Baoviet Holdings Annual Report 2019 - Báo cáo thường niên năm 2019

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INTEGRATED REPORT 2019



By choosing the message “Thank you for your trust”, Bao Viet does not just want inculcate feelings and gratitude but also demonstrate the commitment to always accompany With customers, shareholders, workers and community because of the belief in the Success, happiness and prosperity. With Bao Viet, we believe in the value of belief - the element that creates strength helps us to overcome all difficulties and challenges and seize the opportunity to grow.

The success of Bao Viet during the journey 55 years is the result of labor and creativity and the beliefs of generations of leaders, officials and consultants Bao Viet and the support and trust of our customers, of shareholders and partners. That has contributed to creation So the proud achievements of a Bao Viet Constantly innovating, building and developing from one Small-scale insurance company, far to become a strong Financial - Insurance Group, Pioneers contribute to creating and developing the market Vietnam finance and insurance, contributing to the work renewing construction and developing the country’s economy. Looking back on every step of the 55-year journey of formation and development, Bao Viet understands that trust is the key creating strength helps Bao Viet grow as strong today. Bao Viet

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THANK YOU FOR YOUR TRUST Integrated Report 2019

would like to extend our deep gratitude to all of you generations of Bao Viet’s leaders, officials, staff and consultants periods have laid the foundation for construction, development and creation Bao Viet; Thank partners, shareholders, customers at home and abroad, the news agencies have always trust, support and stand side by side with Bao Viet on the way 55 years. By selecting the message “Thank you for your trust”, Bao Viet Believe that, the resonance between the belief of Shareholders, partners and customers for Bao Viet Over the past 55 years, along with the beliefs of all officers Employees throughout the Bao Viet system into prosperity of enterprises, is the motivation to help Bao Viet more and more Sustainable development, reaching out.

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Điểm Highlights nhấn BIÁnO teC g rat Á OeTdÍ C Re HpH o ỢP r t 22001199

#TÍCH # MULTI HỢP PLATFORM ĐA NỀN INTEGRATED TẢNG #CÔNG # MODERN NGHỆ TECHNOLOGY HIỆN ĐẠI #THÂN # ENVIRONMENTALLY THIỆN MÔI TRƯỜNG FRIENDLY #TÍCH # VIDEO HỢP INTEGRATED VIDEO TRONG REPORT BÁO CÁO # INTERACTIVE BÁO CÁO TƯƠNG REPORT TÁC

Truy cậpthrough Access vào website: website: baoviet.com.vn/baocaotichhop2019

Tải ứng dụng Download Integrated báo cáo Report tích hợp at:tại:

Type and Nhập từ khóa search “Baoviet keyword“Baoviet Integrated Report Integrated 2019” hoặc “Báo Report 2019” cáoortích “Báo hợp cáo Bảo tích Việt hợp 2019” Bảo Việt 2019”

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THANK YOU FOR YOUR TRUST Integrated Report 2019

We looktôi Chúng forward mong muốn to hearing lắng from ngheyou ý kiến to improve the từ các Quý quality of the vị để report. nâng cao chất lượng nội dung báo cáo. Vui lòngcontact Please liên hệInvestor Bộ phậnRelations Quan hệ Nhà Department đầu tư Email: investorbvh@baoviet.com.vn Tel: (+84) 243928 9999


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POWER BI BI POWER Power BI application Business analytics Ứng dụng Power BI - -Giải pháp phân tích solution thatcho enables visualization kinh doanh phép data trực quan hóa dữ liệu Better Nâng experiences cao trải nghiệm for readers người đọc by trên developing ứng dụng multi-platform đa nền tảng

SMART REPORT 4.0 Smart Báo cáo reporting, thông minh, optimized tối ưu hóa interaction tính tương andtác security và bảo mật on PDF trênand nềnweb tảngplatforms PDF và web

Financial statements Báo cáo tàireporting chính theo in accordance chuẩn mực with international Báoaccounting cáo tài chính standards quốc tế (IFRS) Aligning Gắn kết 17 themục 17 Qorld’s tiêu Phát sustainability triển bền vững goals with của Thế Corporate’ giới vàoactivities Hoạt động của Bảo Việt

Evaluation standard forxếp Vietnam Bộ tiêu chuẩn đánh giá, hạng sustainabilty Doanh nghiệp bềnenterprise vững Việtindex Nam

Báo Sustainability cáo phát triển reporting bền vững in accordance theotoGRI GRIstandards standard

Guaranteed Được đảm bảo by bởi baoviet Khốiholdings’ kiểm toáninternal nội bộ audit Với các onchỉ non-financial tiêu Phi tài chính indicators

INTEGRATED REPORTING IIRC quốctếtế Integrated Báo cáo tích reporting hợp theoinchuẩn accordance mực iirc to quốc the international iirc standard

GRI Digital digital platform Ứng Apply dụng GRI trong việcfor lậpreporting báo cáo

In particular, Đặc biệt, báothe cáo integrated tích hợpreport được is thể presented hiện bằng by the bộ tranh sand painting cát khắcdepicting họa về lịch the sử history hìnhofthành Baoviet’s của Bảo Việt cũng như establishment as well gửias lờithe tri ân gratitude đến tất to cảall các partners, Đối tác,shareholders, Cổ đông, Quý domestic khách hàng andtrong foreign và ngoài customers, nước, các cơ quan press institutions, thôngagencies tấn báo chí have đãalways luôn tin believed, tưởng, ủng supported, hộ, sát cánh and stood cùngside Bảo by Việt side trên with chặng Baoviet đường on the 55-year 55journey năm qua with vớithe thông message điệp “Cảm “Thank ơn niềm you for tin“. your trust”.

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1965 - 2020

VỊ THẾ DOANH NGHIỆP NIÊM THE YẾT ENTERPRISE OF INSURANCE NGÀNH BẢO INDUSTRY HIỂM

Dẫn đầu Leading

LISTED

Điều gì What attracts ở Cổ phiếu investors BVH hấp to BVH dẫnstock? nhà đầu tư? 1. The Cổ phiếu leading dẫnstocks đầu ngành in insurance bảo hiểm. industry. 2. Định Clear hướng visionand chiến strategy, lược rõcorporate ràng, quản governance trị doanh nghiệp aligning theo chuẩn with international mực quốc tế.standards. 3. High Tiềm growth năng tăng potential. trưởng cao. 4. Information Thông tin minh Transparency. bạch. 5. Mastering Làm chủ công technology. nghệ.


THE LEADING CỔ PHIẾUSTOCKS DẪN ĐẦU INNGÀNH INSURANCE BẢO INDUSTRY HIỂM THANH HIGH LIQUIDITY KHOẢN CAO

900.000 900,000

>

Cổ phiếu/phiên (average Stocks/session (Trung bình 10 trading 10 phiên) days)

NĂNG SOLID LỰC FINANCIAL TÀI CHÍNHSTRENGTH VỮNG MẠNH

TỔNG TOTALTÀI ASSETS SẢN NĂM IN 2019 2019

128,238 128.254 VND Tỷ đồng Billion

TỔNG TOTAL DOANH REVENUE THU NĂM IN 2019 2019 23,8% 13,3%

44.848 44,878

LỢI NHUẬN PROFIT SAU AFTER THUẾ TAXNĂM 20192019

1.200 1,243

27,8% 7,2%

VND Tỷ đồng Billion

5,8%

VND Tỷ đồng Billion

CAGR 2008 - 2019 TĂNG AVERAGE TRƯỞNG GROWTH BÌNH RATE QUÂN TỔNG TOTALTÀI ASSET SẢN

14.5% 16,2%

TOTAL DOANH REVENUE THU

LỢI PROFIT NHUẬN AFTER SAU TAX THUẾ

13,5% 11.8%

13,6% 11.8%

CỔ TỨC STABLE BẰNG CASH TIỀNDIVIDEND MẶT ỔN ĐỊNH ADành minimum tối thiểu of 50% 50%oflợi annual nhuậnearnings hàng năm to pay để trả dividends. cổ tức.

TÍCHCONTRIBUTION CỰC ĐÓNG GÓPTO TRỞ THE LẠI ECONOMY NỀN KINH TẾ Đóng Contributing góp 19.416 tỷVND đồng20,471 vào Ngân billion sách to the Nhàstate nướcbudget kể từ khi since cổ phần equitization. hóa đến nay.

ĐỊNHAND HƯỚNG CHIẾNCORPORATE LƯỢC RÕ RÀNG, CLEAR VISION STRATEGY, GOVERNANCE QUẢNALIGNING TRỊ DOANH NGHIỆP THEO CHUẨN MỰC QUỐC TẾ WITH INTERNATIONAL STANDARDS

Inte gr ated repo rt ing

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THANK YOU FOR YOUR TRUST Integrated Report 2019


TIỀM HIGH NĂNG GROWTH TĂNG POTENTIAL TRƯỞNG CAO

3% 4% 26% 27% 69% 71%

Với tỷ lệ thâm nhập doanh thu With the current low Premium/ phí bảo hiểm/GDP thấp như GDP ratio (2.6%), the insurance hiện nay (2,6%), lĩnh vực kinh business sector, especially doanh bảo hiểm, đặc biệt là the life insurance sector, is lĩnh vực bảo hiểm nhân thọ becoming potential for high đang trở thành lĩnh vực có tiềm growth, attracting the attention năng tăng trưởng cao, thu hút of a large number of domestic sự quan tâm của đông đảo nhà and international investors. đầu tư trong nước và quốc tế.

Financial Lĩnh vực dịch and vụ tài chính other financial Và khác services Non-life Lĩnh vựcinsurance kinh doanh Bảo hiểm phi nhân thọ business

Revenue Cơ cấu breakdown doanh thuby business theo lĩnhlines vực

Life insurance Lĩnh vực kinh doanh Bảo hiểm nhân thọ business

THÔNG TIN MINH BẠCH

A diversified Danh mục sảnproduct phẩm đa dạng và ưu việt portfolio

80

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Life insurance Sản phẩm bảo hiểm nhân thọ products

Non-life Sản phẩm insurance bảo hiểm phi nhân thọ products

Large-scale Hệ thống phân distribution phối quy mô lớn system

200

1.000 1,000

Officesgiao Phòng all dịch trên 63 over 63 tỉnh cities thành & Provinces

Chi nhánh Branches

Number Vị thế số11 thịinsurance in trường bảo market hiểm

25.453 25,453

Tỷ đồng VND billion

Life insurance Doanh thu phí bảo hiểm nhân thọ premium

10.301 11,103

VND billion

Non-lifethu Doanh insurance phí bảo hiểm phi nhân gross written thọ premium

MASTERING LÀM CHỦ CÔNG TECHNOLOGY NGHỆ

STRENGTH FROM THẾ MẠNH TỪ EMBRACING OF VIỆC ĐÓN ĐẦU XU HƯỚNG INDUSTRIAL REVOLUTION 4.0 TREND CMCN 4.0

Enhancing Nâng cao chất the lượng quality of sản phẩm,and products dịch services vụ trên nền tảng based on công digitalnghệ số technology

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ASSURANCE ON THE SUSTAINABILITY REPORTING BY INTERNAL AUDIT

THE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness

Holdings TẬP ĐOÀN BẢO VIỆT

Assurance on selected Sustainability indicators

Hanoi, 15 April 2020

To: Baoviet Holdings

In order to assure the reliability for selected indicators in Baoviet Group’s Sustainability Report 2019, the Inspection - Internal Audit of Baoviet Holdings has performed assurance on Baoviet Group’s selected Sustainability indicators 2019.

Management’s Responsibility The Management of Baoviet Holdings is responsible for the preparation and presentation of Baoviet Group’s Sustainability Report 2019 in accordance with the Sustainability Reporting Standards 2016 and the Financial Services Sector Disclosures of the Global Reporting Initiative (GRI). The Management is also responsible for the design and implementation of internal controls which are determined to be necessary to ensure the fairness of information, data presented in Baoviet Group’s Sustainability Report 2019. Inspection - Internal Audit’s Responsibility The Inspection - Internal Audit’s responsibility is to provide independent and objective opinions on selected Sustainability indicators 2019 based on procedures stipulated in the Decree No. 05/2019/ND-CP dated 22 January 2019 on Internal audit, Regulations on Internal audit of Baoviet Holdings, the practice guidance for International Standards for the Professional Practice of Internal Auditing and international practices. These regulations require our internal auditors to conform with the Code of Ethics and adopt the risk-based methodology in planning and performing the engagement to express our conclusions. The engagement was primarily based on interviewing and performing analytical procedures, reconciliations of data. Assurance results have been discussed with the Management and the Head of related Divisions/ functional units.

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THANK YOU FOR YOUR TRUST Integrated Report 2019


GRI G4 FS7 Scope of review and assurance Based on existing resources, the Inspection - Internal Audit has provided limited assurance service for selected Sustainability indicators in Baoviet Group’s Sustainability Report 2019 according to the Sustainability Reporting Standards 2016 and the Financial Services Sector Disclosures of the GRI, including:

GRI 201-1 GRI 404-1

GRI 413-1

GRI 202-1

Ratios of standard entry level wage by gender compared to local minimum wage;

GRI 404-1

Average hours of training per year per employee;

GRI 413-1

Operations with local community engagement, impact assessments, and development programs;

GRI G4 - FS7

Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose.

Conclusion Based on the works described above, in our opinion, the selected Sustainability indicators in Baoviet Group’s Sustainability Report 2019 have been fairly presented, in all material respects, in accordance with the Sustainability Reporting Standards 2016 and the Financial Services Sector Disclosures of the GRI.

Tran Thi Dieu Hang Chief Audit Executive Internal Audit of Investment

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In 2020, Baoviet will continues to promote the spirit of Learning Applying - Creating, promoting the human intellectual strength of Baoviet, successfully fulfilling the planned goals, bringing the brand “Baoviet - 55 years of pride and development, continunous growth, sustainable development and striving forwards”.

CONTENTS

LEARNING

Integranted Report BVH 2019

1. OVERVIEW 2019 Integrated Report’ highlights

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Report is guaranteed by Internal Audit

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Chairman’s message 14

Chief Executive Officer’s message

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30 38 40 42 44

Baoviet’s Overview Corporate Governance Structure 2019 Highlights 10 awards highlights of 2019 Key performance indicators (KPIs)

Message of Strategic Shareholder Sumitomo Life 22

STANDARD Click vào tên từng mục để đến trang cần xem

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THANK YOU FOR YOUR TRUST Integrated Report 2019

4. QUẢN TRỊ DOANH NGHIỆP 216 228 240 252 258 261 268 291 303 318

Baoviet Corporate Governance overview Board of Director Report Board of Directors’ Subordinating Committee Report Supervisory Board Report Remuneration policy for the BOD, The Supervisory Board and the Management Board Policy of shareholder relations Assessment report on Corporate Governance in 2019 Internal Control and Internal Audit Risk Management Legal and compliance


APPLYING

CREATIVE

2. DEVELOPMENT STRATEGY

3. BUSINESS PERFORMANCE

52 58 64 70 74 88 96

Business environment, opportunities and challenges Business model and growth drivers Optimizing factors that drive growth of Baoviet Identify material matters World trends affecting Baoviet’s strategy Sustainable development strategy of Baoviet Development strategy toward 2020 - Vision to 2025

110 169 172 176 178 186 196 200 204

SUSTAINABILITY 5. SUSTAINABLE DEVELOPMENT 326 328 331 334 342 350

Report and review of Management Board Assesments of the Board of Directors on all aspects of business operations Stock information and investor relations Report on business performance of Subsidiaries Report on Baoviet Insurance’s business operation Report on Baoviet Life’s business operation Report on Baoviet Fund’s business operation Report on Baoviet Invest’s business operation Report on Baoviet Securities’ business operation

TRANSPARENT 6. FINANCIAL STATEMENTS

Facts and Figures in 2019 Overview of sustainable development activities in Baoviet Report on environmental and social impacts Engaging business with SDGs Contributions to the sustainable development of local communities Customer health and safety

356 Consolidated financial statements 474 Separate financial statements

482 Supplementary financial information (IFRS)

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CHAIRMAN’S MESSAGE

“Thank you for your trust” is the gratitude of Baoviet to all our customers, shareholders, staff and consultants - who have accompanied and placed their trust in Baoviet in the last 55 years.

Mr. Dao Dinh Thi Chairman of Baoviet Holdings’ Board of Directors

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CHAIRMAN’S MESSAGE

Click to see the BOD Chairman’s message.

Our appreciation for your belief” presents our gratitude to our customers, honoured Shareholders and all of the staff, employees and agents, who have been accompanying and placing your trust in Baoviet throughout the past 55 years

02

2019 REVENUE

USD BILLION

267 2018 BAOVIET’S BRAND VALUE

Click on above to open/hide info

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THANK YOU FOR YOUR TRUST Integrated Report 2019

USD MILLION

Honored shareholders, customers and colleagues, he success of Baoviet throughout 55 years is the results of the hardwork, creativity and belief of the leader generations, staff and agents of Baoviet; as well as the supports and trust from the honoured customers, shareholders and partners. Together, we have created such proud achievements of a Baoviet with constant renovation, construction and development from a small-scaled insurance company to become a strong, pioneered Finance – Insurance Group, contributing to the creation and development of the finance – insurance market of Vietnam. Looking back at each steps in the 55-year pathway forming and development, Baoviet understands that trust has been the fundamental elements creating such strong development of Baoviet today. Baoviet would like to send our deep gratitude to all of the leader generations, staff, employees and agents throughout all periods, thanks to all of our domestic and worldwide partners, strategic shareholders, and honoured customers; press agencies who have trusted, supported side by side with Baoviet in our 55 years of growth.


THANKS FOR YOUR BELIEF - IN THE 55 - YEAR - PATHWAY OF CONSTRUCTION AND DEVELOPMENT Upon the decision for establishment no. 179/CP dated 17/12/1964 of the Government Councial, the Vietnam Insurance Company (precursor of the Finance – Insurance Baoviet Group today) was officially opened for operation on 15/01/1965 with the initial capital of 10 million Vietnam Dong. Throughout the 55 years of development, Baoviet Holdings have gained many achievements in the business activities, contributing to the economy development, and the prosperity of the society. If the revenue of the company at the time of new operation only reached 800.000 Vietnam Dong with the total assets of 900 million Dong, up to 2019, the total consolidated revenue of the Group reached approximately 2 billion USD, with the total profit before taxes reached 1,512 billion Dong. The Capital strategy for the period of 2016-2020 has been completed before deadlines thanks to the private placement scheme. Up to the end of 2019, the charter capital of the Group reached 7,423 billion Dong, Baoiet completed fully its responsibilities in paying to the State budget with 1,560 billion Dong, ensuring the dividend payouts as committed to the shareholders at 10% rate in cash, securing the employment of 6500 employyes and 250.000 agents domestically, contributing to the maintenance such stable society, proactive participation to the social welfare programmes and assistance to the poor provinces all over Vietnam upon the directions of the Government. Throughout the 55 years of establishment and development, thanks to the constant commitment of the leaders and the staff and employees, Baoviet Holdings have been proudly awarded with various awards, honoured rewards of the Party and the State, recognised by the Ministry of Finance with tittle “Excellent Employment Group” and the honoured flags of the Ministry of Finance in consecutive years. On 14/10/2019, the Minister of the Socialist Republic of Vietnam issued the Decision no. 1381/QĐ-TTgCP presenting the tittle “Honoured Flag of the Governement” to Baoviet

Holdings, which emphasises the constantly growing brand name of Baoviet in the domestic and regional finance market. In 2019, the brand value of Baoviet reached 267 million USD, the highest value in the Finance – Insurance market in Vietnam Behind such significant success is the results of the hardwork, creativity of the leader generations, staff, agents of Baoviet, especially the belief and trust from honoured Party and State, honoured customers, shareholders and partners. I believe that upon our strong foundation and achievement in the first half of the century, Baoviet Holdings have emphanised it position as the leader in the finance – insurance market in Vietnam, creating momentum to outreach to the region and the world. Along that pathway, Baoviet Holdings would like to continue to receive your support, together we create a sustainable, strong Baoviet, contributing to the development of a peaceful, prosperous and sustainably growing nation – Vietnam. On behalf of the Party Committee, the Board of Directors of Baoviet Holdings, I would like to express our sincere thanks to the Party, the State, the Party Committee of the Enterprise Central Group, the Ministry of Finance, the management agencies throughout Vietnam, honoured customers, shareholders as well as all of the employees, agents throughout the system of Baoviet. I wish you and your family Heath Happiness - Prosperity. Sincerely thanks,

Mr. Dao Dinh Thi Member of the Party Committee, Chairman of the Board of Directors

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CHIEF EXECUTIVE OFFICER’S MESSAGE

With the spirit of “Learning - Applying - Creative”, I urge each of the Baoviet people to join hands in building this dynamic, developing and sustainable Baoviet. On the basis of equipped technology, constantly learning, applying knowledge, promoting the intellectual strength of Baoviet’s people, we will definitely fulfill the goals set out and will build the brand “Baoviet - 55 years of pride and development” to continue growing stronger in 2020 - opening a new decade with strong beliefs about a strong and far-reaching Baoviet. The values that have been created by Baoviet are not only the pride of each Baoviet’s people but also the “Prestige” which Bao Viet has been keeping with customers, partners and the whole community.

Do Truong Minh CEO Baoviet Holdings

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THANK YOU FOR YOUR TRUST Integrated Report 2019


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CHIEF EXECUTIVE OFFICER’S MESSAGE Dear honoured Shareholders, Customers and Colleagues, The year 2019 has just ended with many remarkable achievements. We are proud that the Baoviet continues to maintain its leading role in the Vietnamese Finance - Insurance market, leading the markets in both life and nonlife insurance sectors. The total revenue from non-life insurance activities in 2019 reached about VND 11,700 billion. Total revenue from life insurance activities in 2019 reached VND 32,153 billion, maintaining the no. 1 position in the life insurance market in terms of total premiums. Aside from the success in the core business activities, Baoviet’s investment and securities sectors continue to maintain stable growth momentum and to successfully achieve the 2019 business plan.

44,878

BILLION VND

2019 TOTAL CONSOLIDATED REVENUE

1,243

BILLION VND

2019 PROFIT AFTER TAX

11,681 TOTAL REVENUE FROM NON-LIFE INSURANCE ACTIVITIES IN 2019

BILLION VND

32,150 TOTAL REVENUE FROM LIFE INSURANCE ACTIVITIES IN 2019 Click above to open/hide information

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THANK YOU FOR YOUR TRUST Integrated Report 2019

BILLION VND

The year of 2019 is also an important milestone as Baoviet has completed its Capital Strategy for the period of 2016-2020 via a private placement project to supplement resources for core businesses. Baoviet has successfully implemented the project of private placement with the strategic partner i.e. Sumitomo Life, issued 41,436,330 additional shares for foreign investors, raising the total charter capital of Baoviet to VND 7,423 billion, fostering the financial strength of the Parent Company as well as continuing to create momentum for sustainable development of such 55-year-old brand. With the message “Mastering Hi-tech, Accelerating Outperformance”, Baoviet focused on developing morden and advanced information technology platform, applied intelligent technology into business activitives, improved operational efficiency, proactively catched up and developed rapidly in the era of industrial revolution 4.0. Along with the modernization of technology, Baoviet has constantly diversified its products, improved service quality, expanded the distribution channels, created trust and customer satifactions upon the increasing demand. The solidarity and determination of Baoviet staff has created a landscape of Baoviet in 2019 with vibrant colors, creating pathways for Baoviet to continue conquering new heights in 2020 and in the following years.


2020

Learning

Applying

The year of 2020 is forecasted with various turbulances, the US-China trade war shown signs of cooling yet has not really ended, the declining growth in the emerging economies, the increase in public debts and the outbreaks of acute pandamic caused by the nCoV virus have affected the world economy severely. However, there are still optimistic factors thanks to the positive effects from the loosening monetary policy of the key central banks in the world, the stability of domestic interest rates, even a slight decrease to support production and the slowdown of the increasing trend in the US dollar (USD), new disease risks are also opportunities for insurance enterprises to expand their exploitation. Upon strong determination to overcome all difficulties and challenges, seize development and breakthrough opportunities, in 2020, Baoviet will drastically implement the key solutions i.e. improving the efficiency of core business areas; strengthening the organizational structure of governance and administration; accelerating digital transformation; modernizing the information technology system; actively researching and developing products that integrate insurance - investment - finance; improving the quality of human resources throughout the system in order to maintain its position as the leading Finance - Insurance Group in Vietnam. With the spirit of “Learning - Applying - Creative”, I urge each of the Baoviet people to join hands in building this dynamic, developing and sustainable Baoviet. On the basis of equipped technology, constantly learning, applying knowledge, promoting the intellectual strength

Creative

of Baoviet’s people, we will definitely fulfill the goals set out and will build the brand “Baoviet - 55 years of pride and development” to continue growing stronger in 2020 - opening a new decade with strong beliefs about a strong and far-reaching Baoviet. The values that have been created by Baoviet are not only the pride of each Baoviet’s people but also the “Prestige” which Bao Viet has been keeping with customers, partners and the whole community. On behalf of the Board of Directors of Baoviet Holdings, I would like to express my sincere thanks to all honoured shareholders, customers, partners, Government agencies and all of the employees, agencies and consultants throughout the system for your companionship and support to Baoviet over the past years. I look forward to receiving your continuous support in the future so that Baoviet will confidently continue its pioneer steps in the pathway to challenge new heights. Wishing you all health, happiness and success!

Sincerely,

Do Truong Minh CEO

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MESSAGE OF STRATEGIC SHAREHOLDER SUMITOMO LIFE

Since 2012, Baoviet and Sumitomo Life have always been working together to build more valuable and indispensable partnership for both companies. Even in this increasingly competitive market environment, continuous efforts of each Baoviet’s members assured that Baoviet has built a firm position as the number one brand in the rapidly growing insurance market.

Mr. Masahiro Hashimoto Chief Excutive Officer of Sumitomo Life Insurance Company

In 2019, Sumitomo Life subscribed additional shares of Baoviet, and now owns 22.09% of the outstanding shares of Baoviet. We believe that strengthening the financial strength of Baoviet through this capital increase is aligned with Baoviet’s growth strategy in the continuously tough and competitive environment. And Sumitomo Life is honored to have been able to contribute successfully as an investor in this capital increase, hoping we could enhance our relationship to the next level. We hope we could continue to pick up the needs of Baoviet and the people in Vietnam and provide more support to help Baoviet to be a long-lasting Investment - Finance -Insurance Group in the future. For many years to come, becoming the more fascinating company together with Baoviet is the future we are aiming for. By enhancing corporate value of Baoviet and Sumitomo Life with strong brand, we are convinced that both companies can make further progress towards a “sustainable future” in 2020.

ESTABLISHED May 1907

HEAD OFFICE Tokyo/Osaka, Japan

CREDIT RATING

A1 Moody’s

A+ S&P

OPERATION NETWORK In Japan: 87 Branch offices, 1,451 District offices.

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THANK YOU FOR YOUR TRUST Integrated Report 2019

In the world: Life insurance companies in USA, Vietnam, Indonesia, Singapore and China.

Representative offices in New York, London, Beijing and Hanoi.


STRATEGIC COOPERATION - STRIVE FOR NEW ADVANCED STATUS At the 55th anniversary event of Baoviet’s establishment, there was a ceremony to announce the selected Strategic Investor of the 2019 Individual Issuance Project of Baoviet Holdings, under which Sumitomo Life Insurance Company (Sumitomo Life) invested a further VND 4,012 billion (equivalent to USD 173 million) to buy additional 41,436,330 BVH shares, equivalent to 5.91% of the current chartered capital, raising the shareholding ratio in Baoviet to 22.09 %. The deal became the focus of the insurance market on the last days of 2019 and was voted as one of 10 outstanding Insurance - Securities events in 2019.

Total assets

294.8

Through the deal, Baoviet raised the total charter capital to VND 7,423 billion, thereby adding equity, strengthening financial capacity, and providing for business strategies in the coming time. Increasing investment between the two leading financial institutions of Vietnam - Japan brings mutual benefits to the business community, demonstrating the confidence and expectation of Japanese investors on the Vietnam Financial - Insurance Market as well as the great potential of this market in general and the sustainable development of Baoviet in particular.

21.6

Total premium

USD Billion

USD Billion

Total net assets

16

USD Billion

Number of employee and agents

Number of insurance policy

11.6 Million

10,973 Employees

31,981 Agents

23


Thank you

investors shareholders


Baoviet appreciates the cooperation and support of investors and shareholders throughout our past journey. Hope you continue to accompany Baoviet to thrive in our upcoming journey.


01

OVERVIEW


Learning


OVERVIEW


30 38 40 42 44

Baoviet’s Overview Corporate Governance Structure 2019 Highlights 10 awards highlights of 2019 Key performance indicators (KPIs)


BAOVIET’S OVERVIEW

VISION

MISSION

Maintain the position as the leading financial-insurance Group in Vietnam, enhance the international competitiveness, reinforce financial capacity, deliver resilient sustainable growth.

To ensure the peace of mind, prosperity, and long-term benefits for our customers, investors, employees and community.

E VALUES COR

Team spirit

Responsibility Behave responsibilitively to customers, community, and each other, and act with integrity.

Keep the team spirit alive and treat your colleagues with respect.

Approachable

Quality Improve the quality of everything you do and reach for a higher standard.

Make yourself approachable and serve your customer professionally, and as you would like to be served yourself.

Dynamic Stay dynamic and open to new ideas and opportunities.

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INSURANCE

BANKING SERVICES

(Life and Non-Life)

INVESTMENT

15/01 1965

The leading insurance and finance group with 55 years of pioneering history of opening and accompanying the development of Vietnam’s insurance market.

each item to see details

FINANCE

6,574 HISTORY ESTABLISHED

Click on

EMPLOYEES ACROSS BAOVIET GROUP

250,000

AGENTS AND CONSULTANTS

17,000,000 179

CUSTOMERS

BRANCHES

1,000

>

TRANSACTION OFFICES

80

NON-LIFE INSURANCE PRODUCTS

55

LIFE INSURANCE PRODUCTS

PROVIDING A FULL RANGE OF SECURITIES, FUND MANAGEMENT AND BANKING SERVICES.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

31


BAOVIET’S OVERVIEW

55 YEARS OF CREATING SUSTAINABLE VALUE

2000 2010 1965 1999

2010 2018

2011

2005

Baoviet Holdings increased chartered capital to VND6,805 billion by issuing additional shares to existing shareholders.

Baoviet Fund Management Company was established.

2012 1965 Vietnam Insurance Company was founded on 15 January 1965 to undertake non-life business.

1989 Vietnam Insurance Company was reformed into Vietnam Insurance Corporation.

1996 Baoviet established the first life insurance company in the market.

1999

Move the mouse pointer over each event to view the event image

32

Baoviet Securities Joint Stock Company was incorporated as the first securites company in Vietnam.

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2007 After a successful initial public offering (IPO), Baoviet financialinsurance group was incorporated. HSBC Insurance acquired 10% stake in Baoviet.

Sumitomo Life becam strategic investor of Baoviet. Baoviet Bank increasing chartered capital to VND3,000 billion.

2016 2008 Baoviet Commercial Joint Stock Bank was established.

The first financial - insurance group of Vietnam reached $01 billion in total revenue.

2009

2017

Baoviet Holdings was listed on the Ho Chi Minh City Stock Exchange (Code: BVH). Baoviet Invest Joint Stock Company was established. HSBC Insurance increased its stake in Baoviet to 18%.

Opening the first Financial supermarket - Baoviet One stop shop.

2010 Baoviet launched a new brand identity.

2018 Baoviet raised its charter capital to VND 7,009 billion through successful issuance of ESOP shares.


2019

2020

Successfully implemented the project of Private Placement Share issuance with partner SML, raising the total charter capital of Bao Viet to VND 7,423 billion, helping Baoviet Holdings complete its 2016-2020 capital raising strategy.

55th anniversary of Baoviet’s establishment

Maintain the position of the leading Financial and Insurance Group in Vietnam, improve international competitiveness, strong financial potential, effective and sustainable growth.

Click to see video clip of Baoviet’s history. Click to see video clip of Baoviet’s history.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

33


BAOVIET’S OVERVIEW

INVESTMENT HIGHLIGHTS

OUTSTANDING MARKET POSITION

HIGH POTENTIAL BUSINESS GROWTH

• Being the Vietnamese leading Finance-Insurance Group, BaoViet excelled 50 years of development history, the top reputational brand on the market, a team of more than 350.000 employees, agents, consultants with the most extensive experience in the financial insurance market.

• Baoviet has created a solid foundation making the momentum for a sustainable growth in the future and get ready to exploiting tremendous opportunities in Vietnam insurance-financial market.

• Large-scale distribution network that includes 179 branches, over 1000 insurance transaction offices in all cities and provinces of Vietnam, which is difficult to find elsewhere in Vietnam.

• BaoViet has consistently and steadily grown our revenue and profit over the years, in all businesses including insurance – investment – financial services.

• A financial – insurance group taking lead in different businesses including non-life insurance, life insurance, fund management, securities and other financial services with total revenue of non-life insurance in 2019 reached nearly VND 11,700 billion, accounting for more than 20% of the market share, continuing to hold the number 1 in Vietnam’s non-life insurance market; total life insurance revenue in 2019 reached VND 32,153 billion, continuing to hold the No. 1 position in the life insurance market in terms of total premiums.

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• Business results grow sustainably and efficiently.

• In 2019, Parent Company has successfully implemented the project of Private Placement Share issuance with partner SML. Baoviet has issued 41,436,330 shares to foreign investors, raising Bao Viet’s total charter capital to VND 7,423 billion, helping Baoviet Holdings complete its 2016-2020 capital raising strategy, strengthen financial capacity for the Parent Company, continuing to create momentum for sustainable development for the 55-year-old brand - Bao Viet.


BVH - ATTRACTIVE STOCK TO INVESTORS

THE ROLE OF SHAPING AND DEVELOPING THE MARKET

• Baoviet is the public listed company with large market capitalization. BVH stock, with high liquidity is the most influential among the stocks of financial and insurance companies, and is always included in the investment portfolio of international exchange traded funds (ETFs) in Vietnam.

• Baoviet proactively takes part in shaping the insurance market and capiatal market of the financial sector of Vietnam.

• Being the first state-owned enterprise to succeed in seeking foreign strategic shareholders. • Belong to the leading group of financial institutions has the highest dividend yield in many years.

• Baoviet plays a key part and is a typical success story in the State – owned enterprise equitization process, achieving a lot of comprehensive innovations. We are making efforts to continue to accelerate next steps of equitization process by reducing the proportion of the State – owned shares, looking for a new foreign strategic partner to increase business perfomance effectiveness. • Baoviet remains a pioneer in socially responsible insurance plans, such as agriculture insurance, natural disaster risk insurance, export credit insurance, aquaculture insurance…

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

35


BAOVIET’S OVERVIEW

BUSINESS LINES AND NETWORK Baoviet Holdings operates under the Business Registration Certificate No. 0100111761, registered for the first time on October 15, 2007, registered for the 13th amendment on January 9, 2020, operating in the field of Insurance - Investment - Finance - Banking.

01.

I NSU RA N C E

• General insurance: Aviation insurance; Vehicle insurance; Marine insurance; Fire and property insurance; Cargo insurance; Engineering insurance; Personal insurance; Medical health insurance; Agricultural insurance... • Life Insurance: Whole life insurance, Endowment insurance; Term insurance; Universal life insurance; unit linked Insurance, Pension insurance ... • Reinsurance services

• Investment in subsidiaries and associate companies • Management of investment funds, portfolio trust management. • Management of securities investment funds, investment in real estate.

03.

FI NA N C I A L S E RV I C ES

02.

I N VESTM E N T

• Stock Brokerage; Proprietary trading; Financial and securities investment consulting; Securities underwriting; Securities depository. • Trading financial services and other fields as regulated by law. • Securities investment consultancy.

• Capital mobilization: receiving deposits, issuance of certificates of deposits, bonds and other valuable papers. • Credit activities: credit in the form of loans, discount, guarantee, financial leasing... • Payment and treasury services

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04. BA N K I N G


Baoviet is the first company to provide non-life insurance and life insurance services in Vietnam. Currently, Baoviet provides comprehensive financial services including insurance, banking, securities, fund management and investment with distribution network across the country, serving millions of customers.

63

Provinces

135

Insurance products

600

NETWORK Extensive distribution network across Vietnam with nearly 200 branches and subsidiaries providing insurance, banking, securities and fund management services in 63 cities and provinces, more than 400 non-life insurance transaction offices and more than 300 life insurance transaction offices throughout the country.

Non-life customer service offices

400

PRODUCTS & SERVICES Baoviet provides a diversified product portfolio with more than 80 non-life insurance products, 55 life insurance products, and other banking, sercurities, fund management products.

Life customer service offices

KEY BUSINESS AREAS Branches located at key economic areas of the country such as Ho Chi Minh city, Hanoi, Da Nang, Nghe An, Hai Phong, Binh Duong remain high performing units, contributing significantly to Baoviet’s total revenue.

Overview

Development Strategy

Business Performance

Corporate Governance

CUSTOMERS Baoviet provides services to all types of individual and group customers across the country.

Sustainable Development

Financial Statements

37


CORPORATE GOVERNANCE STRUCTURE ANNUAL GENERAL MEETING OF SHAREHOLDERS

Secretary Division

BOARD OF DIRECTORS

Asset and Liability Management Committee (ALCO)

Remuneration and Nomination Committee

Strategy and Investment Committee

Audit Committee

Internal Audit Block

(as at 31/12/2019)

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Click above to open/hide information


SUPERVISORY BOARD

Risk Management Council (RMC)

CHIEF EXECUTIVE OFFICER

Financial Management Block

100%

BaoViet Insurance Corporation

Operations Management Block

100%

BaoViet Life Corporation

Strategy and Investment Block

100%

BaoViet Fund Management Company

Information Technology Center

100%

BaoViet Invesment Company Limited

Education and Training Center

59.92%

BaoViet Security Join Stock Company

60%

BaoViet Au Lac Limited Company

Associates

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

39


2019 HIGHLIGHTS

01.

02.

04. 40

Baoviet continued to affirm leading position in Vietnam insurance market in both life and non-life insurance

Enhanced the financial capacity of the Baoviet Holdings and its Subsidiaries - Bao Viet Holdings increased its charter capital to VND 7,423 billion through a private placement project

Baoviet continued to invest in completing advanced and modern information technology infrastructure to satisfy business demands and revolutionary trend of industry 4.0.

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03.

05.

Baoviet has won prestigious awards at home and abroad. Bao Viet brand value doubled in 2018 and is the highest in the field of Finance - Insurance Vietnam, reaching 267 million USD.

Baoviet Life go-live officially Life system, replacing Talisman system.


06.

08.

The subsidiaries of Baoviet have continued to launch new products, featuring many advantages for customers.

Strengthen governance capacity, improve the legal corridor by issuing regulations and processes.

10. Overview

Development Strategy

Business Performance

07.

Cross-selling reached the target 2 months earlier than the set plan.

09.

Baoviet has won prestigious awards at home and abroad.

Implemented well social security activities towards sustainable development.

Corporate Governance

Sustainable Development

Financial Statements

41


10 AWARDS HIGHLIGHTS OF 2019

2

1

Top 10 Best Sustainability Enterprises in Vietnam for 4 consecutive years

Winner at the 2019 Listed Enterprises

4 3 Top 50 best listed companies in Vietnam for the 7th consecutive year 42

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Baoviet leading the insurance industry in 2019


5 Platinum Award at the Annual Report poll

8 Best Securities Advisory Firm for the second consecutive year

7 Baoviet won the best brand in Vietnam for the 3rd time

6 Asia’s best transparent Sustainability Report

9 Top 10 Best Life Insurance Enterprises and Vietnam’s best corporate social responsibility enterprise

10 Vietnam’s Best Fund Management Company in 2019

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

43


KEY PERFORMANCE INDICATORS (KPIs)

Total asset

Owners’ equity

BAOVIET INSURANCE

14,544

3,146

BAOVIET LIFE

101,164

as at 31/12/2019

Increased by 12.5% compare to 2018

Click on the icon below to see other indicators

BAOVIET FUND

BAOVIET INVEST

BAOVIET SECURITIES

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5,219

Increased by 15% compare to 2018

Increased by 22.5% compare to 2018

151

135

Increased by 0.5% compare to 2018

Increased by 1.6% compare to 2018

306

234

2,398

Increased by 3.2% compare to 2018

1,807

Increased by 6.8% compare to 2018


Click on the icon below to see other indicators

Increased by 4.5% compare to 2018

9,858

Gross written premium

8,051

10,297

6,565

11,681

11,494

9,487

Gross written premium revenue

5,829

6,832

7,669

Unit: VND billion

10,297

Total revenues

Revenue from insurance business

2017

2018

25,453

10,116

Revenue from insurance business

2019

25,453

2016

21,508

2015

2019 32,150

29,360

2018

Revenue from insurance business

13,458

13,072

2017

22,150

2016

17,117

2015

17,477

Owners' equity

Profit before tax

Profit after tax

2015

Increased by16.2% compare to 2018

53,896

2018

2019

Total asset under Mgn

44,310

38,086

89

2017

Total asset under management

62,633

59

2016

62,633

2019

31,021

2018

119

2017

115

2016

107

2015

Profit before tax

Profit after tax

2015

193

203

219

263

303

Owners’ equity

227

2016

2017

2018

2019

Increased by 25% compare to 2018

227

2019

223

2018

Owners’ equity

217

2017

214

2016

242

2015

Profit before tax

2018

2019

2.398

2017

2.927

484

2016

Total asset

2,398

327

288

2015

2019

2.199

2018

1.668

2017

564

2016

548

2015

1.880

Profit after tax

Total Assets

Profit before tax

Profit after tax

2015

Overview

Development Strategy

2016

2017

2018

Business Performance

2019

Corporate Governance

2015

Sustainable Development

2016

Financial Statements

2017

2018

2019

45


Thank you

Our Customers


More than half a decade, more than ever, we could not have been Baoviet like today without the accompaning trust of our customers.




DEVELOPMENT STRATEGY


52 58 64 70 74 88 96

Business environment, opportunities and challenges Business model and growth drivers Optimizing factors that drive growth of Baoviet Identify material matters World trends affecting Baoviet’s strategy Sustainable development strategy of Baoviet Development strategy toward 2020 - Vision to 2025


BUSINESS ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

OPPORTUNITIES, CHALLENGES AND RISKS ONWARD TO 2020 The global economic outlook is forecasted to remain challenging and entail unpredictable potential risks. In this context, Baoviet identifies opportunities and challenges for business operations of Baoviet to 2020 as follow:

Insurance Main factors

Factors

Vietnam’s economy recovers and enters a new growth cycle Higher FDI inflows are expected MACROECONOMIC ENVIRONMENT IN 2016-2020

Higher GDP per capita Global economic and financial markets to be increasingly unpredictable Increasing public debt and budget deficit Bad debt pressure

Trade activities to further expand Higher FDI, ODA inflows GLOBAL INTEGRATION

Markets growting in size Increasing competition Comprehensive risk management required

RESTRUTURING OF THE FINANCIAL INSURANCE MARKET

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The financial – insurance market to develop on a stable and sustainable basis Enhanced legal framework of Vietnam in accordance with international standards Requirements for legal compliance

General Life Insurance Insurance

Investment

Financial Services


In the context of unpredictable volatile fluctuations in the global economy and financial markets, the business environment in Vietnam has become increasingly complicated and with many potential risks, therefore Baoviet has proactively implemented forecasting and analytical work on such change of business environment with the identification of opportunities and challenges for Baoviet in the short, medium and long term.

