7m) After the acquisition, hvg holds 51% of AgF The acquisition has helped hvg to increase export revenue by expanding its sales market

to the uSA AgF revenue has also increased from the transfer of management capability from hvg.

Issuer : hAg value of Issuance: vND 1,100 billion Issuance date: 3q - 2010

Maturity : 1 năm / 1 year Convertible price (adjusted) : vND 44,916.67 / share The capital raised will be invested in new business segments which are expected to create stable long term growth for hAgL

Chartered capital: vND 660 billion volume of auction: 11,512,091 shares equivalent to vND 115,120,910,000 (par value)

Average successful auction price:

vND 11,225 / share Total amount raised: vND 129,222,661,900 Auction date: 05/08/2010

IpO deal before BIC became a Joint stock company.

hAgL ownership before the deal: 99,95% Offering volume : 23,500,000 shares Offering price: vND 50,000 Date of transaction: 07/2010 The sale of part of its subsidiary is within the restructuring strategy that hAgL is undertaking

2010 hAgL Joint Stock Company (hAg – hOSE)

Convertible bond issuance advisory

2010 BIDv Insurance Corporation IpO Advisory deal

2010 hoang Anh Land JSC – hAgL’s subsidiary

Share Issuance Advisory Deal

SSIAM in cooperation with SSI’s Securities Services and Treasury departments continue to diversify its range of financial products and services for retail customers

In 2010, while institutional investors were more reluctant to invest, retail investors became more active with larger trading values Aware of the trend, SSIAM cooperated with SSI’s business departments to design and introduce to the market, portfolio management services to retail customers, which was well accepted by many investors

Improving operational processes, with emphasis upon investment process, developing portfolio management software, enhancing internal control and risk management capability

Taking advantage of the sluggish stock market, SSI placed more focus upon improving operational processes, personnel, and technology infrastructure

SSIAM aims to design a variety of investment strategies, and enhance operational processes These processes have been designed in compliance with Vietnam regulations and follow international standards

Each fund and managed portfolio has its own investment strategy but still complies with the Investment process Together with enhancing operational processes, SSIAM has also restructured its human resources to increase specialisation and responsibility, ensuring effective management when the number of funds and portfolio managed or AUM increases.Besides, SSIAM also places emphasis upon enhancing internal control and risk management capability, which is crucial to maintaining investors’ confidence Increasing staff for internal control, improving and automating risk management processes are the steps taken in 2010 which will continue in the following years

In addition, the company placed a lot of focus on human resources development, on designing various investment strategies, improving operational processes, investing in infrastructure and preparing internal strength in order to better prepare for new opportunities

Attracting new assets and maintaining effective management of the current assets

SSIAM and Daiwa SMBC Capital had successfully raised VND 40 billions to increase AUM of DSCAP-SSIAM Vietnam Growth Fund to VND 60 billions by the end of 2010

During the year, SSIAM also successfully raised the new SSI Investment Member Fund with the aim to invest real estate in the USA AUM of the fund at the end

of 2010 reached approximately VND 365 billions and the fund has started to make investments

Although SSI Vision Fund (SSIVF) did not perform as expected in 2010 due to the negative impact of the stock market, SSIVF remains one of the most effective domestic funds based on NAV growth

360 BILLIONS FrOm SSI INvESTmENT mEmBEr FuND)

• ssI vIsIoN fuNd (ssIvf) Is oNE of thE Most EffIcIENt DOmESTIC FuNDS

• AWARdEd “thE bEst vIEtNAM oNshoRE fuNd housE”

By ThE WELL-KNOWN ASIAN INvESTOr, FOr ThE mOST EFFICIENT DOmESTIC FuND hOuSE IN vIETNAm IN 2009

NAV of SSIVF vs VN-Index

SSIVF VN-Index Source: SSIAM

NAV of SSIVF vs other domestic funds

SSIVF 11-2007

Information technology plays an important role in fund

management activities; especially as fund management

products become more diversified Recognising the

importance of information technology, SSIAM has

increased investment in technology infrastructure In

parallel with working with the world’s top vendors in the

asset management field to start analysing the current

system, SSIAM continued investing in small-scale

software, to meet the company’s demands in the short

term and to lay the first bricks in building a strong,

world-class system for the company’s long term

development

COmpETITIvE ADvANTAgE

SSIAM has maintained the top position in its business

activities since its establishment at the end of 2007

Despite the difficulties faced by many other asset

management companies, SSIAM has managed to

keep its AUM relatively stable, maintaining confidence

of international and domestic institutional and retail

investors The tireless efforts by the company over the

years has been compensated for, upon receiving the

award granted by Asian Investor “The Best Vietnam

Onshore Fund House”

To maintain the top position, SSIAM strives to strengthen its competitive advantage:

• Experience of managing the domestic member fund with the largest AUM in Vietnam

• Advantage from the parent company SSI in terms

of customer base, corporate network, investment opportunities sourcing and especially experience shared between strategic partners such as Daiwa Group, ANZ

• A high profile management team with years of experience

in fund management together with a distinctive knowledge

of local markets and the capability to develop a relationship

of trust with domestic and foreign partners.

