4 Preliminary restatement of primary consolidated financial statements (IFRS)

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Bao Viet Holdings

Preliminary restatement of primary consolidated financial

CONTENTS

Special purpose review report

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Selected notes to the primary consolidated financial statements

Ernst & Young Vietnam Limited

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15th Floor, 360 Kirn Ma Street Hanoi, S.R, of Vietnam Tel: +84 4 3831 5100 Fax: +84 4 3831 5090 www.ey.com

Reference: 607555 12/14183693

SPECIAL PURPOSE REVIEW REPORT

To: The Board of Directors of Bao Viet Holdings

We have reviewed the accompanying special purpose primary consolidated financial statements of Bao

Viet Holdings and its subsidiaries (the Group”), which comprise the consolidated statement of financial

position as at 31 December 2009 and consolidated income statement, consolidated statement of

comprehensive income, consolidated statement of changes in equity and the consolidated statement of

cash flows for the year then ended, together with the related explanatory notes attached as set out on

pages 2 to 26, prepared in accordance with the Group’s accounting policies described in notes 2, 3 and 5

(‘the consolidated financial statements”) which apply the recognition and measurement principles of the

International Financial Reporting Standards (“IFRS”) Management is responsible for the preparation of

the consolidated financial statements, which have been prepared solely for management use Our

responsibility is to issue a review report on special purpose primary consolidated financial statements

based on our review

We conducted our review in accordance with the International Standard on Review Engagements 2400

This Standard requires that we plan and perform the review to obtain moderate assurance as to whether

the consolidated primary financial statements are free from material misstatement based on the agreed

materiality of US$ 5 million A review is limited primarily to inquiries of the Group’s personnel and

analytical procedures applied to financial data and thus provide less assurance than an audit We have

not performed an audit and, accordingly, we do not express an audit Opinion

Based on our review, nothing has come to our attention that causes us to believe that the special

purpose primary consolidated financial statements as at 31 December 2009 of the Group have not been

prepared in accordance with the Group accounting policies described in notes 2, 3 and 5 which apply the

recognition and measurement principles of the International Financial Reporting Standards except as

described below

fa Emphasis of a matter

These primary consolidated financial statements are the primary financial statements prepared for the + special purpose as explained above and therefore have not been prepared to meet full requirements of q IFRS 1 “First time adoption of International Financial Reporting Standards”, and do not include \9

comparative information of prior years and full disclosures required for them to be recognized as “Full `

IFRS financial statements”

SS bhief Executive Officer

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2009

Gross written premiums

Reinsurance premium assumed

Less: Premium ceded to reinsurers, deduction and return

Net written premiums

Change in unearned premium reserves

Net earned premiums

Commission income on reinsurance ceded

Other income

Income on reinsurance assumed

Income on reinsurance ceded

Income from other activities

Total revenue from insurance business

Interest income of banking operations

Investment income

Share of profits of associates and joint ventures

Other income

Total income

Claims and maturity payment expenses

Claims expenses for reinsurance assumed

Less: Recoveries from reinsurance ceded

Subrogation recoveries

Salvages Increase in claim reserve

Net claims and benefits incurred

Commission and underwriting expenses of insurance operations

Other reinsurance assumed expenses

Expenses of reinsurance ceded

Interest expenses of banking operations

Selling expenses

General and administrative expenses

Financial expenses

Other expenses

Total commission and expenses

Profit before tax for the year

Enterprise income tax for the year

Profit after tax for the year

Net Profit attributable to:

Shareholders of the Group

7,336,054,068,386 151,666, 182,986 (979,534,348,986)

6,508,185,902,386 (1,467,453,204,038) 5,040,732,698,348

146 828,204,959

4,127,872,732 308,514,166 4,427 528,649

5,193,424,818,854 355,479,712,399 2,618,062,695 499 13,057,543,886

164.619,210.737

8,344,643,981,375 (4,050,560,862,254) (46,246,678,770)

366, 196,782,586 13,815,213,821 6,701 473,334 (150,187,569,249) (3,860,281 ,640,532) (812,295,263,119) (35,541 606,643) (12,526,877 ,265) (126,218,988,181) (122,023,207,897) (1,506,284,663,787) (484,468,384,194) (62,080,670,738) (7,021,721,302,356) 4,322,922,679,019 (236,460,503,222) 1,086,462,175,797

958,610,678,216 127,851,497,581

> tet Ra

‘Nguyen Thanh Hai

Chief Accountant

Bao Viet Holdings

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2009

Profit after tax for the year

Other comprehensive income for the year

Available-for-sale investments:

Net movement in the fair value reserve

Total comprehensive income for the year

269,116,670,572 1,355,578,846,369

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Investments in associates and joint ventures