Insurance Main factors

REVOLUTIONARY TECHNOLOGY 4.0

Factors

General Life Insurance Insurance

Investment

Financial Services

Speedy technology development High competition in developing innovative products

Low insurance penetration rate

DEMOGARPHIC AND SOCIAL FACTORS

Golden demographic structure, increasing middle class People’s better awareness and education on finance – insurance Pressures on market research and analysis to identify customers’ needs

Trend of risk transfer CLIMATE CHANGE

Micro-finance to be developed Climate change’s influence on living environment and increase diseases

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

53


BUSINESS ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

MAJOR RISK Baoviet Holdings has strengthened the enterprise risk management at the Holdings and subsidiaries systematically; identifying, classifying and assessing risks, ensuring all risks are managed in a timely and effective manner. Risks are assessed periodically and promptly reported to the Executive Board and the Board of Directors to mitigate the risks that could negatively impact on performance, reputation of the Holdings.

lity inabi Susta k ris

St

ra t ris egic k

8. 7.

Reputation risk

6. 1.

5.

al tion a r Ope risk

ranc risk e

3. it ed Cr isk r

Liq

2.

Market risk

ui ris dity k

4.

Insu

Notes LEVEL

High risk

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Medium risk

TRENDS: (FORECAST)

Low risk

Increasing

Stable

Reduce


1. INSURANCE RISK

Identification • Insurance compensation costs have a strong fluctuation; • The obligation to pay for insurance events arising beyond product design assumptions; • The insurance compensation costs are not reasonable, exceed the assumptions used in designing product. Monitoring and management of risk

Level & Trend

• Assessing risks in designing new insurance products, underwitting, inspecting and payment/ compensating insurance; assess accumulated risks according to each profession, product group, locality ... • Regularly review important assumptions (death rate table, technical interest rates; loss parameters), review the risks of insurance coverage and reasonably insured subjects; risk transfer through reinsurance operations • Supervise and monitor monthly / quarterly and report to the Board of Management; report quarterly at the meetings of ALCO, RMC Baoviet Holdings and subsidiaries.

2. CREDIT RISK

Identification • Risk of arising bad debts or overdue bond investments, overdue deposits occurred; • Risks from insurance business and or from margin trading. Monitoring and management of risk

Level & Trend

• Monitored within limits compliance in monthly risk report to Executive Board, and quarterly risk report to RMC; • Managed through limits, internal credit rating model, which have been approved by RMC; • Periodicly evaluation the collateral assets of corporate bonds.

3. MARKET RISK

Identification • Fluctuations in deposit interest rates, government bonds interest rates or the price of other goods. Monitoring and management of risk

Level & Trend

Overview

Development Strategy

• Managed, measured in terms of Value at risk, interest rate sensitivity assessment - PVO1 • Monitored by using monthly risk reports, and quarterly report to RMC, ALCO.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

55


BUSINESS ENVIRONMENT, OPPORTUNITIES AND CHALLENGES

4. LIQUIDITY RISK

Identification • The risks cause of term imbalance of cash flow to fulfill payment obligations or directly affect the liquidity status of the whole Group. Monitoring and management of risk

Level & Trend

• Monitor asset and liability cash flow projection for all tenor, the percentage of high liquid asset. Review the asset and liability for each period, the liquidation rate of assets. • Managed by using limit, liquidity Gap, and scenario analysis.

5. OPERATIONAL RISK

Identification • The risk of IT systems affecting the continuity of business loss of information assets; • Risks from compliance with legal regulations; loss and damage that an enterprise may incur in the event of a dispute. Monitoring and management of risk • Eveluation in terms of the impacts to continuity of business, to financial impacts and to the reputation;

Level & Trend

• Monitored by using KPIs, monthly and quarterly reports to Executive Board and RMC; • Managed by Operational Risk Management Framework, Compliance Regulations, Compliance Manual, Information Security Regulation, and processes, procedures and internal control system.

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6. REPUTATION RISK

Identification • Risks arise when the mass media publish adverse information or products and services that do not meet the expectations of customers and investors. • Business activities, behaviors, attitudes of employees or third parties negatively affect the image of the business. Monitoring and management of risk • Monitored, tracked by articles by press agencies, indicators from customer service center;

Level & Trend

• Managed by the processes, procedures, manuals, regulations handling crisis communication; • Training and communication for employees and leaders of the Group on Communication Crisis Management and topical risk management training courses.

7. STRATEGIC RISK

Identification • The annual business plan may not yet align with the strategic objectives plan; • Not predicting all subjective, objective or changes in business environment; • The impact of information technology in the period of industrial revolution 4.0. Monitoring and management of risk • Measured by the financial and non-financial indicators of the implementation of the annual strategy;

Level & Trend

• Monitored by monthly and quarterly analysis of macroeconomic factors, business results, results of strategy hàng năm; • Managed by analysing scenarios of volatility of macroeconomic factors, internal factors, to consider the feasibility of the annual strategy.

8. SUSTAINABILITY RISK

Identification • Risks affected to sustainable development in the Bao Viet system; • Social and environmental risks affected to Bao Viet; • The risks from Bao Viet’s business activities affected to environment and society. Monitoring and management of risk

Level & Trend

• Periodicly monitor the financial and non-financial indicators. • Managed by process, procedures, regulations, auditing sustainable reports by internal and external audit.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

57


BUSINESS MODEL AND GROWTH DRIVERS BUSINESS MODEL For Baoviet, we identify the factors affecting business operations including internal factors (human resources, capital, intellectual property, brand reputation ...) Baoviet built and strengthened over the past half century, along with grasping and utilizing external factors such as sustainable development trends, demographics, and social responsibility which will drive strong growth and sustainability of Baoviet in the future.

Nguồn lựcresources Financial tài chính

Bảo Insurance Life hiểm nhân thọ

Tài sản hữu Tangible assets hình

Bảo hiểmInsurance Non-life Phi nhân thọ

Intangible Tài sản vô hình assets (Thưngand (brand hiệuintellectual quyền sở hữu trí tuệ) property)

CÁC INPUTS NGUỒN LỰC RESOURCES ĐẦU VÀO

Nguồn nhân Human resources lực

PRODUCTS SẢN PHẨM DỊCH VỤ AND SERVICES

HỆ SUPPLY THỐNG PHÂN PHỐI CHAIN

Quản trị chuyên Corporate governance nghiệp Đầu tư - Tài chính Investment - Finance

Yếu tố môi trường Environmental factors Ngân hàng Banking

Yếu tố xã Social factors hội

KEY GROWTH DRIVERS Internal forces

external forces

FINANCIAL RESOURCES Strong financial strength; Exploiting market opportunities.

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PRODUCTION RESOURCES AND TANGIBLE ASSETS

INTANGIBLE ASSETS AND INTELLECTUAL PROPERTIES

Modern information technology platform; Large-scale distribution system.

Product development capacity; Technical assistance from strategic shareholders


Khách Customers hàng

CHUYỂN TRANSFORMING ĐỘNG CÙNG WITHXU TECHNOLOGY HƯỚNG CÔNG TRENDS NGHỆ

Cổ đông và Shareholders nhà đầu tư

ĐốiPartners/Suppliers tác, nhà cung cấp NHẬN RISKS DIỆN AND RỦI RO VÀ CƠ HỘI OPPORTUNITIES

CHIẾN LƯỢC DEVELOPMENT PHÁT TRIỂN STRATEGY

ENGAGE WITH GẮN KẾT STAKEHOLDERS CÁC BÊN LIÊN QUAN

GIÁ TRỊ MANG VALUES FOR LẠI CHO CÁC STAKEHOLDERS BȆN LIȆN QUAN

XÁC ĐỊNH IDENTIFY CÁC ĐỀ THEVẤN MAIN TRỌNG YẾU ISSUES

Người Employees lao động

QUẢN TRỊ CORPORATE DOANH NGHIỆP GOVERNANCE

Public Cơ quan administration ban ngành

PHÂN BỔ ALLOCATING NGUỒN LỰC RESOURCES

Local community Cộng đồng

Environment Môi trường

CORPORATE GOVERNANCE

SOCIAL FORCES

ENVIRONMENTAL FORCES

Corporate governance competency in accordance with International governance standards.

Opportunity derived from sustainability development trend and demographic factors.

Climate change and “going green” business activities.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

59


BUSINESS MODEL AND GROWTH DRIVERS

OPTIMIZING FACTORS THAT DRIVE GROWTH OF BAOVIET During the course of business operations, the effective use of inputs is a decisive factor for creating value and these values including: Economic value (solid growth in revenue and profits, dividends to shareholders); Value added for customers (superior products and services), Physical and spiritual value to Employees (welfare, working environment, income), Benefits for other stakeholders (society, environment ...).

INPUTS

FINANCIAL RESOURCES Owners’ equity (Shareholders); Capital from technical provision (the insured)

UTILIZE INPUTS TO CREATE VALUES

• Efficiency in using financial resources through investment in lowrisk assets (government bonds and deposits represent over 90% of total investment portfolio). • • Seeking new investment channels, improve returns of investments.

• Investment in training (in accordance with learning map), human resource development; • Improvement of competences of consultants/insurance agents;

HUMAN RESOURCES Employees; Corporate culture

• Recruitment and attraction of skilled employees; • Fosering talents and strengthening bond between employees; • Attractive welfare scheme and opportunities of promotion.

• Investment in IT infrastructure development in accordance with international standards (LIPA…), switch to cloud technology solutions integration;

PRODUCTION RESOURCES AND TANGIBLE ASSETS Modern IT platform; Large scale of outbound logistics; 24/7 call-center; The largest direct billing network in Vietnam.

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• Diversified distribution system: online, bancassurance, digital…; • Stable 24/7 call-center system operation; • Efficient operation of direct billing network, insurance fraud controlling.


The identification of key drivers for growth play an important role in enabling the enterprise to deliver suitable decisions in allocating the resources or concentrating resources on certain factors with a view to accelerate the growth rate of an enterprise.

OUTPUTS (PRODUCTS, SERVICES, BUSINESS RESULTS)

VALUES DELIVERED TO STAKEHOLDERS

• Achieving stable growth in revenues, profitability, and reached revenue of nearly US$2 billion in 2019.

• Shareholders/Investors; • The insured;

• 2018 dividend payout of 10%/par value. • Delivering strong financial capacity, promote reinvestment in the economy; make substantial contribution of VND20,000 billion into State budget since equitization.

• Customers using financial services; • State bodies; • Employees.

• Fostering a culture of open communication within the corporate; • Strong bond amongs employees in operations;

• Employees;

• New welfare programs provided (K-care, retirement plan) to bring more benefits for employees, including insurance, savings, accumulation, and value added from financial investments.

• Insurance agents and consultants.

• Improved corporate core competencies based on modern IT platform; • Customer approach through multichannel distribution system; • Superior customer service quality through call center supporting responds to customers’ demand promptly and accurately;

• Customers; • Partners.

• Enhanced risk management, and insurance claim control system; • Brand repositioning to create customers’ trust and closeness as well as friendly professionalism corporate image.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

61


BUSINESS MODEL AND GROWTH DRIVERS OPTIMIZING FACTORS THAT DRIVE GROWTH OF BAOVIET INPUTS

UTILIZE INPUTS TO CREATE VALUES

• Investment in diversified product development, meeting demands of different customer segments;

INTANGIBLE ASSETS AND INTELLECTUAL PROPERTY Market leader in product development competency; Brand value of US$116 million valuated by UK brand finance; Technical support and capacity transfer from foreign strategic shareholder.

CORPORATE GOVERNANCE Corporate Governance in accordance with international customs; Standardized risk management system, and internal control

• 08 new insurance products and many integrated financial products launched; • Enhancement of brand value through prestigious awards; • Exploitation of strength of strategic shareholder to create synergy in management, governance and core businesses.

• Improved corporate governance competencies in accordance with international customs (ASEAN governance scorecard, governance principles by OECD); • Strengthening the role of Internal Control, Compliance Risk Management, promoting synergy and improving the efficiency of governance and administration.

• Demographic factors (golden population structure, rapid pace of population aging) open up opportunities for new product development;

SOCIAL FACTORS Social relationships; Demographic factors; Sustainable development trend; Social responsibilities.

• Seizing opportunities from sustainable development trend: responsible investment, green financial product research and development; • Corporate social responsibility (CSR): Investments in education and young generation, local community development; war martyrs appreciation, hunger eradication and poverty reduction. • Reduce greenhouse gas emissions through greenery programme such as tree-planting projects; • Reducing greenhouse gas emissions from office buildings, air conditioners and refrigerators;

ENVIRONMENTAL FACTORS Climate change; Waste and greenhouse effect reduction. 62

THANK YOU FOR YOUR TRUST Integrated Report 2019

• Minimizeoffice waste, implement 5S workplace methodology practices (Screening - Sort - Clean - Take care - Ready).


OUTPUTS (PRODUCTS, SERVICES, BUSINESS RESULTS)

• Providing a wide range of products with 80 non-life insurance products and 55 life insurance products, launching specialized products: K-Care, Easy Car, Easy Life, cardiovascular products. • Baoviet brand is valuated at USD276 million, doubled in value yoy. • Risk management system, internal control, compliance system implementation, improved competencies through the support of strategic shareholder, Sumitomo Life.

• Enhanced role of the Parent company in strengthening synergy among subsidiaries. The Parent company plays the role of coordination and being responsible for direct management of activites within the whole Group, thus improve business performance.

VALUES DELIVERED TO STAKEHOLDERS

• Customers; • Partners; • Shareholders.

• Shareholders; • Employees.

• Providing voluntary retirement and cancer products combining benefits of protection, accumulation, ensuring peace of mind for workers when they retired; • Developing medical and health care products to serve the growing needs of society: K-Care, a cancer specialty insurance, One Storm - Tropical storm insurance, personal and householdsinsurance;

• Related parties (authorities); • Community; • Environment.

• Invest in construction of health clinics, schools, hunger eradication,poverty reduction, sustainable community development. • Making quarterly observation at workplace; • “Go green” for business operation:economical and efficient use of resources, reducing plastic waste in the office; • “Go green” for lifestyle andpromoting sustainable consumption;

• Business environment; • Living environment.

• Reduce waste water and save energy. Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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OPTIMIZING FACTORS THAT DRIVE GROWTH OF BAOVIET

Stakeholders are our significant partners whose feedbacks are valuable source of information for us to develop and reinforce our operation. For each target group, Baovet uses different approaches to information. Feedback from the parties is carefully reviewed, researched and endeavored to include these feedbacks into our Company’s policies and practices.

BAOVIET’S KEY STAKEHOLDERS We identify stakeholders based on the possible effects of Baoviet’s activities on them or those who are interested in influencing Baoviet’s current operations. We build and develop

relationships based on meeting long-term interests between parties; this relationship is based on trust, transparency, and respect for the corporate ethical standards.

The 7 key stakeholders for Baoviet include:

Employees

Partners/ Supplier

Media

Local community

Customers

Government

Shareholders/ Investors

THE BASIC PRINCIPLE IN ENGAGING STAKEHOLDERS We reach out to relevant stakeholders through a variety of channels of information in a way that is conducive to listening to each other’s ideas and interests in relation to Baoviet’s operations, especially governance issues. company, human resource development, economic growth, contribution to society and environment.

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The process of exchanging with the stakeholders also helps Baoviet to proactively identify current trends and issues as well as helping Baoviet to better understood their interest and expectation, objectively view policies, reports and disclosure of information to stakeholders.


Baoviet identified the stakeholders based on the role and level of influence of the parties involved in Baoviet proportionally as follows:

Cơ quan Media báo chí

Người Employees lao động

25%

15%

CơGovernment quan Quản lý

Shareholders/Investors Cổ đông/Nhà đầu tư

15%

Cộng Local đồng community địa phương

10%

20%

Khách Customers hàng

Đối Partners/Suppliers tác/Nhà cung cấp

10%

5%

Influence proportion of stakeholders on Baoviet.

BAOVIET’S ENGAGEMENT WITH STAKEHOLDERS In 2019, Baoviet continued to engage stakeholders via multidimensional channels, in which our sustainable development strategy is profoundly mentioned to understand opinions of our stakeholders towards Baoviet’s activities relating to Economic - Social - Environmental initiatives. We also took a survey on social network and website to get feedback about our sustainable development activities in 2019. The survey was made available under the Sustainable development/ Survey of stakeholders website section.

Media Employees

Annual labour conference/ Internal publications: Intranet, Monthly Bulletin, Baoviet’s research magazine; Training courses.

Overview

By assessing the importance of issues, we make investments, allocate resources that best meet stakeholders’ expectations and ensure corporate sustainable development.

Shareholders/Investors

Meet the media to exchange information, interview leaders and experts; Programs of exchange, press cooperation, press release about Enterprise activities.

Development Strategy

Throughout discussions and meetings with parties we figured out concerns of stakeholders and their major impacts on Baoviet’s activities. This is the foundation for 2019 Sustainability Report.

Customers

Employees/ agents meeting with customers Call center and 24/7 hotline Customer response management channel integrated on website.

Business Performance

Local community

Government, Meeting with investors/Annual the Central authorities General Meeting, Participate in the Investor Relation conferences and (IR) newletters Baoviet Website workshops organized by the Government Exchange and and Ministries cooperation Become a member programs, of organizations Investors tour and associations and roadshow. including the

Corporate Governance

Work with local authorities to approach residents and survey their expectations

Partners/ Suppliers

Direct meeting: to complete tender policies and cooperation agreement with suppliers.

Association of Vietnamese Insurers, Vietnam Business Council for Sustainable Development, World Economic Forum…

Sustainable Development

Financial Statements

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OPTIMIZING GẮN KẾT FACTORS CÁC BÊN THAT DRIVE LIÊN GROWTH QUAN OF BAOVIET

CÁC STAKEHOLDERS BÊN LIÊN QUAN

CRITICAL CHỦ ĐỀ ĐƯỢC ISSUES CÁC BÊN QUAN TÂM

HOẠT ĐỘNG BUSINESS GROWTH KINH DOANH IS EFFECTIVE, TĂNG TRƯỞNG SUSTAINABLE; HIỆU QUẢ, BỀN VỮNG; ĐỐI XỬ TREATMENT EQUAL BÌNH ĐẲNG VÀ AND ĐẢM SHAREHOLDER BẢO QUYỀN LỢI RIGHTS; CỔ ĐÔNG; THÔNG TIN MINH TRANSPARENT INFORMATION. BẠCH.

SHAREHOLDERS/ CỔ ĐÔNG/NHÀINVESTORS ĐẦU TƯ

UY TÍN DOANH NGHIỆP, CHẤT LƯỢNG SẢN PHẨM, DỊCH VỤ; BUSINESS PRESTIGE, QUALITYPRODUCT, SERVICE; SẢN PHẨM ĐA DẠNG, ĐÁP ỨNG NHU CẦU KHÁCH HÀNG. PRODUCTS DIVERSIFIED, MEET THE NEEDS OF CUSTOMERS.

KHÁCH CUSTOMERS HÀNG

MÔI TRƯỜNG LÀM VIỆC NĂNG ĐỘNG, CHUYÊN NGHIỆP; DYNAMIC PROFESSIONAL WORKING ENVIRONMENT; GIA TĂNG QUYỀN LỢI, PHÚC LỢI CHO NGƯỜI LAO ĐỘNG; INCREASE EMPLOYEE WELFARES AND BENEFITS; CHẾ ĐỘ ĐÃI NGỘ VÀ CƠ HỘI THĂNG TIẾN. BENEFIT AND PROMOTION.

NGƯỜI LAO ĐỘNG EMPLOYEES

THỰC HIỆN CÁC HƯỚNG, CHIẾN LƯỢC PHÁT ORIENTATIONS TRIỂN CỦA CHÍNH IMPLEMENT THEĐỊNH GOVERNMENT’S DEVELOPMENT ANDPHỦ; STRATEGIES; CHUNG TAY CÙNG CƠ QUAN QUẢN LÝ THỰC HIỆN CÁC CHÍNH SÁCH NHẰM HỖ TRỢ;

CƠ QUAN QUẢN LÝ PUBLIC ADMINISTRATION

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TOGETHER WITH MANAGEMENT AGENCIES IMPLEMENT POLICIES CHO SỰ PHÁT TRIỂN CỦA NÊN KINH TẾ, THỊ TRƯỜNG, CỘNG ĐỒNG DÂN CƯ. TO SUPPORT THE DEVELOPMENT OF THE ECONOMY, THE MARKET AND COMMUNITY POPULATION.


HÀNH ĐỘNG BAOVIET’S INITIATIVES CỦA BẢO VIỆT NĂM 2019

KẾT QUẢ VALUES SHARED

• Implement equality policies between major shareholders to đông provide • shareholders Thực thi chínhand sáchsmall bình đẳng giữa các cổ lớn information and create conditions fortin, all shareholders và cổ đông nhỏ về cung cấp thông tạo điều kiện to exercise rights; cho mọi cổ their đôngvoting thực hiện quyền biểu quyết;

• Received andlượt metnhà 180đầu investors; Tiếp đón 180 tư;

• Chi Pay trả cổ fulltức đầy dividend,transparentdisclosure đủ, công bố thông tin minh bạch.of information.

• Xây Create dựng products các sảnand phẩm services dịch vụto đáp meet ứng the nhudiverse cầu đa dạng khách needs of customers; hàng; bảoprotecting vệ khách customers hàng trước against các rủi ro, đem risks, giving đến cho customers khách hàng the các opportunity cơ hội để to hiện realize thực hóa ước theỉr dream, mơ, đảm ensuring bảo sự bình the an peace và thịnh of mind vượng and cho khách hàng; prosperity for customers. • Ứng Application dụng AIof(Artificial AI (Artificial Intelligence) Intelligence) và machine and learning để xây dựng machinelearning toAdviserBot build AdviserBot phục vụ khách to hàng; serve customers; • Tổ chức khảo sát lấy ý kiến khách hàng online và tại • Conducting quầy dịch vụcustomer khách hàng. feedback surveys online and at the customer service counter.

• Tham Participate in 05 domestic andtiến international investment gia 05 Hội thảo xúc đầu tư trong nước promotion conferences (Korea, UK, Singapore và quốc tế (Nhật Bản, Singapore, Anh Quốc…); ...); Over 200 Cuộc calls from investors resolved; • Trên gọi từindividual nhà đầu tư cá nhânare được giải quyết; Dividend rate of 10% par value. • Chi trả cổpayment tức với tỷatlệthe 10%/mệnh giá /cổ phiếu.

• Ra mắt 06 sản phẩm bảo hiểm nhân thọ, phi nhân thọ, • Launched 06 new life, non-life insurance products, fund chứng chỉ quỹ và các sản phẩm tích hợp tài chính, certificates andother integrated financial insurance bảo hiểm khác; products; • Triển khai ưu đãi phí cho khách hàng khi tham gia • Deploying preferential premiums for customers when các gói bảo hiểm, hỗ trợ khách hàng khi bùng phát participating in insurance packages, supporting dịch bệnh Covid-19; customers during theCovid-19 disease outbreaks; • Hơn 500 khách hàng phản hồi tích cực qua kênh online, • 500 customers respond positive feedback via online fanpage và trực tiếp tại quầy dịch vụ khách hàng Bảo Việt. channel, fanpage and directly at service counters. • Triển khai mua bảo hiểm hưu trí, bảo hiểm bệnh ung thư cho CBNV;

• Xây dựng nguồn nhân lực có trình độ chuyên môn cao,build thái độ, làm việc tích cực, có khả tiếp cận • To human resources with highnăng professional với các phươngworking pháp, kỹability, năng and quảnaccess lý hiệntođại; qualifications, modern management methods and skills. • Tổ chức các phong trào rèn luyện sức khỏe. • Organizingfitness exercise initiative movement

• Xây dựng các sản phẩm dịch vụ đáp ứng nhu cầu đa dạng khách hàng; bảo vệ khách hàng trước các rủi • Set upđến a cho division dedicated to để sustainable ro, đem khách hàng các cơ hội hiện thực development; Assignment of vàresponsibility at hóa ước mơ, đảm bảo sự bình an thịnh vượng cho executive level down to the subsidiaries; khách hàng; • Ứng Joineddụng the board of VBCSDIntelligence) to improve performance; AI (Artificial và machine learning để xây dựng AdviserBot phục vụ hàng; • Supplementation of environmental khách and social reviews for Baoviet Project Investment • Tổ chức khảo sát lấy ýHoldings’ kiến khách hàng online và tại Process and Procedure. quầy dịch vụ Equity khách Investment hàng.

Overview

Development Strategy

Business Performance

• Implementing cancer for • Gần 6.500 cánretirement bộ được insurance, tham gia đào tạo insurance chuyên môn employee; nghiệp vụ; • officers aretập trained professional • 6,366 Xây dựng phòng Yoga, in Zumba, tạo điềuskills; kiện cho cán bộ luyệngyms, ngoài giờ; • tập Building yoga classes, dancing, ping pong for the staffsđộng to practice • Khởi chươngovertime. trình tập thể dục giữa giờ.

• Ra mắt 06 sản phẩm bảo hiểm nhân thọ, phi nhân thọ, chứng chỉ quỹ và các sản phẩm tích hợp tài chính, • Successfully appointed candidates for two positions: Vice bảo hiểm khác; Chairman and Executive Board Member of the Vietnam • Triển khaiCouncil ưu đãi cho khách hàng khi (VBCSD); tham gia Business forphí Sustainable Development các gói bảo hiểm, hỗ trợ khách hàng khi bùng phát • Participated in sharing experiences, pioneering the dịch bệnh Covid-19; implementation of sustainability report in accordance • with Hơn 500 khách hàng phản hồi tíchVCSF cực Forum qua kênh international standards at the andonline, ASRS fanpage và trực tiếp tại quầy dịch vụ khách hàng Bảo Việt. (Singapore).

Corporate Governance

Sustainable Development

Financial Statements

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OPTIMIZING GẮN KẾT FACTORS CÁC BÊN THAT DRIVE LIÊN GROWTH QUAN OF BAOVIET

CÁC STAKEHOLDERS BÊN LIÊN QUAN

CRITICAL CHỦ ĐỀ ĐƯỢC ISSUES CÁC BÊN QUAN TÂM

PROVIDING CUNG CẤP, AND CHIA SHARING SẺ THÔNGOPEN, TIN CỞI ACTIVE MỞ, AND CHỦ REGULAR ĐỘNG, THƯỜNG INFORMATION XUYÊN SO ĐỂ BÁO MEDIA THE CHÍ CÓCAN THỂREFLECT PHẢN ÁNH TRUTHFULLY CHÂN THỰC, AND OBJECTIVELY KHÁCH QUANON VỀTHE HOẠT OPERATION ĐỘNG CỦA OF DOANH THE CORPORATION NGHIỆP ĐẾNTO CÔNG THE PUBLIC. CHÚNG.

CƠ QUAN MEDIA BÁO CHÍ

HỖ TRỢAND ASSIST NGƯỜI SUPPORT DÂN NÂNG PEOPLE CAOTO CÁC IMPROVE ĐIỀU KIỆN BASIC SỐNG LIVING CƠ BẢN. CONDITIONS; HỖ TRỢ PHÁT SUPPORT LOCAL TRIỂN ECONOMIC KINH TẾ DEVELOPMENT. ĐỊA PHƯƠNG.

CỘNG LOCAL ĐỒNG COMMUNITY ĐỊA PHƯƠNG

EQUAL TREATMENT OF SUPPLIERS; ĐỐI XỬ BÌNH ĐẲNG VỚI CÁC NHÀ CUNG CẤP. CLEAR CRITERIA FOR EVALUATING OPTIONS.

ĐỐI PARTNERS TÁC/NHÀ SUPPLIERS CUNG CẤP

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HÀNH ĐỘNG BAOVIET’S INITIATIVES CỦA BẢO VIỆT NĂM 2019

KẾT QUẢ VALUES SHARED

• Kết Closely nối chặt connecting chẽ với cơ andquan networking báo chí, đảm with bảo the tin press, tức hoạt độngthat ensuring củathe Bảonews Việt được of Baoviet’s cập nhật activities kịp thờiare và phản ánhinmột updated a timely cáchand chân honest thực,manner; khách quan; • Tăng Increasing cường the sốamount lượng thông of information tin gửi tới sent báo to the chí media thông qua các press through thông releases, cáo báo news, chí, tinin-depth tức, cácanalytical bài viết phân articles tích sent chuyên to thesâu press. nội bộ gửi tới các cơ quan báo chí.

• Collaborate with VTV, VOV in producing news articles, • Phối hợp với VTV, VOV thực hiện các bài phỏng vấn, interviews and stories, short documentary film to provide phóng sự ngắn để cung cấp thông tin về Bảo Việt đến information about Baoviet to the public; công chúng; • More than 250 articles on Baoviet’ sustainable • Trên 250 tin, bài viết về hoạt động PTBV của Bảo Việt development have been published in newspapers in được đăng tải trên các báo tại Việt Nam và quốc tế. Vietnam and internationally.

• Supporting the community through contribution by • Hỗ trợ cộng đồng thông qua đóng góp xây dựng donating basic living conditions, enabling people các điều kiện sống căn bản, giúp người dân tập trung to concentrate on production, securing their family lao động sản xuất, đảm bảo kinh tế gia đình, qua economy, thereby promoting the local economy, đó thúc đẩy kinh tế địa phương, tạo ra các cơ hội creating business development opportunities for phát triển kinh doanh cho Bảo Việt; Baoviet; • Đánh giá tác động môi trường; Giảm tiêu thụ • Environmental impact assessment; reduce energy năng lượng và phát thải khí nhà kính. consumption and greenhouse gas emissions.

• Organized many medical examination and treatment • Tổ chức nhiều chương trình khám chữa bệnh, tặng quà programs, giving gifts to highland mountainous people; cho bà con vùng núi; tặng sách vở và quần áo, học bổng giving books and clothes, scholarships for students; cho các em học sinh, sinh viên; • Invested more than VND400 billion for social welfare • Đầu tư gần 400 tỷ đồng cho các hoạt động an sinh xã hội; initiatives; • Thực hiện báo cáo quan trắc môi trường định kỳ hàng quý • Carried out quarterly environmental monitoring report at tại trụ sở chính Bảo Việt. Baoviet’s Head Office.

• Bổ sung 02 tiêu chí giá vàfor rà environmental soát về môi trường • Supplementation ofđánh 02 criteria and và xã hội trong Quy trình đầu tư án và Holdings’ Quy trình social evaluation and review fordự Baoviet đầu tư góp vốn cổ phần của Tập BảoInvestment Việt. Project Investment Process andđoàn Equity

• Áp dụng bộ tiêu chí đánh giá nhà cung cấp trên • Applying criteria in 5 aspects, 5 phương the diệnsupplier trong đó evaluation có yếu tố môi trường; including environmental factors; • Các nhà cung cấp đáp ứng yêu cầu quản lý, tuân thủ yêu • Suppliers requirements, cầu pháp meet luật vàmanagement quá trình hoạt động khôngcomply gây tổnwith hại legal requirements đến môi trường và xãand hội.operate in a non-damaging way towards environment and society.

Procedure.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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IDENTIFY MATERIAL MATTERS

Based on the evaluation of the importance of issues considered in the correlation between the level of interest of the parties and the level of influence In terms of business activities, Bao Viet has developed a “Core Matrix” in order to determine priorities and allocate resources to best meet the expectations of stakeholders. PROCESS OF DETERMINING KEY ISSUES The assessment of a key area is a principle that requires reporting but at the same time is the process of determining the focus of content in line with the developed Sustainable Development Strategy. The process of conducting material assessment at Bao Viet was conducted in accordance with the steps of the process and methodology for evaluating material areas according to GRI Standards.

On the basis of analyzing the impact on the economic, social and environmental aspects of Baoviet Holdings’ activities, we identify areas of significance in reference to GRI Standards. We aggregate the level of interest according to the identified areas for each stakeholder primarily based on the results of stakeholder consultation. We then summarize the assessment of the material key area of the matrix based on the results of the assessment of importance to stakeholders and businesses.

Key issues assessment process

Identification of sustainable issues impacting on Baoviet • Research and review informations from the market and industry; • Analysis media and press information; • Review and survey from customers, information from Industry Associations; • Internal discussions with workers; • Meeting with local leaders.

Assessment and selection of stakeholders’ concerns

Assessing important aspects that need to be prioritized; Reviewing prioritized aspects by top managers; Selecting prioritized aspects of Baoviet.

Classification of the key aspects under 3 contents: Building the Set of Sustainable Development Issues in 2018 (Reference to GRI Standards)

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Economic

Society

Environment


The assessment of key areas of business is based on the analysis of the business strategy of the enterprise, the analysis of press information and the business environment of the industry. From there we select the key areas and issues that are of interest to the parties. The importance and scope of the issues continues to be screened, analyzed and clarified during discussion meetings with the relevant Departments / Committees and submitted to the senior leaders to identify prioritised issues for implementation in 2019

IDENTIFY KEY ISSUES

Baoviet conducts consultations with experts in the field of sustainable development for areas deemed critical that Baoviet needs to consider at the present time. At the same time, we also consider employees’ opinions through a review of proposals and comments made through internal interactive channels.

in line with international practices. Since then, the Internal Audit Division has proposed solutions to the Board of Directors of Baoviet Holdings to improve the process of managing key issues according to international standards.

In 2019, the Internal Audit Division of Baoviet Holdings conducted an audit to assess Baoviet’s key management process for sustainable development according to the assessment method based on the capacity-maturity model with 04 maturity levels

Identification of sustainable issues impacting on Baoviet

Significant areas of increased interest level from stakeholders

Analyzing influences • Identifying weighted ratio of stakeholders; • Assessing impacts of aspects on stakeholders; • Calculating weighted GPA and impact on stakeholders.

Priorities of stakeholders

Economic performance Indirect economic impact Customer Health & Safety Information Transparency

Employment

Education and Training

Business Ethic and Integrity Market Presence

Local Communities

Products and services for social benefits

Jobs Diversity and Equal Opportunity

Analysis of the effects on Baoviet’s operation • Assessing and grading the impact on sales, costs, regulations and corporate credibility

Emissions and wastes Anti-corruption

Occupational Health and Safety

Environmental Compliance

Priorities of Baoviet

Evaluation and internal review

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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IDENTIFY MATERIAL MATTERS

Priorities of stakeholders

MATERIALITY MATRIX OF KEY ISSUES IN 2019

Economic performance Indirect economic impact

Customer Health & Safety Information Transparency

Education and Training

Business Ethic and Integrity

Employment

Local Communities

Market Presence Products and services for social benefits

Jobs Diversity and Equal Opportunity Emissions and wastes Anti-corruption

Occupational Health and Safety

Environmental Compliance

Priorities of Baoviet

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1.

With regard to economic issues

By assessing the importance of the fields considered in the correlation between the level of stakeholders’ interestand the level of affect onbusiness operations, Baoviet develops a “Materiality Matrix of key issues” to determine the priority and appropriate allocation of resources to best meet the expectations of stakeholders as well as to ensure the sustainable development ofenterprise.

2. With regard to governance, information transparency issues

After the process of understanding and assessing the level of stakeholders’ interestwith key issues, combined with the information recommended by internal audit after the assurance process with some indicators, during the year 2019 Baoviet has reviewed, analyzed and compared in accordance with the GRI Standards criteria. In addition to consulting with stakeholders, there are a number of issues that gained increase interest of stakeholders, Baoviet has focused on these as the main analysis framework in the 2019 report as follows:

As a listed company with large market capitalization, Baoviet attracts the attention of many stakeholders including domestic and foreign investors, media agencies, management agencies ... Therefore, the transparent disclosure of information and diversification of information channels to the public are subjects of interest to stakeholders. In 2017, Baoviet focused on improving the transparency and reliability of information disclosure (expanding the scope of auditing non-financial indicators, continuing to review quarterly financial reports) (according to regulation, the revision of the financial statements only required for interim reports) . Increased attendance and information sharing at international forums (Singapore, Korea, Japan), proactive response to information needs of stakeholders.

THANK YOU FOR YOUR TRUST Integrated Report 2019

After the consultation, we noticed that stakeholders have increased interest in the business performance and position of Baoviet in the market. Stakeholders expressed interest in Baoviet’s need to accelerate its operational efficiency and market dominance after focusing on innovating its business model.


ECONOMIC PERFORMANCE

TRANSPARENCY

EDUCATION AND TRAINING

LOCAL COMMUNITY

HEALTH AND SAFETY OF CUSTOMERS

PRODUCTS AND SERVICES FOR SOCIAL BENEFITS

3. The health and safety of customers As an enterprise operating in the field of insurance and financial services, the safety and health issues of customers are integrated right from the product research and design process to provide customers with comprehensive protectionsolutions. By developing integrated and specialized products, and maintaining micro insurance products for low-income workers, Baoviet can realize its commitment to provide comprehensive financial and protection solutions for customers and community.

ASSESSING THE APPROPRIATENESS OF MANAGEMENT APPROACH FOR MATERIALITY The key issues have been identified and assessed in the direction of integrating the stakeholders’ interests and Baoviet’s concerns specifically into 5 areas: Economic, Social, Environment, Governance, Customers’Health and Safety, from which Baoviet can allocate resources appropriately, best meet the expectations of stakeholders as well as ensure the sustainable development of the business. The issues mentioned above are presented in the following sections of this report.

Content related to key issues is also analyzed and presented in detail in Baoviet Holdings 2019 Sustainability Report prepared according to GRI Standards.

The continuous introduction of voluntary pension products, specialized insurance products, micro insurance products including low-cost products for a large number of people is a way for Baoviet to support and improve the lives of the poor and nearimpoverish households in rural and urban areas.

Overview

Development Strategy

Business Performance

Please refer to Sustainable Development Report 2019

Corporate Governance

Sustainable Development

Financial Statements

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CÁC XU WORLD HƯỚNG TRENDS THẾ GIỚI AFFECTING ẢNH HƯỞNG ĐẾN CHIẾN BAOVIET’S LƯỢC STRATEGY CỦA BẢO VIỆT

INSURTECH

XU INSURTECH HƯỚNG CÔNG TECHNOLOGY NGHỆ INSURTECH TRENDS ĐẾN TILL NĂM 2020 2020

The insurance Ngànhindustry bảo hiểm in the trênworld thế giới andvàintại Vietnam Việt Nam hascóchanged những thay rapidly đổi in recent nhanh years,chóng along with trongthe vàistrong năm gần development đây, cùng với of technology. sự phát triểnWe mạnh havecủa begun côngtonghệ. see fundamental Chúng tachanges, đã bắt đầu revolutionary nhìn thấy những changes. thayInsurtech đổi nền tảng, (Insurance nhữngTechnology) thay đổi is mang the term tính cách used mạng. to referCuộc to thecách trend mạng of information có tên Insurtech technology (Insurance applications Technology) in the insurance - thuật ngữ industry. này được Insurtech dung đểischỉ considered xu hướngaứng trend dụng thatcông will change nghệ thông the traditional tin trong ngành way the bảoinsurance hiểm. Insurtech industry được operating ví như là inmột the past xu hướng hundred sẽ thay years, đổichanging mọi cáchthe thức insurance hoạt động buying truyền behavior thống trong as wellhàng as the trăm management năm qua của mode ngành of an bảoinsurance hiểm, làm thay đổi hành vi mua bảocompany. hiểm cũng như phương thức quản trị của một công ty bảo hiểm.

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6. TẬP TRUNG FOCUS ON VÀODIGITAL KHÁCHCUSTOMER HÀNG SỐ THE

7. LÀM CHỦAIAIAND (ARTIFICIAL INTELLIGENCE) MASTER MACHINE VÀ HỌC MÁYNOW (MACHINE LEARNING) NGAY BÂY GIỜ LEARNING

5. DỮNEW LIỆUOIL LÀ DATA IS THE NGUỒN DẦU MỚI AND THE PRICE IS GOING UP VÀ GIÁ SẼ TĂNG

8. BẢO HIỂM XE CƠ GIỚI AUTO INSURANCE SỰ ĐỘT PHÁ ĐANG TỚI DISRUPTION COMING NHƯNG ĐỊNH HƯỚNG BUT DIRECTION NOT CLEAR KHÔNG RÕ RÀNG

4. GIẢMDIGITAL RỦI RO THUẬT SỐ RISKKỸ REDUCTION

9. VAI TRÒ MỚI CHO NEW ROLE CÁC KỸ NĂNG LÂUSKILLS ĐỜI NHẤT FOR THE OLDEST

10. 10.

3. 3.

KỸ NĂNG XÂY DỰNG VÀ SKILL UP AND TÁI CẤU TRÚCURGENTLY LẠI TỔ CHỨC REORGANIZE MỘTACÁCH NHANH CHÓNG FOR DIGITAL WORLD ĐỂ THÍCH ỨNG VỚI THẾ GIỚI SỐ

BẢO HIỂM SỐ INSURTECH LÀIT’S MỘTATRÒ MỚI NEWCHƠI GAME MỌI THỨTHE BẮTRESET ĐẦU LẠI TỪ ĐẦU PRESS BUTTON

2. 2.

NỀN TẢNG HỆ SINH THÁI ECOSYSTEMS ROCK SẼ ĐẾN SỚM HƠN BẠN COME SOONER THAN YOUNGHĨ THINK

1. 1.

SỐDIGITIZE HÓA HOẶC CHẾT OR DIE

Digital transformation Chuyển đổi kỹ thuật số đã has trởbecome thành ưuatiên tophàng priority đầu của for tất cả all major các công companies ty lớn trong in các keylĩnh sectors vực chủ (manufacturing, chốt (sản xuất, chính phủ, ngân government, banking, hàng, bảo insurance, hiểm, năng energy lượng/tiện / utilities, ích, giáo dục, bảo insurance, education, hiểm, bán lẻ, chăm retailing). sóc sức, khỏe, health giao thông care, và truyền thông). transportation andNếu communication). các năm trước, If incác previous CIOs ngành years, bảo insurance the hiểm quanindustry’s tâm nhất CIOs đến việc are most tăng trưởng concerned doanh about thu và tăng trưởng revenue growthkinh anddoanh, business bướcgrowth, sang giai step đoạn into 2019 the2020 chuyển period 2018 - đổi 2019 kỹdigital thuật số transformation trở thành ưu tiên for the số 1first củatime các lãnh đạo the become cấpnumber cao ở tấtone cả các priority ngành of nghề High không level leaders chỉ riêng in ngành all industries bảo hiểm. not just insurance industry.

Overview

Development Strategy

Business Performance

Corporate Governance

Some Một số insurer công ty bảo are hiểm shifting đang significantly chuyển mình inđáng the kể process trong quáapplying of trình áp digital dụng kỹ transformation, thuật số, chẳng such hạn as như expanding mở rộng kế hoạch plans business kinh doanh throughthông ecosystem qua phát development, triển hệ sinh product thái, đổi mới sản and innovation phẩm creating và tạo mô new hình business kinh doanh models. mới. Gartner dự báo ngành forecasts that bảo the hiểm life and nhânnon-life thọ và phi insurance nhân thọindustry sẽ tiếp tục tăng will continue cường to tập focus trung on digital vào kỹinthuật the future. số trong Insurer thời gian will tới. Các công prioritize the ty development bảo hiểm sẽofưubusiness tiên phátmodel triển mô change, hình kinh doanh data and analytics, (businesscustomer model change), experience dữ liệu improvement, và phân tích (datamodernization and and analytics), of core cải thiện systems trải in nghiệm 2020. khách hàng (customer experience), hiện đại hóa hệ thống core lõi đến năm 2020.