DEvELOpmENT STrATEgy

In order to become the leading domestic asset manager and the partner of choice for foreign financial institutions investing in Vietnam as well as domestic institutions and retail customers and with the aim to prepare for open-ended funds, SSIAM has put forward the enablers for success and initiated

a development strategy for each client segments, in particular:

SSIAM has started to implement the 4 enablers since the end of 2010 and will continue in the years thereafter:

1 Continue to recruit talent into key positions to develop the right business model

2 Improve product research and development capability across a broad set of assets in order to meet the demands

of all client segments

3 Strengthen sales and distribution capability via customer network and the parent company’s infrastructure, at the same time develop relationships with potential partners to expand distribution channels

4 Focus more on investment process, investment servicing, operations and systems to create distinctiveness in the industry, retaining current customers and attracting new customers

Capture more assets from domestic and international institutions by diversifying investment product range, enhancing sales capability, client access and upgrading technology infrastructure

Domestic and international institutions are the key customer segments of SSIAM The company targets domestic institutions which have potential cashflow to invest from their sales of goods and services but are not strong in financial investment capability For these clients, a safe and effective investment strategy is tailored to each based on their particular demands and characteristics

In-depth knowledge in the local financial market and a wide corporate network are the company’s strengths in attracting foreign institutional clients SSIAM aims to build a strong sales team with distinctive local knowledge, good experience and a wide industry network to expand the company’s client base in some target foreign markets SSIAM understands clients’ demands and will provide the appropriate fund management services to the target client segments

In 2010, SSIAM has developed 2 new investment products, ready for the transfer of funds from the parent company

SSIAM will continue to develop other new products in 2011

to meet the varied demands of the company’s clients

Develop retail client base by the range of attractive asset management services

In 2010, SSIAM cooperated with SSI’s Securities Services to offer new services to retail clients and have achieved

a positive result Recognising the importance of retail clients

in raising AUM value and understanding the complexity and diversity in requirement of this client segment, SSIAM constantly does research on products in foreign markets, and redesigns

it to fit the local market, especially designing a comprehensive asset management service package to attract high net worth retail investors

Prepare internal capability for mutual fund opportunities

SSIAM strategy is to be the first mover in both mutual fund manufacturing and distribution right after mutual fund regulation

is passed SSIAM has been developing mutual fund operational processes, modern technology infrastructure, distribution channels and human resources based upon qualified personnel, who have in-depth knowledge of how to design mutual funds with attractive features and how to distribute and manage the fund successfully Expansion into the mutual fund area is not just

a step further in the development ladder for the stock market but also reaffirms the company’s capability in its business activities

Asset Management

Investment activities and sources of corresponding revenue amounting to 641.6 billion and 437.5 billion for SSI in 2010

prINCIpAL INvESTmENT

Performance results

Difficulties which occurred in the market during the year of 2010 created many effects on SSI’s investment activities However, with a diversified and long-term investment strategy, SSI was able to eliminate a large amount of risk in 2010 Revenue from SSI’s investment activities reached VND 437.5 billion and was 11%

higher than the planned figure set at the beginning of the year Based upon the diversification of investment portfolio criteria, SSI has taken the advantages of these difficulties to find investment opportunities at reasonable prices and we have also grasped many other opportunities when the market recovered

Co-investment and long-term companionship with companies is still the business strategy of SSI

However, from the fourth quarter of 2010, when building the long-term development strategy to 2015, SSI decided to gradually reduce investment activities

in order to increase the transparency between the Company’s and clients’ investment activities

to SSIAM for management in order to contribute

to SSIAM’s new developing funds to diversify the investment risks as well as alter the transparency between SSI’s investment and clients’ business activities

TrEASury

Performance results

SSI, as a securities incorporation, manages the largest amount

of owners’ capital contribution and investors’ assets with total assets of VND 8,739 billion and total equity of VND 5,458 billion The Company has the largest market share in trading and a large number of investors’ accounts With 11 branches and transaction offices in Hanoi, Ho Chi Minh City, Nha Trang, Vung Tau, Quang Ninh and Hai Phong, SSI’s clients are all over the country As a result, SSI always places the liquidity, speed and security of transactions as the three most important functions

of the Company Over 10 years of operations, thousands

of investors’ accounts have always been assured of the smoothness, safety and high speed throughput of transactions Regulating funds between accounts at 11 branches and transaction offices of SSI is positively and effectively maintained.For years, SSI has been providing not only payment services but also supporting services for investors in order to help customers gain maximum profit, even during the time of a decreasing market, when securities transactions are not favourable The Investlink product (capital cooperation investment) is always trying to capture the attention of our clients with attractive fixed rate interest, flexible term and investment procedures

Treasury Services also actively cooperates with Securities Services to provide financial support services for investors, ensuring adequate capital requirements and also helping customers to control risks within reasonable limitation

Even without the support of a parent bank behind it, unlike other major securities firms, SSI maintains a positive position

in bond market transactions SSI is not only active in bond brokerage to connect investors with selling and buying demands but also in bond repo transactions to create capital connecting channels and to contribute to market liquidation.SSI has the largest equity among all securities firms in the market; this has brought SSI a benefit of VND 473.02 billion in the treasury business, accounted for 31% revenue from securities trading activities