Fixed maturity investments

Available-for-sale

Loans and receivables Equity investments

Available-for-sale Fair value through income statement Account receivables

Loans and advances to customers

Loans and trusted loans

Policy loans

Deferred tax assets

Unearned premium on reinsurance ceded

Other assets and prepayments

Cash and cash equivalents

Total assets

Liabilities

Insurance contract liabilities

Amount due to customers

Due to banks and other financial institutions

Advances from customers

Income tax payable

Deferred tax liabilities

Other comprehensive income

Foreign exchange differences

Investment and development fund

Finance reserve fund

18,157,148,006,470 3,786,961,866,864 420,948,732,663 29,603,706,539 93,170,087,183 80,873,752,349 1,963,455,411,911 24,532,161,563,979 5,730,266,050,000 1,838,314,624,015 530,295,560,629 554.210,008,693 18,387,227,948 10,222,384,015 11,699,111,508 43,521,050,471 8,736,916,017,279 _——

1,360,924,718,726 10,097,840,733,005 34,630,002,296,984

N30 20 8

7 (TAP DOAN BAO VE"

“SE Nguyatt Thi Phuc Lam

Chief Executive Officer

it - như Nguyen Thanh Hai

Chief Accountant

Le Hai Phong Chief Financial Officer

31 March 2010

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2009

Premium received and interest income received 22,500,820,998,471

Other cash inflows from operating activities 546,958, 763,628

Net cash inflows from operating activities 696,723,997,824

CASH FLOWS FROM INVESTING ACTIVITIES

Loans to other entities and payments for purchased of debt instruments

Repayments from borrowers and proceeds from sales of debt

Payments for investments in other entities (2,703,482,862,334)

Proceeds from sales of investments in other entities 3,662,607,719,333

Interest received, coupon and distributed profits 497 054,068,939

Cash transfer under trusted investment arrangement (517,900,000,000)

Net cash outflows from investing activities (4,883,605,956,943)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash receipts from short and long term loans 5,646, 136,030,318

Net cash inflows from financing activities 6,237,407,630,318

Net cash infiows during the year 2,050,525,671,199

Cash and cash equivalents at the beginning of the year 480,836,990,174 `

_ Cash and cash equivalents at the end of the year 2,532,644,263,412 ;

SChief Executive Officer Chief Financial Officer Chief Accountant

31 March 2010

6

Bao Viet Holdings `

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS

as at and for the year ended 31 December 2009

2.1

2.2

CORPORATE INFORMATION

Bao Viet Holdings (the “Company’) is a joint stock Company pursuant to Business License

No 0103020065 approved by the Hanoi Authority for Planning and Investment dated 15

October 2007, The Company was listed on Ho Chi Minh Stock Exchange on 25 June 2009

and the principal activity of the Company is investment holding

The registered address of the Company is No.8, Le Thai To Street, Hoan Kiem, Hanoi,

Vietnam, The Company and its subsidiaries (together forming the “Group”) provide a wide

range of financial products and services to individual and corporate customers in Vietnam

The principal activities of the subsidiaries are stated in note 2.2

SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the consolidated primary financial statements

The consolidated primary financial statements comprise the income statement, statement of

comprehensive income, statement of financial position, statement of changes in equity,

statement of cash flows and selected notes to the primary consolidated financial statements

of Bao Viet Holdings, the parent company, and its subsidiaries for the year ended 31

December 2009

These consolidated primary financial statements have been prepared to comply with the

requirements of the Subscription Agreement between HSBC Insurance (Asia -Pacific)

Holdings Limited (‘HSBC") and Bao Viet Holdings and in accordance with the accounting

policies stated below The accounting policies apply the recognition and measurement

principles of the International Financial Reporting Standards (“IFRS”) to restate the Group's

Vietnamese Accounting System ("VAS") records for the year ended 31 December 2009

(“Restated”)

In order to restate the VAS records, the principles contained in IFRS 1, ‘First-time Adoption

of International Financial Reporting Standards’ have been applied The general principle

that should be applied on first-time adoption of IFRS is that standards in force at the first

reporting date (which for the Group would be 31 December 2010) should be applied

retrospectively There is uncertainty about which standards will be effective as at 31