Sustainable Development

Financial Statements

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY

OPPORTUNITIES AND CHALLENGES FOR INSURANCE BUSINESS OPPORTUNITIES In the insurance sector, it is possible to say industry revolutionary 4.0 affecting all stages in the Insurance Value Chain: Product Development, Marketing, Sales & Distribution, Underwriting, Customer Service /Legal, Fraud Detection, Claims & Payment Management,... The application of technology (Big Data, IoT) can bring more reliable, faster analysis than previous traditional method and help insurer to develop highly personalized products, meet customer needs.The application of digital technology helps to establish faster Illustrating insurance benefits and premiums; simpler procedures, reduce costs and time to issue insurance policies.Digital interaction also allows to improve the customer experience in the process of claim and benefits payments more quickly.

Big Data

BA

CHALLENGES Legacy system: Replacing existing infrastructure and processes that are embedded deep in the organization can be a burden on resources and a timely process. Furthermore, any transition must have lead to no disruption to day-to-day business. Complexities: Adopting the right partners and the right solution that are scalable in design and future-proof at conception. Handling of more and more data being generated by the connected economy, while conducting more complex analytics.

NK

CA

RD

N 569 G U Y E 2 3 NT 985 H A 147 N H H 9 5 OA 988

AP PL

EA

PR SE

SIG

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Realizing return on investment: Generating returns within a short space of time and mitigating risk from new digital centric entrants looking to disrupt the market. Meeting and exceeding customer expectations, while increasing the value pool.

OVERCOME THESE CHALLENGES Prioritizing digital transformation and supporting strong economic business growth and abundant capital. Investing in new technology areas including mobile applications, digital marketing, analytics, cloud computing and security. Supporting customer-centricity through new business models such as usage-base insurance, affinity-base marketing and new customer interaction options. Include off-premises hosting and cloud-based models.

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BAOVIET HOLDINGS HOLD OPPORTUNITY AND RISK MANAGEMENT FROM INDUSTRY REVOLUTIONARY 4.0 TRENDS

The development of technology will change the way businesses manage and operate, optimize resources and support to minimize environmental impacts. In 2019, BaoViet continuously boost up digital transformation by training and improving staff’s digital culture, focusing on connecting and integrating software and data within BaoViet. Promote the connection and cooperation with ecosystems of non-insurance partners to build a sustainable business ecosystem based on the application of technology to minimize the impacts on the environment and natural system.

The great connect of IoT devices will make the more risks and implications like cyber security, hackers are not only targeting computers, networks and smartphones, but also people, cars, airplanes, electrical systems ... Changes in how to communicate on the Internet also put people at risk of financial and health. The protection of personal information is not guaranteed to lead to unpredictable consequences. Besides, the job market is narrowed because automated technology gradually replaces people in high-risk jobs or repetitive jobs. When AI technology replaces manual labor in the economy and robots replace people

Overview

Development Strategy

Business Performance

Corporate Governance

in many areas, millions of workers around the world may fall into unemployment. Accordingly, these challenges and risks need to be carefully monitored and managed. As a financial and insurance enterprise with a large amount of information and customer data, BaoViet identifies risks related to digital technology and IT systems as one of the key risks that need attention. Because of these risks when incurred may affect the business continuity operations, reputation and finance. BaoViet has applied risk identification, measurement, monitoring and management. We measure by considering the effects of technology risk factors on the financial situation and reputation; Track and monitor key performance indicators (KPIs). Make monthly and quarterly reports depending on each field of activity for the Board of Management and Risk Management Council (RMC). BaoViet follows the Risk Management Framework, Information Security Policy/ Regulation, internal control processes. Thereby, BaoViet can implement risk management measures from digital technology trends to identify risks, losses can arise due to causes such as human, inefficient operation, system errors, or external objective events.

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY BAOVIET HOLDINGS FOCUSED ON THE DIGITAL TRANSFORMATION ACTION PLAN, IMPLEMENTATION OF STRATEGY EDITIONS SUITABLE FOR THE WORLD OF INSURTECH IN THE WORLD AND IN VIETNAM.

With the Industrial Revolution 4.0 and technology trends in the insurance industry, BaoViet is well aware of the importance of IT in its operations and is still actively promoting the application of information technology according to Insurtech. The outstanding activities undertaken in 2019 include:

INTRODUCING PAYMENT CHANNELS THRU SMART DEVICES, PARTNERS

• Expanding payment channels thru partners: Viettel POS, mPOS, VNPOS, banks… etc for even more convenient experience for dealer and clients. • Improving management of payment: payment is a step of continues customer service process thru which contract is executed, maintained and renew efficiently.

SUCCESSFULLY INTRODUCE PHASE 1: ”DEPLOYING NEW BV LIFE’S CORE CONTRACT MANAGEMENT SYSTEM”

• Improve service quality by speed.

CONTINUE COOPERATION WITH BOTH LOCAL AND WORLDWIDE FINTECH AND BIG TECH

• Exploit customer data base thru customer behavior analysis to improve sales.

DEPLOYING DEALER SALES GATE

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• Providing customer with various payment channels: actively make payment anytime and anywhere thru connected smart devices.

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• Able to quickly and flexibly introduce new product to the market. • Providing interativeness between customer and company to handle contract issues automatically with also online selection of insurance packages. • Providing distribution channels digital tools.

• Creating a new distribution and service network without the need to expand traditional sales channels like: open new transaction points, branches. Then boost sales and improve service.

• Providing dealer with easy online sales tools. • Providing connected sales platforms with e-commerce partner, Fintech.


QUICKLY DEPLOY: FAST REPORT SYSTEM, BI REPORT SYSTEM

APPLYING BIGDATA IN DEFINING INSURANCE FEE

• Providing quick report system with updated data during a day thru Insurance and Accounting core system for management system. • Building a hardware/software infrastructure for collecting data timely to help Power BI data analysis.

• Base on data from core system and model to build up customized individual payment fees. • Improve competitiveness as these fees are only for Bao Viet customers.

• Providing flexible and connected infrastructure for ICT applications. FLEXIBLE MOVING TOWARDS CLOUD

• Boost up R&D, evaluate and select Services can utilize cloud computing to save time and cost of deploying ICT service, to act under Vietnam laws. • Research and select service towards DVOPS trends in coordination with automatic procedures to minimize development time. • Boost up study on microservice and containers base on VMware of OS.

IMPROVING MOBILE APPS: BAOVIET DIRECT, MY BVLIFE, BAOVIET PAY, BAOVIET ECLAIM

• Improving customer experience in searching for proper products, online transactions, follow benefit and imbursement process… etc • Improving quality and speed of verification process of vehicles, human healthcare.

• Quickly collecting data for management and reports UPGRADE, NEWLY DEVELOP SYSTEM: A4LIFE, AMS BVL, POWER BI, BVCARE, BVOFFICE

• Improving interactiveness between mobile devices and automatic process (Updating new inquiries, automatic risk management). • Deploying service architecture model to improve flexibility and effectiveness between software system/service internally and externally.

• Act under laws of cyber security on: customer data and privacy; safely operation on web, prevent hacker, to protect intellectual property and enterprise’s confidential data. • Manage security certificates: ISO 27000, OWASP, SANS, BSIMM… CYBER SECURITY ENFORCEMENT

• Improve responsibility of staff. • Actively monitor, collect and analyze security risk to quick respond to any circumstances. • Improve security defense layers: data, application, clients PC, cyber security, edge security, safe cloud and service by 3rd party application

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Development Strategy

Business Performance

Corporate Governance

Sustainable Development

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY

BAO VIET BUILDING A DIGITAL ECO-SYSTEM BASED ON MODERN TECHNOLOGY ARCHITECTURE

Diversify interaction channels with customers as well as enhance customer experience with the best interactive gadgets on digital platforms with Baoviet. In 2020, BaoViet will continue to promote Digital Transformantion by expanding the deployment of applications on digital platforms such as BaoVietPay, BaoViet Direct, Baoviet eClaim, Baoviet Office, my BVLife, customer loyalty programs... to customers, agents/brokers, partners and staff officers. They can interact with BaoViet quickly and experience BaoViet’s customer service completely. In addition, BaoViet focuses on developing and deploying intermediate applications to connect and connect between core applications with newly developed and deployed applications in 2019. With the goal is full digital of BaoViet’s operation process and bulding BaoViet’s eco-system.

Besides, Bao Viet will continue to cooperate and apply new technologies to enhance its operations, example:

80

1.

Using Artificial Intelligence and machine learning to build AdviserBot serve customers and sell their products completely automatically.

2.

BaoViet also build our corporation’s customer profile and customer service including: financial, insurance, banking, investment and real estate in an active and diversified way base on digital infrastructure and customer database analytics. With the existing large customer database, connecting Vietnam and world database all together, BaoViet will be able to deeply understand its own customer and provide affordable product with minimum risk. Based on this convergence database, Baoviet is building online pocket/payment, customer service system, Customer Loyalty program… to supply customer with best services digitally.

3.

Continue to search and cooperate with Fintech, InsurTech companies to participate and expand digital ecosystems.

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BAOVIET STRATEGY TOWARDS 2025

BaoViet strategy towards 2025 is to shorten the route, deploy advanced ICT systems digitally.

The digital ecosystem with the participation of Baoviet will be expanded and solidified with most customers participating.

InsurTech applications will be deployed deeply and widely

BaoViet will continue huge investment to improve ICT infrastructure and timely capture the prevailing new technology trends in the world. Creating the Digital ecosystem to be able to connect, integrate and share information to really put ICT as BaoViet’s strength, to create a competitive advantage in the era of industrial revolution 4.0. By 2020, most of BaoViet transaction is digitalized, thus, enhancing the whole corporation’s efficiency, improving Bao viet user’s experience for both clients and partner on the digital basis.

Improve professional efficiency to support business operations and provide farreaching products and services.

BV deployed Customer Loyalty program based on Blockchain to bring customer to excelent user experience with secured user data and various facilities.

In the period of 2020-2025, with the orientation of “Taking a leap forward in technology”, Baoviet is researching the application of artificial intelligence technology (AI), machine learning, and deep learning in problems such as: Optical recognition OCR , natural language recognition Voice to Text, Text to voice, face recognition Face ID, identification of damage classification for motor vehicles loss-adjusting, data processing analysis BigData intended to enhance customer experience, innovate to automate existing processes for improvement in labour productivity, increase revenue and reduce compensation rates.

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY

IMPACT OF SUSTAINABLE

DEVELOPMENT TRENDS ON

BAOVIET

The world is entering a new growth cycle, global movement poses many challenges due to global economic recovery is not sustainable while unpredictable risks remain; the rise of global trade war, public debt; Governance at the global and national level is slow to adapt to rapid changes in economics and science as well as technology; Environmental pollution, climate change, gap between rich and poor,... are increasingly serious. With such sustainability trend, Baoviet recognizes a number of risks and challenges that may affect the operation of Baoviet. These challenges and risks are assessed according to the extent of impact on Baoviet’s business and the interests of its stakeholders.

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INCREASING CHALLENGES FROM CLIMATE CHANGE AND DISEASES PANDEMIC

Climate change presents a huge challenge which significantly impacts on manufacture, daily life and environment. The increase of temperature, the raise of sea level cause flood and the salinity of water, which have negative influences on agricultural production, industrial manufacture and socio-economic activities. Obviously, human activities have been widely impacting on our own planet, leading to the degeneration of natural ecosystems, the depletion of natural resources and biodiversity, the pollution of air, water, soil…, and especially causing the global climate change. Abnormal storms, floods, droughts are increasing both in frequency and intensity, which causes much damage in many aspects to all areas over the world, including Vietnam.

VIETNAM HAS BEEN MUCH IMPACTED FROM ENVIRONMENTAL CLIMATE CHANGE Vietnam is considered as one of the countries that will be severely affected by climate change (climate change, in which natural disasters, pipe floods, flash floods and landslides cause the greatest and increasing serious

damage, especially in the northern mountainous provinces. Report have suggest that in recent years, natural disasters have been increasing in number, frequency, unpredictability and devastation due to climate change. When hot drought combined with saline intrusion leads to lack of fresh water for planting rice crops, affecting productivity. The prolonged saline intrusion also affects the seasonal calendar of the next crops planting schedule due to the inability to control fresh water. If in one more century, the sea temperature in Vietnam increased by 3oC. Sea level rise in the Mekong Delta from 55 - 75cm, will make 40% of the total area of ​​the Mekong Delta flooded. Sea level rise and saline intrusion will make 45% of the Mekong Delta area saline by 2030.

Baoviet contributes to addressing global challenges from climate change Climate change impacts indirectly on human health through pathogens, increases the likelihood of disease outbreaks and spreads, poses risks for Baoviet’s medical insurance and health insurance packages. Risks expose to people and assets also affect Baoviet with increasing compensation costs.

The damage from climate change to the nation’s economy poses a risk to Baoviet’s business in terms of declining people’s incomes and insurance priorities can be changed by substituting for more urgent risks for customers to serve short-term goals.

Climate change adaptation and response is a global issue but this can also be an opportunity if exploited and utilized. Baoviet recognizes its responsibility to join hands in solving challenges through the development of specialized products such as One-storm - tropical storm insurance, agricultural insurance, rice crops insurance ... mitigating damages and consequences of climate change.

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Corporate Governance

Sustainable Development

Financial Statements

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY

INCREASING DISEASES AND EFFECTS TO GLOBAL AND VIETNAM GROWTH In December 2019, an acute respiratory infection caused by a new strain of corona virus broke out from Wuhan (China) and spread to many parts of this country as well as spread to many countries and other territories. As announced by the World Health Organization (WHO), the official name of the virus that causes Covid-19 is Corona 2 virus

SARS-COV-2

(SARS-CoV-2). Due to the raging epidemic, not only the stock market is affected but also the poor consumption, the factory shutdown and interrupted supply chains are damages that not only the Chinese economy is suffering but also affect the global economy. According to experts’ assessment of the impact of the nCoV pandemic on Vietnam’s socio-economy, in addition to certain social impacts such as disturbing and disrupting life, students on school leave, cancellation or postponement of festive activities and limits gathering of people; The impact of the nCoV pandemic on the Vietnamese economy is analyzed mainly in eight areas that are highly affected: (i) health services and human resources, (ii) tourism - travel - hotel, ( iii) transportation - carrier services, (iv) retail (consumption declining), (v) foreign trade, (vi) investment, (vii) production - supply chains and (viii) financial services - banking.

Baoviet joins hands to address the global challenges of rising disease pandemic

Facing the complicated and unpredictable situation of Covid-19, Baoviet had special policies for customers participating in insurance products such as: Payment of medical expenses for customers participating in health insurance affected by Covid-19, 20% discount on insurance for Baoviet An Gia and Baoviet Intercare products. Benefits

to be paid include testing costs, treatment costs, inpatient hospitalization allowances, and settlement of insurance benefits in the event the Insured’s death due to Covid-19. Baoviet Life applies a special policy for customers who are infected with Covid-19, pledging to pay insurance benefits for all current products to customers, including hospital expenses, serious medical benefits and death benefits under the product terms coverage. In order to support customers on time in case of unfortunate risks incurred due to Covid-19 infection, Baoviet Life also applies a special policy: for customers who are hospitalized in quarantine isolation due to Covid-19 infection according to coronary diagnosis regulations of the competent health agencies. Even though people infected with Covid-19 have received free treatment and care according to the State’s policy, once they have participated in life insurance, customers still receive special hospital allowance (receive 200% of the insured amount of any regular hospital medical expenses benefit under the terms and scope of the policy).

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ALIGNING

GLOBAL OBJECTIVES OF

SUSTAINABLE DEVELOPMENT Corporates and countries fulfilling 17 United Nations Sustainable Development Goals (SDGs), also known as Global Goals for Sustainable Development), will create a comprehensive sustainable world: Social fairness, safer environment, more prosperous and more inclusive economy.

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Sustainable Development

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WORLD TRENDS AFFECTING BAOVIET’S STRATEGY

ALIGNING GLOBAL GOALS FOR SUSTAINABLE DEVELOPMENT (SDGS) IN OPERATION OF ENTERPRISES The United Nations Summit on Sustainable Development adopts the 2030 Agenda with a focus on Sustainability Goals for the period 2015 - 2030, which emphasizes the role of businesses in realizing of sustainable development goals.The summit meeting adopted the 2030 Agenda for sustainable development during the period 2015-2030, in which significant role of corporates is acknowledged to help meet the SDGs. Companies can make contribution into global sustainable development through their core activities and United Nations calls all enterprises to report on their impacts on sustainable development, set ambitious goals with concerted efforts and disclose information transparently. The United Nation’s global target for sustainable development through 2030 consists of 17 goals with 169 concretized targets.

The 2030 Agenda focuses on combining and balancing the three major issues of sustainability, which are issues related to economic, social and environmental issues. These three issues are addressed in a framework of commitments related to actions established under the 5 “P” elements, including: HUMAN Ending poverty in all its forms and respects; uphold the potential and dignity of the person and enhance equality.

HUMAN PLANET Protect the planet from recession; promote consumption and sustainable production; natural resource management.

PROSPEROUS

PLANET

PROSPEROUS Ensuring everyone has a full and prosperous life. PEACE Promote a peaceful, just and open society free from fear and violence.

PARTNER

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PEACE

PARTNER Mobilize the necessary means to implement this Agenda through a vital global partnership, ... with the participation of all countries, all stakeholders and everyone.


CIRCULAR ECONOMY: A GREAT OPPORTUNITY FOR SUSTAINABLE DEVELOPMENT

Completing the Global Goals opens up marketopportunities worth at least $ 12 trillion in valueas surveyed by the Business and Sustainable Development Commission,

Overview

Development Strategy

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Corporate Governance

Rec ycl e

ring/roducing actu nuf Ma

In a circulating economy, manufacturers focus on extending the shelf life and making the most of the value of resources, then managing and recreating these products and resources at the end of their useful life. As such, the application of a circulating economic model will help reduce emissions, promote the efficient use of resources, contribute to solving scarcity and resource conservation issues, while support advanced competitiveness for the world and Vietnam economy.

The remaining waste

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The transition to a circular economy is a great opportunity for sustainable development, not only meeting economic, social and environmental goals but also coping with climate change.Recent studies indicate that adopting periodic economic-oriented business models could open up huge market opportunities worth US $ 4.5 trillion by 2030, creating hundreds of millions of jobs, bringing unprecedented competitive advantages to businesses through reducing risks from scarcity of resources and fluctuations in raw material prices, helping businesses to pre-empt new business policies offuture regulators.

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As one of the leading Financial-Insurance Groups in Vietnam, Baoviet is well aware of its role not only as an economic leader but also as a pioneer in announcing and realizing Sustainable Development Strategy by taking specific concrete actions in business decisions making, ensuring efficient economic growth, protecting the environment, and contributing to ensuring the peace and prosperity of the community on the basis of grasping international sustainable development trend and anticipating market opportunities.

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which accounts for about 60% of the value of the real economy and plays a very important role in achieving the Global Goals. To seize all opportunities, businesses need to pursue social and environmental sustainable development in a strong and clear way as they pursue market share and shareholder value.The more businesses involved in this process from now on, we will become a powerful force together and soon achieve sustainable development goals. Baoviet recognizes that the process of building a circular economy requires technology and the ability to innovate, reuse resources effectively, not only for the environment but also improving the competitiveness of businesses. Therefore, businesses play an important role in joining hands with the Government and relevant agencies to raise public awareness in exploit and reuse resources appropriately. Baoviet understands that building a good future requires collective efforts from all of us as of today in which businesses play a positive role in realizing this future. And to do that, we also need to build a specific roadmap to compensate for the shortage of resources that people have over exploited in the past and at present.

Sustainable Development

Financial Statements

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SUSTAINABLE DEVELOPMENT STRATEGY OF BAOVIET

DIRECTIVES ON BAOVIET’S SUSTAINABLE DEVELOPMENT STRATEGY IN MID-TERM AND LONG-TERM

Identifying impacts and opportunities of sustainable development in mid-term and long-term, Baoviet engaged global sustainable development goals in development strategy by 2020, vision to 2025 based on examining implemented activities and analyzing impacts on Baoviet.

DIRECTIVES Achievements of economic target are associated with social and environmental objective to maintain the interest harmony among related parties at present and in the future with aim at ensuring long-term sustainable development strategy at Baoviet. Baoviet always engages economic growth with environmental protection and social responsibility - three pillars on which a long-term success of Baoviet is built. Among them, economic growth is the most important target since achievement of this goal is critical to fulfill social and environmental objectives.

ECONOMIC GROWTH ENVIRONMENTAL PROTECTION

SOCIAL RESPONSIBILITY

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MID-TERM AND LONG-TERM SUSTAINABLE DEVELOPMENT PLAN PRIORITIES OF BAOVIET BY 2020

Complete framework of implementation plan on global sustainable development goals. Go green’ business operations and engage employees in sustainable development activities. Review and strongly promote engagement of global sustainable development in development plan by 2020-2025. Increase percentage of investment in community development based on 04 priorities. Promote financial system to embrace long-term sustainable development models.

Promote research and adopt international standards in sustainable development. Joining with other corporates, associations, administration bodies to promote sustainable development models. Develop a wide variety of new products for the sake of public interests.

COMMITMENTS FROM BOARD OF DIRECTORS AND BOARD OF MANAGEMENT Business development strategy goes with commitment and decision of business leaders. At Baoviet, directives and commitments of achievement of sustainable development as well as engagement of sustainable development objectives with business activities receive strong consensus from Boad of directors, Board of management, middlelevel managers to employees. Baoviet also established a Standing Committee on sustainable development consists of 45 members, in which the Steering Committee consisted of theBoard of Directors’ Chairman,Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Head of Internal Audit Block with decentralized responsibilities for each set of objectives based on 17 UN sustainable

Overview

Development Strategy

Business Performance

Corporate Governance

development goals and areas in which Baoviet can have the greatest impact when implementing those goals. In addition, Baoviet also sent a representative to join the Executive Board of the Vietnam Business Council for Sustainable Development (VBCSD) for the term of 20182020, so that Baoviet will have the opportunity to update new trends. Sustainable development to integrate in more effective business strategies and activities, and at the same time pledged to join hands with the VBCSD Executive Board in annual activities of sustainable development to promote business towards sustainable development; Promote scaling up the application of sustainability indicators within the Vietnamese business community.

Sustainable Development

Financial Statements

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SUSTAINABLE DEVELOPMENT STRATEGY OF BAOVIET

USING SDG COMPASS AND GRI STANDARDS IN THE IMPLEMENTATION OF STRATEGIC TARGETS By comparing and connecting GRI Standards with Global Sustainable Development Goals (SDGs), businesses can identify key topics and manage the level of engagement betweenenterprise’ activities with SDGs goals, and measure the results of implementing Sustainable Development Strategy at the enterprise. Accordingly, Baoviet has applied a 5-step process as guided by the SDG Compass to identify and manage key issues; Report and monitor the realization of goals, commitment to sustainable development according to SDGs and GRI Standards more effectively.

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The 5-step process as guided at SDG Compass is specifically applied by Baoviet as follows:

Understanding SDGs: Baoviet conducts research, analysis and understanding of the SDGs to engage in business operations.

Step 01 Understanding the SDGs

Step 02 Defining priorities

Identify priorities: Define the priorities of the business based on an assessment of its positive, negative and current impacts on SDGs in the value chain.

Defining goals: By aligning business goals and aligning with SDGs, management can demonstrate its commitment to sustainable development. Step 03 Setting goals

Integrating sustainability into core business operations, governance, strategy: Integrating sustainability into business operations and core governance, bringing sustainability goals into all functions of the company, is the key to achieving the set goals. By integrating sustainability into the strategy and operations of the business, Baoviet can pursue common goals or address systemic challenges.

Step 04 Integrating sustainability

Step 05 Reporting and communicating

Overview

Development Strategy

Reporting and communicating with stakeholders: With the application of SDG Compass guidelines, Baoviet can use a number of KPIs and consult the common priority groups of the international community in measuring and reporting on the effectiveness of sustainable development implementation, at the same time make reports and communicate to stakeholders.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

91


SUSTAINABLE DEVELOPMENT STRATEGY OF BAOVIET

SUSTAINABLE DEVELOPMENT - MEDIUM AND LONG TERM In shaping market opportunities brought about by the Global Goals for Sustainability on the basis of shared value, circular economy, and business philosophy, smart service, big data and responsible investment, Baoviet understands that successful implementation of the Global Goals is the key to opening the door to long-term business development.

SUSTAINABLE ECONOMIC GROWTH

Aligning SDGs

SHORT-TERM (2019-2020) GRI Standard Economic Performance

Market Presence

GRI

GRI

Indirect Economic Impacts

Procurement practices

GRI

GRI

201 203

202 204

• Maintain a leading company in insurance industry with total revenues over US$2 billion. • Adopt prudent investment strategy to ensure asset safety based on an effective distribution of investment capital and beneficial potentials of subsidiaries. • Adopt responsible investment principles, continue to grow business, contribute to local economy, and generate working opportunities for locals. • Promote integrated financial - insurance product mix model, promote responsible consumption.

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In order to adjust business activities in line with the global Sustainable Development Goals, Baoviet not only integrates these goals into the process of strategic planning, business development innovation but also in every aspect of business activities, from investment, operations to marketing, brand communication, management and human resource development ... The application of this comprehensive integrated approach will broaden the strategic vision of enterprises, promoting

ECONOMIC

decisions and investment activities with the expectation of bringing benefits in the long term when the trend of sustainable development becomes the inevitable trend and entering the acceleration cycle. Based on the specific content of the 17 sustainable development goals of the United Nations, Baoviet analyzed, selected and incorporated these objectives in directives on sustainable development strategy by 2025 including:

ENVIRONMENTAL

SOCIAL

MID AND LONG-TERM (2020-2025)

INITIATIVES

• Develop new financial service - insurance product package to maintain interests of investors, customers and society.

• Enhance IT infrastructure, improve customer service to gain business efficiency.

• Maintain revenue and profit growth, return on chartered capital at over 10% and shareholders’ interests.

• Diversify financial services and products to meet customers’ needs. • Promote sales to maintain revenue growth.

• Effectively control risk and cost to improve business efficiency gains. • Contribute to State budget through paying taxes and dividends, indirectly contribute to the implementation of the Government’s social goals. • Maintain a leading position in reinvesting back into the economy from premium sources.

Overview

Development Strategy

Business Performance

Corporate Governance

• Focus on core businesses: insurance – investment – finance - banking. • Promote synergy among subsidiaries, cross-sale, and improve competitive capability. • Develop voluntary pension product, customized insurance package for critical illness, and promote micro insurance for low-income people.

Sustainable Development

Financial Statements

93


SUSTAINABLE DEVELOPMENT STRATEGY OF BAOVIET

SHORT MEDIUM - LONG TERM GOALS SUSTAINABLE COMMUNITY CONTRIBUTION

Aligning SDGs

SHORT-TERM (2019-2020) GRI Standard

• Mitigate income gap between urban and rural areas by investing in disadvantaged areas, especially mountainous provinces. • Support basic living conditions for people in disadvantaged areas to help them focus on their production to better feed themselves and their family.

Employment

Local communities

GRI

GRI

Training and Education

Customer health and safety

GRI

GRI

• Invest in launching insurance packages which meets diversified needs of customers.

Diversity and Equal Opportunity

Products and services with a social benefit

• Develop highly professional human resources having capability to access to modern and advanced management skills.

401

413

404

416

GRI

FS7

405

• Invest in education and young generation for a bright future of the country.

SHORT-TERM (2019-2020) SUSTAINABLE ENVIRONMENTAL PROTECTION

GRI Standard Energy

Aligning SDGs

GRI

302 Emissions

GRI

305 Environmental compliance

GRI

307

• Use energy efficiently in office buildings through rational and conscious use of energy and natural resources. • Increase the use of recycled products and use of devices labeled as “green”. Make a shift from environmental protection awareness to accompany Baoviet in environmental activities for customers, partners and all employees. • Conduct supplier assessments and selection based on their social and environmental commitment. • Apply responsible investment principles in investment projects to ensure the implementation of Baoviet’s sustainable value chain. • Minimize activities that generate waste and pollute the environment, contributing to improving the environment and human health.

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MID AND LONG-TERM (2020-2025)

INITIATIVES

• Narrow the income gap between urban and rural areas.

• Implement poverty alleviation activities in accordance with Government Resolution 30A; invest in the construction of semi-boarding houses, health clinics, schools in disadvantaged local areas;

• Invest in poor alleviation activities to improve living conditions for people in disadvantaged areas. • Ensure benefits and proper working environment for employees; improve income and living conditions for long-term commitment agents. • Invest in improving the quality of education, develop the young generation and provide financial support for poor students.

• Organize programs that carry the message “He for She” - Men for Women at work to raise awareness about gender equality and women’s rights • Invest 1% of profit after tax for community activities such as support after natural disaster and war martyrs tribute; • Invest in human resources training; • Perfecting the mechanism of evaluation and payment of wages according to productivity efficiency; • Engage employees with community activities such as fundraising through walking events, giving winter jackets to poor children…

MID AND LONG-TERM (2020-2025)

INITIATIVES

• Reduce usage of energy and natural resources thereby reduce greenhouse effect;

• Reduce greenhouse effect by reducing energy usage in buildings of Baoviet;

• Reduce by 10% consumption of petrol and electricity;

• Turn off air-conditioner system after 18h30;

• ‘Go green’ lifestyle and promote sustainable consumption; apply 100% indicators measuring energy and water consumed in the whole Group;

• Control waste processing system in buildings of Baoviet to ensure environmental standards;

• Save paper, stationery and reduce waste in offices. • Minimize the amount of plastic waste in office activities.

• Review petrol and electricity consumption monthly; • Replace electric water heater with D.O Oil Central Heating; • Increase review of agreements on environment and society with suppliers and investment plans.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

95


DEVELOPMENT STRATEGY TOWARD 2020 - VISION TO 2025

Economic growth, environmental protection and social responsibility are the three factors that play a fundamental role for the sustainable development of Baoviet in the period of 2016 - 2020, the period when Vietnam’s economy entered a new development cycle with expectations of economic growth, social stability.

DEVELOPMENT STRATEGIC DURING 2016-2020 Based on the assessment of the market situation and prospects for the period 2016-2020, BaovietHoldings’ Shareholders Meeting approved the strategic directions of the Group during 2016-2020 in the

resolution No. 02/2016/NQ-ĐHĐCĐ-TDBV dated 18/05/2016 and resolution No. 03/2019/NQ-ĐHĐCĐTĐBV dated 29/6/2019 and vision to 2025 with the following details:

MAINTAIN THE POSITION OF THE LEADING FINANCIAL AND INSURANCE GROUP IN VIETNAM, ENHANCE INTERNATIONAL COMPETITIVENESS, STRONG FINANCIAL POTENTIAL, GROWSUSTAINABLY AND EFFICIENTLY. STRATEGIC DIRECTION DURING 2016-2020: Qualitative objectives

SUSTAIN THE NO.1 POSITION IN THE LIFE AND NON-LIFE INSURANCEMARKET BY 2020

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THE LEADING COMPANY IN FUND MANAGEMENT, PROVIDINGDOMESTIC FINANCIAL SERVICES.

THE PIONEER COMPANY APPLYING TECHONOLOGY INFORMATION IN BUSINESS, ADAPTING WITH THE 4TH TECHNOLOGY REVOLUTION, MEETING BAOVIET’S BUSINESS AND MANAGEMENT REQUIREMENTS.


Quantitative objectives

CONSOLIDATED TOTAL ASSET by 2020 is

120,000-130,000 BILLION VND

TOTAL REVENUES by 2020 is

45,000

TOTAL PROFIT AFTER TAX by 2020 is

BILLION VND

1,250 -1,350

CAGR 2015 – 2020 of Profit after tax/Charter capital ratio about

14%

BILLION VND

PROFIT AFTER TAX by 2020 is

1,100

BILLION VND

TOTAL REVENUES by 2020 is

1,600 BILLION VND

PROPER DIVIDEND PAYOUT RATIO as low as

50% of profit after tax,distributing more profit for reinvestment anddevelopment fund.

BAOVIET HOLDINGS

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

97


DEVELOPMENT STRATEGY TOWARD 2020 VISION TO 2025 RESULTS OF STRATEGIC IMPLEMENTATION DURING 2016-2019 Vietnam’s economy entered the new growth cycle, flourished in 2017 - 2019, GDP achived 6,8% -7,08%- 7.02%,inflation was strictly controlled under 4%;stable monetary policy, highest foreign exchange reserves and strong bank liquidation. The stock market developed well, all primary indexes increased steadily. During the period 2016 - 2019, the life insurance market still maintained a high growth rate (average 28,8% annually), the non-life insurance market growed stably (average 13% annually).

THỊ TRƯỜNG BẢO HIỂM NHÂN THỌ DUY TRÌ TỐC ĐỘ TĂNG TRƯỞNG CAO (BÌNH QUÂN/NĂM)

28,8%

THỊ TRƯỜNG BẢO HIỂM PHI NHÂN THỌ TĂNG TRƯỞNG ỔN ĐỊNH Ở MỨC KHÁ (BÌNH QUÂN/NĂM)

13%

GDP

GIAI ĐOẠN NĂM 2017 - 2019 ĐẠT

6,8% - 7,08% - 7,02%

In this situation, Baoviet Holdings and its subsidiaries implemented the 2016-2020 strategic initiatives with some results as follow:

Quantitative strategic goals

Consolidated

The parent company BVH

44,878

BILLION VND

1,243

TOTAL CONSOLIDATED REVENUE OF 2019

CONSOLIDATED PROFIT AFTER TAX

1,562

1,084

BILLION VND

TOTAL REVENUES OF 2019

BILLION VND

BILLION VND

PROFIT AFTER TAX COMPLETED THE BUSINESS PLAN.

Return on chatered capital (ROCC) was 15%. BVH always ensured benefit of shareholders, dividends in 2016 - 2019 period paid to shareholders equivalent to 10% and 12%.

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1

Qualitative strategic goals

NO. ENTERPRISE

During 2016-2019, Bao Viet continued to be

in both non-life and life insurance segments with biggest premium.

Technology Information

In the field of fund management Bao Viet Fund continued to affirm its leading position,total assets under managementamong TOP 2, reachingVND 60,795 billion; ROCC of BVF achieved 40%. Return ratios of investment portfolio outperformed benchmark of customers during the period of 2016-2019. BVF was honored “The best fund management in Vietnam 2018” by Global Banking & Finance Review Magazine – The best honor banking and finance magazine of United Kingdom.

In the securities sector Bao Viet Securities Company (BVSC) has been continuously honored as the best and standard of M&A Advisory Companyrecently. In 2019, BVSC was honored with 2 big prizes “Best Securities Advisory Firm” on 31/1/2020 at Bangkok, Thailand and “Best Brokerage House Vietnam 2020” of International Business Magazine at Dubai, UAE. BVSC was always in the Top 10 securities companies with the largest stockand bond brokerage market share on HoSE (No.7 with 3.75% stock market share and N0.5 with 1.76% bond market share).

Overview

Development Strategy

Business Performance

Corporate Governance

IT infrastructure was cmpleted: Data center (built in 2008), disaster prevention system (built in 2017), Core network, WAN connected nationwide was established with architecture complying with internationalstandards.The new core system of Baoviet Life (LIPA project) after a rapid time to deploy with high pressure on schedule as well as the complexity of business specific requirements officially wentlive in November 2019. LIPA has been developing very well in replacing Talisman software and is going to replace BVLife system in 2021.Baoviet General Insurance’s InsureJ core system has been widely deployed to all subsidiaries in the country. It deployed to most important product lines, supplying”ConformityData” for senior managers of Bao Viet General Insurance to manage and develop business timely and effectively. During the period 2016-2019, Baoviet implemented a lot of technology applications to enhancecustomers’ experience(Baoviet Direct, My BVLife,especially Baoviet Pay is a digital banking with many added benefits for customers). Besides, Baoviet gradually develops multi-channel (e-commerce, telesale, webiste), brings technology into operation including satellite applications, which have been deployed to optimize operational needs of business, from issuing electric invoice to claim asessment. Quick report system (base on Mobile) helped the BOD’s Baoviet Holdings to watch the “real time” business data of subsidiaries, so that, they can make suitable and fexible decisionsin daily operation.

Sustainable Development

Financial Statements

99


DEVELOPMENT STRATEGY TOWARD 2020 VISION TO 2025

Financial capacity

5,000

BILLION VND SUCCESSFULLY MOBILIZED THROUGH ISSUING SHARES UNDER THE EMPLOYEE SELECTION PROGRAM (ESOP)

7,423

Bao Viet Holdings always satisfies the capital needs of its subsidiaries, during the period 2016-2019, BVH increased charter capital of Bao Viet General Insurance to VND 2,900 billion and to VND 4,150 billion for Bao Viet Life by the end of 2019 to meet the requirements of business development. Bao Viet Holdings also successfully mobilized nearly VND 5,000 billion through issuing shares under the Employee Selection Program (ESOP) and private placement for strategic shareholders, increasing the capital of the parent company to VND7,423 billion.

BILLION VND

INCREASING THE CAPITAL OF THE PARENT COMPANY

Brand communication

TOP

50

IN THE FINANCE AND INSURANCE SECTOR IN VIETNAM.

Governance capacity

Risk Management

Human resource management

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267

THE HIGHEST VALUE BRAND BAO VIET BRAND WAS VALUED IN 2019 (DOULBE THAN 2018),

Triᝇu USD

Bao Viet Holdings which promotes the centralized management role, coordinating resources of the parent company, was recognized by high international awards for corporate governance according to international standards. Baoviet basically completed the consolidation of the organization model in the direction of streamlining and efficiency. Baoviet alo developedcorporate governance system including regulationsin the whole group (issuing amendments to the Charter, Governance Regulations, Debt Management Regulation ...) to enhance the coordination between BaoViet Holdings and its subsidiaries.

Bao Viet Holdings developed and completed regulations on risk management (Decision promulgating the declaration of risk appetite and major risk limit, liquidity risk limit) and supported to develop risk management regulations at subsidiaries. At the same time, Bao Viet builds a model to assess key risks, manage comprehensively and prevent risks effectively. Continue implementing the centralized management organization from parent company to its subsidiaries; Implement staff rotation, improve efficiency, labor productivity ...; High-level and middle-level leaders were strengthened, with planning and development processes. Bao VietHoldings organized training programs to improve governance capability, focusing on training leadership skills for all leaders in a digital age associated with the orientation of fintech / insurtech applications.


Bao Viet launched many new and breakthrough insurance products, first appeared in Vietnam market (An Binh Thinh Vuong, An Hung Phat Loc, Accident Insurance and Health Care, Bao Viet Inter Care, Cancer and Cardiology Insurance‌). Researched and developed product strategy for new channels such as Banca, Digital sales, Telesales.

Product development

Centralized management, promoting sales and customer service activities

BVGI and BVL continued to operate the centralized management model, catched up the trend of IT application in sales and customer service activities. In the period fo 2016-2019, Bao Viet implemented a lot of technology applications to enhancecustomers’ experience, such as: App Baoviet Direct helped customers to directly connect to BVGI’ agents; App My BVLife was an information gateway that helped customers to search information related to their policies, and to pay annual fee; Baoviet Agency System could be confirmed as the electronic policy for customers via OTP, e-policy with digitalsignature replacing traditional policies. EClaim System helped to verify the compensation process on software, the image management system helped to transfer digitized document.

Bao Viet is the first and only enterprise with a system covering all provinces/ cities in the field of life and non-life insurance (By the end of 2019, Bao Viet Life has 76 member companies and Bao Viet General Insurance has 18 agencies and 79 member companies).

Network Development

Increase cross-selling, strengthen cooperation with new partners. Develop new distribution channel

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

101


DEVELOPMENT STRATEGY TOWARD 2020 VISION TO 2025

THE OVERALL STRATEGIC TARGET TO 2020 VISION TO 2025

VISION TO 2025

LEADING

MAINTAIN THE POSITION OF THE FINANCIAL-INSURANCE GROUP IN VIETNAM

MASTER HIGH TECHNOLOGY, DIFFERENT TO CREATE EFFICIENCY, ENHANCE INTERNATIONAL COMPETITIVENESS, STRONG FINANCIAL POTENTIAL, GROW SUSTAINABLY AND EFFICIENTLY. with 2020 business plan, Bao Viet Holdingswill exceed the strategic target by 2020 according to the 2016-2020 strategic plan.

STRATEGIC TARGET TO 2020

Consolidated

TOTAL CONSOLIDATED REVENUE WILL GET

44,960

Bao Viet Holdings

TOTAL REVENUE WILL GET

BILLION VND

BILLION VND

CONSOLIDATED PROFIT AFTER TAX WILL REACH

1,180

BILLION VND

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1,488

PROFIT AFTER TAX BY

1,000

BILLION VND

CAGR (2015 – 2020) OF PROFIT AFTER TAX/ CHARTER CAPITAL RATIO ABOUT

13,5%


Bao Viet Holdings and its subsidiaries focus on completing the strategic target in 2020 with the orientation of sustainable development for core business, selective growth, more balanced development between business fields, focus on implementing initiatives as follows:

INFORMATION TECHNOLOGY

Bao Viet Holdings will actively keep up with technological changes to apply in product development, developing new distribution channels such as online, mobile, applications supporting traditional distribution channels and increasing productivity of distribution channels, improving customer service and providing customers with excellent service thanks to digital application and modern technology platform.

Bao Viet Holdings continues to strengthen the centralized governance, coordinate the resources of Parent Company throughout the Group in finance, human and training, IT, brand and investment.

BRAND

CORPORATE GOVERNANCE AND HUMAN RESOURCE

Bao Viet Holdings will enhance to promote and advertise throughout the sale promotion, digital marketing channel. Business performance will be linked with corporate social responsibilities.

Although high growth rate of insurance market and new entry of competitors, Baoviet will continue the diversified products packages by reviewing, completing the current products linked with each channel, rdeveloping new products, investment - insurance product suitable with market conditions, customers needs and business direction.

SYNERGY

Overview

Development Strategy

PRODUCTS AND DISTRIBUTION CHANNELS

Continue to conduct the cross-sell projects, co-oparate projects among all subsidiaries in the traditional business, product development, distribution, sale projects, promotion, etc to leverage the corporate strength, contribute for revenue growth, improve business performance, and to maintain the leading position and market share of Baoviet.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

103


Thank you

Our Community


The trust and sharing of the community with Baoviet has contributed to building a rich and prosperous Vietnam.