Development strategy

In 2011, SSI will continue to develop its experience in safe and efficient capital management with high liquidity to ensure the availability of fast and time saving transactions for investors Treasury Services will effectively coordinate with Securities Services to provide investors with more capital support of safe and flexible financial services with low risks and simple procedures

At the same time, the division will improve the existing products

to support investors with idle funds to receive high interest rates, flexible terms and gain maximum profit from owner’s equity and further strengthen the role of adaptive and receptive bond brokers

Revenue and capital investments

Source: SSI Audited Financial Reports from 2006 - 2010

1,200 1,000 800 600 400 200 0

2010 was the year which was full of unexpected events for the Vietnam Stock Market due to changes in macroeconomic policies, which caused unsatisfactory operating results of listed companies and negative impact upon investors’ confidence The number of listed companies on the two stock exchanges has increased considerably to over 600 and competition between securities firms in research and investment advisory has become fiercer.

In this context, SSI’s research products have continued

to receive positive feedback and trust from both retail and institutional customers and have become one of the effective supporting materials for their investment decisions

BuSINESS pErFOrmANCE

Improving research and investment advisory process with more quality and a wider range of research products

• In 2010, Research and Investment Advisory department, with

a staff of 15, have standardised its operating processes with

a variety of research products to serve both institutional and retail customers

• We continuously improve our research reports such as macro reports, industry reports, company reports and daily and weekly newsletters, which are provided to both internal clients and external target clients The reports are highly appreciated especially by foreign institutional clients in Vietnam

rESEArCh &

Obtaining a long term advisory contract with a foreign asset management firm despite the overall difficulty in attracting foreign capital

Given the overall difficulty of attracting foreign capital into Vietnam, the fact that SSI has successfully signed a long term contract with Daiwa Asset Management to provide investment advisory services to Daiwa Vietnam Mother Growth Fund, which has AUM of about 100 million USD, this has become a spotlight of the market

Successfully organising many finance conferences for institutional and retail clients

Following the success of the first Gateway to Vietnam Conference in 2009, Research and Investment Advisory department coordinated with the Corporate Communications department and Investment Banking department to organise

the gateway to vietnam 2010 conference, held in Novermber

2010, with the theme, “Driving growth through the private

sector” This event attracted over 600 domestic and foreign

institutional investors The conference provided an overview

of the potential of Vietnam’s economy and the private sector and the opportunities to assess investment into about 20 large private companies through face-to-face meeting with the companies’ management Gateway to Vietnam conference has become an annual event with our goal to connect domestic and foreign capital to investment opportunities and has been

of great interest to institutional and retail investors, especially foreign institutions

“SSI - Sector Watch” conference is organised twice a year,

to provide investors with information and investment views about major economic sectors The conference and the Sector Watch report, with an overall picture of each sector as well as

a comprehensive detailed analysis, have been highly regarded

by investors

Awards from international organisations:

SSI’s Research and Investment Advisory was selected as one

of the Top 3 Research House and Top 3 Equity Analyst in the first award for Research Houses in Vietnam by Bloomberg and was awarded the second prize of Equity Research House

in 2010 by the two famous leading media of Bloomberg and Thomson Reuters

COmpETITIvE ADvANTAgE

As one of the two initial business functions with a license to operate, SSI’s research products are designed to be a valued-added service to clients, to which much attention is paid SSI strives to continuously improve the product quality to make research products a differentiated and distinct strength in the market

Deep knowledge about the Vietnam market: 10 years of

operating with the Vietnam Stock Market has helped SSI’s Research and Investment Advisory to acquire a deep level of knowledge about the Vietnam economy and Vietnam Stock Market This competitive advantage contributes to the quality

of research reports and reflects the true picture of the economy and appropriate investment views for different development phases of the market

Distinctive knowledge about industry sectors and companies:

SSI differentiates itself by focusing upon detailed industry and company research and strives to increase the number of companies in its coverage

Information is updated quickly and in detail: SSI has

capability to build and maintain a wide corporate network, which enables quick information update about companies in coverage and the depth of information in each research report

DEvELOpmENT STrATEgy

SSI’s Research and Investment Advisory department has made

a number of changes in its operational process to fit in with its company-wide development since the end of 2010 and will continue to do so during 2011 Accordingly, the department will be restructured to become part of the Securities services rather than a standalone support department Furthermore, additional staff will be recruited and will be divided into two separate branches:

• Institutional research will cooperate with Institutional brokerage to provide appropriate research report, tailored to the specific needs of each institutional client segment The Institutional Brokerage group is located in Ho Chi Minh City

to better serve the majority of foreign institutions in Vietnam

• Retail research aims to provide succinct and quality reports

to meet the needs of retail clients

In 2011, SSI’s Research and Investment advisory also set the objective to increase the number of companies in coverage and to introduce new research products to meet the increasing demands of clients, focusing more upon strategy reports and advisory services provided for foreign institutional investors, similar to those provided to Daiwa Asset Management Company

Research and Investment Advisory

SSI strives to continuously

improve the product quality

to make research products

a differentiated and distinct

strength in the market

In order to perform procedures set out in the business development plans, SSI has restructured the management organisation and is well

on the way to developing Human Resources in order to:

1 Enhance specialisation: clearly define roles and responsibilities for each position in the system

2 Promote the coordination of activities amongst individuals/divisions/

business departments and to actively monitor and control

3 Develop and maintain the competitive qualification in the operating area

4 Nurture and develop the next generation of leaders

SSI organisational structure is divided into three separate units namely Business Unit, Governance/Control Unit and Support Unit

The Business unit’s restructuring focuses upon:

• Dividing the Securities Services into 2 professional parts to look after different types of customers, these two divisions are Institutional Brokerage and Retail Brokerage, including branches and transaction offices

• Establishing the Business Development department which was previously known as the Marketing Project with functions such

as product development, marketing and customer care

• To merge the Research & Investment Advisory department

to Securities services with the responsibility of managing institutional clients and setting up a new Research Services for individual customers

• Investment Banking department restructures the organisation together with the positions of Managers in charge

• Reforming the organisation of SSIAM Co Ltd to be ready for diversified and specialised funds

To unify business support activities and ensure the effectiveness

of the system; to ensure departments of Information Technology, Corporate Communications, Administration and Human Resources are

grouped into Support unit with the COO in charge of the entire unit’s

activities This unit’s development strategy is to support other units to accomplish their tasks successfully

Because of the widening in the operation area and the complexity

of business activities, SSI strengthens the role of the governance/

Control unit with new risk management, financial management and

compliance control functions

Corporate Communications

Information Technology

SECurITIES SErvICES

Institutional Brokerage

Trading Transaction Branches/

Offices

Business Development

retail Brokerage

SuppOrT uNITS

research &

Investment Advisory

mr Nguyen Duy hung mr Ngo van Diem mr Nguyen hong Nam ms Dam Bich Thuy Mr bui quang Nghiem mr yuichi Akai mr Alistair marshall Bulloch

BOArD OF

DIrECTOrS

Chairman and CEO

Mr Nguyen Duy Hung is the Chairman

and the CEO of SSI He is also SSI’s

founder

Board member

At the moment, Ms Dam Bich Thuy is the General Director of ANZ Vietnam One-member Co Ltd She has many years of experience as the Director of the Natural Resources Department, supporting loans in Asia for ANZ Singapore Investment Banking;

member of ANZ Finance Cooperation

Ms Thuy has an MBA from The Wharton School of Business.

Board member

Mr Nguyen Hong Nam is a successful business Manager with experienced in different areas Mr Nam accomplished the MA from Lugansk University – Ukraine.

Board member

Mr Ngo Van Diem has 31 years of experience in the domestic and foreign investment sector, state corporations, industrial zones development and economic integration at high and middle positions in the Government Agencies

He has held positions as Director of the State Committee Office of Investment Cooperation, Director of the State Evaluation Council, Director of Vietnam Industrial Zones Board of Management and Vice Director of Research Department of the Prime Minister based

at the Government’s Department Mr

Diem graduated from Leipzig University and has a PhD in Economics Graduated from Martin Luther University Halle in Germany.

Board member

Mr Yuichi Akai is the present Chairman

of Daiwa Securities Capital Markets Cooperation As a senior member of Japanese banking industry, Mr Akai has been with Daiwa Securities for many years in different positions

He has a BA qualification in Law from Kobe University (Japan) and from Virginia University, Darden, US.

Board member

Mr Alistair is the Managing Director and Senior Advisor in Asia – Pacific Region, Europe and America of ANZ

He has more than 30 years experience

in the banking sector.

Board member

Mr Bui Quang Nghiem is the Director

of Nghiem & Chinh Law Partnership, Vice Chairman of Ho Chi Minh Law Association Mr Nghiem graduated from Halle University – Germany.

mr Nguyen Duy hung Chairman Appointed on 1 November 1999Re-appointed on 27 September 2003

Re-appointed on 28 April 2010

mr Ngo van Diem Board member Appointed on 21 April 2007

mr Nguyen hong Nam Board member Appointed on 1 November 1999Re-appointed on 24 April 2009

ms Dam Bich Thuy Board member Appointed on 24 April 2009

Mr bui quang Nghiem Board member Appointed on 24 April 2009

mr yuichi Akai Board member Appointed on 28 April 2010

mr Alistair marshall Bulloch Board member

Appointed on 19 October 2010 (temporarily appointed by ANZ Bank)

BOArD OF DIrECTOrS

ACTIvITIES

BOD’s resolutions, the directions of the Chairman to Executive Board and monitoring the operation plan of the following month Thereby, they provide full transparent information about the direction of BOD and Executive Board with honesty in a timely manner for BOD members These members can then scrutinise the view of the Company’s performance and create favourable conditions for objective and truthful evaluation on the Company’s activities, contributing to improving the, strategy making and development planning capacity In 2010, the BOD closely supervised the business as well as the operational activities of the Company, branches and transaction offices

Furthermore, the BOD had also worked closely with the Board

of Supervisors to discuss the cooperation in activities in order

to enhance the active role of the Board of Supervisors 2010 was also a year of internal changes within SSI; the conversion program was implemented in the entire company with the aim

to improve each department’s working efficiency and maintain market position The BOD has monitored and controlled the internal media regarding the conversion program and the implementation of the restructuring project with the new development orientation