December 2010, and therefore in preparing the restated primary consolidated financial

statements as at 31 December 2009 the recognition and measurement principles contained

in the IFRS in force as at 31 December 2009 have been applied If the first time IFRS

financial statements for the Group are prepared as at 31 December 2010 as planned, the

restatements for the year ended 31 December 2009 may change if there are updates and

changes in IFRS that are in force as at 31 December 2010 for the first time

In addition, IFRS 1 contains a number of exemptions which companies are permitted to

apply The Group has elected to apply the exemption related to insurance contracts, which

restricts the changes in accounting policies required for insurance contracts and exempts

the Group from retrospective application for insurance contracts when restating

Basis of consolidation

The subsidiaries are fully consolidated from the date of acquisition, being the date on which

the Group obtains control, and continues to be consolidated unti! the date that such control

ceases Control exists when the Group has the power, directly or indirectly, to govern the

financial and operating policies of a company so as to obtain benefits from its activities

The financial statements of the subsidiaries are prepared for the same reporting period as

the parent entity, using consistent accounting policies Adjustments have been made to bring

into line any dissimilar accounting policies that may exist

U lá:

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS (continued)

as at and for the year ended 31 December 2009

2.3

SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of consolidation (continued)

All inter-company balances and transactions, including unrealized profits arising from intra-

group transactions, have been eliminated in full Unrealized losses are eliminated unless the

transactions provide evidence of impairment of the asset transferred

Minority interests represent the portion of profit or loss and net assets of the subsidiaries not

held by the Group and are presented separately in the income statement and within equity in

the consolidated balance sheet, separately from parent's shareholders equity

The principal activities and other particulars of the subsidiaries as at 31 December 2009

directly by

Name of company company Principal activities

Bao Viet Life Corporation 100% Life insurance and reinsurance

Bao Viet Insurance 100% General insurance and reinsurance

Bao Viet Fund Management 100% Fund management and investment

Bao Viet Securities Joint 59.92% Securities trading, brokerage,

Stock Company portfolio management, underwriting,

consulting and securities placement

Bao Viet Commercial Joint 52% Banking

Stock Bank

Bao Viet Investment Joint 55% Real estate investment and

Bao Viet — Au Lac Limited 60% Vocational driving training services

| Company

Investments in associates

The Group's investments in associates are accounted for using the equity method An

associate is an entity in which the Group has significant influence

Under the equity method, investments in associates are carried in the statement of financial

position at cost plus post acquisition changes in the Group's share of net assets of

associates Goodwill relating to an associate is included in the carrying amount of the

investment and is neither amortised nor individually tested for impairment

The income statement reflects the share of the results of operations of associates Where

there has been a change recognised directly in the equity of an associate, the Group

recognises its share of any changes and discloses this, when applicable, in the statement of

changes in equity Unrealised gains and losses resulting from transactions between the

Group and an associate are eliminated to the extent of the interest In an associate

The share of profit of associates is shown on the face of the consolidated income statement

This is the profit attributable to equity holders of an associate and therefore Is profit after tax

and non-controlling interests in the subsidiaries of an associate

The financial statements of associates are prepared for the same reporting period as the

parent company Where necessary, adjustments are made to bring the accounting policies

in line with those of the Group

Bao Viet Holdings

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS (continued)

as at and for the year ended 31 December 2009

2.3

24

2.5

(i)

SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments in associates (continued)

After application of the equity method, the Group determines whether it is necessary to

recognise an additional impairment loss on the Group's investment in its associates The

Group determines at each reporting date whether there is any objective evidence that the

investment in an associate is impaired If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of an associate and its carrying value and recognises the amount in the income statement

Upon toss of significant influence over an associate, the Group measures and recognises

any retaining investment at its fair value Any difference between the carrying amount of an associate upon loss of significant influence and the fair value of the retaining investment and

proceeds from disposal are recognised in profit or loss

Foreign currency translation

The Group's consolidated primary financial statements are presented in Vietnamese Dong,

which is also the parent company’s functional currency Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are

measured using that functional currency

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date All differences are taken to the income statement

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at

the date when the fair value is determined

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to

the Group and the revenue can be reliably measured The following specific recognition criteria must also be met before revenue is recognised:

Premiums

Gross recurring premiums on life insurance business are recognised as revenue when payable by the policyholder For universal life business, revenue is recognised on the date

on which the policy is effective

Premiums for direct and facultative business in general insurance are accounted for in the period in which the amount is determined, which is generally the period in which the risk

commences Premiums include any adjustments arising in the accounting period for premiums receivable in respect of business written in prior accounting periods The effects

of cancellations of premium renewals and of premiums from new business and premium

adjustments which are not accounted for in the period in which the risk commences, are not material

Unearned premiums are those proportions of premiums written in a year that relate to

periods of risk after the balance sheet date Unearned premiums are calculated on a daily pro rata basis The proportion attributable to subsequent periods is deferred as a provision for unearned premiums

Premiums received, commission and claims paid or payable on reinsurance treaty inward business are accounted for when notified by the ceding company or agent concerned

9

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS (continued)

as at and for the year ended 31 December 2009

SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Interest income from banking activities