03

BUSINESS PERFORMANCE


Creative


BUSINESS PERFORMANCE


110 169 172 176 178 186 196 200 204

Report and review of Management Board Assesments of the Board of Directors on all aspects of business operations Stock information and investor relations Report on business performance of Subsidiaries Report on Bao Viet Insurance Corporation’s business performance Report on Bao Viet Life Corporation’s business performance Report on Bao Viet Fund Management Company’s business performance Report on Bao Viet Investment Co., Ltd’s business performance Report on Bao Viet Securities Joint Stock Company’s business performance


REPORT AND REVIEW OF MANAGEMENT BOARD

In 2019, the gross domestic products (GDP) witnessed an impressive result with a growth rate of 7.02% - This is the second consecutive year that Vietnams economic growth has reached over 7%. GDP growth is high, the economy still ensures macro stability, consumer price index is at 3.54% - ensuring the target of controlling consumer price index below 4%. After economic downturns in 2012, the country has posted stable growth when this rate is even higher than average growth in the period 2016 – 2019, which is expected to create more robust recovery opportunities for the economy in 2020. MACROECONOMIC CONTEXT, FINANCIAL - INSURANCE MARKETS 2019

TOTAL REVENUE OF LIFE INSURANCE MARKET

GROSS PREMIUM REVENUE OF NON-LIFE INSURANCE MARKET

GDP

7,02%

52,896

107,710 BILLION VND

BILLION VND

BUSINESS PERFORMANCE IN 2019

44,878

Finance

Billion VND

Human resources

128,238

Scale

6,574

People

Number of staff

Consolidated revenue

Billion VND

113,686

Invest

Billion VND

Total investment capital

Total consolidated asset

OUTLOOK FOR INSURANCE MARKET IN 2020 Vietnam insurance market in 2020

15%

Total revenue increased on average

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Non-life insurance

Life insurance

8-10%

Growth forecast for 2020, gross premium revenue of non-life insurance market

16-18%

Growth forecast for 2020, revenue of life insurance market maintains high growth momentum


MASTERING TECHNOLOGY, SUMITOMO LIFE EFFICIENCY MANAGEMENT A1 A+ TOWARD SUSTAINABLE DEVELOPMENT STRATEGIC SHAREHOLDER

Credit rating:

Moody’s

S&P

PERFORMANCE OF BVH STOCKS COMPARISON TO THE MARKET 500

380.22

352.55

400 300

229.62

197.39

178.03 200

78.20

90.02

83.08

67.91

88.81

54.98

68.84

37.14

100 -

-96.77

-64.87

-48.91

-82.00

-107.67

-101.54

-101.65

-132.16

-194.25

-219.31

(100)

-104.46 -155.74

-170.33

(200) (300)

12/2018

1/2019

2/2019

3/2019

4/2019

5/2019

BVH stock fluctuation assessment

6/2019

7/2019

8/2019

Buy value

9/2019

10/2019

11/2019

Sell value

12/2019

Deviation

BUSINESS RESULTS OF SUBSIDIARIES

BAO VIET INSURANCE CORPORATION

BAO VIET LIFE CORPORATION

Total revenue

Total revenue

11,681

32,150

Billion VND

Billion VND

BAO VIET FUND MANAGEMENT COMPANY

BAO VIET SECURITIES JOINT STOCK COMPANY

BAO VIET INVESTMENT CO., LTD

Total revenue

Total revenue

Total revenue

Billion VND

Billion VND

Billion VND

118.7

Overview

Development Strategy

564

Business Performance

Corporate Governance

Sustainable Development

263

Financial Statements

111


REPORT AND REVIEW OF MANAGEMENT BOARD

coVid-19 Pandemic

&

CONSEQUENCES TO THE SOCIO-ECONOMIC, FINANCIAL - INSURANCE MARKET An outbreak of acute respiratory infections caused by a new strain of the Corona virus (Covid-19) started in Wuhan City, Hubei Province, central China in December 2019. By the end of April 2020, there were over 2,700,000 cases of infection in more than 200 countries and territories, more than 185,000 people had died. The Covid-19 virus pandemic is devastating to countries around the world. After 12 years, equivalent to an economic cycle from the 2008 crisis, the world economy is approaching the possibility of crisis if the pandemic is not controlled soon. Experts say the Covid-19 pandemic is creating two major challenges: (1) The uncertainty caused by Covid-19, especially in the context of the world still unable to accurately assess the level of danger, the time for it to be controlled; (2) Negative impacts from pandemic prevention measures. These two factors have a great impact on the global economy, from supply chain disruptions, supplydemand relations, to demand reduction, and change in spending habits, consumption and travel, leading to stagnant production, increased unemployment, leading to the risk of defaulting, bankruptcy of a series of businesses and psychology worries of risk, even causing panic among financial investors. The Organization for Economic Co-operation and Development (OECD) forecasts that global economic growth in 2020 will be only 2.4%, a decrease of 0.5% compared to the previous forecast. 112

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According to the IMF, in the worst case scenario, global GDP could fall by 3.3% in 2020. It is estimated that USD26,000 billion, equivalent to 30% of global GDP, is needed to restore the world economy. Key countries have issued many anti-epidemic regulations and implemented unprecedented fiscal and monetary policy support packages to prevent recession and economic crisis. The Covid-19 epidemic has a strong and multidimensional impact on all sectors of our country’s economy and society: (i) the main impact on growth, investment and trade; (ii) disrupting important production value chains; (iii) a decline in consumption has a major impact on services and tourism. In addition to promoting public investment, the Government also offers fiscal support packages including: tax support, social security, electricity price reduction... with a scale of more than 4.3% of GDP. The State Bank has cut a series of operating rates and issued Decree 01 to create a legal basis for commercial banks to restructure, reduce interest rates and fees for loans.


BILLION USD

EQUIVALENT TO 30% OF GLOBAL GDP TO RECOVER THE WORLD ECONOMY

THREE SCENARIO ON VIETNAM’S ECONOMIC GROWTH IN 2020

Scenario 1 Positive

Scenario 2 Basis - the most likely scenario

Scenario 3 Negative

Overview

Development Strategy

The Covid-19 epidemic in Vietnam was completely under control by mid-May and economic activity gradually returned to normal. Countries will control the pandemic in the second quarter of 2020. Preventive measures such as restrictions on tourism, border gates, trade ... will soon be removed between the second quarter of 2020. From the third quarter of 2020 to the end of the year, the growth of industries may return to the growth rate of recent years. Vietnam economic growth is estimated at 5-5.6% of GDP. The average inflation of the year at 3.5-4%. Disease outbreaks are under control in the third quarter of 2020 globally. In Vietnam, the disease was controlled by the end of the second quarter of 2020 and the measures to prevent the epidemic, such as social distancing, lasted until the end of April to May. Commercial activities were resumed at the end of the second quarter of 2020 but actually recovered in the third quarter of 2020. From the fourth quarter of 2020 to the end of the year, the growth of industries can return to the growth of recent years. Vietnam’s economic growth is estimated at 3.8-4.2% GDP. The average inflation of the year at 3-3.5%. The Covid-19 epidemic was only completely under control in the fourth quarter of 2020. Countries continue with social distancing and restrict travel. Activities only gradually return to normal again at the end of the fourth quarter. Vietnam’s economic growth is forecasted at <1.5% GDP. Average inflation is at 2-2.5%.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

113


REPORT AND REVIEW OF MANAGEMENT BOARD INSURANCE INDUSTRY

According to the assessment of the world’s leading organizations, although the insurance industry remains stable and ensures capital consolidation in the face of Covid-19, the insurance sector still faces negative impacts from Covid -19.

It is forecasted that in the common case, Vietnam’s non-life insurance market will grow by 8-10%, and the life insurance market (total premium revenue) will increase by 16-18%. In life insurance, the declining interest rates and volatility of capital markets and the risk of a global economic recession could pose a much greater risk to life insurance companies than the increase claims arising from the pandemic. Rating organizations downgrade the outlook for the life insurance industry from stable to negative. In the field of health insurance, it is difficult to determine the impact of the disease on a global level because the impacts will vary widely from country to country. The number of cases and deaths varies greatly between countries / regions, and the health insurance system is not the same across countries. In the field of non-life insurance, the commercial lines most vulnerable to the Covid-19 flu due to business shutdowns

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or higher compensation rates include: Cargo insurance, insurance aviation, travel insurance, commercial credit insurance and business interruption insurance. For other commercial insurance lines, the impact is said to be limited. Insurance companies are also facing the impact of fluctuations in the stock market on investment activities and asset value decline on the balance sheet. Given the complicated situation of the pandemic, Baoviet Holdings has proactively assessed and forecasted the macroeconomic situation, the market situation of the industry related to Baoviet’s business activities. Baoviet Holdings has been urgently deploying a review of the business situation, providing appropriate response measures to minimize the impact of the pandemic in an effort to implement and strive to complete the approved business plan at Annual General Meeting of Shareholders.


In addition, the Group has been conducting research and forecasts on the domestic and global market situation in order to seize opportunities, identify challenges and risks after the Covid-19 pandemic aiming to proactively build and successfully implement the strategic tasks for the 2021-2025 period of the Group on sustainable development, effective business in accordance with the context and the trend of “new normal” after Covid-19 pandemic.

After the period of social distancing implementation, many countries around the world are preparing for the postCovid-19 period with the status of “New Normal” (meaning the prospect of slow growth for many years). The Covid-19 pandemic has also rapidly changed the way we live, work and study.

Some of the “new normal” trends after the Covid-19 pandemic can be mentioned as follows: Firstly, the Covid-19 pandemic made the social safety net stronger. The current epidemic can at least emphasize the importance of social safety nets such as unemployment insurance systems, universal health systems, workers’ pension systems or payroll systems for resignation due to illness or disease.

Schools, colleges and universities are turning to an online classroom model and putting high expectations on teachers, students must improve their skills to catch the inevitable trend. Students also revise their plans for studying abroad because they can study online anywhere and still be effective and safe.

Secondly, the community health care system will be invested more. The Covid-19 pandemic also emphasized the importance of investing in public health systems because if any part of society was particularly vulnerable to this pandemic, it would hurt and make the whole society more vulnerable.

Sixthly, data analysis became the trend. Despite the risks associated with privacy, the world still appreciates the benefits of technology compared to the disadvantages it brings.

Thirdly, after the Covid-19 pandemic remote communication, working from afar will be booming. Remote communication technology is booming, especially among office workers, so it is normal to work remotely. A survey of more than 800 companies conducted by consulting firm Gartner in mid-March 2020 shows that 88% of companies are now encouraging or even asking workers to work from home. Fourthly, the Covid-19 pandemic had a mixed effect on e-commerce. Measures of “social distancing” and “working from home/in-house” requirements to prevent pandemic will strongly promote the growth of e-commerce as well as the approach of goods and services to consumers.

The spread of a pandemic remains a difficult variable to predict when it will decline, for businesses management in this new age will be different - and will largely depend on the CEOs and executive teams available ready to escape the traditional safety zone and challenges as before.

Fifthly, the pandemic promoted digital transformation earlier. The number of downloads of online communication tools and the need for online learning are on the rise.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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REPORT AND REVIEW OF MANAGEMENT BOARD

MACROECONOMIC CONTEXT, FINANCIAL – INSURANCE MARKETS 2019

GDP GREW BY 7.02% - THIS IS THE SECOND CONSECUTIVE YEAR GDP HAS REACHED OVER 7% Unit: % Agriculture, Forestry, and Fishery Industry and Construction Services GDP (yoy)

6.33

7.44

7.03

7.30

6.98 9.64

8.00

8.85

8.90

7.57 6.68

6.21

6.81

7.08

2.41

1.36

2.90

3.76

2015

2016

2017

2018

7.02 2.01

2019

Nguồn: GSO

The gross domestic products (GDP) in 2019 witnessed an impressive result with a growth rate of 7.02% compared with 2018. In the general growth of the whole economy, the sector of agriculture, forestry and fishery increased by 2.01%, contributing 4.6% to the general growth; the sector of industry and construction grew by 8.90%, contributing 50.4%; the service sector expanded by 7.3%, contributing 45%. The main motivation for the economic growth this year was still the manuafacturing with the increase of 11.29% and the market services (transportation and storage jumped up by 9.12%; wholesale and retail trade went up by 8.82%; finance, banking and insurance moved up by 8.62%). Regarding the structure of the economy, it continues to shift positively in the trend of reducing the proportion

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of agriculture, forestry and fisheries; increase the share of industry, construction and service industry. In 2019, the proportion of the industrial sector increased and the proportion of the agricultural sector shrank mainly due to the positive economic restructuring. About the quality of economic growth in 2019, the contribution of the total-factor productivity (TFP) to GDP growth reached 46.11%; on average, it gained 44.46% in the period of 2016-2019, much higher than an average of 33.58% in the period 2011-2015. Labor productivity of the whole economy increased 6.2%- highest in the years 2016-2019. Labor productivity of the whole economy at current prices in 2019 was estimated at VND 110.4 million per labor (equivalent to US$ 4,791 per labor, an increase of US$ 272 compared to 2018); at constant prices, labor productivity recorded a rise of 6.2% due to a high increase in the additional labor force and the number of employed laborers in 2019. The social investment capital at current prices in 2019 increased by 10.2% over the previous year. The investment efficiency was improved with many new production capacities added to the economy. Incremental capitaloutput ratio (ICOR coefficient) decreased from 6.42 in 2016 to 6.11 in 2017, 5.97 in 2018, and an estimate of 6.07 in 2019. The average ICOR for the 2011-2015 period reached 6.14, lower than the coefficient of 6.25 for the 2011-2015 period. The structure of investment capital shifted in a positive direction. The rate of investment non-State sector’s capital sector increased steadily over the years and accounted for 46% in 2019; In contrast to non-state sector investment, the proportion of State sector’s capital capital gradually decreased over the years and accounted for 31.0% in 2019; FDI sector’s capital accounts for a stable proportion, this ratio of 2019 is 22.9%.


INFLATION WAS CURBED BELOW THE GOVERNMENT TARGET In recent years, the inflation rate tends to decrease, the average CPI of 2019 increased by 2.79% compared to the same period last year.

CPI rate

CPI MoM

average CPI

2.79

The reason that inflation continued to be stable is because the State Bank actively managed monetary policy in a prudent manner with the reduction of credit growth rate and money supply compared to last year.

01

02 03 04 05 06

07 08 09

10

11

12

01

02 03 04 05 06

2018

07 08 09

2019

10

11

12

Source: GSO

FISCAL POLICY Vietnam’s fiscal has eased in 2017-2019 when the budget deficit / GDP plummeted thanks to revenues from state divestment in businesses and positive GDP growth. However, revenue from divestment of state-owned enterprises is not a stable source of income, therefore, in the long-term, the financial stress situation of Vietnam remains. Budget pressure will return in 2020 and 2021.

Overview

Development Strategy

Business Performance

Corporate Governance

In addition to the positive movements of economic indicators such as budget overspending, declining public debt, trade surplus, the inflation remains low, the economy has improved in investment efficiency and competitiveness. These factors continue to grow in the future and maintain an important role for macro stability.

Sustainable Development

Financial Statements

117


REPORT AND REVIEW OF MANAGEMENT BOARD INDICATORS OF THE ECONOMY

CPI

December 2019

5.23%

December 2019

2.78%

December 2019

6.2%

Average of 2019

2.79%

Average of 2019

2.01%

Average of 2019

9.1%

yoy

Compare with 2018

(accumulated until December 20, 2019)

Compare with 2018

22.55

Billion USD 11.8% compare with 2018 FDI disbursement

20.4 Billion USD

6,7% compare with 2018

Total government revenues

1,414.3 1,316.4

Trillion VND equalling 80.6% of 2019’s estimate

Vietnam’s Retail and Consumer Services

Năm 2019

yoy

11.8%

Compare with 2018

THANK YOU FOR YOUR TRUST Integrated Report 2019

4,003.2 Trillion VND

Compare with 2019

New registered 138,139 enterprices 1,730.2 Trillion VND

December 2019

44.6

Billion USD Trade deficits: USD 1 bil.

517

Accumulated 12 months Billion USD Trade surplus: USD 9.94 billion

5.2% 17.1%

Change in capital increase

2,273 Trillion VND

International Visistors

Import export

12%

Compare with 2018

Total registered capital 2019

Trillion VND Equalling 100.2% of 2019’s estimate Total government expenditures

yoy

Enterprices

(accumulated until December 15, 2019)

Total newly registered and additional registered capital

December 2019

yoy

Government revenues and expenditures

FDI

118

Industrial production index (IIP)

basic inflation

(Thousand Visits)

December 2019

2019

1.710,2 24,4% yoy

18.008,6

16.2% compare with 2018


Total government revenues

Domestic revenues From export-import balance Collecting from crude oil Others

1,414.3 Trillion VND

Total government revenues equalling 100.2% of 2019’s estimate.

REVENUES/ EXPENDITURES

97,9

Total government expenditures

1,316.4 Trillion VND

TRILLION VND

Regular expenditure Expenditure on development investment Spent on interest payment Others

Total government expenditures equalling 80.6% of the year 2019 estimate.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

119


REPORT AND REVIEW OF MANAGEMENT BOARD

INSURANCE MARKET

2019 is the 9th consecutive year in which the insurance market maintains growth momentum over 20%. According to the Insurance Association of Vietnam (IAV), total insurance market premiums are estimated at VND 160,606 billion, an increase of 20,6% compared to the previous year, of which, non-life insurance premiums are estimated at VND 52,896 billion (+13.4% YoY), life insurance premiums are estimated at VND 107,710 billion (+24.5% YoY).

Although there have still some common difficulties, in 2019, the insurance market still maintain its growth momentum; mechanisms and policies in the insurance field are continuously improved. On February 28, 2019, the Prime Minister issued Decision No.242/QD-TTg approving the scheme “Restructuring the securities market and insurance market until 2020 and orientations to 2025�. The overall objective of the scheme to the insurance market is to build comprehensive development of the safe, sustainable and efficient insurance market, meeting the diverse insurance needs of organizations and individuals, ensuring social security; that the insurance enterprises have strong financial capacity, executive and management capabilities to meet

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international standards, able to compete domestically and regionally. In 2019, the National Assembly promulgated the Amending and Supplementing Law of some articles of the Law on Insurance Business to promptly internalize the obligations to be enforced in the CPTPP Agreement that came into effect with Vietnam from 14/ 01/2019, in which it focuses on clearly defining the concept of insurance auxiliary services and the liabilities of these services. According to the new provision, from November, 2019, individuals and organizations providing insurance auxiliary services will have to comply with the new provisions of the amended Insurance Business Law 2019.


NON-LIFE INSURANCE MARKET

Non-life insurance direct premium written in 2019 continues to grow positively. Baoviet General Insurance (BVGI) ranks first in the market in terms of direct premium written, further confirming its role as a leading insurance enterprise.

THE NON-LIFE INSURANCE DIRECT WRITTEN PREMIUMS REACHED up 13.4% compared to 2018

52,896

VND bil.

According to the data of IAV, in 2019, the non-life insurance direct written premiums reached 52,896 billion VND, up 13.4% compared to 2018, higher than the growth rate of 12.8% in 2018. Car insurance and health insurance continued to be the growth engines of the market, maintaining a large proportion (each business accounts for over 30%) in the product structure of the whole market. The commercial insurance business still faced many difficulties such as P&C insurance, Hull and P&I Insurance, so the market share tends to decrease. The group of 5 leading insurers (Top 5), including BVGI, PVI, Bao Minh, PJICO and PTI continue to compete fiercely. Most of the Top 5 have higher growth rates than the previous year.

Overview

Development Strategy

Business Performance

Corporate Governance

Direct premium (VND bil.) BVGI

PVI

Bao Minh

PJICO

PTI

13.4% 12.8%

Others 52,896

46,653

41,344

17,390

11.6%

3,206 2,612 3,396

29.7% 7.6% 4.5%

6,689

2.8%

8,051

22.4%

22,191

19,409

14.3%

4,159

36.8%

2,809 3,548

9.1% 8.9%

6,874

13.2%

7,784

9,853

4.5%

10,297

5,692

2017

2018

3,066 3,862

2019

Source: IAV

Sustainable Development

Financial Statements

121


REPORT AND REVIEW OF MANAGEMENT BOARD

Sources: IAV

Market share of direct premium (%) BVGI

PVI

Bao Minh

PJICO

19.5

42.1

19.5

2018

16.2

42.0

2019

14.7

14.7

8.2 7.8

Others

21.1

41.6

2017

PTI

8.9

6.3

7.3

7.6

10.8

6.0

5.8

BVGI maintains its leading position in the market, following the strategic goals of the 2016-2020 period. For the whole year of 2019, the direct premium written of BVGI is estimated at VND 10,301 billion, up 4.5% over the same period, accounting for 19.5% of the market share, continuing to maintain a gap with the second position of PVI Insurance. BVGI has focused on consolidating, shifting to a centralized management model, streamlining the apparatus, success in technology investment and application development (Baoviet Direct, Eclaim, InsureJ ...) to promote growth, increasing differentiation in the market, while increasing access to the diversified needs of customers in the digital age, supporting business activities. The direct insurance claims in 2019 tended to decrease compared to 2018

In 2019, the market’s loss ratio was 38.9%, lower than 2018. Most of the market’s main businesses reduced loss ratio compared to 2018, especially motor vehicle insurance decreased to 47.3% from 57.5% in 2018 and the hull and P&I insurance decreased to 49.8% compared to 73.8% in 2018. Health insruance slightly increased from 29.2% (2018) to 30.5% (2019) because 3/5 of the big insurers (BVGI, Bao Minh, PJICO) increased the compensation rate of this business.

Loss ratio of direct premium (%) 2016

2017

2018

2019

80% 70% 60% 50%

49,8

47,3

38,9

37,7

40%

32,3

30,5

30%

21,1

20% 10%

Motor Vehicle Ins.

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THANK YOU FOR YOUR TRUST Integrated Report 2019

Health Ins.

P&C Ins.

Ins. of good transported

Fire, Explosion Ins.

Hull & P&I Ins.

Total Sources: IAV


The non-life insurers compete to expand their networks, partnerships, and promote the technology application in business activities.

Besides network development through the opening of new offices and branches, in 2019, the insurance companies continued to promote the development and exploitation of traditional distribution channels in parallel with channel exploitation such as bancassurance and online sales , social networks, selling through e-commerce websites, e-wallets, expanding cross-selling cooperation with partners such as business associations, financial companies, transportation businesses, telecommunications businesses, health care service companies ...

system management, cooperated with technology partners and foreign partners to provide health care insurance on digital platforms (Baoviet Mydoc), developed many new products using 4.0 technology (Travel Eassy, Flight Easy, Gadget Easy and E-cargo Policy)‌

In the recent period, the insurance companies have stepped up investment in the digital technology application in business and management activities in order to optimize their management and administration capacity, minimize risks and improve customer service quality, quickly access to customers. BVGI and PTI are the leading enterprises in IT development and application.

PTI have established PTI Digital insurance business on 2 platforms: telesales and cybermarketing; cooperated with INSO – Insurtech to own an app to buy insurance, claim online; cooperated with the FASTGO ride-hailing app to integrate insurance for customers and drivers. In addition, PTI have cooperated to implement bancassurance with LienVietPostBank to distribute home insurance and motor vehicle insurance with online process. In addition, PTI have implemented the application MyPTI - technology application of positioning to coordinate inspectors, reducing waiting time for customers, reducing time of compensation process (only 15 minutes).

BVGI have researched and implemented many new technology applications such as Baoviet Direct digital insurance management system, BaovietPay e-wallet application, Baoviet Eclaim compensation system ... to help checking and access information quickly and effectively , saving customers time while increasing security and

PVI, Bao Minh and PJICO have also gradually participated in this race. PVI have implemented PVI Mobile application on both iOS and Android operating systems with the feature that customers perform online self-claim declaration steps. Bao Minh and PJICO have implemented PREMIA insurance core software.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

123


REPORT AND REVIEW OF MANAGEMENT BOARD

LIFE INSURANCE MARKET The life insurance market continues high growth momentum - Bao Viet Life ranks first in terms of total direct premiums.

According to figures of IAV in 2019, the total direct premiums reached VND 107,710 billion, up 24.5% compared to the previous year. The life insurance market continues to be considered as a highlight of Vietnam’s financial market in 2019. In 2019, Baoviet Life (BVL) continued to maintain its leading position in the market in terms of total direct premiums. Prudential and Dai-ichi slowed down, lower than the market average, their market share decreased compared to the same period. Meanwhile, Manulife and AIA maintained high growth momentum; Manulife surpassed Dai-ichi to rank third in the market by promoting contract exploitation through agents and bancasurance.

Total direct premium (VND bil.) 24.5%

30.6%

31.2%

50,471

17,390

36.5%

3,206 2,612 3,396

51.9%

6,689

19.8%

8,051

29.8%

34.6%

66,230

10,066

44.4%

8,053

42.8%

6,295

34.9%

8,126

38%

32.7%

2016

16,213

18.6%

17,478

23.1%

2017

BVL

Prudential

107,710

20,244

86,488

14,543

39.2%

11,502

10.4%

8,492

34.3%

11,211

39%

19,231

16.4%

21,508

18%

11,408

15,583

22,387

25,452

2018

Manulife

Regarding direct new business premium (NBP), in 2019 the market grew by 18.5%, much lower than the same period (31.3%). In 2019, Manulife surpassed BVL to be No. 1 in the market for NBP, in 2019, Manulife’s NBP was estimated to grow by 37.4% compared to the same period, double the overall market growth rate.

12,700

AIA

107,710

THE TOTAL DIRECT PREMIUMS REACHED Up 24.5% compared to the previous year

2019

Dai ichi

Others

VND bil.

Market share of total direct premium (%)

16.8

15.2

12.2

2017

9.5 24.5 12.3

2018

13.3

18.8

24.9

26.4

9.8 13.0

2019E

11.8

22.2

23.6

20.8

10.6 14.5

Sources: IAV

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THANK YOU FOR YOUR TRUST Integrated Report 2019


The insurers continue to compete to expand the network, promote the traditional agency channel in parallel with the development of new distribution channels, especially the bancassurance channel, focus on promoting the renewal / development of auxiliary products, and at the same time, accelerate the application of information technology to increase customer experience.

The insurers have expanded the network of distribution channels, expanded bancassurance channel cooperation, the most notably FWD spent $ 1 billion to cooperate exclusively for 15 years with Vietcombank and acquired the Vietcombank Life Insurance joint venture. - Cardiff. In addition, the insurers have invested in developing services for VIP customers in big cities, promoting exploitation in new markets (small cities and rural areas). They have more diversified in finding agent partners such as digital companies, banks, non-life insurers and real estate exchanges. The two main product lines of the market are still universal and endownment. However, there is a noticeable reversal when the market share of universal is higher than that of endownment. Life insurers promote exploitation of universal and unit-link after the new Decree that stipulates conditions for agents to sell universal and unitlink products. At the same time, the enterprises also proactively reduce selling of endownment insurance products and increase exploitation of investment products during the period of Government bond‘s low interest. The insurers focus on promoting/ developing long-term health insurance products and supplements related to health, hospitalization and critical illness to increase competitiveness and attractiveness for the main product. Currently, Manulife, AIA, AVIVA, FWD, Generali, Hanwha Life and Phu Hung Life have exploited health products.

Overview

Development Strategy

The application of technology in the insurance value chain has also been promoted by the insurers in 2019, mainly focusing on customer service and customer care, in which typically, the MyBVLife application was deployed by BVL, in order to serve customers quickly and conveniently in the service experience process.Customers can easily look up insurance policy information, account value lookup, insurance benefits,... and premiums online.

Besides BVL, the other insurance enterprises have also implemented applications to enhance customer experience, such as Manulife’s EasyClaim or Generali’s GenClaims, which also help their customers look up insurance information. Besides, some insurance companies like Prudential have also started selling insurance products in online channel.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

125


REPORT AND REVIEW OF MANAGEMENT BOARD BANKING - FINANCE - MONEYTARY MARKET

In 2019, The State Bank of Vietnam (SBV) has actively and flexibly operated the monetary policy to stabilise the macro economy and also coordinated closely with fiscal policy and other macroeconomic policies to stabilise the macro economy, control inflation and support economic growth at a reasonable level.

A successful year in managing exchange rates In 2019, the USD/VND exchange rate only had a single wave around May 2019 when the US-China trade relationship became tense. The exchange rate of commercial banks reached 23,360/23,480, an increase of 0.84-0.97% compared to the end of 2018 but quickly cooled down in the following weeks. The exchange rate for the whole year almost moved and tended to decrease at the end of the year. The overall balance of Vietnam has been in surplus for 12 consecutive months, reaching a surplus of nearly 14 billion USD - a record ever. A large amount of foreign currency supply helped the SBV buy USD 20 billion in 2019, bringing the foreign exchange reserve to over USD 79 billion - twice as much as the end of 2016. The results achieved outside objective factors are also not possible. Not to mention the coordinating role of the SBV.

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Monetary policy in 2019 has shifted towards a more easing The State Bank of Vietnam (SBV) has adjustments refinancing interest rates, in which 2 times reduced OMO interest rates and 3 times of treasury bill rates, the total reduction was 0.75%. The fluctuating range of interbank interest rates has been significantly reduced to 2.25% - 4.0% / year.

Deposit interest rates and loan interest rates in the market decreased slightly at the end of 2019 Deposit rates were on an upward trend (around 20 points, mostly among medium and small commercial joint stock banks) in the first 10 months of 2019 before plummeting in November due to the SBV’s decision to adjust deposit rates cap. Specifically, the SBV lowered the maximum deposit rate cap in VND of commercial banks. The maximum interest rate applicable to demand deposits and terms ofless than one month was 0.8%/ year, the terms from 1 to less than 6 months are 5% / year (the old rate is 1% / year and 5.5% / year). Short-term lending interest rate in VND of commercial banks with 5 priority areas decreased to 6% / year (the old rate was 6.5% / year) since November 19, 2019. With the above requirements, the real mobilizing interest rates of banks have dropped sharply at terms of less than 6 months. Although interest rates for terms of over 6 months were still high, signals of decline have begun to appear.


STOCK MARKET

The market size of stock market maintained the growth momentum, increased by nearly VND 1,402 trillion, up 16% compared to the end of 2018. Vietnam’s stock market capitalization enhanced to VND 4,384 trillion, up 10.7% yearon-yer and equivalent to 79.2% of 2018’s GDP and 72.6% of 2019’, thereby fulfilling the target (70% GDP) set in the stock market development strategy until 2020.

VN-Index finished last year at 960.99 points, despite many ups and downs, VN-Index still gained 68.45 points, equivalent to 7.67%. HNX-Index decreased 1.65% in 2019.

VN-Index & HNX index in 2019

The stock market in 2019 is divided into 2 distinct periods, gaining points in most of the first quarter and then moving sideways for the rest of the year. This situation is similar to 2018 but the difference is that in 2019 VNIndex increased by 7.67% thanks to the low background of the end of 2018. Despite weak market sentiment and risky risks on the world financial markets, Vnindex mainly moving sideways in the area of 950-1000 points, a signal that VN-Index is in a fairly solid accumulation area to wait for new signals. In 2019, the average trading value reached 183 million units/session with an average transaction value of VND 4,127 billion/session. Average transaction value per trading session on HOSE reached VND 4,100 billion (down 25.4% yoy), mainly influenced by matching orders when the trading value through this channel dropped sharply - 31.3% YoY. The average trading value across the market decreased by -28.5% YoY, reaching 4.87 trillion VND / session in 2019.

VN-Index

Source: HNX

HNX index

1,050

112

108 1,000 104 950 100

900

96

92

850 2

8

14 18 30 12 18 22 28 6 12 18 22 28 3 9 16 22 26 7 13 17 23 29 4 10 14 20 26 2 8 12 18 24 30 5 9 15 21 27 3 9 13 19 25 1 7 11 17 23 29 4 8 14 20 28 2 6 12

Jan. 2019

Feb. 2019

Mar. 2019

Apr. 2019

May. 2019

Jun. 2019

Jul. 2019

Aug. 2019

Sep. 2019

Oct. 2019

Nov. 2019

Dec. 2019

Foreign investors continued to be net buyers on the market In fiscal year 2019, foreign investors were net buyers of VND 6.59 trillion in HOSE. However, the net buying came from several large M&A transactions, with the highlight of SK Group purchase VIC on May 21. With matching order, foreign investors saw a net selling of VND 1.67 trillion, in which most of the net selling value focused on the last 5 months (VND 5.3 trillion dong), in contrast with the net buying trend of 4 months beginning of the year (VND 2.8 trillion).

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

127


REPORT AND REVIEW OF MANAGEMENT BOARD BOND MARKET In general, the bond market in 2019 has received huge support from the monetary policy when the state bank pumped a significant amount of dong into the market.

Interest rates have fallen sharply in 2019, the issuance scale narrowed As of December 15, 2019, public investment disbursement was about VND 255,088 billion, reaching 61.8% of the plan. Although it has increased sharply since November 2019 after the resolution of 94 / NQ-CP, according to the State Treasury, the disbursement of public investment until the end of January 31, 2020 (the time of finishing payment of capital construction investment Version of the budget 2019) only reached 88% of the plan. Therefore, the State Treasury also proactively reduced the amount of government bonds issued in 2019.

the volume of issued via bidding reached 76% compared to the plan announced in early 2019.

The total value of government bonds issued in the year reached VND 197,769 billion, an increase of 19.3% compared to 2018. In which, the 10 and 15 year tenors had the highest issuance volume, accounting for 41% and 39% respectively. Release value. G-bond issuance term reached 13.57 years (higher than 12.15 in 2018). The average ratio of winning bids was 80.3%, higher than 56.8% in 2018 and 73.7% in 2017. Demand of G-bond was also high with the average rate of registration in 2019 reached 322.4%. Thus,

Bond yields remained low throughout the year 2019 due to:

In the last auction session of the year, the winning interest rates decreased simultaneously in the tenors, especially the 5-year term to only 2% / year - down 37bps compared to the latest one, the winning interest rate of 10 years and 15 years are 3.48% and 3.65%, respectively. The winning interest rate is very low, creating certain favorable conditions for the issuance in 2020.

1. The State Bank cut the refinancing rate; 2. Abundant liquidity in the market; 3. Increasing money supply due to the government buying a large amount of USD to increase foreign exchange reserves;

4. Slow disbursement of public investment.

The average winning interest rate (%) 4,91

4,66

4,46

4,40

4,46

4,54

4,30

4,68

4,08

5,28

5,30

5,04

5,10

5,21 5,01

4,88

4,44

5,06

5,06

5,00 4,77

4,70

4,58

4,72

4,72

4,72

4,57 4,65

4,28

4,51

4,13

4,29

4,19

3,81 3,45

5,03

4,94

4,73 4,35

4,18

4,74

4,86

5,00

5,11

3,50

3,63

3,70

3,70

4,01

3,65 3,30

3,05

01

02

2,94

2,97

2,99

03

04

05

3,10

3,76

3,73

3,58

3,59

3,15

3,64

3,50

2,85 06

2018

07

08

09

10

11

12

15Y

01

10Y

02

03

5Y

04

05

06

07

08

09

2019

10

11

12

Source: HNX

Bond yields on the secondary market continued to decline in the last months of the year 2019 The trend of reducing interbank interest rates and G-bond yields in the secondary market continue to decline in 2019. Year-end, the yields of 1-year, 3-year, 5-year, 10-year, 15 years, 20 years and 30 years was respectively 1.36% / year, 1.7% / year, 1.91% / year, 3.39% / year, 3.57% / year, 4, 02% / year and 4.44% / year. The yield curve moved down a long step compared to the 2017 and 2018 premises.

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In 2019, foreign investors net bought nearly VND 14 trillion on the secondary market, focusing on the first 9 months. The total trading value of the whole market reached VND 2.26 million billion, an average of VND 9,024 billion / session, increased by 3.5% compared to 2018.


REAL-ESTATE MARKET The real estate market in 2019 still maintains a stable development. Real estate market has not appeared the phenomenon of ‘real estate bubble’ and is still in the cycle of recovery and growth but has shown signs of decline in both project supply, housing product supply and number of transactions. The market is purifying unclear investment business trends and customers will be more thorough in product selection, avoiding unnecessary risks. 2019 is a year when the market has

Overview

Development Strategy

Business Performance

Corporate Governance

many influences from new policies and regulations (the State Bank (SBV) tightens credit on real estate, amending a number of laws such as Investment Law, Law on Bidding, Construction Law. ...). However, these are all policies aimed at establishing a stable and sustainable development market. Although the amended laws, if passed, must also take effect from 2020, not affecting the market immediately, but businesses also need to prepare in advance to avoid passive.

Sustainable Development

Financial Statements

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did not grow. According to the IMF, in the worst case scenario, global GDP could fall by 3.3% in 2020. For the world economy to recover and return to the upward momentum, the stabilization of the economies is required. Emerging and developing economies are currently under pressure, as well as need to take steps towards resolving trade disagreements and prevent disease early.

ECONOMIC OUTLOOK

2020

The global economy in 2020 is expected to continue the downward trend. The impact from the ewly discovered coronavirus (COVID-19) creating fluctuations in global commodity and financial markets. After 12 years, which is equivalent to an economic cycle from the 2008 crisis, the world economy is approaching the possibility of crisis if the epidemic is not controlled soon. International financial institutions lowered the growth forecast by nearly half compared to the pre-epidemic forecast and in the negative scenario the global GDP almost

OPPORTUNITY

Vietnam’s economic prospects in 2020 are also quite precarious, especially in the context that the world has not yet been able to accurately assess the danger level, the time to control the Covid-19 epidemic. The negative impact from measures to prevent pandemic from affecting all sectors of the economy and society; With 3 main impacts on growth, investment and trade; Disrupting important production value chains; The decline in consumption has a great impact on services and tourism.

CHALLENGE

In this context, Bao Viet Group identifies opportunities and challenges as follows: Macroeconomic insurance market Banking - Finance - Moneytary market Stock market Bond market Real estate market

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OPPORTUNITY

MACROECONOMIC With the situation of Covid-19 epidemic affecting Vietnam’s economic growth since the beginning of 2020, for Việt Nam’s economic prospects in 2020, Baoviet offered three scenarios. In the basic scenario - the most likely scenario: it is assumed that the pandemic would continue until the beginning of third quarter. Vietnam would continue

social distancing until the beginning of May. Economic activities would only return to normal at the end of the third quarter. With this scenario, the economy would begin recovering in the fourth quarter of this year. Vietnam’s economic growth is estimated at 3.8-4.2% GDP. The average inflation of the year at 3-3.5%.

INSURANCE MARKET Vietnam’s insurance market in 2020

In order to promote the development potential of the insurance market, in early 2019, the Prime Minister approved the Scheme to restructure the securities market and the insurance market by 2020, with a vision to 2025. In order to implement the overall development goal of the safe, sustainable and effective insurance market, meeting the diversified insurance needs of organizations and individuals, ensuring social security, the scheme has proposed many important solutions with specific implementation roadmap. These are the orientations and also an opportunity for the insurance market to approach and develop stronger. Specifically targets as followings:

Along with that, the XIV National Assembly has also promulgated an amending and supplementing law of some articles of the Law on Insurance Business and the Law on Intellectual Property No.42/2019/ QH14. The new law has internalized the international commitment on insurance auxiliary services in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), meeting the requirements of the practice and completing the elements of the insurance market, including: insurance business, reinsurance business; insurance intermediaries and auxiliary services.

1. Average growth rate of total assets, total investment, total professional reserves, total equity, total revenue will increase by 20% on average in 2020 and 15% per year from 2021 to 2025.

2. By 2020, 11% of the population will participate in the life insurance and by 2025, 15% of the population will participate in the life insurance.

3. Average insurance premium per GDP will reach 3% by 2020, 3.5% by 2025, of which the life insurance market will about 2.3-2.5% and the non-life insurance market will be 0.9-1% of GDP.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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INSURANCE MARKET Non-life insurance

With average insurance premiums per head ($ 19) and low penetration rates (0.8% of GDP 2019), Vietnam’s non-life insurance market still has plenty of room to grow as the economy continues high growth momentum. People insurance that is often interested by new customers is very well designed by insurance companies. The growing automobile market is also supporting the motor vehicle insurance sector well. In 2020, the non-life insurers will continue to focus on exploiting and developing individual insurance product lines. Regarding to health insurance, in the context of social that citizen are interested in health more and more, medical costs have increased highly, epidemics are dangerous, the demand for health insurance is forecast to continue to increase sharply , the insurance enterprises have focused resources to develop new products, exploit the market demand. This is considered the main growth driver of the nonlife insurance market. Motor vehicle insurance is expected to grow more positively thanks to the large growth of the automobile market, the roadmap for tax reduction of cars in addition to Decree 100/NDCP to increase fines for violations in the transport sector will have a positive impact. Travel insurance is also considered as a potential segment in Vietnam thanks to the improved living standards of the people and increasing travel demand.

The Government has also launched an agricultural support policy through Decision No. 22/2019 / QDTTg on the implementation of agricultural insurance support policies, which will be a premise for agricultural insurance to continue developing in the future. In the coming time, technology application investment continues to be the orientation of the insurance enterprises aiming at the goal of effective and sustainable development. The enterprises will continue to invest in technology application in business and administrative activities, information data , risk management, insurance profiteering, to pay attention to technology application in compensation assessment, settling compensation, after-sales service, to promote multi-dimensional cooperation and connectivity on technology application platform (ecosystem), cooperating with technology startups to build digital technical platforms.

FORECAST: IN 2020, THE DIRECT PREMIUM WRITTEN OF THE NON-LIFE INSURANCE MARKET IS EXPECTED TO GROW BY

8%-10%

Life insurance

In Vietnam, that the population size, the structure of gold and the labor force are large, the population is aging; urbanization and the middle class are increasing rapidly will be the main growth engine for the life insurance market. The life insurers continue to compete to develop new products, especially health and hospital assistance products. Expanding the operational network, professionalizing traditional distribution channels and bancassurance channels and promoting the application of digital technologies will continue to be the key competitive strategy of the life insurers in 2020. The bancasurance channel becomes an important distribution channel of these enterprises in addition to expand branches and member companies across the country. The insurers develop products for banking distribution

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channel. In addition, 2020 is forecasted to continue to be the year of digital technology blooming for the insurance enterprises in general and the life insurance enterprises in particular. Continuing the growth momentum of 2019, the life insurers have exploited digital applications to develop customer service, bringing more utilities to customers.

FORECAST: THE LIFE INSURANCE MARKET WILL MAINTAIN A HIGH GROWTH MOMENTUM WITH THE TOTAL DIRECT PREMIUM INCREASING BY

16-18%


BANKING - FINANCE - MONEYTARY MARKET With the flexible operating policy of the State Bank of Vietnam, the monetary market is expected to remain stable in 2020. Bao Viet forecasts that the interest rate can decrease by about 0.5% (the amplitude is +/- 50 points) in 2020. The reduction in the VND’s deposit interest rate for long terms will still have gaps between large and small banks due to the regulations on reducing the ratio of short-term mobilized capital for medium and long-term loans. However, the control of small banks in 2019 has brought results, helping to limit interest rate race.

STOCK MARKET The main factors supporting the stock market in 2020 are: The business results of listed companies on the stock market continue to flourish; IPO, state divestment and new listing of shares in 2020; trade agreements (effective CPTPP and EVFTA). The market will fluctuate with many small waves and divided into 2 stages: The first stage, during the first 6 months of the year, the market will be difficult and the second stage the last 6 months of the year the market will be more prosperous, especially at the end of third quarter and early fouth quarter.

BOND MARKET In 2020, about VND 128,000 billion of G-bonds are due date (up 11.6% compared to 2019). The need to increase liquidity assets of commercial banks and the trend of monetary easing will make G-bond interest rates likely to fall further in 2020 but the reduction will be much smaller than in 2019 and in the range of 30-100bps. In the Secondary bond market: Income movements in the secondary market are often similar to the primary market, so the bond yields are likely to decrease in 2020, but the reduction will not be large because interest rates are already very low. The gap between 10-year bond yield between Vietnam and the US is currently at 1.49% / year - the lowest in history.

REAL ESTATE MARKET The legal corridor for the real estate market is increasingly completed in the direction of stable and sustainable development. Therefore, in 2020, the market will continue to grow stably, without the risk of ‘real estate bubble’; Foreign investors will continue to seek opportunities and invest heavily in Vietnam’s real estate market.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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CHALLENGE

MACROECONOMIC In the world, the Covid-19 epidemic has a serious impact, disrupting the world’s supply chain of many products and goods, stagnating production and business, reducing demand for commodity products, services, affecting regional and global growth. In addition, external challenges: (i) the Covid-19 epidemic evolved unpredictably; (ii) trade tensions among major countries are still complicated and unpredictable (of which, Vietnam is on the list of countries monitored for monetary manipulation); (iii) the decline and slowdown of the world economy, especially large countries such as China, the US, Europe, Japan due to epidemics ...

Domestically, Vietnam’s economy continues to face the challenges of:

1. Domestic supply-demand declining; 2. Restructuring the economy, especially SOE

restructuring and disbursement of public investment remains slow;

3. The economy’s resilience to external shocks is

still thin while Vietnam is a very open economy.