The internal governance regulations of the Company allow BOD members to directly work with any staff of the Company

to accomplish their assigned tasks and prepare comments for the meeting Whilst working, BOD members can question, discuss, request information and data but still respect the rights of the CEO

In 2010, the BOD held meetings at the end of every quarter and spot meetings to discuss the trend of the market trends, the direction for the Board of Management’s activities, issued 04 Resolutions and 04 Decisions related to the BOD’s responsibilities

The Company’s Board of Directors (BOD) has 3 rules of activities:

the full compliance of the law and business ethics regulations

In 2010, there were some personnel changes in the

organisation of BOD to maintain and strengthen the

management of the Company For instance, at the annual

Shareholders Meeting in April 2010, shareholders re-elected

Mr Nguyen Duy Hung and other independent BOD members

including the following people:

• Mr Yuichi Akai (additional election to replace Mr Akihiko

Kanamura who had resigned)

• Mr Alistair Marshall Bulloch (temporarily assigned to

replace Mr Mark David Whelan who had resigned)

There are seven members, including five non-executive members

who are senior management personnel of large organisations, with

vast experience in law consultancy and financial management

These members contributed greatly to the Company in terms of

policy and operation planning during time when there were many

difficulties and fierce competition in the market

BOD exerts great effort into their activities to strengthen the

cooperation and information exchange between members The

BOD monthly performance reports are prepared and sent to

BOD members before the 10th of each month regarding the

implementation of the Shareholders Meeting’s resolutions,

BOArD OF

SupErvISOrS

Activities of the Board of Supervisors in 2010 continued to contribute to the success of the Company There are three members in the Board of Supervisors, each independent members with management experience and high qualifications

in finance and accounting The Board of Supervisors fully accomplished the task of supervising the activities of the BOD and Executive Board to ensure compliance to the law and BOD’s Resolutions and Regulations The Company’s Management Regulations have necessary articles in order to support members of the Board of Supervisors providing conditions on ways to perform their roles and responsibilities both in working infrastructure, reports and information gathering

The Board of Supervisor’s representatives attended every meeting of the BOD and pertinent documents were reviewed when meeting invitations were sent to the Board of Supervisors

With the typical characteristics of a securities company, the Company has developed a compulsory internal control system according to the Regulation on the organisation and performance of securities companies issued with Decision

No 27/2007/QD-BTC dated 24 April 2007 by the Minister of the Ministry of Finance The internal control system provides for sufficiently experienced staff with appropriate working

Changes in the personnel of the BOD, Board of Supervisors, Board of Management and Chief Accountant:

• There were changes in the personnel of the BOD; Mr

Akihiko Kanamura and Mr Mark David Whelan resigned

on 28 April 2010 and 19 October 2010 respectively Mr

Yuichi Akai was elected and Mr Alistair Marshall Bulloch was temporarily assigned

ChANgE IN

pErSONNEL

certificates to perform the supervision on the Company’s procedures and regulations in compliance with the internal control The internal control system is not directly under but is still considered as the further function of the Board

of Supervisors in monitoring daily activities Internal control reports of the system are also important information that helps the Board of Supervisors to perform their responsibilities and functions

Every year, the Company issues Internal Control System Evaluation reports to send to the related state departments and the Board of Supervisors

for the meeting Whilst working, BOD members can question, discuss, request information and data but still respect the rights of the CEO

In 2010, the BOD held meetings at the end of every quarter and spot meetings to discuss the trend of the market trends, the direction for the Board of Management’s activities, issued 04 Resolutions and 04 Decisions related to the BOD’s responsibilities

policy and operation planning during time when there were many

difficulties and fierce competition in the market

BOD exerts great effort into their activities to strengthen the

cooperation and information exchange between members The

BOD monthly performance reports are prepared and sent to

BOD members before the 10th of each month regarding the

implementation of the Shareholders Meeting’s resolutions,

mr Nguyen Duy hung

Chairman cum CEO

mr Nguyen Kim Long

Director, Legal & Internal Control

mr Bui viet Dung

Deputy CIO

mr Nguyen Khac hai

Deputy CEO of SSIAM ms Nguyen Ngoc Anh

Director, Northern Region

mr Nguyen Thanh Tung

Director, Investment

mr pham Truong Son

Deputy CEO of SSIAM mr peter Sorensen

Director, Business Development

mr Le viet ha

Director, Investment mr Dinh The Anh

Director

ms Nguyen Thanh huong

Managing Director mr Bui The Tan

Managing Director

mr Nguyen Duc hung Linh

Director, Investment Advisory

mr Nguyen Chi Trung

Director, Hai Phong Branch

mr Le Cong Dao

Associate Director, Quang Ninh Branch

mr Nguyen Duy Tuan

Director, Ham Long Branch

ms Tran Thi Thuy

Director, Hanoi Branch

ms Than hien Anh

COO

Managing Director, Corporate Communications

mr Lai Tuan Cuong

Associate Director,

E – trading

ms Dao Nhat mai

Director, Nguyen Cong Tru Branch

mr huynh Thanh Nam

Director, Vung Tau Branch

ms hoang Thi Xuan

ms Do Thi Thanh Thuy

Marketing Manager

mr Nguyen huynh Bach Khoa

Manager, 3/2 Transaction Office

ms hoang viet phuong

Director, Equity Research

mr Tran Duong Anh viet

Director, Internal Audit

mr Nguyen hong Nam

Deputy CEO

gOvErNANCE/ CONTrOL uNITS

ASSET mANAgEmENT INvESTmENT BANKINg SECurITIES SErvICES rESEArCh & INvESTmENT ADvISOry