Interest income is recognised in the consolidated income statement on an accrual basis, using effective interest rate method

Fees from rendering of services

Fees from rendering of services comprise fund management fees, placement fees, incentive fees, brokerage, underwriting activities, which are recognized when services are performed and the revenue can be reliably measured

Gains from securities trading

Gains from securities are the excess of selling prices over the weighted average cost of securities sold

Dividends

Income is recognised when the Group's entitlement as an investor to receive the dividend is established

Taxes

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at

the amount expected to be recovered from or paid to the taxation authorities The tax rates

and tax laws used to compute the amount are those that are enacted or substantively enacted, by the reporting date

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to

interpretation and establishes provisions where appropriate

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting

date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes

Deferred tax liabilities are recognised for all taxable temporary differences, except:

« Where the deferred tax liability arises from the initial recognition of goodwill or of an

asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

s In respect of taxable temporary differences associated with investments in subsidiaries,

associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences

will not reverse in the foreseeable future

10

Bao Viet Holdings

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS (continued)

as at and for the year ended 31 December 2009

Deferred tax (continued)

Deferred tax assets are recognised for all deductible temporary differences, carry forward of

unused tax credits and unused tax losses, to the extent that it is probable that taxable profit

will be available against which the deductible temporary differences, and the carry forward of

unused tax credits and unused tax losses can be utilised except:

e Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

e in respect of deductible temporary differences associated with investments in

subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will

reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced

to the extent that it is no longer probable that sufficient taxable profit will be available to allow

all or part of the deferred tax asset to be utilised Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become

probable that future taxable profits will allow the deferred tax asset to be recovered

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or

loss Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists

to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority

Financial instruments — initial recognition and subsequent measurement

Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value

through profit or loss, loans and receivables, held-to-maturity investments or available-for- sale financial assets, as appropriate The Group determines the classification of its financia!

assets at initial recognition

All financial assets are recognised initially at fair value plus, in the case of investments not at

fair value through profit or loss, directly attributable transaction costs

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are

recognised on the trade date, i.e the date that the Group commits to purchase or sell the asset

The Group’s financial assets include cash and short-term deposits, trade and other receivables, loan and other receivables, quoted and unquoted financial instruments, and derivative financial instruments

†1

SELECTED NOTES TO THE PRIMARY CONSOLIDATED FINANCIAL STATEMENTS (continued)

as at and for the year ended 31 December 2009

2 SIGNIFICANT ACCOUNTING POLICIES (continued)

2.7 Financial instruments — initial recognition and subsequent measurement (continued)

i, Financial assets (continued)

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading

and financial assets designated upon initial recognition at fair value through profit or loss

Financial assets are classified as held for trading if they are acquired for the purpose of

selling or repurchasing in the near term This category includes derivative financial

instruments entered into by the Group that are not designated as hedging instruments in

hedge relationships as defined by IAS 39 Financial assets at fair value through profit and

loss are carried in the statement of financial position at fair value with changes in fair value

recognised in finance income or finance cost in the income statement

When the Group is unable to trade these financial assets due to inactive markets and

management's intent to sell them in the foreseeable future significantly changes, the Group

may elect to reclassify these financial assets in rare circumstances The reclassification to

loans and receivables, available-for-sale or held to maturity depends on the nature of the

asset This evaluation does not affect any financial assets designated at fair value through

profit or loss using the fair value option at designation

Derivatives embedded in host contracts are accounted for as separate derivatives and

recorded at fair value if their economic characteristics and risks are not closely related to

those of the host contracts and the host contracts are not held for trading or designated at

fair value though profit or loss These embedded derivatives are measured at fair value with

changes in fair value recognised in the income statement Reassessment only occurs if

there is a change in the terms of the contract that significantly modifies the cash flows that

would otherwise be required

(b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market

After initial measurement, such financial assets are subsequently measured at amortised

cost using the effective interest rate method (EIR), less impairment Amortised cost is

calculated by taking into account any discount or premium on acquisition and fee or costs =

that are an integral part of the EIR The EIR amortisation is included in finance income in the

income statement The losses arising from impairment are recognised in the income

statement in finance costs

Non-derivative financial assets with fixed or determinable payments and fixed maturities are

classified as held-to-maturity when the Group has the positive intention and ability to hold it

to maturity

After initial measurement held-to-maturity investments are measured at amortised cost using

the effective interest method, less impairment Amortised cost is calculated by taking into

account any discount or premium on acquisition and fee or costs that are an integral part of

the EIR The EIR amortisation is included in finance income in the income statement The

losses arising from impairment are recognised in the income statement in finance costs The

Group did not have any held-to-maturity investments for the year ended 31 December 2009

12