INSURANCE MARKET Besides the opportunity, the insurance market in 2020 will also face with many challenges affecting to the growth of the market, especially the unpredictable Covid-19 epidemic. According to the evaluation of the world’s leading organizations, although the insurance industry remains stable and ensures capital safety in the face of Covid-19, the insurance sector still faces negative impacts from Covid -19. In the life insurance sector, the declining interest rates and volatility of capital markets and the risk of a global economic recession may cause much greater risk to life insurance companies than compensation claims arising from epidemics. The rating organizations downgrade the outlook for the life insurance industry from stable to negative. In the non-life insurance sector, the most vulnerable fields by the Covid-19 pandemic due to business shutdowns or higher compensation rates include: insurance of good transported, aviation insurance, travel insurance, credit & financial risk insurance and business interruption insurance. For the other commercial insurance fields, the impact is said to be limited. The insurers are also facing with the impact of fluctuations in the stock market on investment activities and asset value decline on the balance sheet. 134

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On the other hand, the unhealthy competition among the insurers, the limitation of high quality human resources, and the incompleted legal framework to meet integration commitments are also challenges for the Vietnamese insurance market. For the nonlife insurers, unfavorable natural disasters are also one of the factors that need to be paid attention by the insurers to calculate and prevent risks. Insurance profiteering, especially in motor vehicle insurance, health insurance is not easy to control. In addition, competition pressure, participation in new market segments (public property insurance, natural disaster insurance ...) and information technology investment require the insurers to continue to increase their financial capacity, management capacity, participating in international credit rating to enhance their position in the market. In the field of life insurance, the competition to develop health care products also increases the risk of the insurers facing with arising insurance fraud, the lack of a completed database system of the insurance industry that also makes them difficult to control compensation. In addition, the support of capital and information technology systems from the parent company of foreign insurers, also cause great pressure on domestic insurers, forcing domestic insurers to constantly innovate and enhance their competitiveness and management capacity to achieve effective and sustainable growth goals.


BANKING - FINANCE - MONEYTARY MARKET With the complicated disease situation, low inflation, does not exclude the possibility that the SBV will continue to set out policies to lower lending rates. Commercial banks can still deeply reduce interest rates in the coming time. Because the impacts from the COVID-19 epidemic have affected the demand for loans in many sectors, credit in 2020 will grow slower than the growth rate in 2019.

STOCK MARKET In 2020, the stock market will continue to be affected by macroeconomic risks of the world and domestic economies. Global growth slows down due to the impact of epidemics, trade wars continue to tense ... Foreign cash flow may shrink. Exchange rate fluctuations is one of the factors that have quite a large influence on Vietnam’s stock market movements in recent years. Foreign capital is often seen in the negative direction when the exchange rate tends to increase.

BOND MARKET In 2020, it is expected that the issuance pressure will not be large because the disbursement of public investment capital is only nearly 60% of the assigned plan, nearly 450 trillion of undisbursed government bonds may be arranged to 2020. However, the actual demand for issuance next year will depend greatly on market demand.

REAL ESTATE MARKET The real estate market may continue to see an increase in the land price in areas planned to become special zones, new urban areas with synchronous investment in technical and social infrastructures. The local hot fever in some housing projects in the urban center has fast progress of construction, synchronous infrastructure, reputable investors, and reasonable prices.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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BUSINESS PERFORMANCE

In 2019, with strong consensus among the whole group and concerted efforts to adopt technology solutions to opitimize all resource and promote synergy of the whole Group. The success of the private offering in 2019 has enhanced the Groups’ financial capacity, also formed a solid foundation to fullfill the strategic plan for 2020, heading to the celebration of 55 years of establishment.

BUSINESS PERFORMANCE OVERVIEW OF BAOVIET HOLDINGS IN 2019 In 2019, despite the context of unfavourable financial market and stiff competition among insurers, especially in life insurance, Baoviet Holdings’ total revenues hit a high record of nearly USD2 billion, correspondent with the excessive proportion over annual plan 2.9%, grew by 7.2% compared to 2018. As a leading Finance - Insurance Group, 2019 positive business performance is driven by buyoant insurance activity when net revenue from insurance activity reach VND33,309 billion; 14.6% higher than 2018. This thereby embraced BaoViet Group to affirm its leading position in both non-life insurance and life insurance markets.

NET REVENUE FROM INSURANCE ACTIVITY

33,309 VND BILLION

FINANCIAL ACTIVITY

USD BILLION

(VND BILLION)

Beside, financial activity is also a bright spot of the year with the revenue of VND7.871 billion, profit of VND5.687 billion. This achievement is encouraging in the context of market’s unfavourble movements, and significantly contributed into positive business performance of Baoviet Holdings.

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7,871 REVENUE

5,687 PROFIT

GREW BY 7.2% COMPARED TO 2018


7,871

34,074

527

Unit: VND billion

33,309

3,517 2,184 Net revenue from insurance business

Financial incomes

Share of profit in associates and JV

Total direct insurance operating expenses

General and administrative expenses

1

Financial expenses

344

1,512

Expenses from other activities

Profit befre tax

THE NO.

TOTAL CONSOLIDATED ASSETS

128,238

BAOVIET HOLDINGS CONTINUES TO AFFIRM BRAND IN VIETNAM’S INSURANCE FINANCE MARKET

VND BILLION

PROFIT AFTER TAX

1,243 VND BILLION

TOTAL REVENUES

44,878 VND BILLION

OWNERS’ EQUITY

19,903 VND BILLION

CONSOLIDATED BUSINESS PERFORMANCE

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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REPORT AND REVIEW OF MANAGEMENT BOARD 2019 CONSOLIDATED BUSINESS PERFORMANCE TOTAL REVENUES

Core business remained their growth, backing Baoviet to hold its privileged position in the market

2019, with the message “Mastering Hi-tech, Accelerating Outperformance” Baoviet focused on developing morden and advanced information technology platform, applied intelligent technology into business activitives and internal management, improved operational efficiency as well as services’quality. Baoviet thus achieved an impressive performance in all core businesses, specically:

2015-2019 Consolidated revenue (VND billion)

43,608

44,878 41,854

44,878 Grew by 7.2% compared to 2018

7.2%

2018-2019 revenues by core businesses (%) 3% 4%

32,750 25,675

27%

20,789

26%

2018 69%

2019 71%

Actual Plan 2015

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2016

2017

2018

2019

Life insurance

Non-life insurance

Financial services and others


Life insurance business Life insurance business affirmed its market leader with a total revenue of VND 32.150 billion, up 9.5% than the previous year and outperformed 4.3% of the target. Along with the prompt approach and launching of new products to meet market’s demand and enhance value attributed to customers, Baoviet Life Insurance (BVL) has constantly modernized its information technology platform, applied advanced technologies into management and customers. Hence, business efficiency and customer service quality have continuously been improved. Premiums achieved nearly VND25,500 billion, 18.3% higher than 2018; of which, initial premiums grew up to 24%. The contribution of life insurance’s revenues remained the largest share of total Group’s revenues (71%).

32,150

VND BILLION

TOTAL REVENUES FROM LIFE INSURANCE BUSINESS

25,453

VND BILLION

PREMIUMS ACHIEVED

Non-life insurance business Non-life insurance business maintained its growth momentum as well as its market leading position. Total revenues reached VND11.681 billion, 1.6% higher than the target and accounting for 26% of total Group’s revenues. Main market segments such as aviation insurance, health and personal accident insurance, engineering insurance, and fire & special risk insurance phenomentally grew by 32.9%, 16.8%, 14.2% and 11.9% respectively, making substantial contribution to maintaining the leading position of Baoviet General Insurance (BVGI). Gross written premium accordingly achieved an increase of 4.5%, touching VND10,297 billion

11,681 TOTAL REVENUES FROM NON-LIFE INSURANCE BUSINESS

VND BILLION

Financial services and others Financial services and others contributed total revenues of VND 1.499 billion, which accounted for 3% of the total Group’s revenues. Though Vietnam stock market experienced a number of unfavourable movements in 2019, total revenues from securities achieved a growth of 3% compared to previous year, reaching VND564 billion. Total revenues from fund management business witnessed a steady growth of 3% to VND119 billion. Revenues from office rental, construction and real estate management businesses recorded a growth of 36%, achieved VND263 billion, attributing to the Group’s remarkable performance of the whole Group. Overview

Development Strategy

Business Performance

Corporate Governance

1,499 TOTAL REVENUES FROM FINANCIAL SERVICES AND OTHERS

VND BILLION

564 TOTAL REVENUES FROM SECURITIES

Sustainable Development

Financial Statements

VND BILLION

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Consolidated profit after tax adhered to the goal of long-term sustainable and efficient development

By concentrating all resources to fulfill the strategy goals of 2016 - 2020, in 2019, Baoviet’s consolidated profit after tax achieved VND1,243 billion, 5.8% higher than 2018; of which, insurance business still remained the largest contributor into the Group’s profit (81%), other businesses accounted for 19%. In 2019, seizing favourable movements of insurance market, Baoviet successfully exploited substantial resources to maintain its market share, which in turn, resulted in its leading position in both general insurance and life insurance market. At the same time, business efficiency has also been enhanced with the portion of profits from insurance activites in the total Group’s profit being increased from 69% (2018) to 81% in 2019. Continuing results achieved in 2018, as well as in order to catch up with the trend of technology innovation, in 2019 Baoviet continued developing morden and advanced information technology platform, applied intelligent technology into business activitives, especially in insurance, to improve operational efficiency and establish a solid foundation for new heights in the following years. On going competent management system, modern infrastructure, strong brand identity with high quality products and customer services, all supported Baoviet to head to “Affirm the leading role” in 2020. In the context that 2019 financial market experienced many turbulences: interest rate and government bond rate noticed unfavourable movements; the stock market witnessed a challenging year with multidimensional impacts from the global and local economy which led to the drop of the market’s liquidity…; the Group’s enormous expenses for network, distribution channel expansions as well as innovative IT infrastructure, Baoviet successfully managed to achieve a very positive business performance with a higher profit, which well accomplished the target.

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2015-2019 consolidated profit after tax (VND billion) 1,603

1,243

5.8% higher than 2018

1,175

1,165

2015

2016

1,175

1,243 1,225

Actual Plan 2017

2018

2019

2018-2019 consolidated profit after tax’s structure by core businesses

19% 31%

2018 69%

2019 81%

Insurance

Financial services and others


TOTAL CONSOLIDATED ASSETS

Total consolidated assets of Baoviet Holdings by the end of 2019 significantly rose more than VND 15,000 billion, reached VND128,238 billion, mainly lied in deposits to maximize gains from interest rate’s movements. Deposits and bond investments remained the main investment 91,392 channel with high portion of long term invesments to assure long-term corporate liability. 72,996 2015-2019 Total consolidated assets (VND billion)

128,238

128,238 113,175

58,553

13.3% higher than 2018

Long-term investments Other assets Fixed assets, investment properties, CIP Reinsurance assets

Account receivables Cash and cash equivalent Short-term investments

2015

2016

2017

2018

2019

Total consolidated assets

Robust growth in total consolidated assets (up VND15,000 billion, equivalent to 13.3%) were mainly driven by funds from insurance business and the private offering, in which deposits, especially short term deposits, notice a big increase of more than VND 12,000 billion. Taking advantage of favourable short term deposit interest rate

in the context of remaining low Government bonds’ rate, new funds from private offering and insurance activities were utilized for deposits, especially short-term deposits, which facilitated to optimize investment return as well as to be flexible with long term opportunites when arise.

2019 Total consolidated assets by core items (VND billion) 2018

2019 63,343 55,788 45,891 41,053

7,650

8,129

2,160 4,743 Cash and cash requivalent

Overview

Short-term investments

Development Strategy

Account receivables

Business Performance

3,343 3,041

2,333 2,388

Reinsurance assets

Fixed assets, investment properties, CIP

Corporate Governance

Sustainable Development

848 703 Long-term investments

Financial Statements

Other assets

141


REPORT AND REVIEW OF MANAGEMENT BOARD A noticeable note in life insurance is long-term liability, so in order to facilitate asset-liability management, long-term financial investment remained the strategic investment channel. Total long-term financial investment of 2019 reached VND45,891 billion, among them, long-term bond investments accounted for 80%, amounting to VND 32,085 billion. Main drive for the increase of long term investment compared to 2018 (more than VND 4,800 billion) was deposits due to unfavorable volatilities in long-term bond market. The portion of bond investments notice a slight decrease, but still remained the key channel. Funds from private offering for subsidiaries’ capital injections and developing morden and advanced information technology were obtained at the year end, hence, the balance of cash & cash equivalent was temporarily high.

Total consolidated assets’ structure

Total consolidated assets’ structure remained stable with the largest contribution of financial investments, in which, short term investments remained the main channel in order to take full advantages of favourable movements of short term deposit interest rate while long term bonds’ rate kept such low, attractive long term investments were limited. Long term financial investment took a high portion of the total assets with 36%, secondly ranked. Newly obtained funds from private offering at the year end led to a higher portion of cash and cash equivalent, compared to 2018.

2018-2019 Total consolidated assets’ structure 1%

2% 1%

36%

36%

3%

2018

49%

Cash and cash equivalent Short-term investments Account receivables Reinsurance assets

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2019 49%

2% 7%

4%

2% 2%

6%

Fixed assets, investment properties, CIP Long-term investments Other assets


LIABILITIES AND OWNERS’ EQUITY Total liabilites and owners’ equity

Following a similar upward trend in total assets, total liabilities and owners’ equity in 2019 peaked at VND128,238 billion, 13.3% higher than 2018, in which statutory insurance reserves increase VND15,512 billion (21.8%), mainly due to an increase in the mathematical reserves at Baoviet Life resulting from strong growth in revenues from insurance business, influence of low Government bond rates and adoption of new regulations in calculating 91,392 statutory insurance reserves. That supported Baoviet Holdings to minimize possible effects from financial losses that might incur in the future.

128,238

113,175

72,996

2015-2019 Total consolidated liabilities and owners’ equity (VND billion)

128,238

58,553

13.3% higher than 2018

Equity Technical reserves Liabilites 2015

Total liabilities and owners’ equity by main classes (VND billion) 86,773

2016

2017

2018

2019

Liabilities and Owners’ equity’s structure

2018-2019 Liabilities and Owners’ equity’s structure

71,260 16% 14%

26,439

15,476

2019

19,903 63%

2018 2019

68%

Liabilites

Technical reserves

Equity

Liabilites

In 2019, Baoviet has successfully implemented the project of private offering with the strategic partner i.e. Sumitomo Life with proceeds from the issuance of more than VND 4,000 billion, including share premium, resulting in the increase of contributed charter capital from VND 7.009 billion to VND 7.423 billion, equivalent to 28.6%.

Overview

23%

2018 21,563

17%

Development Strategy

Business Performance

Corporate Governance

Technical reserves

Equity

Accounting for the biggest proportion of equity’s structure, statutory insurance reserves remained stable with 68%, indicating Baoviet Holdings’ strong financial capacity as well as ensuring long term and stable policy holders’ rights and benefits. Thanks to the private offering, shareholders’ equity increase its portion in total liabilities and Owners’ equity from 13.7% to 15.5%. Contribution of total liabilities slightly dropped from 23.4% to 16.8% due to the slowing down of repo activities.

Sustainable Development

Financial Statements

143


REPORT AND REVIEW OF MANAGEMENT BOARD SOLVENCY RATIOS WERE MAINTAINED AT HIGHER LEVEL THAN REGULATION

Solvency ratios of subsidiaries were sustained at good (3.0 times upwards), ensuring the solvency for short-term liabilities, of which the liquidity ratios of Baoviet Life Insurance (BVL), Baoviet Securities Joint Stock Company (BVSC) and Baoviet Investment Company (BVI) were considerably improved in 2019.

Solvency Ratio (times) 2018

2019

7.1 6.9

4.3 3.8

3.6 3.0 2.6

2.6

BHNT (*)

BHBV (*)

2.1

BVF

BVSC

1.9

BVI

(*): In case of BVGI and BVL, for liquidity calculations, technical reserves were excluded from current liabilities.

Capital Adequacy Ratios (“CARs”)/Solvency margin of all subsidiaries are sustained at high level and complied with legislation, especially in BVSC and BVF when CARs of BVSC and BVF as at 31/12/2019 were 714% and 405% respectively, significantly exceeded the regulatory requirements (180%). As at 31/12/2019, the solvency margin of BVGI and BVL were 108.3% and 107% respectively, which remained higher than MOF’s benchmark.

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In-depth investment technology foundation and efficient managment are expected to springboard Baoviet to deliver impressive and sustainable growth in following years.


BAOVIET ATTEMPTS TO ACQUIRE

Technological mastery TOWARDS SELF-SUSTAINING DEVELOPMENT

With the message “Mastering Hi-tech, Accelerating Outperformance”, Baoviet focused on developing morden and advanced information technology platform, applied intelligent technology into business activitives, improved operational efficiency, developed utility software to meet its diversified business lines’ requirements, enhanced customer services’quality and proactively catched up and developed rapidly in the era of industrial revolution 4.0. In 2019, the rise of chartered capital from VND7,009 billion to VND7,423 billion through the private offering to its stretagic partner Sumitomo Life enhanced the Group’s financial capacity significantly. This in turn had a short-term impact on profitability ratios. However, all these ratios maintained stable in 2019 despite all market’s volatility. In-depth investment technology foundation and efficient managment are expected to springboard Baoviet to deliver impressive and sustainable growth in following years.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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REPORT AND REVIEW OF MANAGEMENT BOARD

BUSINESS PERFORMANCE OF THE PARENT COMPANY

2019 BUSINESS PERFORMANCE OVERVIEW In the context market’s difficulties, in 2019, the Parent Company still noticed an positive business result, on both revenues and profits. Since investments are the core business of the Parent Company, its revenues from financial activities contributed the largest percentage (84%) in total revenues with VND1,307 billion, 2.9% higher than the previous year. In 2019, Baoviet continued to focus on promoting investments in infrastructure, particularly IT infrastruture to catch up with the trend of techonology and greatly facilitate the core business, revenues from IT service as a result gradually grew and attribute

180 1,307

Revenues from financial activities

146

5

Revenues from traning services & others

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VND180billion into total revenues, up 8% than 2018 and considerably contributed into total revenues (12%). Along with efforts to promote revenues, Baoviet has constantly developed and applied intelligent technology into business activitives, improved operational efficiency, maximized all resources to minimize expenses. All these has driven the Parent Company to accomplish well the business target with profit before tax of VND 1,110 billion and profit after tax of VND 1,084 billion.

56

Revenues from office rental services

Unit: VND billion

205 203

Revenues from IT services

General & administration expenses

Other operating expenses

54

1,100

Financial expenses

Profit before tax


Total revenues from financial activities

Profit after tax

1,307

1,084

VND billion

VND billion

THE PARENT COMPANY OUTPERFORMED THE TARGET FOR 2019 PROFT AFTER TAX Despite the context of keeping low market’s interest rate, higher number of natural disaster and insurance events which significantly affected to subsidiaries’ business performances, especially to insurance businesses, hence indirectly affect to the Parent Company’s performance, the Parent Company managed to well accomplish the plan by proactively searching and optimizing investment opportunites, enhancing expenses management, applying intelligent techonology into business activitives and improving operational efficiency. As a result, profit after tax achieved VND1,084 billion, fulfilled the target and slightly higher than 2018 (3.1%). Furthermore, with the aim to foster the financial strength of the Parent Company, in 2019, Baoviet Baoviet has successfully implemented the project of private offering with the strategic partner Sumitomo Life with total value of VND 4,012 billion, raising the total charter capital of Baoviet from VND 7,009 billion to VND 7,423 billion as at 31/12/2019, which will create momentum for strong development in the following years. Return on chartered capital (after private offering) maintained at high level (14.6%), ensuring the dividend payout ratio committed with shareholders.

1,084

1,052

1,026 1,022

1,002

The Parent Company outperformed the target for 2015-2019 proft after tax (VND billion)

1,084

3,1% higher than 2018 2015

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

2016

2017

Financial Statements

2018

2019

147


REPORT AND REVIEW OF MANAGEMENT BOARD TOTAL ASSETS Total assets - The Parent Company

The Parent Company’s total assets as at 31/12/2018 climbed to VND18,220 billion, up 32.3% with main contributor from cash & cash equivalent and long-term financial investments. Cash & cash equivalent was temporarily high as at 31/12/2019 due to the proceeds from private offering. This proceeds was partly held under deposits and partly lay at cash & cash equivalent to be able to catch up with investment opportunities when arise.

18,220

13,767 12,156

Aiming at reinforcing core subsidiaries’ financial strength, in 2019, the Parent Company already injected the total of VND 1,450 billion of capital to BVGI (300 billion) and BVL (1.150 billion), which raised the balance of investments in subsidiaries. This capital raising helps to foster core-businesses and subsidiaries’ financial strength under fierce competition in insurance market as well as set the stage to move towards strategic goals in the next period of Baoviet.

12,636

12,860

2016

2017

2015-2019 total assets - The Parent Company (VND billion)

18,220

32.3% higher than 2018

Long-term financial investments Fixed assets and Investment properties Inventories and other assets

Short-term receivables Short-term financial investments Cash and cash equivalent 2015

Assets’ structure of the Parent Company

By term, non-current assets remained the largest contribution in total assets’ structure with 94%, in which invesments in subsidiaries and joint ventures took major proportion. By investment lines, investments in subsidiaries and associates and joint ventures remained the highest portion with 61%. The movements of cash & cash equivalent’s portion from 9% (in 2018) to 14% and the contribution of term deposits at 9% are temporary since the proceeds from the private offering to the strategic partner Sumitomo Life was only collected around the year end. Compared to 2018, in 2019, the value of investments in subsidiaries, associates and joint ventures was significantly increase (mentioned above), but noticed an decrease in proportion of the total assests (61% versus 67%) since the scale of the total assets rose sharply. 148

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2018

2019

2018-2019 Assets’ structure of the Parent Company

5% 7%

14%

5% 4%

9%

9%

2018

8%

2019

6% 5%

67%

61%

Cash and cash equivalents Term deposits Equities Bonds

Other assets Investment in Subsidiaries, Associates & JV Fixed assets and CIP


LIABILITIES AND OWNERS’ EQUITY Remaining strong financial capacity helps Baoviet to maintain the equity proportion in the liabilities and owners’ equity structure at high level

As at 31/12/2019, Total Liabilities and Owners’ equity were recorded at VND18,220 billion, 32.3% higher than previous year, in which Owners’ Equity/Total Liabilities and Owners’ equity ratio consistently remained at high level over years (96%-98%) and reached 97.8% by the end of 2019.

18.220

VND BILLION TOTAL LIABILITIES AND OWNERS’ EQUITY 32.3% higher than previous year 97%

96%

97%

98%

98%

In 2019, the Holdings made use of financial leverage to fund for large IT projects. The long-term debt/equity and long-term debt/chartered capital ratios were curbed at very low level (1.3% and 3.1% respectively), which argues well for good equity structure. Additionally, total debt (including short-term and long-term debt) over total liabilities and owners’ equity has been usually around 2%, indicating a strong note in financial strength of the Holdings. 2015-2019 Liabilities and Owners’ Equity structure (Unit: %) Owners’ equity

Liabilities

4%

3% 2015

3% 2016

2%

2017

2% 2018

2019

Liquidity ratios were at high level

The current liabilities of the Parent Company remained negligible, its liquidity ratios were thus sustained at the high level at all times, indicating strong solvency of the Company. Positive profitability

Profitability indicators of the Parent company remain high over the years. At the end of 2018, the ratio of Profit after tax/Charter capital (ROCC) and Profit after tax/Equity (ROE) reached 14.6% and 6.1% respectively. ROCC and ROE ratios slightly fluctuate since 2019 charter capital sharply rose up thanks to the private offering. The rates of ROCC and ROE are always stable through years, showing efficiency as well as longterm stability in the operation of the Parent Company. The year 2019 has just ended with many remarkable achievements, made by determined efforts of the Parent Company and all its subsidiaries against the backdrop of unfavourable volatities. Baoviet continues to maintain its leading role in the Vietnamese Finance - Insurance market, leading the markets in both life and non-life insurance sectors, along with other achievements of invesments and securities sectors; which create a solid foundation for the Group to deliver ‘International standard’ in the period of 2020- 2025 with the spirit of “Learning - Applying - Creative” and the throughout message “Mastering Hi-tech, Accelerating Outperformance”.

2015-2019 Profitability of the Parent Company (Unit: %) ROCC : Profit after tax/ Chartered capital ROE : Profit after tax/Owners’equity

14.7

8.5

2015

15.0

15.1

15.0

8.4

8.2

7.8

2016

2017

2018

14.6

6.1

2019

IMPACTS OF EXCHANGE RATE FLUCTUATIONS ON BUSINESS PERFORMANCE Fluctuations in exchange rates between VND and other currencies in which the Group conducts business may affect its financial condition and business performance of Baoviet and its subsidiaries. Subsidiary which is affected by foreign currency risk is Bao Viet General Insurance (BVGI); however, the total exposure is insignificant.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

149


REPORT AND REVIEW OF MANAGEMENT BOARD

INVESTMENT PERFORMANCE

Baoviet Holdings’ investment activities comply with the principles of safety and efficiency to increase the benefit of shareholders, customers and ensuring jobs, living standards for employees. On the basis of the strategic orientation for the period 2016 - 2020, in 2019 the management role of BVH was expressed through the implementation of risk management policies, building and deploying the model evaluation and classification of the credit institution to determine the investment limits in financial institutions, continue improving the processes and regulations related to investment activities. BVH also set up the investment monitoring measures to ensure timely action when the counterparts appear to experience credit quality deterioration. As a result, the Group’s investment activities ensure safety, contributing significantly to the overall business result of the Group and each unit.

INVESTMENT PERFORMANCE OF THE GROUP IN 2019 At 31/12/2019, the total investment capital of the Group was 113,686 billion, increasing 15.5% compared to last year's figure. In particular, fixed income investments (deposits and bonds) reached 105,587 billion, or 16% higher than 2018's figure, accounting for 92.9% of the total capital investment. Equity investments reached 6,358 billion, or 4,8% higher than 2018's figure, accounting for 5.6% of the total capital investment.

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total investment capital of the Group at 31/12/2019

113,686 VND billion increasing 15.5% compared to last year’s figure.

total investment capital of BVH at 31/12/2019

14,502

VND billion 22.2% higher than the figure at 31/12/2018


The Group’s Investment Portfolio at 31/12/2019 (Unit: Billion VND)

No.

At 31/12/2019

Items

At 31/12/2018

2019/2018

Amount

Proportion

Amount

Proportion

105,587

92.9%

90,995

92.4%

16.0%

I

Fixed Income Investment

1

Deposits

72,952

64.2%

58,026

59.0%

25.7%

2

Bonds

32,635

28.7%

32,969

33.4%

-1.0%

II

Equity Investment

6,358

5.6%

6,069

6.2%

4.8%

III

Other investment

1,741

1.5%

1,363

1.4%

27.7%

113,686

100%

98,428

100%

15.5%

Total

Source: Consolidated Financial Statements_Audited 2019.

Investment Portfolio at 31.12.2018 of the group

Investment Portfolio at 31.12.2018 of BVH

1.5% 5.6%

1.4% 6.2%

14.7%

6% 10.7%

33.4%

2018

28.7% 59%

2019

7.3%

2019

2018

64.2%

83.3%

78.0%

Deposit

Bonds

Equity

Others

Deposit

Bonds

Equity

INVESTMENT PERFORMANCE OF BVH IN 2019 At 31/12/2019, the total investment capital of BVH was 14,502 billion, or 22.2% higher than the figure at 31/12/2018. Approximately 90% of the equity investment portfolio focused on insurance and financial services - the core businesses of BVH. Total investment revenue in 2019 reached VND 1.306 billion, completing 101% of 2019 plan. BVH’s Investment Portfolio at 31/12/2019 (Unit: Billion VND)

No.

At 31/12/2019

Items

At 31/12/2018

Amount

Proportion

Amount

Proportion

2019/2018

I

Fixed Income Investment

3,190

22.0%

1,987

16.7%

60.5%

1

Deposits

2,131

14.7%

709

6.0%

200.7%

2

Bonds

1,059

7.3%

1,278

10.7%

-17.2%

II

Equity Investment

11,313

78.0%

9,878

83.3%

14.5%

14,502

100%

11,865

100%

22.2%

Total

Source: Financial Statements_BVH only_Audited 2019

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

151


REPORT AND REVIEW OF MANAGEMENT BOARD

INVESTMENTS IN 100% SUBSIDIARIES The year 2019 continued to record the impressive growth of Bao Viet’s subsidiaries with positive business results. By the end of the year 2019, Bao Viet Group still maintained its leading position in the insurance market in both life insurance and non-life insurance. Bao Viet Fund Management Company was proud to be voted the Best Fund Management Company in Vietnam by Global Banking & Finance - the leading financial magazine of the UK, thus contributing to the growth of the Group. In 2019, BVH proactively decreased the dividend received from subsidiaries that BVH owns 100% charter capital to enhance the financial capacity, serving their business operations.

1,041.8 INVESTMENT REVENUES FROM THESE SUBSIDIARIES REACHED

INVESTMENTS AT BVH

BILLION VND

VIETNAM’S BEST FUND MANAGEMENT COMPANY

EXCEEDING THE PLAN

In 2019, BVH’s investment activities have achieved positive results, with remarkable increase in revenue compared to 2018, making an important contribution to the achievement of the strategic objectives of the period 2016 - 2020.

Fixed income investment

Equity investment

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BVH re-invested available fund with suitable terms in line with interest rate movements and cash flow plan; increased investments in corporate bonds to improve investment efficiency.

Fixed income investment revenue in 2019 reached 193 billion, exceeding the target by

54%

46%

Revenues from equity investment reached 71 billion, exceeding of the plan, mainly coming from divestment profits and dividends.


BVH’S EQUITY INVESTMENT PORTFOLIO AT 31/12/2019 (Unit: Billion VND)

No.

Item

Amount

Proportion

31/12/2019

31/12/2018

31/12/2019

31/12/2018

1

Insurance

7,267

5,817

64.3%

58.9%

2

Bank

1,599

1,599

14.1%

16.1%

3

Securities, Fund

1,260

1,260

11.1%

12.8%

4

Real Estate

462

441

4.1%

4.5%

5

Others

724

760

6.4%

7.7%

11,313

9,878

100%

100%

Total

Among big projects that Bao Viet has invested in, there’s no project that failed to reach the announced or committed schedule. In 2019, to enhance the financial capacity of core subsidiaries, BVH has increased BVGI’s chartered capital from 2,600 billion to 2,900 billion and BVL’s chartered capital from 3,000 billion to 4,150 billion which were also the biggest investments of BVH over the year.

THE GROUP PROMOTES ITS ROLE IN MANAGING AND COORDINATING INVESTMENT ACTIVITIES

EFFICIENCY

SHAREHOLDERS INCREASE THE BENEFIT OF CUSTOMERS

SAFETY

EMPLOYEES

Baoviet Holdings’ investment activities comply with the principles of safety and efficiency to increase the benefit of shareholders, customers and ensuring jobs, living standards for employees. On the basis of the strategic orientation for the period 2016 - 2020, in 2019 the management role of BVH was expressed through the implementation of risk management policies, building and deploying the model evaluation and classification of the credit institution to determine the investment limits in financial institutions, continue improving the processes and regulations related

Overview

Development Strategy

Business Performance

Corporate Governance

to investment activities. BVH also set up the investment monitoring measures to ensure timely action when the counterparts appear to experience credit quality deterioration. As a result, the Group’s investment activities ensure safety, contributing significantly to the overall business result of the Group and each unit.

Sustainable Development

Financial Statements

153


REPORT AND REVIEW OF MANAGEMENT BOARD

ESG

EMBED

ENVIRONMENTAL

IN INVESTMENT PROJECTS

SOCIAL

CORPORATE GOVERNANCE

We believe that corporate governance, social and environmental mechanism are important factors when assessing the effectiveness of middle and longterm investment. Therefore, besides return indicators, Baoviet also embed the Environmental, Social and Governance (EGS) indicators in our investment selection, review and continued to implement Principles for Responsible Investment when reviewing major investment projects.

With the leading scale of total assets in the insurance market, Bao Viet has increased its investment back into the economy with investment orientation based on safety and efficiency principles, ensuring the Group’s sustainable development, thereby ensuring the benefit of shareholders, customers and employees.

As a listed company with capital contributions from many investors, we understand that sustainable development is a competitive advantage in attracting capital. Therefore, Bao Viet - as an investor, strives to engage sustainable factors into assessing potential projects.

In the past, governance criterion was considered the most important part when evaluating an investment project. But now, according to the newly promulgated procedures of Bao Viet, labour usage, community contribution and environmental awareness also become important criteria for evaluating and adding points to the project. In the near future, we will continue to prioritize the development of our core business - to ensure the sustainable development of Bao Viet, and to contribute to the reduction of harmful effects on the environment.

Bao Viet focuses on the core business with 90% of our equity investment portfolio focusing on insurance, investment and financial services, which are also environmentally friendly industries. In 2019, we have always complied with criteria related to governance - social - environmental issues in the management of investment projects and equity investments.

The linkage of sustainability factors for suppliers as well as investment projects helps Bao Viet approach closely to the goal of building a sustainable value chain, which benefits Bao Viet and its counterparts as well.

5 PRINCIPLES

1

PRINCIPLE

Engage ESGs factors into investment analysis and decision making processes

of responsible investment Baoviet is applying in our projects include:

2

3

PRINCIPLE

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5

PRINCIPLE

Develop a suitable disclosure regime for ESGs issues at enterprises invested by Baoviet Engage ESGs factors into issues related to Stakeholders’ interests

154

4

PRINCIPLE

PRINCIPLE

Report on the implementation progress

Cooperate with other financial institutions to foster the development of green finance market


GREEN CAPITAL MARKET Green growth is defined as an important highlight in the development policy of many countries in the world towards sustainable development. Vietnam’s financial market is making efforts to research policies, seeking feasible solutions to promote the development of green capital markets. The shift from traditional capital market to green capital market has been regarded as an important step in creating a strong financial channel for restructuring Vietnam economy, thus moving towards sustainable development in the long term.

Bao Viet is one of the big enterprises pioneering in researching and seeking financial support towards green growth through the reduction of greenhouse gas emissions, environmental pollution and the green production. Baoviet hopes to join the Securities and Exchange Commission and other related parties to develop and implement a framework for green finance and green financial products, thus maintaining the business effectively while ensuring environmental and social benefits; which, in turn, helps maintain the sustainable development of green capital market.

Baoviet’s investment activities comply with the principles of the United Nations’ responsible investment (including not to invest in projects negatively affecting the environment or employing child labor ...), invest in insurance, investment and financial services environmentally friendly industries. We are proud to be the only listed insurer in the VNSI stock index. In addition, Baoviet also holds many other VNSI stocks such as VCB, MBB, BID, VNM, REE…., to name just a few.

ORIENTATION 2020 On the basis of the strategic orientation approved by the Board of Directors, along with financial and monetary market forecasts, in 2019 The Group follows and expands its investment orientation on the basis of compliance with the principle of safety and efficiency, thus increasing the benefit of shareholders, customers and ensuring jobs, living standards for employees. In 2020, Bao Viet aims to actively participate in the green capital market by considering investment in green financial products of great significance such as:

Overview

Development Strategy

Business Performance

Corporate Governance

List of green projects built by the State Bank, or local governments’ green bonds, investment projects in the fields of wind power, solar power, or construction of green buildings, etc ... Although Vietnamese bond market has changed remarkably over the past few years, green bond market is still small and has a long way to go. As a member of Vietnam Bond Market Association (VBMA), Bao Viet commits to full participation in training courses and seminars related to the green bond market and wishes to collaborate with other parties to revise related policies. It is strongly believed that together we can help promote the green bond market development.

Sustainable Development

Financial Statements

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REPORT AND REVIEW OF MANAGEMENT BOARD

HUMAN RESOURCES DEVELOPMENT

Always identifying people as the core factor, determining the strong and sustainable development of enterprises, in our human resource development strategy, we focus on building, training, creating and developing a team of high qualified personnel in key fields; building a professional working environment, attractive benefits; deploying a system of performance quality assessment based on work efficiency and closely linked, based on our vision, code of conduct, professional ethics and cultural characteristics.

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47.9%

540

52

MALE

MIDDLE MANAGERS

SENIOR MANAGERS

1%

ETHNIC MINORITY LABORERS

52.1% FEMALE

6,574 EMPLOYEES

POLICIES ON MAINTENANCE AND HUMAN RESOURCE DEVELOPMENT OF BAOVIET For many years, Baoviet has always respected and acknowledged that the values created by our members contribute to success, regardless of position, age, gender, education, social status, personality, life style, thought process, work experience, ethnic origin ... It is the

philosophy that is the foundation for us to build a dynamic, fair and personal working environment. Our employees have the opportunity to work and train for success and career development in company.

LABOR FORCE IN BAOVIET In 2019, Baoviet’ total labor force was 6,574 people, an increase of 3.26% compared to 2018. Regarding labor structure in 2019 by gender: The percentage of male workers accounts for 47.9%, female employees 52.1%. Compared to 2018, the number of employees by gender has changed and female workers account for the majority of whole labor structure. In terms of age structure, the proportion of employees under 30 accounted for 27% (up 0.5% compared to 2018), middle-aged workers aged 30 to under 50 accounted for 64.1% and workers 50 years and older with seniority in Baoviet accounting for 9.4%. Regarding ethnicity, the labor of Kinh people is 6,508 people (99%) and ethnic minority laborers was 66 people (accounting for 1%).

Overview

Development Strategy

Business Performance

Corporate Governance

Regarding labor qualification, with the goal of building and maintaining a team of highly qualified and reasonably qualified officials in structure, in 2019, our employees continued to maintain the rate of qualified employees with graduate and post graduate level. The labor force with university degree accounts for the majority with 81.8%, the graduate makes up 8.5% and the labor with university degree only accounts for 9.7% (down 0.7% compared to previous years). Regarding the structure of managers, in 2019, the total number of Baoviet’s managers was 592 people, accounting for 9% (down 0.4% compared to 2018), employees were 5,982 people, accounting for 91%. Regarding the management structure, senior managers were 52 people, accounting for 0.8% and middle managers were 540 people, accounting for 8.2%.

Sustainable Development

Financial Statements

157


REPORT AND REVIEW OF MANAGEMENT BOARD LABOR STRUCTURE STATUS BY CRITERIA Labour Structure – By Criteria

Number of employees

Proportion out of Baoviet’s total number of employees

6,508

99%

66

1%

6,573

100%

1

0.02%

556

8.5%

Bachelor degree

5,379

81.8%

College graduate

231

3.5%

Others

406

6.2%

Male

3,149

47.9%

Female

3,425

52.1%

Under 30 years old

1,776

27.0%

From 30 to 50 years old

4,217

64.1%

620

9.4%

North

3,571

54.3%

Central

1,476

22.5%

South

1,527

23.2%

52

0.8%

540

8.2%

5,982

91%

BY ELTHNIC

Kinh Ethnic minority BY NATIONALITY

Vietnamese

Foreigners BY EDUCATION LEVEL

Master degree or Higher education

BY GENDER

BY AGE

Over 50 years old BY REGION

BY SENIORITY

High-level managers Middle-level managers Staff

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97 6 Ý

RECRUITMENT Continuing to complete the strategic goals for the period 2016-2020, Baoviet has continuously focused on intensive investment in many areas of human resource management, including recruitment policies to attract young, highly qualified, dynamic, creative, enthusiastic and equipped labor force with basic and advanced information technology knowledge to suit business requirements in the context of technology application in operation corporate governance and financial and insurance business, in line with Baoviet’s “Mastering high technology, differentiating efficiency” approach. In 2019, Baoviet recruited 976 candidates, most of whom were Bao Viet Insurance Corporation, Bao Viet Life Corporation and Bao Viet Investment Company due to the increased service providers requiring a larger number of employees than in previous years.

Of the total number of candidates recruited, the male candidates accounted for 43%, the female accounted for 57%. Young candidates under the age of 30 years old were recruited by Baoviet accounting for the highest proportion of 76%, followed by candidates aged 30 to 50 years old accounting for 24% and not recruiting candidates over 50 years old. By region, the most recruited units in the North accounted for 54%, followed by the South with 14% and the Central with 32%.

TURNOVER RATE In 2019, the business market had many changes that led to many challenges for businesses to maintain the existing team. Employees had many opportunities to choose better jobs, consistent with career orientation and the need to change their working environment. At the same time, in 2019, the elderly workforce (over 50 years old) gradually retired according to the regime. In 2019, Baoviet had a fluctuation of labor compared to the previous year, especifically, the total number of unemployed workers in Baoviet in 2019 was 786 people, equivalent to a 12% Turnover rate

severance rate. Regarding the employment structure in 2019, the severance rate of males was 13.5%, of females was 10.5%. Regarding the age group, the unemployment rate of workers over 50 years old (mostly retired) accounted for 12.1%, young workers (under 30 years old) accounted for 25.4% and workers aged 30-50 years old only accounting for 6.2%. In terms of geographic area, units in the North and the South had high rates of resignation compared to those in the Central region, in particular the rate of resignation in the North, Central and South are 12.2%, 12% and 11.3%.

Age

Gender

Region Total

<30 2019

Quantity (person) Ratio (%)

2018

Quantity (person) Ratio (%)

Overview

Development Strategy

Business Performance

30-50

>50

Male

Female

North

Central South

451

260

75

425

361

436

177

173

786

25.4%

6.2%

12.1%

13.5%

10.5%

12.2%

12.0%

11.3%

12%

219

225

96

315

225

298

65

177

540

13.0%

5.5%

16.9%

9.3%

7.6%

9.2%

5.1%

9.5%

8.5%

Corporate Governance

Sustainable Development

Financial Statements

159


REPORT AND REVIEW OF MANAGEMENT BOARD

O SAFETY

CCUPATIONAL HEALTH AND WELFARE POLICIES OF BAOVIET

Baoviet always strived to bring about an equal, friendly and professional working environment, ensuring safety and health for employees. Health care programs and policies had always been maintained and improved by Baoviet over the years to ensure health, labor safety and financial safety for staffs.

Non-life insurances to protect health and financial safety against health risks for employees and their relatives, including:

Healthcare Healthcare Health insurance and human combine insurance (Healthcare)

160

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K-Care K-Care Health insurance for family, Combined life insurance and Cancer insurance (K-Care)

Life insurance types had been implemented including: Successful Insurance, Life Insurance and Sustainable Retirement Insurance at Baoviet and our units to attract, maintain and develop a team of highly qualified personnel, ensure our human resources for sustainable development, long-term commitment, peace of mind for career development at Baoviet, and help the insured to improve improve living standards, have a stable additional income in addition to pensions, ensure a relaxing life, be financially independent, have the ability to continue to support relatives after retirement and protect against risks in life and in the course of work.


In 2019, Baoviet continued to show an interest in the health of our employees through conducting periodic health examinations for employees at reputable medical facilities and high-service quality. With the strength of products to protect customers against health risks, Baoviet regularly organizes consultancy programs with the participation of experts and doctors for internal customers and staffs. Members are expected to increase their knowledge on health protection and care, especially for female workers. Besides, the physical training and sports movements of our staffs were encouraged through the organization

of classes and clubs such as Yoga classes, Yumba, table tennis clubs, dance classes, tennis tournaments, table tennis, soccer friendlies. At some units of Baoviet, a gym has been built to create conditions for employees to practice outside working hours. For retired officials, in addition to organizing visits, giving gifts on the occasion of International Elderly People, Lunar New Year, Baoviet maintained annual combined human insurance with a liability of VND 20,000,000 / person.