ENABLErS

TEChNOLOgy

maintain the stability, security and safety of the technology infrastructure that fully supports the daily needs of the operation’s activities

SSI, like other companies in the securities industry, has

an extremly important customer database which consists

of customers’ personal information and trading account information The leak of information would have serious effects upon our customers and the Company Similarly, a very small problem which may occur in the operation system could lead

to very high financial losses both to our customers and to SSI

In order to minimise these risks, SSI’s Information Technology (IT) Department works to maintain a “stable, effective, safe and secured” system by implementing synchronized methods

Systems operation:

• To ensure the efficiency of the operating system, SSI has been upgrading and developing the operating processes, restructuring the operating staff structure with specified roles, tightening the responsibilities of each position, building the internal hotline for technical support for the company, assuring that every minor IT incident which occurs in each department is solved as quickly as possible, minimising any direct impact and risk to the Company’s operations which may indirectly affect the clients of SSI

• SSI’s server and network system are well equipped to increase the quality to meet current needs and to prepare for the future system upgrading All the equipment, safety and security software (firewall system, virus protection software) has been performing at the maximum capacity

to prevent every threat of intrusion into any loophole that may lead to a leak of customer information SSI is also the leader in the deployment of the Disaster Prevention Project

to improve efficiency and safety should problems occur

Trading system:

• The most important objectives of the IT Department are

to ensure the smoothness of the trading system We have developed the optimal technology methods to maintain the stability of the system and the ability to quickly fix any disruptions which may occur for any subjective or objective reasons at the fastest speed SSI is also one of the first companies to successfully implement the trading through HNX, UPCOM securities exchange in 2010

• SSI’s online trading system consists of the Smart Trading and Web Trading which are gradually replacing the traditional and less-customer-attractive trading methods and are becoming favourite trading channels for investors

The Smart Trading, with the secured method of using

an account code, password and the Token identification numbers when customers perform trading, ensures the absolute safety for the user In 2010, SSI officially launched the Web Trading system into operation with many preeminent features Besides order trading, users can also

do online cash transfer, investment portfolio management, fast and convenient information checking services; margin accounts, online statements and useful warning tools will

be available online in the near future The Web Trading system brings users the convenience of flexible PIN code selection and of using the token for verification,

to ensure the security and safety of the system

Information technology, continues to take strategic role

in the development of the finance and banking sector and

the securities sector in particular In securities firms, the

operational process is becoming increasingly diverse and

complicated; customers want to have high quality and

competitive products on time and especially at a reasonable

cost In order to meet these needs, SSI has positioned

Information technology as a strategic part of the current

development strategy and for the coming years, in line with

the implementation of business development

• SSI’s Contact Center (Customer service center) was launched at the end of 2009 and was one of the first contact operator systems with many updated features for the securities industry The system supports investors in trading orders, cash transfers, information checking,… with the two-layer security tools including account code and token, creating a fully secure system for clients when making transactions through SSI

• Furthermore, the SMS system is also an effective tool for updating transaction information and company events to every client With SMS templates, our clients can also check the account balances, market information and codes

of stocks

To ensure the upgrading of the modern system and maximum support for the Company’s growth, to be the pioneer in the trend of technological development and to become the leading securities firm in utilising technology

Keeping abreast of the latest technology in the field of, effectively applying new technology into finance and securities system development, application software for business operations are the company’s targets, together with the above effective application of the system target

We fully understand the disadvantages of the current trading system Unacceptable incidents reveal more and more clearly, inadequacies in the development of the Vietnamese Stock Market with the variety and complexity of financial services and the growing demand of the investors Fully appreciating the market trends, SSI has carried out research on the latest technology with some of the renowned financial services software providers in the world This was conducted in order

to analyse the market demands and to investigate the current situation to ensure every transaction is modern, functional and widely used and to gain the competitive advantage on cost reduction

The Smart Trading, Web Trading systems continues to be upgraded with new features, a user-friendly interface that fully satisfies the requirements from investors and ensures the speed, the security and the safety for our clients when they are trading with these systems

Portable devices such as mobile phones and iPads are becoming increasingly popular and useful tools in all areas

In 2011, SSI aims to develop and introducing new mobile phone applications to investors help them transact any time, at any place by the safest means

In addition to the best online services for the investor, SSI is proceeding to build daily trading support software such as Customer Information Management, the automation of trading processes, a risk warning system, compliance and Research software… to minimise the manual work and the risk as well

as increase working efficiency

Realising the importance of companies’ websites in the advertising of products and services and information declaration, SSI’s website is constantly upgraded in terms of interface, content and high speed with modern features, and user-friendliness, in order to publish information quickly and precisely In addition to that, SSI’s website is its e-trading gate and also offers supporting analysing tools to help investors in decision making

Information Technology management structure

Confirming the strategic role of Information Technology in the coming years, SSI has set up an Information Technology Committee with the responsibility to consult with the CEO in the planning of Information Technology development strategies and issuing investment decisions on key IT projects and related management and personnel decisions