MATERNITY LEAVE POLICY FOR FEMALE EMPLOYEES AND MALE EMPLOYEES WITH SPOUSE TAKING MATERNITY LEAVE Baoviet applied maternity leave policies for employees (both men and women) to comply with the labor law and to apply the policy of reward, welfare, health insurance and other types of insurance. At the same time, employees were still considered for annual emulation, consideration for periodic wage increases and performance evaluation as a basis for considering annual work performance rewards and related welfare regimes. In 2019, the actual number of employees taking maternity leave was 187 people; in which, male employees whose wives give birth were 34 maternity leave, while female employees having maternity leave was 153 people. By the end of December 31, 2019, there were 140 employees returning to work after maternity leave, reaching 74.9%; in which, male workers returned to work 100% and female workers returned to work was 107, reaching 69.9%. The remaining female employees would return to work in 2019 after the end of the maternity leave regime. Baoviet commits and always ensures the full employment for the maternity leave workers to return to work at the old position after the end of the leave.

Overview

Development Strategy

Business Performance

Corporate Governance

In addition to ensuring that employees are assured of rest and recuperation after birth and to have the necessary health to continue working as required by the organization, after the end of maternity leave, the main Maternity leave policies also help employees feel secure financially and create the best conditions to support employees to care for children. In addition, in order to create maximum conditions for employees to have time to take care of their children, after the end of maternity and commuting leave, female workers were provided with conditions to shorten working time for 1 hour / day compared to other workers until the child is full 12 months old. Female employees can register to work late or leave early compared to the standard working time prescribed by Baoviet and ensure that the total number of late hours and / or early dismissal does not exceed 1 hour in accordance with the regulations of internal rules and labor law.

Sustainable Development

Financial Statements

161


REPORT AND REVIEW OF MANAGEMENT BOARD

ASSIGNING EMPLOYEES PARTICIPATING IN HEALTH AND SAFETY OFFICER NETWORK OF BAOVIET

In 2019, Baoviet has implemented occupational safety and sanitation to ensure compliance with the provisions of law, ensuring efficiency, bringing peace of mind and safety for employees.

Pursuant to Article 74 of the 2015 Law on Occupational Safety and Health, each functional board in Baoviet needs to have at least 1 part-time officer in charge of safety and sanitation. Safety and Hygiene (WHSO) is concurrently responsible for occupational safety and health, fire and explosion prevention in the functional board. Hygiene and safety are direct workers, knowledgeable about occupational safety and sanitation, voluntary and exemplary in the observance of labor safety and hygiene regulations. Works implemented during the year include: Develop a plan for occupational safety and health of the year; Arrange people to work in labor safety; Establish a network of safety and hygiene;

Sign a contract of medical examination and treatment facility to take care of workers’ health; Organize training on occupational safety for employers and employees;

Implement the regime of annual report on occupational safety and health, periodic report on the situation of accidents in the first 6 months and annually to the labor state management agency in accordance with regulations.

MANAGING AND PAYING BY WORK PERFORMANCE

Baoviet’s performance management policy has been maintained since 2009 to establish, control and evaluate the achievement of goals, classify the performance of each individual, as a basis for viewing and considering to adjust the annual salary and rewarding working efficiency for individual employees based on achievements and level of contribution to the organization’s success; contributing to creating a fair and competitive income mechanism in the salary policy of Baoviet. 162

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Performance-based salary scheme and management system

In 2019, individuals who were proposed to be classified as Class 1 (Excellent) had to present their reports of achievements in the previous year. These achievements must have a level of influence and benefit on the the comapany and be recognized by the majority of individuals. In case the number of votes for more than 50% of the Board members and individuals was reached, the Board of Directors would approve the General Director of the Group to approve Class 1 - Excellent, the Director of the Center must present the report and protect the achievements of those individuals before the Council. These achievements had to have the level of influence and network benefits in the Block / Center scale and were recognized by the majority of individuals and collectives in the Division / Block. In case the number of votes for more than 50% of the Board members and individuals was reached, the Board of Directors approved Class 2 – Good Performance. The remaining individuals were considered and rated Class 3 – Completed and Class 4 - Not completed depending on the level of accomplishment of the work goal in the year and the expression of attitudes and behaviors of individuals.


Baoviet’s performance management process

Start planning for next year objectives

Managers collect performance management data. Employees start with selfappraisal

r

mber ece

ry

M id-y ear

No

a

al

M ar

er

Employees discuss performance appraisal with their managers and receive year-end rating

r

Employees complete setting goals for the year, and are well aware of these goals

c h

v isi ng

YOU

m

g

Re

O ct o b

a is

ss

Fe b pr

t in et

i ve

ap

erf or

ry

O b j e ct

A pril

S e pt e m Mi

ber

pr

a is

Jul y

Pr

ov i

de t

M

al

June

ra i n i n g

ce

g

ap

& d e ve l o

an

Au

t

r

m

ye

ar

ay

d-

us

pw

or

e kp

rfo

Employees discuss mid-year appraisal with their managers and receive mid-year rating

Janu a

kp

e

be

D

r & m a n a g e wo r

nc

m

n ito

ua

ve

Mo

Complete work performance appraisal

Managers collect their employees’ mid-year performance management data. Employees start withself-appraisal

In 2019, in addition to complying with current laws and regulations, Baoviet continuously updated new trends in the market’s remuneration policies to improve the competitive advantage of human resources, to attract and retain high quality labor force easily, to motivate and increase labor productivity. With the human resource development strategy approved by the Board of Directors, Baoviet continued to implement the performance-based income policy, participated in surveys about the market’s wages and salaries to determine pay range, pay rate to its employees corresponding to each job level and performance accomplished, ensuring the internal equity and competition with the outside. In 2019, the total number of employees going through performance appraisal in accordance with Baoviet’s regulations was 3,498 persons, accounting for 94% of the

Overview

Development Strategy

Business Performance

Corporate Governance

labor force; out of which the number of male employees was 1,640 people equivalent to 46.88% of total labors, and the number of female employees was 1,858 peoples (53.12%). In terms of age group, employees aged under 30 was 1,125 persons, making up 32.16% of the total labors, the figures for the group of employees from 30 to 50 years old was 2,105 persons, making 60.18% and over 50 years old which was 268, making 7.66%.

The remaining of the total number of employees as of December 31, 2019 of Baoviet were assessed and recorded their achievements in 2019 according to the specific policies of each subsidiary of Baoviet, accordingly with each position and specific job; and be awarded for the specific achievement.

Sustainable Development

Financial Statements

163


REPORT AND REVIEW OF MANAGEMENT BOARD Performance evaluation criteria

Be on the list of regular employees at the time of the assessment

Having a working plan and being directly approved by the manager

Have a minimum working time to meet the requirements of Baoviet

PERFORMANCE EVALUATION CRITERIA

Earned from the salary fund of Baoviet

Evaluation criteria

01

Excellent

02

Good-performance

03

Completed

04

Not completed

Unit: Person NO. UNIT

PERCENTAGE OF APPRAISED EMPLOYEES

EVALUATED LABOR, IN WHICH:

TOTAL PERCENTAGE TOTAL OF NUMBER OF NUMBER OF APPRAISED EMPLOYEES APPRAISED EMPLOYEES EMPLOYEES

AGE GROUP

GENDER

Under 30

From 30 to 50

Over 50

Male

Female

1

BVH

267

262

98%

27

225

10

160

102

2

BHBV (*)

558

558

16%

85

391

82

381

177

3

BVNT

2,265

2,068

91%

758

1,143

167

1,041

1,027

4

BVF

49

48

97.96%

9

39

-

27

21

5

BVSC

247

239

97%

71

163

5

114

125

6

BVInvest

323

323

100%

175

144

4

135

188

3,709

3,498

94%

1,125

2,105

268

1,858

1,640

Total

(*) The performance appraisal data of BVGI is calculated at the Corporation Head Office.

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PERFORMANCE BASED SALARY POLICY Fundamental model which forms the basis for Baoviet salary policy

Job

Comparison

SALARY

Organizational analysis

Salary survey SALARY RANGE

ANNUAL APPRAISAL

Job description

Policy JOB GRADE

Job assessment

Market

Objective delivery

Behaviours

Objective setting

Employees

Performance

Salary and bonuses from Baoviet’s salary fund in 2019 include Salary Salary depends on the job/title and allowance; Supplementary salary; Salary for outstanding annual leave that employees have not used up. Bonus th 13 month salary;

Performance based bonus. Results of salary adjustment in 2019 In 2019, Baoviet has periodically increase salaries of 939 employees based on annual job title/position, equivalent to 29.2% of total employees and 111% compared with 2018. Among them, male employees were 476 persons (15.1% of total number of male employees) and female employees were 463 persons (13.5% of total female employees). For work performance based salary review, 100% of employees eligible for performance appraisal in 2019 had their salary reviewed consistent with the budget and current regulations.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

165


REPORT AND REVIEW OF MANAGEMENT BOARD

INVEST FOR TRAINING AND EDUCATION

In 2019, along with focusing on improving advances and modern information technology infrastructure, Baoviet employees continue to upgrade their professional qualifications and capabilities through the training activities. Baoviet applied many technologies such as Workplace, Workchat, E-learning into training activities, which helped improve training efficiency and save time of Baoviet employee training. Especially, Baoviet has successfully implemented a new e-learning portal with many advantages compared to the previous one. The interface of the new portal is scientifically designed and user-friendly. New technologies are integrated in the system; therefore online training material creation and human resource training data management becomes easier and faster. Accordingly, in 2019, the number of online training sessions has increased by nearly 40 percent compared to 2018. In addition, Baoviet Training Center has successfully digitized training programs on professional skills, soft skills and workplace technology applications, etc., to implement training on this new portal. In the context of the Technology Revolution 4.0 is having a great impact on Baoviet’s business activities, Baoviet has built and organized introducing and training programs of the latest knowledge and information of 4.0 technology in the field of finance – insurance and data analysis to

166

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help Baoviet’s employee with using useful and practical technological tools for work, in order to improve workplace productivity and complete business tasks in 2019. Baoviet manages and enhances the effectiveness of training on Capacity dictionary system; Capacity framework; General learning maps; Functional learning maps. The training needs, the capacity to be trained, the compulsory professional knowledge are determined in a specific and accurate way based on the specific job position of each officer. Therefore, each Baoviet employee will have a detailed training schedule in order to fully develop their competency. In 2019, Baoviet also supplements new training programs to update the skills and abilities needed during the revolution of digital technology. Baoviet employees are also always given favorable conditions to participate in training programs as well as to encourage learning culture incessantly.


Specifically, in 2019, Baoviet trained 6,574 employees with 6,696 training sessions. The total number of training hours is 105,365 hours of training, of which the total number of training hours under the General Learning Map is 8,651 hours, the number of hours of training outside the General Learning Map is 96,714 hours of training, this is the number of training hours for professional programs. The average number of hours of training per employee in a year is 16 hours of training, of which the average number of hours for male employee is 22.1 hours, for female employee is 10.5 hours. On average, the number of training hours by title, the number of training hours of senior managers is 15.5 hours, the middle-level employee is 53.5 hours, the employee is 12.6 hours.

THE TOTAL NUMBER OF TRAINING HOURS

105,365

Average training hours and number of training sessions in 2018 - 2019 Criteria

2019

2018 By gender

By position

Total

Male

Female

109,723

68,807

40,916

1,636

Under the General learning map

21,244

11,979

9,265

Under the Functional learning map

88,479

56,828

Training sessions

8,752

Under the General learning map Under the Functional learning map Total number of employees as of 31/12 Average training hours per employee per year

Staff

Total

Male

Female

27,583

80,504

80,885

55,375

25,510

168

5,343

75,374

12

3,669

17,563

8,651

4,220

4,431

2

787

7,862

31,651

1,624

23,914

62,941

72,234

51,155

21,079

166

4,556

67,512

5,637

3,115

43

2,541

6,168

6,658

4,453

2,205

15

497

6,146

1,661

1,049

612

2

124

1,535

1,177

579

598

3

108

1,066

7,091

4,588

2,503

41

2,417

4,633

5,481

3,874

1,607

12

389

5,080

6,366

3,388

2,978

46

555

5,765

6,574

3,149

3,425

52

540

5,982

17.2

20.3

13.7

35.6

49.7

14

12.3

17.6

7.4

3.2

9.9

12.6

Total training hours by gender in 2019

Senior management 120

30

Middle management

Non-managerial titles

3.2

9.9

20

5

12.6

40

14

10

20.3

7.4

15

35.6

60

13.7

20

49.7

80

17.6

20.3

100 23

25

Staff

63.7

35

Senior Middle managers managers

Total training hours by titles in 2019

Female 30.1

Male

By position

104.9

training hours

Senior Middle managers managers

By gender

2017

Overview

Development Strategy

2018

2019

Business Performance

2017

Corporate Governance

Sustainable Development

2018

Financial Statements

2019

167


168

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ASSESMENTS OF THE BOARD OF DIRECTORS ON ALL ASPECTS OF BUSINESS OPERATIONS

2019 was an important year in implementing the development strategy of Baoviet Holdings for the period of 2016 to 2020. Under the leadership and administration of the CEO, the efforts of the Board of Management, BVH with the spirit of synergies and solidarity, together with the subsidiaries, have strongly drastically implemented the key solutions, completing business plan for 2019. Baoviet Holdings continues to affirm the No. 1 Brand in Vietnam’s Insurance Finance Market with a brand value of USD 267 million, is the highest in the financialinsurance field in Vietnam. Moreover, Baoviet Holdings has been strictly complying with the regulations in operating in compliance with the Charter, Internal Management regulations and current laws.

VỐN ĐIỀU LỆ

TÀI SẢN GIA TĂNG LỢI ÍCH DOANH THU TĂNG TRƯỞNG

LỢI NHUẬN

ASSESMENTS OF THE BOARD OF DIRECTORS ON ALL ASPECTS OF BUSINESS OPERATIONS IN 2019 CONSOLIDATED BUSINESS RESULT

128,238

TOTAL CONSOLIDATED ASSET

BILLION VND

TOTAL CONSOLIDATED REVENUE

CONSOLIDATED PROFIT AFTER TAX

Overview

Development Strategy

44,878

BILLION VND

1,243 BILLION VND

Business Performance

Corporate Governance

The total consolidated revenue of the Group in 2019 reached VND 44,878 billion, an increase of 7.2% compared to 2018, and reached 102.9% of the plan. In particular, total revenue of life insurance business reached VND 32,150 billion, up 9.5% compared to 2018, accounting for the largest proportion (71%) of the total consolidated revenue of the Group. ; Non-life insurance business with total revenue of VND 11,681 billion, contributing 26% to total revenue of the Group; Financial and other services accounted for 3% of the consolidated revenue with VND 1,499 billion. Consolidated profit after tax reached VND 1,243 billion, total consolidated assets reached VND 128,238 billion as of December 31, 2019, an increase of VND 15,063 billion (equivalent to 13.3%) compared to the end of 2018.

Sustainable Development

Financial Statements

169


ASSESMENTS OF THE BOARD OF DIRECTORS ON ALL ASPECTS OF BUSINESS OPERATIONS RESULTS ON BUSINESS PERFORMANCE OF THE PARENT COMPANY HOLDINGS CHARTER CAPITAL INCREASED

7,423

HOLDINGS’ TOTAL REVENUE

1,562

HOLDINGS’ PROFIT AFTER TAX

1,084

BILLION VND

BILLION VND

BILLION VND

In 2019, the parent company has basically completed the business plan set by the Annual General Meeting of Shareholders with the total revenue of VND 1,562 billion, profit before tax of VND 1,084 billion. The ratio of profit after tax over the charter capital of the parent company in 2019 was 15.7% which guaranteed the dividend payout ratio committed to shareholders. BVH has completed capital strategy for the period of 20162020 through a private placement project, increasing charter capital to VND 7,423 billion, collecting a huge capital surplus to supplement capital and invest in core business. This is a remarkable result in the context that macroeconomic and financial - insurance markets are still challenging.

RESULTS ON THE IMPLEMENTATION OF KEY TASKS IN 2019 In addition to the positive results on business targets, in 2019, with the message “Mastering high technology Differences create efficiency”, BaoViet has drastically implemented strategic solutions to improve the efficiency

of core businesses, promote internal cooperation, increase professionalism and affirm the leading brand and services quality of Baoviet.

The results achieved in carrying out the key tasks in 2019 are as follows:

01

Complete the tasks, business target in 2019 towards the efficiency and sustainability; continue to review the 2019 - 2020 development strategy to align with the market; improve the financial capability of BVH and its Subsidiaries.

Strengthen the implementation of the synergy projects, focusing on cross-selling and the IT application projects, headquarter offices for share, marketing and branding.

03

Catching up with the trend of Industry 4.0; Baoviet has researched and implemented the digital transformation in the business activities, investing in modern information technology infrastructure.

Brand communication and marketing activities, effectively support sales operation, good management of communication and public relations crisis. In particular, Baoviet and its subsidiaries received many prestigious awards in domestic and abroad with a brand value of USD 267 million, is the highest in the financial-insurance field in Vietnam.

05

04

Sharpen the organizational structure, improve the staff quality, implement clear KPIs, draft policies on salaries and remuneration on fair and efficient basis.

Diversify the products and distribution channels, provide professional services to create differences.

170

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06


ORIENTATIONS IN 2020

With the motto “Learning - Applying - Creating”, BaoViet has been confident to act, constantly learned knowledge, experience, creatively applied new technologies to business activities, continues to maintain Number 1 position. BaoViet will accelerate its business operations towards effective and sustainable development, closely following the strategic orientation for the 2016-2020 period with key solutions:

01

Complete the tasks, business target in 2020 towards the efficiency and sustainability; Complete the adjusted strategy for the 2016-2020 period; Develop a 2021-2025 strategy for submission to AGM.

Speeding up the implementation of key information technology projects.

02

Implementing Digital Transformation Project.

03

Technology application in governance, management and administration; Developing software in sales and customer service.

Covering the unified image of BaoViet nationwide; Promote Marketing, communication to support business activities. Continue to develop and increase the value of BaoViet brand.

04

Enhancing the governance and management roles of the Board of Directors and Board of Management; advisory role of BOD’s committees and councils.

05

Building a modern corporate culture and environment, organizing training courses and seminars on corporate governance; Completing the legal corridor: Rules, system of Regulations, processes; Enhancing the Group’s role in the subsidiaries to accomplish common goals.

Restructuring organizational structure effectively; researching and applying on digital transformation, strengthening maneuvering, rotation, building successor teams; developing appropriate salary and bonus mechanisms; enhance training to improve the quality of human resources.

07

Overview

06

Developing new, diversified and preeminent products, expanding the network and distribution channels.

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

171


STOCK INFORMATION AND INVESTOR RELATIONS

STOCK INFORM ATION AS AT 31/12/2019

CHARTERED CAPI

TAL

7,423,227,640,000

VND

NUMBER OF SHARES LIS TED

742,322,764 SHARES

ABLE STOCKS NUMBER OF FREELY TRANSFER

692,720,434,00

THE NUMBER OF RESTRICTED TRANSFERABLE SHARES

49,602,330,00

SHARE TYPE

ORDINARY PAR VALUE

10,000 VND/1 SHARE

SHARES TRADING OVERSEA:

not have Baoviet Holdings does in 2019. overseas stock trading

TREASURY SHARE

Overall evaluation of the market

In 2019, the domestic stock market is influenced by external factors such as the US-China trade war, fluctuations in the interest rate environment in the world, and slowing global economic growth. The external context has created quite a lot of negative impacts on the market, while the domestic context was stable with the macro indicators all reached plan targets, corporate profit growth over the same period are the basis which help the stock market through difficult times.

THANK YOU FOR YOUR TRUST Integrated Report 2019

SHARES (*)

0

SHARE

(*) Number of shares restricted from transfer is the number of shares issued under the Employee Stock Ownership Plan from May 2018 and shares issued individually to strategic shareholders in December 2019.

BVH STOCK PRICE PERFORMANCE IN COMPARISON TO THE MARKET

172

SHARES


380.22

500

352.55

400

229.62

300

197.39 78.20

83.08

178.03 200

90.02

67.91

54.98

88.81 37.14

68.84 100 -

-96.77

-64.87

-82.00

-107.67

1/2019

2/2019

3/2019

-48.91 -101.54

-132.16

-194,25

-219,31 12/2018

-101.65

4/2019

5/2019

BVH stock fluctuation movement

6/2019

7/2019

Buy value

8/2019

(100)

-104.46 -155.74

9/2019

-170.33

(200) (300)

10/2019

T11/2019

Sell value

T12/2019

Deviation

BVH stock price performance In the first quarter of 2019, BVH shares were quite positive with the price line fluctuating around 10% compared to the end of the fourth quarter of 2018. Entering the second quarter of 2019, the price of BVH shares has decreased due to the large number of ESOP shares allowed to be traded in May 2019. However, BVH shares rebounded strongly in the rest of the second quarter and the first half of the third quarter of 2019. The average liquidity of BVH in 2019 is 205,931 shares / session. For the remainder of 2019, BVH shares return to the cumulative correcting trend to create a better price base before recovering and growing in the next period. In 2020, with the expectation that more cash flow from new ETFs will enter the market, analysts expect the attractiveness of an industry leader such as BVH to attract a lot of attention and the stock’s average liquidity will be pushed higher. BVH stock may continue to accumulate with price fluctuations within a small range. When accumulating enough and creating a solid price, we expect BVH stock will recover and grow again. Currently, BVH is the leading stock in terms of market capitalization and liquidity. With stable and sustainable business results and maintaining good liquidity, BVH’s attractiveness to international investment funds and ETF funds in Vietnam stock market has been maintained.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

173


STOCK INFORMATION AND INVESTOR RELATIONS

SHAREHOLDER STRUCTURE Ownership structure Ownership (%)

Number of shareholders

504,664,200

67.98%

2

2

0

482,509,800

65%

1

1

0

646,455,221

87.09%

2

2

0

140,759

0.02%

1

1

0

0

0

0

0

0

73,572,384

9.91%

9,282

165

9,117

Total

742,322,764

100%

9,286

169

9,117

In which: - Domestic

523,366,726

70.5%

8,634

62

8,572

652

107

545

No.

Shareholders

1

State Ownership (*)

2

Founding shareholders

3

Major shareholders (5% upwards) (***)

4

Trade Union

5

Treasury shares

6

Other shareholders

(**)

- Foreign

Number of shares

218,956,038

29.5%

Shareholder structure (*) Institution

Individual

Note: (*): including Ministry of Finance, SCIC | (**): includes Ministry of Finance | (***): includes Ministry of Finance and Sumitomo Life

INFORMATION ON OWNER’S INVESTMENT CAPITAL Owner’s investment capital In 2019, Bao Viet Holdings increased its charter capital through the issuance of individual shares, so the amount of capital contributed by shareholders as of December 31, 2019 changes compared to the end of 2018, specifically as follows: December 31, 2019

December 31, 2018

Ordinary share

Ordinary share

Chartered Capital

7,423,227,640,000

7,008,864,340,000

Capital surplus

7,310,458,742,807

3,713,080,881,197

14,733,686,382,807

10,721,945,221,197

Trading of treasury shares Baoviet Holdings did not incur any transaction to buy / sell treasury shares in 2019.

Other stocks Implementing Resolution No. 02/2019/ NQ-DHDCD-TĐBV dated June 29, 2019 of the Annual General Meeting of Shareholders, Baoviet Holdings completed the private placement of shares on December 18, 2019 with the number of shares issued at 41,436,330 shares, the time limit for stock transfer is 01 year from the date of completion of the offering. Capital raised from the issuance will be used by Baoviet to increase capital for its member subsidiaries, invest in information technology infrastructure and supplement working capital. All of the above listed shares have been additionally listed since January 7, 2020.

174

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Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

175


REPORT ON BUSINESS PERFORMANCE OF SUBSIDIARIES

BAOVIET INVEST CO., LTD

BAO VIET SECURITIES JOINT STOCK COMPANY

176

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BAOVIET INSURANCE CORPORATION

BAOVIET LIFE INSURANCE CORPORATION

BAOVIET FUND MANAGEMEN CO., LTD

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

177


REPORT ON BAO VIET INSURANCE CORPORATION’S BUSINESS PERFORMANCE

In 2019, by pioneering in the adoption of advanced technology in both business activities and governance, operations management, claim processing, customer data control and service quality improvement, Bao Viet Insurance Corporation continued to maintain its position as the top insurer in the local general insurance market with a market share of over 20% and sustainable growth with total revenues exceeding VND 11.700 billion. Click to see video clip

Mr. Nguyen Xuan Viet Chief Executive Officer

YEAR OF INCORPORATION

1965

MARKET SHARE

20.1% BAOVIET HOLDINGS WITH

100%

DISTRIBUTION NETWORK SCOPE AND CUSTOMER BASE

CAPITAL

TOTAL REVENUES

11,681

BILLION VND

Number of branches: 79 Number of transaction offices/regional offices: 690 Number of agents/consultants: 85.000 Number of customers: over 10 million.

CHARTER CAPITAL

2,900 BILLION VND

PRIMARY PREMIUMS

10,297 BILLION VND

Search for garages, nearest hospitals/clinics

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Manage insurance contract benefits

Buy and order insurance online

Declare and track compensation claims

BaoVietID - Electronic insurance card replaces traditional card


CORPORATE PROFILE Bao Viet Insurance Corporation is a subsidiary wholly owned by Bao Viet Holdings. Over the 55 years of operation, Bao Viet Insurance has constantly been striving to fulfill our role and responsibilities as the leading insurer in Vietnam. Bao Viet Insurance is currently an insurance enterprise with a large charter capital, strong financial capacity, diverse products, superior service quality and, highly qualified staff.

The company’s strategic orientation is to promote the application of Industry 4.0 in business and governance activities to offer highly flexible and customer-friendly products and services; to develop and launch new products, tailor products to each customer segment and develop solutions to increase sales in the key areas; to continue to leverage and develop partnership distribution; to promote marketing activities, online distribution, and sale contests to support business activities; and to ensure effective and sustainable growth goals.

By pioneering in the application of technology and solutions of Industry 4.0, processes and transactions are digitally transformed, thus making it fast, efficient and time-saving for customers to access information. Information and data is systematically managed, highly secured and properly replicated.

In 2019, Bao Viet Insurance’s remarkable achievements in business and governance activities helped enhance its brand reputation, sustainability and market leadership, ensuring the efficiency of revenues and profits contributed to the overall performance of the Group. In addition to a diversified sales and distribution network spanning across the country, Bao Viet Insurance is expanding its acquisition coverage through the e-commerce site (at baovietonline.com.vn) and other channels including digital partners, banks, and so on in order to offer customers and the market the optimal choices.

Overview

Development Strategy

Business Performance

Corporate Governance

For several consecutive years, Bao Viet Insurance has been honored with multiple prestigious awards at home and abroad, including: Vietnam Best Non-life Insurance Enterprise and the most innovative Non-life Insurance Enterprise Vietnam (Global Banking and Finance Review); Best Vietnam Non-life Insurance Brand 2018 (Best Brand Magazine); Vietnam top 10 most prestigious non-life insurance companies (Vietnam Report).

Sustainable Development

Financial Statements

179


REPORT ON BAO VIET INSURANCE CORPORATION’S BUSINESS PERFORMANCE

BUSINESS PERFORMANCE IN 2019

For several consecutive years, Bao Viet Insurance has established its role as the number one insurer on the local market with revenues growing sustainably over the years. At the same time, the Company leads the group of top 5 insurers with a market share of over 20%.

11,681

BILLION VND

180

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2015

7,669

6,832

9,487

11,494

Total revenues

11,681

MAINTAINED THE LEADING POSITION IN TERMS OF REVENUES AND SUSTAINABLE DEVELOPMENT

2016

2017

2018

2019

For several consecutive years, Bao Viet Insurance has established its role as the number one insurer on the local market with revenues growing sustainably over the years. At the same time, the Company leads the group of top 5 insurers with a market share of over 20%. As of December 31, 2019, the Company’s total revenues were VND 11,709 billion. The retail business including medical and personal, health care insurance, etc., which recorded a 2-digit growth rate, continued contributing to the sustainable growth of Bao Viet Insurance Corporation as well as the Baoviet Holdings.


3,000

85,000

>

79

>

EMPLOYEES

AGENTS

SUBSIDIARIES ACROSS THE NETWORK

700 REGIONAL INSURANCE OFFICES SPREADING ACROSS THE COUNTRY

TĂNG VỐN ĐIỀU LỆ LÊN

2.900 TỶ ĐỒNG

INCREASED CHARTER CAPITAL TO MEET THE REQUIREMENTS OF DEVELOPMENT In 2019, Bao Viet Insurance Corporation officially increased its charter capital to VND 2,900 billion, thus becoming the leading insurance enterprise in terms of capital sizing. The increase of charter capital is part of the Company’s business strategy which aims to expand the market and distribution channels, invest heavily in information technology, promote advertising and communication to market insurance products to individual customers, thereby increasing knowledge about insurance and developing business activities more robustly. At the same time, the Company looks to adopt the centralized management model and ensure high efficiency in risk management, thereby strengthening the capacity to provide insurance products and services for large projects as well as enhancing the ability to deliver insurance benefits to Customers. In parallel, Bao Viet Insurance Corporation continues to apply advanced technology in products, guarantee and claim handling process, compensation as well as in administration and governance through core applications such as InsureJ, Sun Account, etc. At the same time, the Company looks to expand the operation network, distribution channels and cross-sell possibilities within the Group to further diversify services and utilities for the convenience of Customers.

Overview

Development Strategy

Business Performance

Corporate Governance

ESTABLISHED THE SUPREMACY OF NETWORK SIZE, BROUGHT FRIENDLY SERVICES CLOSER TO CUSTOMERS Bao Viet Insurance Corporation affirmed the supremacy of its business network, with 79 subsidiaries across the network together with over 3,000 employees, more than 85,000 agents and nearly 700 regional insurance offices spreading across the country. To date, Bao Viet Insurance Corporation is the largest company in the industry market. Besides, programs dedicated to promoting sales, cross-selling and business synergies have also been intensified not only to improve sales and performance but also to diversify distribution channels, offering customers more opportunities to access premium insurance products and services in a prompt and timely manner. Bao Viet Insurance Corporation is not only the No. 1 insurer for individual customers and households but also the leading provider of comprehensive insurance packages and risk management frameworks that enable institutional and corporate customers to minimize losses. All these speak volumes for Bao Viet Insurance’s desire to reach out further to Customers.

Sustainable Development

Financial Statements

181


REPORT ON BAO VIET INSURANCE CORPORATION’S BUSINESS PERFORMANCE

“CUSTOMER-CENTRICITY” IS THE KEY TO SUCCESS In 2019, Baoviet Insurance Corporation kept expanding its scale and network through the development of partnerships and the promotion of sale relations with many large and prestigious partners at home and abroad in many fields such as banking, sales channel development, digital technology, and so on. Some of these are well-known names including Vietcombank, Techcombank, BIDV, Standard Chartered Bank, Vietnam Airlines, Momo, and Viettel Post. Bao Viet Insurance Corporation is constantly researching to premiere many world-class products with superior features in different business verticals, thereby offering more valuable options and benefits to customers. In October 2019, Bao Viet Insurance launched a generation of Travel Insurance products: Travel insurance: Travel Easy/ Electronic device insurance Gadget Easy/ Flight delay insurance: Flight Easy and E-cargo Policy products are developed based on new technology. Customers has full control of their purchase, registration, management and tracking of their insurance orders through online software. The purchase, tracking and management of insurance is done quickly, flexibly and securely, thus providing an unprecedented experience for customers and partners. These have contributed to building a closed, safe and secure digital ecosystem to bring convenience to customers.

The promotion of partnership and the tailoring of products to the needs and desires of customers is a testament to the strong transformation of Bao Viet Insurance Corporation. The Company places customers at the heart of all activities and is willing to innovate and cooperate to completely conquer customers as well as the constantly growing non-life insurance market.

ONE OF “VIET NAM BEST PLACES TO WORK”, A GUARANTEE FOR DEVELOPMENT AND PROMOTION ROADMAP In parallel with strategic and business promotion activities, Bao Viet Insurance Corporation is also at the forefront of creating a professional and friendly working environment that provides opportunities for development, promotion and remuneration for all 3,000 employees of the Company. In 2019, Bao Viet Insurance Corporation continued to be honored as one of the best places to work in the nonlife insurance industry. The assessment, which was conducted by experts and companies specialized in measuring the brand health of the top employers, was a testament to the tireless efforts of Bao Viet Insurance over the 55 years of investing in people - the Company’s valuable asset. Listening to the interests of employees, Bao Viet Insurance Corporation has set new standards of an ideal workplace, where all employees receive commitments of comprehensive care, maximum development in a personal career path, rewards for

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contributions, diverse experiences, challenges at work, and opportunities to learn for personal improvement and development.


PROMOTED COMMUNITY ACTIVITIES, CONTRIBUTING TO CONNECTING VALUES AND IMPROVING LIFE QUALITY

As a leading non-life insurance company in Vietnam and with a sustainable development orientation, Bao Viet Insurance Corporation has been constantly contributing to education and community activities in order to help yield practical benefits and improve social life.

Overview

Development Strategy

Business Performance

Corporate Governance

On its growth path, Bao Viet Insurance Corporation has accompanied with localities and entities across the country to organize and coorganize social activities. Over the past 10 years, the Company has joined Bao Viet Holdings to spend over VND 360 billion to implement hunger eradication and poverty reduction, donate charitable houses, help poor households and ethnic minority people in impoverished areas as well as provide relief to victims of natural disasters. Some of the outstanding activities which are held annually include: The program “Bao Viet join children at school� is carried out at the beginning of a new school year, giving gifts to hundreds of poor students; the presentation of gifts to poor patients on the occasion of the Lunar New Year at K Hospital, Hanoi Heart Hospital, Viet Duc Hospital; joint organization of the Voluntary Blood Donation Day, etc.

Sustainable Development

Financial Statements

183


REPORT ON BAO VIET INSURANCE CORPORATION’S BUSINESS PERFORMANCE

BUSINESS GOALS AND ORIENTATIONS FOR 2020

Backed by its stable and solid financial resources and based on the high business performance maintained in recent years, Bao Viet Insurance Corporation aims to affirm the number 1 position and lead the innovation drive on the market with the message “Effective management Cutting-edge technology”. The Company will take the lead in applying Industry 4.0 not only in business and governance activities but also in distribution and service quality to bring customers full packages of insurance products in the fastest manner, promote sustainable development as well as the highest efficiency, and ensure the delivery of its commitments toward employees, owners, customers, and partners. KEY TASKS IN 2020 In order to fulfill the strategic goals that the Company has set out, Bao Viet Insurance Corporation has identified the key tasks and instilled determination across the system.

Continue to complete the centralized management model

Business management and Business development Improvement of business efficiency

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By applying information technology and specializing the insurance business process from compensation management to sales and after-sale services.

Promote data analysis, bring the actuary role into business management; continue to implement a centralized management model of pricing, business management, premium rate offer, guidance on acquisition and delegation of powers; Adjust and develop premium rate schedules in alignment with business objectives; Adjust sales policies to ensure goals of efficiency; Perform monthly business performance analysis to make timely adjustments to the acquisition policy; Review, adjust, and update business guidelines; Intensify the development of new products to serve the increasing needs of customers, ensuring the diversity of products; Promote cross-selling with Bao Viet Life.


AS SUCH, THE TARGETS OF THE BUSINESS PLAN FOR 2020 ARE AS FOLLOWS:

Claim investigation slashing compensation costs

Pioneer in the application of technology - ensuring timely and standard-compliant data

Distribution channel focusing on developing highly potential channels

Financial and policy function needs to be flexible while remaining effective

Human resources development

Marketing and Communications

Overview

Development Strategy

Total revenue

Profit after tax

BILLION VND

BILLION VND

10,785

70

Continue to implement the centralized management model for claim investigation in such a schedule that matches reality. Implement claim investigation solutions all business verticals: vehicles, technical assets, maritime assets, health, and personal insurance, including: Adjust and apply advanced operating models; Strengthen verification and investigation; Approve repair costing and compensation plan; Evaluate and negotiate with vendors (garages, hospitals, etc.); Provide training and apply KPIs to investigators; apply information technology. Ensure the proper operation of business management software including InsureJ (for vehicle, maritime insurance and technical assets insurance) and BV Care (for health insurance products); Complete reports for management purposes; Build a centralized customer database to support acquisition, business management, claim investigation, and customer care; Complete the connection of InsureJ with Sunaccount; continue to complete, upgrade and deploy other software which constitutes part of the Company’s IT ecosystem; Promote the digital transformation of the insurance business. Consolidate the non-life professional agency channel through training activities, sales contests, and the application of software in agent management. Promptly alert and control agent activities that do not comply with applicable regulations; Continue to promote cross-selling channel, make adjustments in terms of products and costs to ensure the performance of this channel; develop potential-rich channels like Bancassurance; continue to develop new distribution channels such as online, telesales, partnership distribution, etc. and apply information technology. Assign and adjust selling expenses based on business performance; push the collection of debts; control non-compensation such as operating costs, general administration costs, and selling costs; coordinate with BVF to effectively implement investment activities. Recruit and appropriately utilize resources, ensure labor quality, save costs; Continue to expand the adoption of Key Performance Indicators (KPIs) to improve the labor productivity of employees; Introduce a package remuneration mechanism based on the number of policies to better reflect performance in salary scheme. Concentrate on sales promotion activities in regards to target customer groups; Build partnerships with electronic partners to: Introduce and promote sales on media channels to retail customers and; Launch communication campaigns on products and services to bring diverse knowledge and information to customers.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

185


REPORT ON BAO VIET LIFE CORPORATION’S BUSINESS PERFORMANCE

Click to see video clip.

2019 had passed and marked a successful decade of Bao Viet Life Corporation on its journey of creating sustainable values to Customers. Over the period of more than 20 years of exploring and developing the Vietnamese Life insurance market, with the continuous growth and stable financial conditions, along with promoting the synergy of the entire Bao Viet Holdings, Bao Viet Life Corporation continues to aim for effectiveness and sustainable growth, 4.0 technology application, better customer service and Corporate management quality in order to meet the increasing diversified demand of its customers. Mr. Pham Ngoc Son Chief Executive Officer

BAO VIET LIFE CORPORATION FOUNDED IN

1996

1

BVLIFE

BAOVIET HOLDINGS INVESTS

KEEPING THE LEADING NUMBER POSITION IN PREMIUM REVENUE MARKET SHARE FOR THREE CONSECUTIVE YEARS

100%

CAPITAL

TOTAL REVENUE

32,150 BILLION VND

PROFIT BEFORE TAX

1,104

CHARTERED CAPITAL

BILLION VND

BILLION VND

PROFIT AFTER TAX

894

BILLION VND

SCALE OF NETWORK DISTRIBUTION, CUSTOMER BASE Number of branches: 76 Member companies Number of transaction offices / Regional offices / Customer care room: 388 Regional offices Number of agents: nearly 250,000 Consultants, 17 General agents offices

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4,150

PREMIUM REVENUE

25,452 BILLION VND

MY BVLIFE APPLICATION Enhance utilities to better serve customers


CORPORATE PROFILE

BaoViet Life Corporation (BVL) is a subsidiary with 100% capital owned by BaoViet Holdings – the leading Finance & Insurance Holdings in Viet Nam. During its establishment and development, BVL has consistently affirmed its leading position in the life insurance market with sound and strong financial position.

As the first enterprise to lay the foundation for the life insurance market in Vietnam, over the past 24 years, BVL has become a reputable and reliable brand for millions of Vietnamese people with a largest system of branches and regional offices.

As the only domestic Insurer in the Vietnamese life insurance market, BVL has continuously maintained the rapid growth rate in term of total premium revenue and new business revenue. Specially, according to the ISA/MOF, in 2019 BVL continue remaining the 1st POSITION in term of total premium revenue’s market share. BVL has also been recognizing by the State and Governmental Authorities as the market leader in term of contributing the income tax for the State’s budget as well as in implementing the strategic development orientation of Vietnamese Government in building the social welfare system through the development of life insurance market. In the process of development, BVL is always committed to the mission “Protect Vietnamese Family - Protect Vietnamese Benefits”, perform social responsibilities, contribute to building a healthy, peaceful and prosperous community. Thanks to these relentless efforts, BVL had the honor to receive various international awards such as:

Overview

Development Strategy

Business Performance

Corporate Governance

• “Top 10 reputation Award 2019” for life insurers - an award voted by Vietnam Report Joint Stock Company. This is also the third time Bao Viet Life has firmly upheld this position. • “Life insurance enterprise has the best social responsibility and community development activities in Vietnam in 2019”. • “The best companies to work for in Asia 2019” by HR Asia Magazine.

Sustainable Development

Financial Statements

187


REPORT ON BAO VIET LIFE CORPORATION’S BUSINESS PERFORMANCE

32,150

BILLION VND

25,452

Insurance revenue

2015

2016

2017

29,360

22,150

17,117

Total revenue of BVL in 2019

13,072

In 2019, with its strategic orientation on business development and market expansion, BVL had an extraordinary business performance with high growth rate on revenue and profit as compared to 2018. Details as following:

2018

32,150

2019 BUSINESS PERFORMANCE

2019

BILLION VND

increased by 18,4% in comparison with 2018. With this result, BVL continued to maintain the 1st position in the life insurance market in term of total revenue market share.

6,670

Financial revenue

BILLION VND

Our firmly direction in investment activities is safety and efficiency concentration, risk control and liquidity management in order to ensure the policy holder’s benefit.

Profit before tax

1,104

Profit after tax

BILLION VND

growth of 15,5% as compared to 2018.

894

BILLION VND

growth of 14,5% as compared to 2018.

ROE was

21.6%

As the only domestic life insurer in the market, BVL has consistently affirmed its leading position of a Vietnamese enterprise. Sound business performance reinforce the financial strength with the total assets of VND 101.166 billion, grew by 15% as compared to 2018. The above tremendous growth rates resulted from BVL’s comprehensive business solutions with the strategic directions of “sustainable growth and development” through business network expansion, products innovation, customer service improvement, information system innovation, 4.0 technology application for business operation and management, new premium payment application, productivity improvement and comprehensive protection system building to enhance the Vietnamese people’s mindset in healthcare.

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DISTRIBUTION SYSTEM DEVELOPMENT AND BUSINESS NETWORKS EXPANSION With the strategic orientation to expand and develop, BVL has emphasized on market expansion and improving the quality of customer service. In 2019, BVL has opened 13 new regional offices, strengthening the system of branches and general agents across the country. Total number of agents continuously increased, reaching almost 250.000 people as at 31/12/2019, increased by 15 % compared to the end of the year 2018. Agents were selectively recruited and intensively trained to be professional in order to ensure

that the agent could be able to provide the appropriate, adequate consultation for customers to meet customers’ needs and to improve customer satisfaction. The current network of BVL contains 76 branches, 17 GAs offices, 2300 staffs, nearly 250,000 agents and 388 regional offices located in over 63 provinces nationwide, helps BVL to provide quality diversified services to customers nationwide.

ALTERNATIVE DISTRIBUTION CHANNELS AND COOPERATION ENHANCEMENT Besides the traditional agency channel, BVL also continued to develop alternative distribution channels, such as Bancassurance, Telesales, Corporate customer sales... to diversify the sales method as well as to improve life insurance advising service to customer. Telesales channel provide customer with not only insurance agency services but also a bridge for direct communication between customer and BVL to receive customer feedbacks/complaints receiving, information

Overview

Development Strategy

Business Performance

Corporate Governance

provision, customers’ inquiries feedbacks... This channel has been significantly contributing to the improvement of customer service quality. Corporate Customer channel’s task is to satisfy the needs of corporate clients. This channel has been providing various life insurance solutions, pension package to support corporate clients in developing better welfare policy for employees, creating better working productivity and efficiency, enjoying the income tax incentives.

Sustainable Development

Financial Statements

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REPORT ON BAO VIET LIFE CORPORATION’S BUSINESS PERFORMANCE

INCREASING UTILITIES TO SERVE CUSTOMERS With the motto “Your trust, our committment”, BVL always concentrate in improving the quality of service, investment and application of 4.0 and modern technologies in its operation to bring customers true satisfaction. In 2019, BVL implemented a serie of new applications to serve the customers such as:

1.

My BVLife app - Online policy info browsing, online transactions, the automatic mobile message;

2.

Chatbot - An 24/7 automatic chat system to provide insurance product advice, promotions programs information, policy alternation and information instruction;

3.

Pay insurance premiums via Moblie, Internet banking;

4.

Launched new Baoviet Life website, improve and complete the positive experience of customers with modern and user-friendly interface, including convenient utilities such as: the financial planning tool, product comparison, agent-selection choice as well as providing the useful knowledge, experience, policy value for customers. In 2019, the number of customer visits reached 2,000 customers per day, doubled the average of 2018.

BUILDING A COMPREHENSIVE PROTECTION SYSTEM, INCREASING BRANDING POWER In an effort to build a comprehensive protection system to bring healthy lives, creating positive lifestyle for customers, BVL introduced the Vietnam Healthcare Call Center - 18006966 / extension 2 to provide advice from experienced professional doctors to customers and the whole family through unlimited calls. This is the unique special benefit in the Vietnamese life insurance market to only consumers of BVL.

VIETNAM HEALTHCARE CALL CENTER

18006966 EXTENSION 2

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10.000

CUSTOMERS NATIONWIDE AND MILLIONS OF PEOPLE HAVE ACCESSED TO THE HEALTH INFORMATION CHANNEL OF BVL.

Besides, to provide useful knowledge to improve the life quality for customers, the Vietnam Healthcare website was launched; Baoviet Life also help taking care of customer health through special theme customer such as: “Live proactively - screening for cancer and stroke”, “Preventing disease from the root, take initiative in personal finance” with attention of nearly 10,000 customers nationwide. Millions of people have accessed to the health information channel of BVL, contributing to affirming the international titles “Life insurance company for public health” and “Life insurance company with the best social responsibility activities in Vietnam in 2019”.


PRODUCT DEVELOPMENT TO MEET THE DIVERSIFIED DEMANDS OF THE MARKET R&D are continuously implemented and promoted. In 2019, BVL continued to introduce new product “An Phat Cat Tuong”, which is honored to be the “Most Innovative New Life Insurance Product Vietnam 2019” by Global Banking and Finance Review – a prestigious magazine in England. With 12 protection benefits including cancer and stroke, the product has received the positive response of a large number of customers. In addition, the Universal Life products of BVL remained to be the attractive products in the market with high interest rates earned in the context of remaining low interest rate. Until now, the product portfolio of BVL has diversified range of product with over 40 products. Utilizing the strenghts of a leading Financial – Insurance Holdings in Vietnam, BVL also coordinated with other subsidiaries in the Bao Viet Holdings to launch new and robust products. The introduction of mixed products with preferential benefits helped providing customers with full package services, which increase the benefits and satisfication for customers.

PROMOTE THE APPLICATION OF INFORMATION TECHNOLOGY, DEPLOY THE PREMIUM PAYMENT THROUGH MOBILE APPLICATION AND MPOS With the goal of promoting the application of technology to innovate the management of invoices and insurance premiums, BVL has successfully implemented the model of collecting premiums via Mobile App and electronic invoices throughout BVL system. The deployment of this application has received positive reviews from numerous employees, agents and customers, contributing to risk management, improving customer service and the reputation of BVL’s brandname. Especially, in 2019, BaoViet Life launched new policy management software, raising quality in managing insurance policies, shortening the processing time for tasks performance, improve customer service in the light of 4.0 industrial revolution.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

191


REPORT ON BAO VIET LIFE CORPORATION’S BUSINESS PERFORMANCE

SOCIAL COMMUNITY ACTIVITIES S O C I A L S E CU RITY

BICYCLE TO SCHOOL In addition to the sustainable growth on business results, BVL has always affirms its leading role in the market through social activities towards a good society. The charity program “Social Security - Bicycle to school” has been implemented for many consecutive years by BVL in collaboration with the National fund for Vietnamese children, this program was designed to encourage, motivate poor students who wants to study in the 63 provinces of Vietnam and shortening the distance between them and their school.

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JOINT HAN DS

FOR THE COMMUNITY Free charity health examination program “Joint hands for the community� has also been launched in 4 continuous years by BVL which provided the opportunity for poor people to have free health examination and receive advices for health care by doctors from top leading hospitals. Furthermore, comprehensive healthcare system with many other health-care oriented programs were also launched in large scale had helping people to realize the importance of healthcare. With the achievements in both business operations and social activities, BVL affirms its role as the pioneer insurer in Vietnamese Life Insurance market.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

193


REPORT ON BAO VIET LIFE CORPORATION’S BUSINESS PERFORMANCE

BUSINESS TARGET AND ORIENTATION IN 2020

With a sustainable financial strength and the continuous high growth of business results over the years, Bao Viet Life continues aiming at high revenue growth, better customer service, ensuring the benefits for customers, maintaining the leading position in the market.

In order to achieve the above targets, BVL shall perform the following comprehensive and consistent solutions based on its long tradition development as a pioneering Vietnamese enterprises in the life insurance market, utilizing the synergy strength of Baoviet Holdings:

Network and branches expansion, regional offices enhancements to serve customers

In 2020, BVL will continues concentrating on expanding business system and network to dominate the market by developing multi distribution channel system asides from traditional agency channel. BVL will continue to reinforce the Bancassurance channel via cooperation with commercial banks, credit institutions, as well as developing corporate customer channel, telesales, digital sales, general agency... Furthermore, BVL also focus intensively on the recruitment and training for employees, agents to build up the professional, capable and high-skilled agency force which is able to bring insurance products to customer all over the country.

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Business target in 2020

BILLION VND

BILLION VND

920

BVL will continuously promote market researches and develop diversified product packages to meet the demand of the market and different customer segments with high competitiveness features, in accordance with the general strategic direction of the Vietnamese Government and Ministry of Finance in reforming the social security system. In 2020, BVL will continue to introduce new products and synergic products within the Bao Viet Holdings to create a wider range of product portfolio.

Efficient investment strategy

Improving Customer service quality

Given that the market interest rate remains at a low level, BVL shall carry out a flexible investment strategy which could utilize investment opportunities of financial market to bring the best benefit as well as guarantee the commitments to policyholders. Simultaneously, BVL shall also contribute to the development of Vietnam financial market by re-investment into the economy and entering into government bonds market. In addition, BVL will focus on building and promoting research and development of investment products; establishing information network, systematic cooperation in order to promote the synergic strength within Bao Viet Holdings. BVL shall continue improving the quality of customer service by diversifying the customer care programs, maximally utilizing advanced technology in order to meet the customers’ demands, to improve customer’ satisfaction. Promotion campaigns, customer care programs shall be promoted in a combination with synergic activities with other Subsidiaries of the Bao Viet Holdings. Capturing the consumption trend of Vietnamese Customers as well as the rapidly development of 4.0 technology, in 2020, BVL will continue to promote IT application such as: Online applications, online reports, online premium transactions, Chatbot, developing MNyBVLife helping customer to directly communicate with BVL or adjusting contact information, submitting claims… Currently, MyBVLife is accessible application via website mybvlife. baovietnhantho.com.vn and on App Store and Google Play platform, allowing customers to interact all functions with a single application.

Optimizing the application of advanced technology

Promoting the synergy within the Holding

Development Strategy

Profit after tax

33,605

New products development

Overview

Total revenue

Promoting the strength of Bao Viet Holding – The leading Financial and Insurance Holdings of Vietnam with a diverse fields of business: life insurance, health insurance, fund management, banking, securities... In 2020, BVL continues to utilize the synergic Bao Viet Holdings’s strength, increase the cooperation and internal synergic activities, in order to provide integrated insurance – financial – banking solutions, maximizing the utility of the services provided to customers...

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

195


REPORT ON BAO VIET FUND MANAGEMENT COMPANY’S BUSINESS PERFORMANCE

2019 was a remarkable year of Baoviet Fund Management Company as the company has achieved outstanding results. Total assets under management reached VND 62,619 billion, an increase of 16.2% over the previous year. Investment activities achieved good results when most investment portfolios recorded good growth comparing to the benchmark and higher than customer’s expectation.

Click to see video clip.

FOUNDED YEAR

2005

BAOVIET HOLDINGS WITH

100%

CAPITAL

Mr. Nguyen Dinh An Chief Executive Officer

TOTAL REVENUE

118.7 BILLION VND

PROFIT AFTER TAX

40.5

BILLION VND PROFIT AFTER TAX/ CHARTER CAPITAL

41%

BVBF WAS THE LEADING BOND OPEN-ENDED FUND IN VIETNAM MARKET NAV INCREASED

CAPITAL ADEQUACY RATIO

404.60%

14,4%

CHARTER CAPITAL

100

BILLION VND

TOTAL ASSET UNDER MANAGEMENT

62,633 BILLION VND

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VIETNAM’S BEST FUND MANAGEMENT COMPANY IN 2019


CORPORATE PROFILE

Founded in 2005, Baoviet Fund Management Company is a wholly owned subsidiary of Baoviet Group. Its core business includes portfolio management, fund management and securities investment advisory.

With the experiences managing large-scale and long term capital, together with capabilities in providing diversified and comprehensive financial package up to international standard, Baoviet Fund has been asserted its position as one of the leading professional financial investors in Vietnam. Total asset under management as of 31/12/2019 was VND 62,619 billion. Recently, the Company has managed five portfolios, three open-ended funds and one member fund. As a strong investment pillar of Baoviet Group, in 2019, all investment portfolios achieved good results, meeting customer’s expectations. In particular, the Baoviet Bond Investment Fund (BVBF) grew by 14,4% in 2019, becoming the best bond open-ended fund in Vietnam market.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

197


REPORT ON BAOVIET FUND MANAGEMENT COMPANY’S BUSINESS PERFORMANCE

2019 BUSINESS RESULTS By synchronously deploying appropriate business solutions, made efforts in all activities, in 2019, Baoviet Fund Mangement Company had a good business performance, details as following:

Total asset under management

Total revenue

62,633

BILLION VND

As of 31/12/2019, total asset under management of the Company was 16.2% increased comparing to that of 2018.

118.7

BILLION VND

Exceed target and increased 3.04% compared with last year.

Profit after tax

40.5

BILLION VND

The Company Profit after tax exceed 2.1% comparing to initial plan and increased 5.6% in comparison with 2018. Baoviet Fund Management Company is one of the top fund management companies in terms of business performance in the market.

• Profit after tax on charter capital reached 41%.

Other financial indicator

• Capital Adequacy Ratio as at 31/12/2019 reached 404,6%, doubled the usable target set by the Ministry of Finance. • All portfolios of customers exceeded their expectations.

OUTSTANDING INVESTMENT RESULTS AFFIRM THE KEY ROLE IN INVESTMENT ACTIVITIES OF BAO VIET Investment activities for customers’ portfolio were carried out by Baoviet Fund following the principle of prudence and flexibility. Along with the effective risk management, Baoviet Fund has implemented solutions and proposed suitable investment products to customers, constantly looked for new investment opportunities and portfolio

restructure time in order to bring the best performance for portfolio. Thus, Investment portfolios had impressive growth, met and exceeded customer’s expectations. With the growth of 14.4% in NAV, BVBF was the best bond open-ended fund in Vietnam in terms of performances.

CHANGE BUSINESS MANAMENT MODEL

ENHANCING GOVERNANCE CAPACITY BY PROMOTING IT INVESTMENT

In 2019, Baoviet Fund Management Company had a positive change in the corporate governance model after evaluating operational efficiency in the previous period. In addition, the efforts to improve the competitiveness of staffs has brought many good results, made the management and administration more professional and effective.

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Software investment projects were implemented in 2019 to improve operational efficiency, support investment activities such as Business Intelligence system, upgrade IMS system.


BUSINESS TARGET AND ORIENTATION IN 2020 BUSINESS TARGET IN 2020 The year 2020 is an important milestone marking the 15-year of development of Baoviet Fund Manangement Company. In addition, this is the last year of 5-year strategic development period (2016-2020) of the Company. With the goal of sustainable growth, Baoviet Fund Management Company has set the following business plan:

Net profit / Charter capital ratio

37.6%

Total revenue

113 Billion VND

Profit after tax

38

Billion VND

2020 KEY SOLUTIONS Based on the business goals, assessments on the market and the company’s strengths, Baoviet Fund Management Company has set out 2020 tasks and key solutions as follows:

Continue to strengthen the key role in the investment activities of the Bao Viet system with outstanding investment results

The most important goal of BVF is to achieve outstanding investment results. In the context of the volatile market in short term, Baoviet Fund will focus on following market movement, strengthening market forecast activities to provide investment solutions, suitable divestment, maximize creativity and flexibility with market changes, strive for exceeding initial plan. Baoviet Fund will continue to concentrate on risk management activities, minimize the risks that may occur during operation process, ensuring the safety of customers’ assets.

Deploy new products, develop distribution channels

Following the goal of developing new products that meet market demand, have high connectivity in Bao Viet product system to create diverse product chain, in 2020, Baoviet Fund Management Company will continue to research and launch new funds along with developing the distribution channel system for each specific product.

Reinforce competitiveness, toward automation through IT investment

In 2020, by promoting investment in information technology systems, Baoviet Fund Management Company aims to provide a full range of supporting tools for investment activities, sales, administration and so on. This strong foundation will help the company reinforce competitiveness in the trend of industrial revolution 4.0 and increase efficiency in all areas of operation.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

199


REPORT ON BAO VIET INVESTMENT CO., LTD’S BUSINESS PERFORMANCE

After more than 10 years of operation, Baoviet Investment Co., Ltd has continuously improved its professionalism, abundant financial capacity, rich experience, skilled human resources and high sense of responsibility to meet demand for real estate investment and providing construction services and construction investment consultancy with domestic and foreign partners.

Click to see video clip.

Mr. Nguyen Minh Tuan Chief Executive Officer

ESTABLISHED IN

2009

306

PROFIT AFTER TAXES

OWNER EQUITY

8

TOTAL ASSET

234

BILLION VND

BILLION VND

BILLION VND

CHARTER CAPITAL

200

BILLION VND

BAOVIET HOLDINGS WITH

100%

CAPITAL

TOTAL REVENUE

263

BILLION VND

Revenue from office leasing and property management : VND 101 billion Revenue from trading & services: VND 81 billion Revenue from from real estate: VND 47 billion Revenue from Construction & others : VND 35 billion

4 MAJOR FIELDS Real estate investment. Office leasing & management . Construction & project management. Trading & services.

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INTRODUCTION

As a member of Bao Viet Finance - Insurance Group, operating under Vietnamese Enterprise Law, Bao Viet Investment Co., Ltd is established on the basis of consolidating financial and human resources, functions, tasks and great achievements in the field of investment and construction of Baoviet Holdings in order to specialize investment and construction activities to further promote the role of a State Corporation in the national economy. Bao Viet Investment Co., Ltd (“BVI”) has successfully completed the 2019 business plan; total revenue archives 265 billion VND, increased 37% compared to 2018 result; net profit after tax archives 8 billion VND, increased 67% compared to 2018 result. In 2020, the Company aims to provide comprehensive solutions for investment and management of real estate resources for BVH and its subsidiaries. After 10 years of operation, BVI has set up a system combining activities in 03 major fields: real estate investment, office leasing and property management and project management.

Overview

Development Strategy

Business Performance

Corporate Governance

BVI has clearly identified Office leasing and Property management is one of the core business in the development strategy in the coming years, and will strengthen business plan to attain this goal. At the same time, BVI always increase business value in “Baoviet synergistic program” as well as invest in infrastructure; effectively use land fund; Operate & cooperate with services retail partners. With professional management, abundant financial capacity, experience, skilled staff and responsibility with commitments, BVI always meets the demand for real estate investment, construction services and construction investment consultancy of domestic and foreign partners.

Sustainable Development

Financial Statements

201


REPORT ON BAO VIET INVESTMENT CO., LTD’S BUSINESS PERFORMANCE

BUSINESS PERFORMANCE IN 2019

Total revenue

263

BILLION VND, ACHIEVES 4%.

Revenue from major activities is 255 billion Dong, among them : • Construction revenue is 27 billion Dong. • Office Leasing and Property Management revenue is 101 billion Dong. • Trading & Services revenue is 81 billion Dong. • Revenue from real estate is 47 billion Dong.

Profit

8

BILLION VND, ACCOUNTED FOR 101.2% OF THE ANNUAL PLAN.

• Profit after taxes/ owner’s equity achieves 4%. • Profit after taxes/Charter capital achieves 3,4%. In 2019, the Company provides building management services up to 27 buildings across the country, increases 19 buildings compared to 2018. BVI has completed construction and started operation of two shared Office Buildings for BVH and its subsidiaries in Dak Nong and Lao Cai province. With professionalism, abundant financial capacity, rich experience, elite human resources and high sense of responsibility, Baoviet Invest Company believes that it will always meet the demand for real estate investment and construction services, construction consultancy, real estate management business.

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BUSINESS OBJECTIVES AND ORIENTATION IN 2020

In 2020, together with BVH’s orientation on cross-business synergies of members’ products, BVI focuses on researching and advising BVH and its subsidiaries of property management solutions, including real estate, head office, and office buildings in provinces and cities nationwide.

BUSINESS PLAN IN 2020 With such a long-term orientation, BVI aims to achieve sustainable growth with the following financial indicators:

KEY SOLUTIONS IN 2020 Total revenue

268

Real estate business activities

Billion VND

• Rapidly invest the projects of Baoviet synergistic program, such as: Bao Viet Building in To Hieu stress (Ha Dong District), Bao Viet Apartment in Phan Chu Trinh street (Vung Tau City), Shared Office Building in Long Thanh (Dong Nai Province), Tra Vinh, Hau Giang. • Researching real estate market to carry out buying and selling apartments to increase profit in the short term. • Speed up capital retrieval from Eco - Green and Landmark 51 projects.

Total expenses

261 Billion VND

Office building management activities • Expanding the provision of building management services in localities across the country for BaoViet Life (18 buildings).

Profit before taxes

6

HR Management

Billion VND

• Piority using internal emplyees to meet works requirement. • Organize training courses to improve employees’ skills.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

203


REPORT ON BAOVIET SECURITIES JOINT STOCK COMPANY’S BUSINESS PERFORMANCE

In over 20 years of operation, as the very first securities firm of Vietnamese stock market, BVSC has continuously improved financial capacity, strengthened operation, invested in information technology system, and improved service quality to become a reputable securities company in the market.BVSC has constantly received awards from prestigious local and foreign organizations. Mr. Nhu Dinh Hoa Chief Executive Officer Click to see video clip.

YEAR OF FOUNDATION

1999

BAOVIET HOLDINGS INVESTS

59,9%

CAPITAL

Number of transaction offices: 8 offices Number of brokers: 397 brokers Number of clients: 66,649 clients

TOTAL REVENUE & OTHER INCOME

564

Billion VND

PROFIT BEFORE TAX

151

Billion VND

PROFIT AFTER TAX

135

Billion VND

TOP 10

TOP 100

PRODUCTS AND SERVICES: BROKERAGE, PROPRIETARY TRADING, REVENUE FROM LOANS AND RECEIVABLES

CHARTER CAPITAL

722

Billion VND

MARKET SHARE

3.7%

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OVERVIEW Founded in 1999 with Vietnam Insurance Corporation (currently known as Baoviet Holdings) as the founding shareholder under the management of Ministry of Finance, BVSC inherited the brand reputation and financial strength of the leading finance – insurance corporation in Vietnam.BVSC provides professional financial and investment services to domestic and foreign individuals, institutions, investment banks, and funds. In 2019, BVSC was one more time recognized and honored with major awards from both state authorities and domestic and foreign media. Stock Exchanges and Vietnam Securities Depository (VSD) awarded BVSC “Outstanding member securities company in 2018-2019” and“Outstanding member in payment of underlying securities transactions in 2018”. Besides, BVSC also earned a series of major awards, including “Outstanding M&A consulting firm in Vietnam 2018-2019” at annual M&A forum, “Top 10 Leading brands inVietnaminInvestment Banking (IB) services in 2019”,“Best Securities Advisory Firm – 2019”by International Finance Magazine (IFM), “Top 50 Vietnamese Organizations With Attractive EmployerBrand 2018”, “Vietnam Strong brand in 2018”, “Top 100 Sustainable Development Enterprises in 2019”,and “Top 10 Best Annual Reports in 2019 (mediumcap group)”.

2019 BUSINESS PERFORMANCE The stock market increased slightly in 2019, yet trading volume plunged by 28.80%. At the end of 2019, VnIndex settled at 960.99 points, up 7.67% while HnxIndex closed the year at102.51 points, down 1.65%. UpCOMIndex closed at 56.56 points, up 7.06%.

TOTAL EQUITIZATION OF ALL 03 TRADING FLOORS OVER

4,400,000

BILLION VND In which: capitalization on HSX reached VND 3,300 trillion; HNX reached VND 192 trillion, Upcom reached VND 912 trillion

Overview

Development Strategy

Business Performance

Corporate Governance

Average trading value of three exchanges stood at VND4,661 billion/session, down 28.80% YoY. The plunge in market liquidity significantly affected BVSC’ business performance, especially in securities brokerage. However, with enormous efforts in all business activities, BVSC achieved VND151.16 bn profit before tax, with VND143.29bn realized profit before tax, equaling 98.14% of the target and 93.60% of the same period last year. BVSC earnedVND135.51 bn profit after tax, including VND127.93 bn realized profit after tax, 101.53% of the planand 97.17% of the same period last year. BVSC earned VND564.05 billion total revenue in 2019, including VND500.21 billion realized revenue,equaling 113.68% of the plan and 107.76% of the same period last year.

Sustainable Development

Financial Statements

205


564 2019

327

564 Brokerage

2018

484

Total revenue in 2015 - 2019

288

BVSC’s three key business activities, including brokerage, investment in financial assets (proprietary trading and term deposits) and incomes from loans and receivables, remained as key contributors to BVSC’s revenue:

548

REPORT ON BAOVIET SECURITIES JOINT STOCK COMPANY’S BUSINESS PERFORMANCE

BILLION VND

135.9

2015

2016

2017

BILLION VND

BVSC earnedVND135.9 billion in brokerage revenue, equaling 88.80% of the plan and 79.18% of the same period last year. The plunge in brokerage revenue was driven partly by the significant drop in market liquidity. Besides, the failure of launching derivative products because of failing to meet capital requirements also lowered BVSC’s competitiveness. However, thanks to its synchronous efforts, BVSC managed to earn the aforementioned revenue and remained in Top 10 companies with the largest market shares in stocks and fund certificates transactions in 2019 (ranked 8th). BVSC was ranked third in largest market shares in bond transactions on HNX and ranked fifth on HSX.

Interest income from loans and receivables

193.7

Investment in financial assets

192.8

Revenue from financial advisory

Income from depository

Financial income

Revenue and other incomes

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BILLION VND

equaling 113.28% of the plan and 114.76% of the same period last year.

BILLION VND

equaling 130.08% of the plan and up 15.43% YoY, accounting for 34.21% of total revenue (including both proprietary trading and term deposits).

11

BILLION VND

equaling 116.03% of the plan and 150.39% of the same period last year.

5.9

BILLION VND

equaling 106.30% of the plan and 89.69% of the same period last year.

22.4

BILLION VND

equaling 101.32% of the plan. Demand deposit interest and accrued dividend) .

2,4

BILLION VND

(including guarantee revenue and distribution agency, other revenues and other incomes).


LEADING BRAND OF THE CONSULTING MARKET WITH SUCCESSFUL MAJOR CONSULTING DEALS IN 2019

TOP 10 LISTED COMPANIES WITH BEST ANNUAL REPORTS

Consultancy and securities underwriting remained as BVSC’s core business. They did not contribute a large proportion of revenue but built up BVSC’s reputation, supported brokerage development, and opened up investment opportunities.

Being listed in 2019 Top 10 Best Annual Report - mediumcap enterprises continued to affirm BVSC’s reputation and transparency (in the Selection of listed companies, hosted by SSC, the Hanoi Stock Exchange (HNX), and the Ho Chi Minh City Stock Exchange (HSX), and Vietnam Investment Review).

BVSC continued to boost capital raising deals via stocks and bonds issuance in 2019. BVSC,in 2019, raised VND 100 billion bonds for F88 Business JSC, successfully consulted for Samsung SDS Asia’s acquisition ofCMC Corporation’s 25-million-share private placement, and especially consulted for Sumitomo Life’s additional purchase of Baoviet Holdings’ 41 million shares at VND 4,012 billion.

BVSC was continually honored with prestigious awards at2019 M&A Forum, including “Vietnamese Outstanding M&A Consulting Organization in 2018-2019”, “Top 10 Leading brand in Vietnam in Investment Banking (IB) services in 2019”, “Best Securities Advisory Firm - 2019” by International Finance Magazine (IFM) and other awards.

Overview

Development Strategy

Business Performance

Corporate Governance

TOP 100 SUSTAINABLE DEVELOPMENT ENTERPRISES

With a sustainable development orientation, BVSC was honored in Top 100 Vietnamese Sustainable Development Enterprises in 2019, elected by VCCI and Business Council for sustainable development, for the second consecutive year.

Sustainable Development

Financial Statements

207


REPORT ON BAOVIET SECURITIES JOINT STOCK COMPANY’S BUSINESS PERFORMANCE

BUSINESS GOALS AND ORIENTATIONS IN2020 BUSINESS GOALS FOR 2020

(Expected submission to the Annual General Meeting of Shareholders in 2020)

Total revenue

483 Billion VND

Profit after tax

Profit after tax to charter capital ratio

Billion VND

(Charter capital: VND 1,083 billion)

79

Note: The above business plan will be revised to closely align with the macroeconomic situation and the stock market due to the impact of the COVID - 19 pandemic

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8.4%


2020 KEY SOLUTIONS Solutions in customer services, product development, and service quality improvement.

Solutions in Information Technology aiming at applying digital transformation in all of BVSC’s business and operations, mastering high technology to make a difference.

In 2020 , BVSC will:

• Developing new website with portals for BVSC analytical reports.

• Continually providing brokerage services on Online Trading and Mobile Trading platforms and implementing new FrontEnd system to enhance efficiency in brokerage and gain revenue and market share.

• Upgrading back office system, adding features for transactions with domestic and foreign institutional customers andsupporting individual brokers in providing information and consultancy to customers more effectively.

• Continually deploying utility products, such as iBond, to diversify customer investment tools, researching and developing investment consulting products and transaction services to attract customers. • Closely followingmarket policies in interest rates and fee, etc. to make appropriate adjustments on highly competitive service policies.

Overview

Development Strategy

Business Performance

• Implementing Data Warehouse & CRM for sales: Building platforms forData Warehouse system (aggregating and acquiring multidimensional data) and CRM platforms to provide sales departments with effective information technology tools. • Satisfying requirements onnew securities systems from HSX and VSD. • Building modulesto support different types of transactions, including Market Maker ETF, Derivatives, and Covered Warrants, once approved. • Transforming part of employee workstation into centralized virtual environment for better management of data security.

Corporate Governance

Sustainable Development

Financial Statements

209


Thank you

Our Officials Our Consultants



Standard


04

CORPORATE GOVERNANCE


CORPORATE GOVERNANCE


216 228 240 252 258 261 268 291 303 318

Baoviet Corporate Governance overview Board of Director Report Board of Directors’ Subordinating Committee Report Supervisory Board Report Remuneration policy for the BOD, the Supervisory Board and the Management Board Policy of Shareholder Relations Assessment report on Corporate Governance in 2019 Internal Control and Internal Audit Risk Management Legal and compliance


BAOVIET CORPORATE GOVERNANCE OVERVIEW

Baoviet is pioneering the application of good corporate governance practices in the process of building internal management systems at the Group, aiming at improving the quality of corporate governance, creating a premise for breakthrough operating development and achieving broader economic goals related to the confidence of shareholders and investors, accumulating and accessing capital markets and allocating capital to expand business operations across the Group.

In recent years, under the direction and guidance of the Board of Directors, Baoviet Holdings is one of the pioneering enterprises in applying good practices in corporate governance, including the Corporate Governance of Organization for Economic Co-operation and Development (OECD) and ASEAN Regional Corporate Governance Scorecard. The governance principles relate to: (i) Rights of shareholders, (ii) Equal treatment of shareholders, (iii) Roles of stakeholders, (iv) Information disclosure and transparency, and (v) Responsibility of the Board of Directors, which was actively referenced by Baoviet Holdings during the process of building the internal management system at the Group, aiming at improving the quality of corporate governance, creating a premise for breakthroughs in business development and achieving broader economic goals related to shareholders and investors’ confidence, accumulation, access to capital

216

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markets and allocation of capital to broaden business activities across the Group. In addition, Baoviet Holdings also strictly complies with regulations on corporate governance in accordance with Vietnamese Law including Decree 71/2017 / ND-CP of the Government and Circular No. 95/2017. / TT-BTC of the Ministry of Finance. In order to effectively operate the governance model, Baoviet Holdings has built and issued a system of internal management regulations to create a unified and transparent governance mechanism to control and monitor the activities of the corporation in a professional, transparent and effective manner, contributing to ensuring the interests of shareholders and harmonizing with the interests of stakeholders including customers, employees and the community.


Governance principles at Baoviet Holdings

1

2

3

4

5

Ensuring effective governance structure

Ensuring shareholders’ rights and fair treatment among shareholders

Ensuring the roles and interests of stakeholders

Ensuring transparency in all activities of the business

Ensuring the Board of Directors and the Supervisory Board leading and controlling the business operations effectively

CORPORATE GOVERNANCE FRAMEWORK OF BAO VIET HOLDINGS Baoviet Holdings’ corporate governance framework includes the following components:

Structure of board of directors (Refer to Chapter IV content: Reports of the Board of Directors and Remuneration of the Board of Directors and Supervisory Board)

Operation and effectiveness of Board of director (Refer to the content of Chapter IV: Reports of the Board of Directors and Committees under the Board of Directors)

Strategy, plan and Monitoring (Refer to the report in Chapter II of the Annual Report)

Risk management and compliance (Refer to content of Chapter IV: Internal control system)

Transparency and communications (Refer to the content in Chapter VI of Annual Report)

Responsibilities (social, ethical, environmental) (Refer to the content in Chapter V of Annual Report)

Overview

Development Strategy

Business Performance

1

• • • •

Organization and Structure Supervision and Training Remuneration Plan of successors

2

• • • • •

Ethic and relationship of members of BODs Assets – Liabilities Management Committee Remuneration and Nomination Committee Strategy and Investment Committee Audit Committee

3

• • • • •

Vision and Mission Strategy and business plan Monitoring the effectiveness of Group’s operation & governance Information technology strategy Human resource management

4

• Risk management process • Internal control process

5

• Financial and non-financial reports • Continuous communications

• • • •

Code of conduct Business ethic Working environment/Safety and Healthy Social responsibility

Corporate Governance

Sustainable Development

Financial Statements

217


BAOVIET CORPORATE GOVERNANCE OVERVIEW

GOVERNANCE PRINCIPLES AT BAOVIET HOLDINGS

The corporate governance model of Baoviet is implemented based on 05 core values:

EQUALITY

TRANSPARENCY

Baoviet’s corporate governance frame protects the benefits of shareholders and ensures equal treatment to all shareholders, including retail shareholders and foreign shareholders.

RESPONSIBILITY

Baoviet’s corporate governance framework approves the rights of stakeholders as stipulated by the law and encourages co-operations among companies/ subsidiaries and relevant parties in generating incomes, jobs and ensure Baoviet’s financial stability.

Ensure the disclosure of information concerning important issues which are related to the business operations, including financial status, business results; ownership and supervision structures have always been performed in a timely and precisely manner.

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CLARIFICATION RESPONSIBILITY

SUSTAINABILITY

Baoviet’s corporate governance frame ensures long term and stable benefit of shareholders and the harmony of governance elements concerning socioeconomic development and environment.

Baoviet’s corporate governance frame ensures the providing of strategic orientation for the Company, ensures effective control of the BOD, and ensures proper explanations of the BOD in front of the Company and in front of shareholders.


Baoviet’s stable corporate governance structure is implemented based on the reasonable combination of such elements as follows:

Complying with international governance frameworks and standards guided by OECD, IFC and adopting advanced corporate governance models from foreign strategic partners.

Baoviet’s corporate governance structure consists of the adequate components as required for a public company (General Meeting of Shareholders, Board of Directors, Board of Management and subordinating Committees)

1.

2.

SOLID CORPORATE GOVERNANCE FOUNDATION

Complying with international governance frameworks and standards guided by OECD, IFC and adopting the advanced corporate governance models from foreign strategic partners’ models.

Fully complying with Vietnam legal framework and regulations, governance regulations applied to Vietnam’s listed companies, and subject to adjustments to suit Vietnam’s conditions.

3.

Overview

STANDARD ADOPTION ALIGNMENT WITH GENERAL PRACTICES AND LEGAL REGULATIONS IN VIETNAM

Development Strategy

Business Performance

INTERNATIONAL GOVERNANCE

Corporate Governance

4.

UNANIMOUSLY APPLIED ACROSS THE GROUP

Sustainable Development

Financial Statements

219


BAOVIET CORPORATE GOVERNANCE OVERVIEW

BOARD OF DIRECTORS

In recent years, under the direction and guidance of the Board of Directors, Baoviet Holdings is one of the pioneering enterprises in applying good practices in corporate governance. Relevant governance principles to be actively referenced by Baoviet Holdings in the process of building internal management system at the Group, aiming at improving the quality of corporate governance, creating a premise for breakthrough in business development activities and achieve broader economic goals related to the confidence of shareholders and investors, accumulate, access to capital markets and allocate capital to expand business operations throughout the Group.

Mr. Dao Dinh Thi Chairman of the Board of Directors

Born in

: 1974

Nationality

: Vietnamese

Qualification(s)

: Bachelor of Economics

Experience(s)

: Over 23 years in finance, accounting, investment area.

Current occupation(s): • Chairman of the Board of Directors of Baoviet Holdings tenure 2018- 2023 (since 27/6/2018). Former occupation(s): • Chairman of the Board of Directors of Baoviet Holdings for the term 2012- 2017 (as of 23/12/2014); • Deputy Chairman of Debt and Asset Corporation; • Deputy Chairman cum Director of Finance and Accounting Division, Viglacera Corporation; • Chief Accountant cum Director of Finance & Investment Division cum Director of Viglacera Real Estate Trading Company.

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Mr. Do Truong Minh

Mrs. Than Hien Anh

Member of the Board of Directors, Chief Executive Officer

Member of the Board of Directors

Born in

: 1971

Born in

: 1974

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s)

: Master of Business Administration (MBA)

Qualification(s)

Experience(s)

: Over 25 years in insurance area.

: Master of Business Administration (MBA), Bachelor of Banking; Bachelor of Insurance

Experience(s)

: Over 22 years in finance and insurance area.

Current occupation(s):

Current occupation(s):

• Member of the Board of Directors of Baoviet Holdings tenure 2018- 2023 (since 27/6/2018);

• Member of the Board of Directors of Baoviet Holdings tenure 2018- 2023 (since 27/6/2018);

• Chief Executive Officer of Baoviet Holdings (as of 27/6/2018).

• Chairwoman of the Members’ Council, Baoviet Life Insurance Corporation.

Former occupation(s):

Former occupation(s):

• Acting Chief Executive Officer of Baoviet Holdings (as of 03/01/2018);

• Member of Boad of Directors for the term 2012-2017 (as of 23/12/2014), Baoviet Holdings;

• Member of the Members’ Council; Acting Chief Executive Officer of Baoviet General Insurance Corporation;

• Chief Executive Officer of Baoviet Life Insurance Corporation;

• Chief Operations Officer, Baoviet Holdings.

• Chief of Strategy & Risk Management Block; • Chief of Strategy Development Block; • Director of Restructuring Project of Baoviet Holdings; • Executive Director cum Director of Strategies Conversion Project; Director of Communication Division cum Director of Brand Conversion Project.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

221


BAOVIET CORPORATE GOVERNANCE OVERVIEW BOARD OF DIRECTORS

Mr. Nguyen Xuan Viet

Mrs. Tran Thi Dieu Hang

Member of the Board of Directors

Member of the Board of Directors

Born in

: 1970

Born in

: 1973

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s)

: Bachelor of Economics

Qualification(s)

Experience(s)

: 24 years in information technology, insurance.

: Master of Business Administration (MBA)

Experience(s)

: Over 24 years of experience in insurance and auditing.

Current occupation(s):

Current occupation(s):

• Member of the Board of Directors of Baoviet Holdings tenure 2018- 2023 (since 27/6/2018);

• Member of the Board of Directors of Baoviet Holdings tenure 2018- 2023 (since 27/6/2018);

• Chairman of BVH R&A Committee;

• Chairman of BVH Audit Committee;

• Member of the Members’ Council, Chief Executive Officer of Bao Viet Insurance Corporation;

• Head of Inspection - Internal Audit of Baoviet Holdings;

• Member of the Members’ Council, Bao Viet Fund Management Company; • Vice Chairman of the Board of Directors of VietNam National Reinsurance Corporation. Former occupation(s): • Acting Chief Executive Officer of the Bao Viet Insurance Corporation; • Deputy Chief Executive Officer of Bao Viet Insurance Corporation.

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• Chairwoman of the Members’ Council, Bao Viet Insurance Corporation. Former occupation(s): • Head of Market Development Department, Department of Insurance Management and Supervision - Ministry of Finance; • Head of Non-life Insurance Management and Supervision Department, Department of Insurance Management and Supervision - Ministry of Finance.


Mr. Teruo Shimmen

Mr. Kenji Yoneda

Member of the Board of Directors

Member of the Board of Directors

Born in

: 1969

Born in

: 1966

Nationality

: Japanese

Nationality

: Japanese

Qualification(s)

: Bachelor of Foreign Studies

Qualification(s)

: Master of Law

Experience(s)

: Over 28 years in Insurance field

Experience(s)

: 31 years in Insurance field

Current occupation(s):

Current occupation(s):

• Member of Board of Directors of Bao Viet Holdings;

• Member of Board of Directors of Bao Viet Holdings;

• Member of Bao Viet Holdings’s Audit Committee, Strategy and Investment Committee;

• Member of Board of Directors of Singlife;

• Member of Council Members, Bao Viet Life Insurance Corporation; • Chief Representative, Hanoi Representative Office of Sumitomo Life Insurance Co. Positions in past at Sumitomo Life:

• General Manager In Charge of International Business Dept. of Sumitomo Life Insurance Co. Positions in past at Sumitomo Life: • General Manager In Charge of Customer First Promotion Dept.; • Deputy General Manager, Compliance Control Dept.;

• Principal Manager, Corporate Planning Dept. of Sumitomo Life Information Systems Co.; • Assistant General Manager, International Business Dept.; • Special Staff Manager, Corporate Planning Dept. Planning Development Sect.;

• Chief Representative, Hanoi Representative Office; • Chief Representative, London Representative Office; • Deputy General Manager, Agency Marketing Dept.; • Manager, New Business Marketing Planning Sect.

• Special Staff Manager, Information Systems Dept.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

223


BAOVIET CORPORATE GOVERNANCE OVERVIEW

EXECUTIVE BOARD

Mr. Do Truong Minh

Mr. Nguyen Anh Tuan

Mr. Pham Ngoc Tu

Member of the Board of Directors, Chief Executive Officer

Chief Operations Officer of Baoviet Holdings

Deputy Chief Officer of Financial Block of Baoviet Holdings

Born in

: 1971

Born in

: 1977

Born in

: 1979

Nationality

: Vietnamese

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s) : Master of Business Administration (MBA)

Qualification(s) : Master of Finance Credit

Experience(s) : Over 25 years in

Experience(s) : 20 years in finance

insurance area.

Kinh nghiệm

: 19 years in finance area.

area.

Current occupation(s):

Current occupation(s):

Current occupation(s):

• Member of the Board of Directors of Baoviet Holdings in period 20182023 (since 27/6/2018);

• Chief Operations Officer of Baoviet Holdings (since 28/11/2016);

• Deputy Chief Officer of Financial Block of Baoviet Holdings (since 18/05/2015;

• Chief Executive Officer of Baoviet Holdings (as of 27/6/2018). Former occupation(s): • Acting Chief Executive Officer of Baoviet Holdings (as of 03/01/2018). • Member of the Members’ Council; Acting Chief Executive Officer of Baoviet General Insurance Corporation; • Chief Operations Officer, Baoviet Holdings.

• Member of the Remuneration and Appointment Committee of Baoviet Holdings; • Member of the Board of Members of Baoviet Life Corporation; • Member of the Board of Directors of Baoviet Securities. Former occupation(s): • Acting Chief Operations Officer, Baoviet Holdings; • Deputy Chief Operations Officer of Baoviet Group; • eputy Head of Secretary Division of Baoviet Holdings; • Deputy Head of Investment Project Division, Baoviet Holdings; • Member of Member’s Council of Baoviet - Tokio Marine.

224

Qualification(s) : Master of Economics

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• Member of the Board of Directors of Baoviet Securities Company. Former occupation(s): • Deputy Chief Officer of Internal Audit Block of Baoviet Holdings; • Member of the Board of Directors of Vietnam Water and Environment Investment Corporation (VIWASEEN); • Chief Accountant of VIWASEEN; • Head of Board of Supervisor of VIWASEEN; • Member of Board of Supervisor of VIWASEEN; • Deputy Head of Finance Accounting Division of VIWASEEN.


Mr. Nguyen Xuan Hoa

Mr. Nguyen Thanh Hai

Mr. Truong Tuan Lam

Chief Accountant

Director of baoviet training center

Deputy Director of Information Technology Center

Born in

: 1977

Born in

: 1972

Born in

: 1973

Nationality

: Vietnamese

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s) : Master of Business Administration (MBA)

Qualification(s) : Master of Business Administration (MBA)

Experience(s) : Over 20 years

Experience(s) : Over 23 years

in finance and accounting area.

Qualification(s) : Master of Economics

Experience(s) : Over 24 years of experience in information technology.

in finance and accounting area.

Current occupation(s):

Current occupation(s):

Current occupation(s):

• Chief Accountant of Baoviet Holdings (as of 13/01/2016);

• Director of Baoviet Training Center (as of 13/01/2016)

• Member of the Members’ Council of Baoviet Insurance Corporation;

Former Occupation(s):

• Deputy Director of Information Technology Center (as of 16/12/2019);

• Head of Board of Supervisor of Baoviet Securities Company (BVSC); • Member of Representative Board of BVIF. Former Occupation(s): • Deputy Chief Officer of Finance Block, Baoviet Holdings;

• Chief Accountant of Baoviet Holdings; • Vice Director, Director of Financial Planning Division of Baoviet Holdings;

Former Occupation(s):

• Head of Financial & Accounting Department, Baoviet Life Insurance Corporation in Hanoi.

• Deputy Director of Information Technology - Baoviet Holdings

• Head of Financial Division, Planning and Finance Division, Baoviet Holdings;

Development Strategy

Business Performance

• Deputy Director of IT Center Baoviet Holdings

• Head of IT Operation and Management Division - Baoviet Holdings • Deputy Director of Information Technology - Baoviet Holdings

• Deputy Head of Planning and Finance Division, Baoviet Holdings.