The Information Technology Committee also performs the role of implementation, monitoring and evaluating the efficiency of the implemented projects, reporting to the CIO

in the management and operation of the IT personnel system and solving problems which occur during the operation and implementation of projects

When a company’s competitive advantages no longer relate only to the fields of products and services, owing to the speed

of propagation through communications and imitation by competitors, experts in the securities sector agree that the stable and key strengths of a financial firm are in its operations and personnel systems

SSI realises the important role of the operations division

in the company’s development strategy and defines the main responsibilities that the division will accomplish in the following period:

• Building, developing and synchronising all the Operating processes to elimate the differences, overlaps and extra stages during the transaction process to bring customers the services at the right time, at the right place and for the right demand

• Automation of all operational processes to minimise manual work and operation risks

• Cooperating with other departments to issue the Operation Compliance Control process to ensure the success of process implementation

• Proceeding in the research of the latest and most feasible operation models that are suitable for SSI, to build a standardised retail system and reduce the operation expenses and maximise performance

In the last three months of 2010, SSI’s Operation division completed the first steps in standardising the processes and implementing the whole system The new processes were designed, based upon the central operation system model, with responsibilities for each individual incharge of each stage

in the products and services value chain that are provided to customers The criteria of the new processes are: quality, time, improvement levels, risk management and the ability

to satisfy customers’ needs

The upgrade and development of operating procedures are also expressed in the entire business operation In fact, presently at SSI, there is still so much manual work that causes mistakes and operational risks and financial losses to the Company Facing that urgent need, SSI’s Operation division has set the priority for the completion of securities processes automation during the first 6 months of 2011 Accordingly, front desk staff and brokers would be able to reduce the pressure of manual work, in order to focus their time on customer care activities; customers demand

a study to improve the quality of products and services

In addition, SSI will start to restructure the personnel hierarchy, re-divide the departments that are suitable for every individual’s qualification, experience and the new operations model Together with basic knowledge that is required by the State department, each staff would be trained with advanced skills, soft skills that help them to accomplish their tasks at optimum performance so that customers will be most satisfied with SSI’s products and services

SSI’s operations division continues to improve and update and

is in compliance with current state law and in line with market trend The most important mission is to satisfy the complexity

of requirements from the investors

SSI has positioned Information

of the current development strategy

designed, based upon the central operation system model, with responsibilities for each individual incharge of each stage

in the products and services value chain that are provided to customers The criteria of the new processes are: quality, time, improvement levels, risk management and the ability

to satisfy customers’ needs

OpErATIONS

After 10 years of development, the success of SSI nowadays

is created from the contribution of generations of management,

professionals and staff who had and is still working for the

Company SSI treasures every value that each individual has

contributed to the Company and consider human resource as

the key competitive advantage for stable and fast development

Because of that, SSI always tries to create an effective working

environment and every staff member is supported with

necessary factors to improve the development and creativity

so they are able to give their best performance SSI takes note

of nurturing talent and leadership succession SSI understands

that applying the best human resource management policy is

one of the most effective methods to increase the satisfaction

of customers and is very aware of the value this brings to

shareholders and the community

At the moment, SSI is in the process of completing the human

resource management policies, including:

recruiting and training policy

Recruitment and training are always in SSI’s human resource development programme and are the key factors that directly affect the talent attraction and retention

At SSI, with a particularly complicated business activities structure, the spectrum of customers ranges from individuals

to large global organisations, the Company builds

a recruiting model with diversity and flexibility; suitable for the characteristics of each business segment The Human Resource Department is in-charge of setting out general principles, processes and basic requirements for recruitment activities and accordingly, each department would develop their specific requirements and benefits for their recruitment needs

Recruiting new talent is just the starting point The role of our training policy is to help employees understand and quickly aspire to the Company operating systems and at the same time, apply the policy to support employees and develop their

specific skills and knowledge Having understood this fact, SSI constantly develops a policy and training plan suitable for the market’s evolving trend and the strategy of the whole company

Immediately after joining SSI, each staff member would attend courses on the operations and brand culture of the company and include internal regulations, operating procedures related to each position and compulsory training courses in accordance with the government’s law Apart from the required expertise knowledge, the Company’s activities greatly need soft skills;

so employees of the Company would be required to attend soft skills development courses, such as Effective communication skills, Negotiating skills, Professional selling skills, etc Besides the general training policy, each department also develops their own specific training programme to improve professional capabilities

In addition to hiring experts to deliver lectures or organising on-site visits at SSI’s partners, internal training of departments

is developed as an effective method for experienced staff

to train less experienced colleagues On the other hand, SSI always highly rates the self-training of every individual and encourage staff to spend their time on researching and enhancing knowledge and experience from various channels

performance evaluation and incentive policy

Objectively and precisely evaluating the working performance

is fundamental for implementing the salary policy based upon performance results (Performance-based) This is an important goal that SSI is committed to achieve

Every position of the system is clearly described for the recruitment procedures and the construction of the Key Performance Indicator system The targets, together with the indicator system, is be built from the strategy and goals

of the Company, then to targets of supporting Departments/

Divisions and ultimately to each individual Every staff member clearly understands the evaluation mechanism, there is direct discussion between employees and managers to ensure equality, objectiveness and transparency which is the target that SSI is developing

The reward policy always attracts the attention of the staff and is one of the key motivational factors that encourage employees to develop their capacity Rewarding based upon the work performance becomes the overall rule through SSI’s personnel management system

At SSI, the “Employee of the year” and “Manager of the year” rewards are designed to honor individuals with great performance during the year These awards have become an

annual activity to encourage individuals’ to try their best to receive the reward and develop their capacity to deserve the received title

Job encouragement and development policy

It is not easy to attract talent but it is more difficult to retain personnel within the Company, an important mission of the organisation In addition to the incentives of competitive income packages, other supporting policies to help employees foresee their career development opportuntities at SSI, need to

be built, maintained and strengthened

SSI is always focused upon the development of following generation of leaders creating opportunities for each individual to improve their capacity and create promotion opportunities at the appropriate time The Company aims

to develop an internal recruitment market to help individuals find the most appropriate position to promote their maximum capacity

With the comprehensive personnel management policy and strategy, the strength of SSI’s organisation is in both quantity and quality

At the end of 2010, the total number of SSI’s staff was 520 people, with 51% of female staff Many female employees were appointed to key leadership positions and have successfully accomplished their missions The average employee turnover is about 8% in 2010 proving the stability of SSI’s personnel About 15% of employees have a master’s degree and most of them graduated from foreign universities in the USA, the UK, Australia, the Netherlands, Singapore… SSI encourages and has the supporting policy for employees to take international certificates and up to now, there are many staff who have received CFA, ACCA

2008 2009 2010 Source: SSI

SSI recognises the paramount importance of quantifying the impact upon the company that market fluctuations have on the value of the company’s financial assets and liabilities in order

to gain a more objective, long term view and to build more feasible risk avoidance measures By conducting scenario analysis and setting upper limits for each individual risk factor, SSI is well prepared for any changes in its risk profile

to minimise potential losses Considering 2010 and 2011 the market would face risks from inflation and exchange rates, SSI firmly follows the caution in investing point and always has

a back-up system such as focusing upon value investment

in highly efficient exporting fields and receiving foreign currencies and fund raising abroad…

Credit risk

SSI is also exposed to credit risk, which refers to losses caused when a client, partner or issuance institution is unwilling or unable to repay its debt The risk arises when the client or partner suffers deterioration in financial condition and the value of the collateral declines SSI’s profitability will be threatened by the losses associated with this risk

To manage this risk, SSI conducts evaluation and credit rating for each client or partner based upon market information, client information and history of working with the client We then assign each client or partner a credit limit, the transaction will then proceed within the established limit The department

in charge will carefully monitor and estimate the value of the credit extended to the client or partner, using a credit evaluation model that incorporates factors such as credit period, collateral, liquidity, in order to prevent losses in

a timely manner.

Liquidity risk

Liquidity risk occurs when SSI becomes unable to repay its debt SSI’s ability to repay debt is weakened in the case of negative movement of the market or of the price of a particular financial asset Besides, if other parties want to sell the same asset at the same time, this would impact upon the ability to liquidate the asset

SSI always tries to maintain an appropriate balance of assets and liabilities and investing in high liquidity assets is our basic principle in liquidity risk management To secure the availability

of capital for short term needs, SSI keeps part of its portfolio

in high liquidity assets such as cash, certificates of deposit, government bonds and other liquid valuable papers With capital for long term need, SSI seeks credit line from various credit institutions and overdraft of its bank accounts Funds may be procured through other means such as derivative contracts (repo, forward), issuance of commercial papers with medium and long term maturities Over the last year, SSI offered a variety of financial products to retail customers to achieve dual objectives of increasing the company’s range of products and increase liquidity.

Basic risk management policy

SSI has established basic risk management regulations

governing all activities, in particular:

• Managing director/Head of each department is responsible

for identifying risks associated with their business and

cooperate with the Risk management department to

establish appropriate and feasible risk prevention measures

• With regard to enterprise-level risks, the Risk management

department will establish the overall risk management

structure, which is specific for each period and specific for

each type of risk

• Risk management policy and procedure to protect the best

interest of our customers are structured and communicated

clearly to all the company’s staff and customers

Types of risks and the risk management system

In the course of our business activities, SSI is exposed to

a variety of risks that are intrinsic to the financial services industry These could affect our financial position and the result of our operations We believe that by properly identifying, evaluating and effectively controlling the various associated risks, we will be able to maintain our financial strength and minimise any financial losses incurred

The types of risks that have been deemed important to manage include market risk, credit risk, liquidity risk, operational risk, systems-related risk, information security risk, law and compliance risk, and reputation risk

(*): Risk Management department has been established and operating within Financial Control Department and will officially function as a separate department in 2011.

risk management systemmajor risks Department in charge Executive officer in charge

market risk Liquidity risk Credit risk

Operational risk Departments in charge combined with Internal Control department Head of departments/Managing director + Head of Internal Control department

Systems-related risk &

Information security risk Information technology department CIOLegal and compliance risk Internal Control department Head of Internal control department

reputation risk Corporate Communications Head of Corporate Communications department

rISK

mANAgEmENT