Overview

• Member of the Board of Directors of CMC.

• Deputy Director of Information Center - Baoviet Life.

Corporate Governance

Sustainable Development

Financial Statements

225


BAOVIET CORPORATE GOVERNANCE OVERVIEW

SUPERVISORY BOARD

Mr. Ong Tien Hung

Mr. Vu Thanh Hai

Mrs. Tran Thi Phuong

Head of Supervisory Board

Supervisor

Supervisor

Born in

: 1964

Born in

: 1983

Born in

: 1988

Nationality

: Vietnamese

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s) : Master of Business Administration

Qualification(s) : Bachelor of Auditing Certificate of Auditor (CPA), Ministry of Finance

Qualification(s) : Bachelor of accounting Certificate of Auditor (CPA), Ministry of Finance

Experience(s) : 30 years in finance

Experience(s) : 15 years in auditing

Experience(s) : 9 years in auditing

and accounting. Current occupation(s):

Current occupation(s):

Current occupation(s):

• Head of Supervisory of BVH tenure 2018- 2023 (since June 29, 2019).

• BVH Supervisor tenure 2018-2023 (since June 29, 2019);

• BVH Supervisor tenure 2018-2023 (since June 27, 2018);

• Teamleader of Audit for insurance Division, Inspection - Internal Audit, BVH.

• Teamleader of Audit for investment Division, Inspection - Internal Audit, BVH.

Former Occupation(s):

Former Occupation(s):

• Auditor of the Insurance Activities Division, Internal Audit Block, BVH;

• Auditor of the Investment Activities Division, Internal Audit Block, BVH;

• Auditors, Assistant Auditors VACO Auditing Company Limited.

• Auditors, Assistant Auditors VACO Auditing Company Limited.

Certified Accountant, Ministry of Finance.

Former Occupation(s): • Supervisor of BVH tenure 20182023 (since June 27, 2018); • Member of Supervisory Board BVH has a term of 2012-2017 from November 29, 2012; • Director of Organization and Personnel Department, Bao Viet Insurance Corporation; • Head of Department, Director of Internal Control Board and Risk Management, Bao Viet Insurance Corporation; • Deputy Head of the internal inspection department; Main inspector, Inspector of the Ministry of Finance. 226

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CORPORATE GOVERNOR CUM SECRETARY OF BVH

Mrs. Luong Thi Bich Ngoc

Mrs. Le Thi Thanh Chau

Corporate Governor

Supervisor

Born in

: 1982

Born in

: 1981

Nationality

: Vietnamese

Nationality

: Vietnamese

Qualification(s) : MSc. Banking and Finance,

Qualification(s) : MSc. Risk management,

Bsc. Banking and Finance, Auditor Certificate of the MOF

BSc. Accounting and Audit

Experience(s) : 15 years in finance and corporate secretary

Experience(s) : 12 years in finance and risk management.

Current occupation(s):

Current occupation(s):

• The Corporate Governor of BVH cum the Secretary of BVH (from 11/7/2018);

• The Corporate Governor of BVH cum the Secretary of BVH (from 11/7/2018);

• Deputy Head of Corporate Secretary Division, BVH.

• Deputy Head of Corporate Secretary Division, BVH; • BOD’s member of HiPT.

Former Occupation(s):

Former Occupation(s):

• Head of Corporate Secretary Division, Operations Block, BVH; • Deputy Head of Corporate Secretary Division, Operations Block, BVH.

Overview

Development Strategy

Business Performance

Corporate Governance

• Deputy Head of Corporate Secretary Division, Operations Block, BVH; • Deputy Head of Risk Management Division, Operations Block, BVH.

Sustainable Development

Financial Statements

227


BOARD OF DIRECTOR REPORT

In 2019, the Board of Directors (BOD) promoted its roles in the most efficient manners in the leadership and directions for constructing the objectives, strategies and business plan in 2019 and the strategies for the period of 2016-2020 focusing on strengthening the internal cooperation for maximising the corporate strength of the Group, fostering all solutions to improve the efficiency in corporate management yielding to the implementation of the strategies on development and sustainable growth. “Mastering Hi-tech, Accelerating Outperformance”.

STRUCTURE OF THE BOARD OF DIRECTORS List of BOD’S members (as at 31/12/2019)

No.

228

Fullname

Tittle

BOD’s members

Tittles of BOD’s members at other listed companies in Vietnam

Rate of ownership with voteable rights at BVH 24.46%

1

Mr. Dao Dinh Thi

BOD’s Chairman

Fulltime Executive

(Representative of State owned capital: 174,119,770 shares Personal ownership: 55,045 shares )

2

Mr. Do Truong Minh

BOD’s member

Executive

(Including: Representative of State ownedcapital: 112,141,830 shares Personal ownership: 15,000 shares)

3

Ms. Than Hien Anh

BOD’s member

Nonexecutive

(Including: Representative of State owned capital: 49,062,050 shares Private ownership: 44,630 shares)

4

Mr. Nguyen Minh Hoang

BOD’s member

Executive

(Including: Representative of State owned capital: 49,062,050 shares Private ownership: 0 shares)

5

Mr. Nguyen Xuan Viet

BOD’s member

Nonexecutive

(Including: Representative of State owned capital: 49,062,050 shares Private ownership: 83,835 shares)

6

Ms. Tran Thi Dieu Hang

BOD’s member

Executive

(Including: Representative of State owned capital: 49,062,050 shares Private ownership: 0 shares)

7

Mr. Teruo Shimmen

BOD’s member

Nonexecutive

(Representative of Sumitomo Life: 81,972,710 shares)

8

Mr. Kenji Yoneda

BOD’s member

Nonexecutive

(Representative of Sumitomo Life: 81,972,711 shares)

THANK YOU FOR YOUR TRUST Integrated Report 2019

None

15.11%

None

6.62% None

6.61% None

6.62%

6.61%

11.04%

11.04%

None

None


ACTIVITIES OF THE BOD IN 2019 ORGANISE THE AGM AND REPORTED TO AGM REGARDING THE ISSUES UPON THE COMPETENCES OF THE AGM In 2019, the BOD of Baoviet Holdings organised 01 annual general meeting of shareholders on 29th June 2019. The AGM discussed and approved of the issues as follows: • Report on the business activities in 2018 and the 2019 Business plan; • Approval of the audited consolidated financial report and the separated financial report in 2018 of BVH; • BOD’s report on the BOD’s activities report;

• Election on the Board of Directors and Supervisory Board of BVH for the period of 2018-2023. The 2019 AGM of Baoviet Holdings has commenced accordingly as stipulated by the regulations of the Law on Enterprise, the Charter of Baoviet Holdings as well as other related regulations for listed companies. Prior to the AGM, Baoviet Holdings implemented the announcement on the finalisation of shareholder list; meeting invitation; disclosure of information presented at the meeting and implemented the announcement of the financial reports as stipulated.

• Activities report of the Supervisory Board; • Remuneration for the BOD and SB for the fiscal year 2018 and the projected budget on the remuneration for the BOD and SB for the fiscal year 2019; • Solutions on using the Profits after taxes in 2018 and the usage plan on profits after taxes in 2019 of BVH; • Approval on private placement issuance of shares to raise capital of BVH; • Approval on the implemented results of the development strategy for the period of 2016-2018 and the proposal on the adjustments of the developement strategy to 2020 of BVH;

Overview

Development Strategy

Business Performance

Corporate Governance

In addition, in 2019, BVH has collected opinion in written forms of shareholders to approve the following specific issues: • The contents of amendments and supplements to the business lines of BVH • Amendment and supplement the relevant provisions in Clause 1, Article 4, the current Charter of BVH on the business lines of BVH. According to the regulations of the 2019 AGM, the BOD implemented all the issues approved by the AGM.

Sustainable Development

Financial Statements

229


BOARD OF DIRECTOR REPORT REGULAR BOD MEETING FOR THE IMPLEMENTATION AND THE PROVISION OF THE ORIENTATION FOR DEVELOPMENT OF BAOVIET HOLDINGS Upon the implementation of the regulations as stipulated by the Law on Enterprise and the Charter of Baoviet Holdings, in 2019, the BOD of Baoviet Holdings maintained the regular meetings quarterly as well as the open meetings in order to discuss, concluded and in-time provided immediate directions on the corporate governance of the Group. The BOD organised 06 (six) meetings including 05 (five) regular meetings and 01 (two) open meetings related to the contents on the organisation of the 2019 AGM and implemented the construction of 2020 business plan for

BVH and its Subsidiaries which BVH owns 100% charter capital. The organisation of BOD’s meetings ensured the proper implementation as stipulated by the Charter of BVH and the Law on Enterprise. The BOB’s members participated in the BOD’ s meetings or authorized for BOD’s members to attend the meetings and vote in serious manners as stipulated by the Charter of BVH and the regulations on operation of the BOD, specifically as follows:

BOD’s meetings in 2019

No.

BOD’s members

Tittle

Starting date/no longer being BOD’smembers

Rate

Reasons for absence

1

Mr. Dao Dinh Thi

BOD’s Chairman

Starting date as BOD’s member 23/12/2014

06/06

100%

2

Mr. Do Truong Minh

BOD’s member

Starting date as BOD’s member 27/6/2018

06/06

100%

3

Ms. Than Hien Anh

BOD’s member

Starting date as BOD’s member 23/12/2014

06/06

100%

4

Mr. Nguyen Minh Hoang

BOD’s member

Starting date as BOD’s member 26/5/2017

06/06

100%

5

Ms. Tran Thi Dieu Hang

BOD’s member

Starting date as BOD’s member 27/6/2018

06/06

100%

6

Mr. Nguyen Duy Khanh

BOD’s member

Starting date as BOD’s member 26/5/2017

06/06

100%

7

Mr. Nguyen Xuan Viet

BOD’s member

Starting date as BOD’s member 27/6/2018

0/02

0%

8

Mr Kazuhiko Arai

BOD’s member

Starting date as BOD’s member 27/6/2018

02/02

100%

End of date as BOD’s member 29/6/2019

9

Mr. Shuichi Sakai

BOD’s member

Starting date as BOD’s member 28/3/2016

02/02

100%

End of date as BOD’s member 29/6/2019

10

Mr. Kenji Yoneda

BOD’s member

Starting date as BOD’s member 29/6/2019

04/04

100%

Starting date as BOD’s member 29/6/2019

11

Mr. Teruo Shimmen

04/04

100%

Starting date as BOD’s member 29/6/2019

BOD’s member

Starting date as BOD’s member 29/6/2019

All of the BOD’s meetings focused on solving the key issues related to the directions on organising the 2019 AGM; constructing and implementing the 2019 business plan, the development strategy for the period of 20162020 as approved by the AGM; directing closely the implementation of the business plan, implementing the

230

No. of BOD’s meeting participated

THANK YOU FOR YOUR TRUST Integrated Report 2019

End of date as BOD’s member 29/6/2019

key tasks throughout the Group as well as implementing the resolutions of the 2019 AGM, etc. The resolutions of the BOD agreed that the essential orientations shall assist the BOM to implement the business tasks of the Group effectively.


THE OPINION COLLECTIONS FROM BOD’S MEMBERS IN WRITTEN FORMS IN ORDER TO APPROVE THE DECISIONS UPON THE COMPETENCE OF THE BOD Aside from the direct BOD’s meetings, the BOD approved on all other decisions via the form of opinion collecting from BOD’s members in written forms in order to solve the issues upon the competence of the BOD according to the submissions of the CEO and other Committees of the BOD. In 2019, the BOD solved over 100 issues related to the important orientations on corporate governance, completed and issued the regulations on internal corporate governance, investment on HR development, strengthening

the managerial positions, orientations on the investment activities across the Group, etc. Directed the adjustment of management structure, closely supervised the operation of the BOD in the implementation of the resolutions, decisions of the AGM and the BOD. The resolutions and decisions of the BOD have been issued based on such highly responsible spirit, fostering the leadership capability of the BOD’s members upon the interests of shareholders as well as the sustainable growth of the Group.

RESOLUTIONS OF THE BOD ISSUED IN 2019 (Including resolutions approved in the regular BOD’ meetings quarterly and via opinion collections in written forms from BOD’s members) No.

Resolution No.

Date of issue

1

01/2019/NQ-HĐQT

03/01/2019

Resolution related to HR at BVGI for 2019-2020

2

02/2019/NQ-HĐQT

03/01/2019

Resolution related to HR at BVL for 2019-2020

3

03/2019/NQ-HĐQT

08/01/2019

BOD’s meeting in December 2018

4

04/2019/NQ-HĐQT

08/01/2019

Resolution on BOD’s activities in 2019

5

05/2019/NQ-HĐQT

08/01/2019

BOD and BOD members’ performance result

6

06/2019/NQ-HĐQT

08/01/2019

Resolution to to the investment activities at BVH

7

07/2019/NQ-HĐQT

10/01/2019

Resolution to to the investment activities at BVH

8

08/2019/NQ-HĐQT

15/01/2019

Resolution related to HR at BVL

9

09/2019/NQ-HĐQT

15/01/2019

Resolution related to HR at BVGI

10

10/2019/NQ-HĐQT

28/01/2019

Resolution to to the financial activities at BVGI

11

11/2019/NQ-HĐQT

28/01/2019

Approval the policy of the List of contracts between BVH and BVSC

12

12/2019/NQ-HĐQT

29/01/2019

Reviewed consolidated financial statements as at Sep 30, 2018 under IFRS

13

13/2019/NQ-HĐQT

19/02/2019

Approval the finalization of IT project

14

14/2019/NQ-HĐQT

20/02/2019

Extend office lease contract at 72 Tran Hung Dao building with Sumitomo Life

15

15/2019/NQ-HĐQT

05/03/2019

Resolution related to HR at BVI

16

16/2019/NQ-HĐQT

05/3/2019

Resolution to to the investment activities at BVH

17

17/2019/NQ-HĐQT

13/03/2019

Approval of organization of the 2019 AGM of BVH

18

18/2019/NQ-HĐQT

13/03/2019

Approval on transactions between BVH and BVSC

19

19/2019/NQ-HĐQT

14/03/2019

Approval the finalization of IT project

20

20/2019/NQ-HĐQT

19/3/2019

Resolution to to the financial activities at BVL

Overview

Development Strategy

Business Performance

Content

Corporate Governance

Sustainable Development

Financial Statements

231


BOARD OF DIRECTOR REPORT

232

No.

Resolution No.

Date of issue

Content

21

21/2019/NQ-HĐQT

19/3/2019

Approval the policy of the training contracts between BVH and Related Parties

22

22/2019/NQ-HĐQT

19/3/2019

Resolution to to the financial activities at BVH

23

23/2019/NQ-HĐQT

19/3/2019

Approval the transactions between BVH and BVSC

24

24/2019/NQ-HĐQT

26/3/2019

Approval the transactions

25

25/2019/NQ-HĐQT

28/3/2019

Resolution on salary of BVH

26

26/2019/NQ-HĐQT

28/3/2019

Resolution on salary of BVGI

27

27/2019/NQ-HĐQT

28/3/2019

Resolution on salary of BVF

28

28/2019/NQ-HĐQT

28/3/2019

Resolution on salary of BVL

29

29/2019/NQ-HĐQT

29/3/2019

Approval of the audited separated financial report in 2018 of BVH under VAS

30

30/2019/NQ-HĐQT

08/4/2019

Approval of the audited consolidated financial report in 2018 of BVH under VAS

31

31/2019/NQ-HĐQT

10/4/2019

Resolution on building salary plan of the subsidiaries of which BVH invested 100% charter capital.

32

32/2019/NQ-HĐQT

12/4/2019

Approval of changing date of the 2019 AGM of BVH

33

33/2019/NQ-HĐQT

24/4/2019

Resolution on policy of List of contracts, transactions between BVH and related parties

34

34/2019/NQ-HĐQT

24/4/2019

Released restrictions on transfer of stocks ESOP 2018

35

35/2019/NQ-HĐQT

14/5/2019

Resolution on policy of List of contracts, transactions between BVH and related parties

36

36/2019/NQ-HĐQT

20/5/2019

Supplemented business lines and amended, supplemented Charter of BVI

37

37/2019/NQ-HĐQT

20/5/2019

Approval the distribution the PAT in 2018 of subsidiaries of which BVH invested 100% charter capital.

38

38/2019/NQ-HĐQT

23/5/2019

Resolution related to HR at BVH

39

39/2019/NQ-HĐQT

24/5/2019

Approval of the audited consolidated financial report in 2018 of BVH under IFRS

40

40/2019/NQ-HĐQT

29/5/2019

Approval of organisating of the 2019 AGM of BVSC

41

41/2019/NQ-HĐQT

30/05/2019

Classification of strategic investments and financial investments

42

42/2019/NQ-HĐQT

04/6/2019

BOD’s meetings in Quarter 1 of 2019

43

43/2019/NQ-HĐQT

13/6/2019

Resolution on policy of List of contracts, transactions between BVH and related parties

44

44/2019/NQ-HĐQT

19/6/2019

Approval of organization of the 2019 AGM of BVH

45

45/2019/NQ-HĐQT

19/6/2019

Approval of contents of the 2019 AGM of BVH

46

46/2019/NQ-HĐQT

29/6/2019

BOD’s meetings dated 29/6/2019

47

47/2019/NQ-HĐQT

22/07/2019

Resolution to to the investment activities at BVH

THANK YOU FOR YOUR TRUST Integrated Report 2019


No.

Resolution No.

Date of issue

48

49/2019/NQ-HĐQT

24/7/2019

Approval on the 2019 social welfare fund of BVH

49

50/2019/NQ-HĐQT

24/7/2019

Resolution related to senior HR

50

51/2019/NQ-HĐQT

25/7/2019

Resolution related to legislation

51

52/2019/NQ-HĐQT

29/7/2019

Resolution related to HR

52

53/2019/NQ-HĐQT

29/7/2019

Resolution related to salary at BVL

53

54/2019/NQ-HĐQT

29/7/2019

Resolution related to salary at BVI

54

55/2019/NQ-HĐQT

29/7/2019

Resolution related to salary at BVF

55

56/2019/NQ-HĐQT

29/7/2019

Approval of the audited separated financial report in Q1.2019 of BVH

56

57/2019/NQ-HĐQT

01/8/2019

Resolution related to investment at BVH

57

58/2019/NQ-HĐQT

12/08/2019

Resolution related to HR at BVL

58

59/2019/NQ-HĐQT

14/8/2019

Approval of the audited consolidated financial report in Q1.2019 of BVH under IFRS

59

60/2019/NQ-HĐQT

23/8/2019

Resolution related to finance at BVH

60

61/2019/NQ-HĐQT

29/8/2019

Approval of the reviewed consolidated and separated financial report as at 30th June 2019 of BVH under VAS

61

62/2019/NQ-HĐQT

29/8/2019

Resolution related to strategy of BVH

62

62a/2019/NQ-HĐQT

04/9/2019

BOD’s meeting in Quarter III/2019

63

62b/2019/NQ-HĐQT

04/9/2019

Resolution on assigning tasks of BOD’s members

64

63/2019/NQ-HĐQT

05/09/2019

Resolution related to finance at BVL

65

64/2019/NQ-HĐQT

06/9/2019

Approval the finalization of IT project

66

65/2019/NQ-HĐQT

06/09/2019

Resolution related to finance at BVH

67

66/2019/NQ-HĐQT

11/09/2019

Resolution related to growth scenario of BVH

68

67/2019/NQ-HĐQT

11/9/2019

Resolution related to investment activities at BVH

69

68/2019/NQ-HĐQT

16/9/2019

Resolution of adjusting product development

70

69/2019/NQ-HĐQT

18/9/2019

Resolution related to bonus and welfare fund at BVH

71

70/2019/NQ-HĐQT

23/9/2019

Approval of setting up teamwork at BVGI

72

71/2019/NQ-HĐQT

08/10/2019

Resolution related to Investor selection

73

72/2019/NQ-HĐQT

09/10/2019

Resolution related to salary activities

74

73/2019/NQ-HĐQT

15/10/2019

Approval of the content of the TSCTA

75

74/2019/NQ-HĐQT

23/10/2019

Resolution related to investment activities at BVH

76

75/2019/NQ-HĐQT

28/10/2019

Approval on adjusting business lines

77

76/2019/NQ-HĐQT

28/10/2019

Resolution on plan of submission to BVH’s shareholders by written form

Overview

Development Strategy

Business Performance

Content

Corporate Governance

Sustainable Development

Financial Statements

233


BOARD OF DIRECTOR REPORT

234

No.

Resolution No.

Date of issue

78

77/2019/NQ-HĐQT

29/10/2019

Resolution related to private placement project

79

78/2019/NQ-HĐQT

01/11/2019

Resolution on plan of submission to BVH’s shareholders by written form

80

79/2019/NQ-HĐQT

18/11/2019

Approval the finalization of IT project

81

80/2019/NQ-HĐQT

18/11/2019

Approval the finalization of IT project

82

81/2019/NQ-HĐQT

20/11/2019

Approval of assigning a 2019 labor and salary plan at BVGI

83

82/2019/NQ-HĐQT

20/11/2019

Approval for transforming land using purpose and proposal the plan of rearranging at BVH

84

83/2019/NQ-HĐQT

20/11/2019

Resolution related to HR at BVGI for the period 2019-2021

85

84/2019/NQ-HĐQT

21/11/2019

Amended Decision 784/2018/QĐ-HĐQT dated 29th May 2018

86

85/2019/NQ-HĐQT

22/11/2019

Resolution related to investment activities at BVH

87

86/2019/NQ-HĐQT

29/11/2019

Approval of the reviewed consolidated and separated financial report as at 30th Sep 2019 of BVH under VAS

88

87/2019/NQ-HĐQT

29/11/2019

BOD’s meeting in Quarter IV/2019

89

88/2019/NQ-HĐQT

09/12/2019

Approval of the transaction between BVH and BVSC on entrustment for dividend payment in fiscal year 2018

90

89/2019/NQ-HĐQT

09/12/2019

Resolution related to investment activities at BVH

91

90/2019/NQ-HĐQT

09/12/2019

Resolution related to investment activities at BVH

92

91/2019/NQ-HĐQT

09/12/2019

Resolution related to investment activities at BVH

93

92/2019/NQ-HĐQT

10/12/2019

Approval of the transaction between BVH and BVGI

94

93/2019/NQ-HĐQT

16/12/2019

Policy of investment divestment

95

94/2019/NQ-HĐQT

19/12/2019

Approval of the audited consolidated financial report for the half year of 2019 of BVH under IFRS

96

95/2019/NQ-HĐQT

23/12/2019

Approval the finalization of IT project

97

96/2019/NQ-HĐQT

23/12/2019

Resolution related to HR at BVH

98

97/2019/NQ-HĐQT

25/12/2019

Resolution related to senior HR

99

98/2019/NQ-HĐQT

25/12/2019

Resolution related to senior HR

100

99/2019/NQ-HĐQT

25/12/2019

Resolution related to senior HR

101

100/2019/NĐ-HĐQT

30/12/2019

Amended and issue the BVH’s Charter (11th edited)

102

101/2019/NQ-ĐQT

31/12/2019

BOD’s meeting in December 2019

103

102/2019/NQ-ĐQT

31/12/2019

Resolution on performance evaluation results for 2019 of the BOD and members of the BOD at BVH

104

103/2019/NQ-HĐQT

31/12/2019

THANK YOU FOR YOUR TRUST Integrated Report 2019

Content

Operation plan of the BOD in 2020


THE IMPLEMENTATION ON ASSESSING THE OPERATION OF THE BOD AND OF THE BOD’S MEMBERS AND OTHER COMMITTEES OF THE BOD IN 2019 ACCORDING TO THE GOOD PRACTICES ON CORPORATE GOVERNANCE WORLDWIDE AND REGIONALLY In order to improve the assessment activities of the BOD according to the good practices on corporate governance worldwide and regionally, in 2019, the BOD implemented the regulations on operation of the BOD, completed the assessment activities on the procedures and specific assessment criteria regarding the operation of the BOD, of each BOD’s members and the committees of the BOD, specifically as follows: Assessment criteria on the operation of the BOD includes 40 criteria regarding:

Assessment criteria on each BOD’s members including 17 criteria regarding:

(i) Rights and responsibilities of the BOD;

(i) interactive level amongst BOD’s members;

(ii) Structure of the BOD; (iii) Procedure of the BOD;

(ii) Quality of the comments/recommendations of the BOD’s members;

(iv) Operating results of the committees of the BOD;

(iii) Implementation of tasks;

(v) Assessment of implementing the resolutions of the AGM and the annual business plan.

(iv) Roles of BOD’s Chairman. The Remuneration and Appointment Committee and the Corporate Secretary Division held responsibilities on consulting to the BOD throughout the process of implementing the assessment

The above assessment criteria were constructed based on the references of the standards at Part E – Responsibilities of the BOD in the Question set level 1 – Corporate Governance scorecard for ASEAN regional enterprises, Regulations on corporate governance of OECD and referential standards on assessing the operation of the BOD and of the BOD’s members in developed countries worldwide.

In Dec 2019, the BOD implemented the assessment results on the operation of the BOD in 2018, the committees of the BOD and of the BOD’s members with the results specifically as follows:

RESULTS ON THE ASSESSMENT OF THE OPERATION OF THE BOD AND OF THE COMMITTEE OF THE BOD ASSESSED RESULTS ON EACH BOD’S MEMBERS

Based on 13 criteria on 3 issues: 1.

2.

3.

Interactive level amongst BOD’s members;

Quality of the comments/ recommendations of the BOD’s members;

Implementation of tasks;

The BOD’s members have self-assessed the performance of their duties, and cross-assessed the activities of other BOD’s members.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

235


BOARD OF DIRECTOR REPORT Weak No.

To be improved

Average

Good

Assessment Criteria

Very good Average point

1

Rights and responsibilities of the BOD

4.5

2

Members and structure of the BOD

4.5

3

Procedure of BOD

4.6

3.1. Participation in BOD’s meetings

4.6

3.2. Access to information

4.6

3.3. Opinion collections in written forms

4.4

3.4. Appoint and re-elect the BOD (if any)

4.9

Performance of Committees under BOD

4.2

4

Rank

Issues for improvement

The independence between BOD members and BOM and influential shareholder of

Members of the Remuneration and Appointment 4.1. Remuneration and Nomination Committee

4.2. Audit Committee

4.0

4.0

Committee are majorly independent members i.e. over 50% Chairman of the Remuneration and Appointment Committee is independent member. The Audit Committee includes NED with majority of BOD members as independent. Chairman of the Audit Committee is an independent BOD’s member.

5

4.3. The Strategy & Investment Committee

4.4

4.4. The Assets-Liabilities Committee (ALCO)

4.5

Assessed the implementation of the AGM ’s resolutions and the annual business plan

4.5

Average point

4.4

Result: 09/09 BOD’s members were 4.4 to 4.8 point (maximum is 5 point) at the rate of” VERY GOOD” and “GOOD”.

GENERAL COMMENTS ON THE ASSESSMENT RESULTS REGARDING THE OPERATION OF THE BOD, AND OF THE BOD’S MEMBERS AND THE COMMITTEES OF THE BOD • The BOD fostered the roles and responsibilities in the corporate governance, ensuring the organization structure as stipulated by the Law on Enterprise and the Charter of BVH. • The BOD implemented properly and completed the resolutions of the 2018 AGM and the 2019 Business plan. • The committees of the BOD contributed significantly in consulting to the BOD regarding issues upon the competence of the Committees such as strategy, investment, appointment of senior staff, remuneration and bonuses, audit and management of assets and liabilities, etc.

236

THANK YOU FOR YOUR TRUST Integrated Report 2019

• BOD’s members had very good rate of information sharing, proactively provided the assessment, analysis in depth regarding issues upon the competence of the BOD, implemented the responsibilities in such honest, careful manners for the most benefits of shareholders and of BVH. • BOD’s Chairman fostered the roles in implementing effectively the operation of the BOD, encouraging the BOD’s members in providing opinions and other contents upon the competence of the BOD; ensuring the construction of operation plan of the BOD prior to the fiscal year and submitting the meeting materials for opinions from BOD’s members at least 05 days prior to the meeting date.


In order to strengthen the responsibilities of the BOD, to comply with the standards regarding the responsibilities of the BOD at the ASEAN corporate governance scorecard, the BOD needs to continue to strengthen the tasks as follows: • Continue to strengthen the marketing on the mission/ vision of the Group, consider the business strategy annually to adjust with new changes.

• Continue to improve the quality of reports, consultancy to the BOD regarding issues upon the competence and responsibilities of the Committees of the BOD;

• Consider to supplement the regulations on the organization of the meeting amongst non-executive BOD’s members without the presence of the executive members in the regulations on corporate governance/ Regulations on operation of the BOD.

• Strengthen the information sharing amongst BOD’s members via the provision, update on information regarding the business of the Group, the market status as well as the opportunities on business development; encouraging BOD’s members to provide assessment, in-depth assessment on the issues upon the competence of the BOD, providing practical and feasible recommendations on issues in the agenda for the BOD to discuss and to decide.

• Strengthen the independence amongst BOD’s members with the BOM and big shareholders of the Group via the vote of independent BOD’s members participating in the BOD, and to participate in the activities of the committees of the BOD;

ORIENTATIONS ON THE OPERATION OF THE BOD IN 2020

In 2020, the BOD shall continue to maintain the meeting regime quarterly as stipulated and to organise the meeting upon the form of opinion collection in written form from BOD’s members in order to implement the 2020 AGM’s resolutions, to implement the issues regarding the corporate governance and to direct the implementation of key tasks in 2020 across the Group, specifically as follows:

1.

2.

Continue to foster the values built and developed in recent time, strongly implementing the business solutions in order to “learning - applying - creating” in 2020, focusing on the issues such as (i) improving the business efficiency in the fields of operation, improving the ROCC, (ii) review, innovate, organize the HR structure for the better streamline and operating efficiency; (iii) invest for developing the HR resources closely align with the planning, rotation of staff throughout the Group; (iv) continue to foster the Synergy project of BVH; (v) focus on the investment and completion of the modern IT system to meet the business demand.

3.

4.

Overview

Implement the resolutions of the 2020 AGM focusing on the completion of the 2020 business plan, closely follow the development strategy for the period of 2016-2020;

Improve the corporate governance capability based on the application of the best International practices in order to ensure the exploitation of efficient resources, reaction of sustainable values in the long run, as well as attracting the investment sources into the enterprise;

Coordinate with the State management agencies to apply the legal framework, develop the market, new products; continue to focus on implementing the social welfare programs, support the community according to the direction of the Communist Party and the Government, being the pioneer enterprise in the act of environmental protection, yielding to implement the strategy for sustainable development of Baoviet Holdings.

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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BOARD OF DIRECTOR REPORT LIST OF MEMBERS OF THE BOD WITH CERTIFICATE OF TRAINING IN CORPORATE GOVERNANCE IN 2019 • Mr. Dao Dinh Thi - Chairman of the Board of Directors participated in the course “Building and operating the Board effectively: The role of Chairman & Succession Plan” (CG Certificate 2015); “Certification of Board Member” (DCP) (VIOD Certificate 2019). • Mr. Do Truong Minh - Member of the BOD, Chief Executive Officer (CG) 2015; • Ms. Than Hien Anh - Member of the BOD (VIOD Certificate 2019); • Mr. Nguyen Minh Hoang - Member of the BOD, Chief Officer of Strategy and Investment Block (CG) 2015; • Ms. Tran Thi Dieu Hang - Member of the BOD participated in the course: Master’s program on Auditing Committee (CG certificate 2015), (VIOD Certificate 2019); • Mr. Nguyen Xuan Viet - Member of the Board of Directors (CG certificate 2015).

Baoviet Holdings becomes an official member of Vietnam Institute of Directors (Vietnam Institute of Directors - VIOD) As a leading Financial-Insurance Group in Vietnam, corporate governance in Baoviet has been identified as a core element to ensure sustainable development. Baoviet said that when businesses combine and manage well their resources in the system, they will help the resources complement each other, creating resonant values ​​and greater values for ​​ shareholders and stakeholders. In 2019, Baoviet became an official member of the Vietnam Institute of Directors - VIOD (*), which providing cooperation opportunities for Baoviet Holdings in awareness and practical activities on corporate governance in Vietnam while also give access to advanced management practices through regular interaction with leading domestic and international organizations on corporate governance. The participation and companionship of Baoviet is highly appreciated by VIOD, which is an important contributing step towards motivate businesses in Vietnam to actively apply good management practices, gradually narrowing the gap between Vietnam and countries in the region and the world.

Over the past year, Baoviet Holdings has continuously renovated and absorbed the latest information and methods in accordance with International Standards on Corporate Governance, constantly improved and developed the corporate governance system in accordance with International Standards and Vietnamese law. In addition to professional training courses on Corporate Governance that members of Baoviet Holdings’ Board of Directors attended, the Board members also actively participated in forums and seminars to learn, exchange, acquire knowledge and forms of successful corporate governance in the region in general and in Vietnam in particular. One of the major developments contributing to the improvement of the Baoviet Holdings’ governance system is the training and consolidation of the Group’s Supervisory Board, ensuring that 100% of Supervisors have achieved the Certificate of supervision and professional auditing. In addition, the supervisors operate independently and interact closely with the Board of Directors, continuously monitor the operations of the business at subsidiaries, make appropriate and timely recommendations and ensure corporate governance is promoted.

With the slogan “Learning - Applying - Creating”, Baoviet Holdings is committed to perfecting accordingly to the recommendations of VIOD to ensure a strong and sustainable corporate governance system. (*) As a professional social organization, the Member of the Vietnam Institute of Directors (VIOD) operates in the model of an Institute of Directors (IOD) same as the custom practice in other countries. Some organizations are similar to VIOD in other countries such as the Thai Institute of Directors’ Member (Thai-IOD); Member of Singapore Institute of Directors (SID); Member of Australian Institute of Corporate Directors (AICD).

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Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

239


BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

THE COMMITTEES OF THE BOD

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THE AUDIT COMMITTEE

THE STRATEGY AND INVESTMENT COMMITTEE

CORPORATE GOVERNANCE OFFICIERS OF BVH

The Audit Committee (AC) is an agency within the corporate governance structure of Baoviet Holdings (BVH) since the decision on establishment of BVH in 2008. In 2015, the functions, responsibilities and organisational structure of the AC have been revised in order to keep its relevance to the actual operation of BVH, to foster the efficiency, effectiveness of the operation of the Committee.

The Strategy and Investment Committee (“SIC”) is a body of the management structure of BVH, established upon the decision of the BOD. The main functions of the Committee are to assist the BOD of BVH in the process of approving the consultancy and recommendation regarding the contents related to the fields of strategy and investment.

The Corporate Governance Officer (CGO) is a body of the corporate governance structure of BVH, established by the BOD. The main functions of the CGO are to assist the BOD of BVH.

THANK YOU FOR YOUR TRUST Integrated Report 2019

THE REMUNERATION AND APPOINTMENT COMMITTEE

THE ASSETS-LIABILITIES COMMITTEE (“ALCO”)

The Remuneration and Appointment Committee (RAC) is a body of the corporate governance system of Baoviet Holdings, established upon the decision of the BOD.

The ALCO committee has the functions on consulting and revising to the BOD. In 2019, the ALCO committee started to construct and to transfer the database to implement the ALCO reports throughout the Group via Power BI.


REPORT OF THE AUDIT COMMITTEE

RIGHTS AND RESPONSIBILITIES The Audit Committee (AC) is an agency within the corporate governance structure of Baoviet Holdings (BVH) since the decision on establishment of BVH in 2008. In 2015, the functions, responsibilities and organisational structure of the AC have been revised in order to keep its relevance to the actual operation of BVH, to foster the efficiency, effectiveness of the operation of the Committee. Therefore, the AC has functions of consultancy and assistance to the BOD in terms of: • Ensuring the internal audit system and complying the law in such efficient manners via the internal audit activities • Ensuring the sufficient requirements on the external financial reports (including the applicable requirements for the listing onto the security market according to the law and the Charter of BVH) via the assessment of the audited financial reports (or revision).

The AC has main responsibilities as follows • Management in terms of profession, specialization on the activities of the Internal Audit Block (IAB), including: the construction of the plan on auditing strategy, the annual audit plan; professional issues related to the IAB in the report on the auditing results; Inspections and supervision of the internal audit plan, calculation of the effectiveness of the internal audit activities; Consideration of key results from the internal audit activities and feedbacks from the CEO, Chiefs for each Blocks of BVH and the CEO of the Subsidiaries with 100% charter capital owned by BVH. • Recommendations to the BOD and the CEO of BVH in order to ensure the IAB having sufficient resources for organizing the implementation of auditing activities. • Assessment of separated and consolidated audited financial reports of BVH annually and halfyear periods regarding the compliance of the auditing standards, regulations on the listed and requirements of the law related to the financial reports to submit to the BOD of BVH. The implementation of coordinating the Supervisory Board of BVH regarding the tasks related to the construction of the reports on finance and independent auditing.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

STRUCTURE OF THE AUDIT COMMITTEE In 2019, the Audit Committee continues the operation with the structure of 01 Chairwoman and 02 members, in which the Chairwoman of the Audit Committee is a BOD’s member, 01 member as the Deputy Chief on Internal Audit of BVH, 01 member as BOD’s member, representing the strategic partner i.e. Sumitomo Life. The members of the Audit Committee have long-time experience in the fields of auditing, finance, insurance and investment. HR of the Audit Committee up to 31/12/2019: Ms. TRAN THI DIEU HANG Chairwoman BOD’S member of BVH; Head of Inspection - Internal Audit, BVH Nationality: Vietnamese Qualification(s): MsC. Business Management Experiences in finance & insurance: 24 years Current position: • BOD’s member tenure 2018-2023 (since 27/6/2018) • Chairwoman Audit Committee; • Head of Inspection - Internal Audit, BVH; • Chairwoman of the Members’ Council of BVGI. Mr. NGUYEN QUANG VINH Member Deputy Head of Inspection - Internal Audit, BVH Nationality: Vietnamese Qualification(s): MsC. Economics Experiences in finance & insurance: 31 years Current position: • Deputy Director of Internal Audit Department, BVH Member of Audit Committee. Mr. TERUO SHIMMEN Member BOD’S member of BVH Nationality: Japanese Qualification(s): BsC. Foreign Studies Experiences in finance & insurance: 28 years Current position: • BOD’s member tenure 2018-2023 (since 29/6/2019) • Member of the Members’ Council at BVL; • Member of Audit Committee; • Member of Strategy &Investment Committee. 242

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ACTIVITIES OF THE AUDIT COMMITTEE IN 2019 In 2019, the Audit Committee implemented the key tasks according to its functions and scopes as follows: • Participated in directing the construction of the internal audit plan as well as the professional tasks of the internal audit block in order to ensure the quality, progress and completion of 100% plan in 2019 as approved by the AGM; directed the internal audit Block to implement 34 audit sessions, including 12 sessions at Subsidiaries of BVGI and assessement on the business performance in 2018, in 6M of 2019 at BVGI; 15 sessions at Subsidiaries of BVL, 06 audit session on investment activities. All of the auditing sessions have in time identified the weaknesses in the implementation of the internal regulations of BVH; Regulations and professional procedure of the Subsidiaries, providing relevant recommendations. Besides, the committee provided recommendations on the implementation of the regulations of the Government in the business field, assisting the Subsidiaries to strengthen the audit tasks as stipulated by the Law. Upon the approval of the audit results, the BOD and CEO have acted in time in order to foster the corporate governance and improving the management efficiency. • Review of financial reports: In 2019, the Audit Committee cooperated with the Supervisory Board, Ernst & Young (“EY”) independent audit company and the financial

department of the Subsidiaries, company members regarding the financial reports in 2019, in order to ensure such reports to comply with the accounting standards, financial information disclosure regime for listed company. Besides, the Audit Committee proceeded the evaluation/consultancy to the BOD for approval of the VAS audited financial reports of the Parent company and the consolidated reports of BVH in 2018 according to VAS and IFRS. • The Audit Committee provided opinions regarding the reports/ submissions of the Audit Block in order to improve the operating quality of the Block; simultaneously participated in the recommendation and report to the BOD/ CEO in the follow-up completion of organizing the operation mechanism of the Internal Audit Block. • Implemented the cooperation between the Audit Committee and other departments of the Parent company and its Subsidiaries; providing opinions to the meeting of RMC, ALCO and other tasks upon request of the BOD. • In order to fulfill the above tasks, Audit Committee has hold meetings, discussions, comments on periodic reports as well as reports of the Committee before submitting to the BOD.

DIRECTIONS IN 2020 In 2020, upon the solid foundation of strong experience in domestic and overseas flat-forms on the fields of audit, finance, insurance and investment, the Audit Committee continue to implement the consulting function to the BOD with the purposes as follows:

1.

Ensure the efficiency of the supervisory system;

2.

Direct the professional tasks of the Internal Audit Block to ensure the completion of the 2019 business plan assigned by the BOD;

3.

Implement the tasks related to the financial reports and organised the independent audit;

4.

Directed to ensure the quality in the task of internal audit i.e. review, update the stipulated documents; procedure in order to ensure the compliance to the law and the regulations of BVH;

5.

Foster the cooperation between the Supervisory Board and other functional agencies of BVH and its Subsidiaries.

The Audit Committee continue to excel in completing the operation plan in 2020 in order to strengthen the roles of the Audit Committee in the consultancy to ensure the efficiency, risk control, improvement of corporate governance; contribution to meet the business targets in 2020 of BVH. Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

OPERATION OF THE REMUNERATION AND APPOINTMENT COMMITTEE FUNCTIONS AND RESPONSIBILITIES The Remuneration and Appointment Committee (RAC) is a body of the corporate governance system of Baoviet Holdings, established upon the decision of the BOD. The main functions of the Committees are as follows: Consult, suggest to the BOD regarding the planning on the strategy development of HR, especially the strategy development of the senior HR resources of BVH; Recommend to the BOD on the consideration, approval of the fundamental issues regarding: • Models on the organizational structure and the model on the corporate governance; • Policies on the management of labour and salary of BVH; • Policies on the staff management of BVH; • Issues related to the salary, remuneration, planning, and appointment of staff, HR strengthening upon the direction of BOD, etc.

MEMBERS OF THE REMUNERATION AND APPOINTMENT COMMITTEE In 2019, the RAC had several changes in the HR i.e. The Chairman of the RAC of BVH has been changed since 18th July 2019. Upon the functions and responsibilities of the RAC, the RAC implemented the consultancy to the BOD in completing the corporate governance model, drafting the development strategy in planning, appointment of management tittles at BVH and its 100% owned Subsidiaries, as well as the policies in HR, salary, remuneration and bonuses of staff under the management of the BOD. HR of the RAC up to 31/12/2018:

Mr. NGUYEN XUAN VIET BOD’S member, Chairman (since July 2019) Nationality: Vietnamese Qualification: MSc. Business Management Experiences in information technology, insurance: 25 years (from 1994) Current positions: Chairman of Vietnam Insurance Associationsl; BOD’s member of BVH; CEO of BVGI.

Mr. NGUYEN ANH TUAN COO, Member Nationality: Vietnamese Qualification: MSc. Banking - Finance Experience: 18 years in the investment field Current positions: COO of BVH (from 28/11/2016); Member of RAC of BVH; Member of Member’s Council at BVL; BOD’s member of BVSC; BOD’s member of BVTM.

Mr. PHI TRONG THAO Executive member Nationality: Vietnamese Qualification: PHd. Economics Management and National economic planning Experience: 36 years in the fields of insurance, education and training Current positions: Executive member of RAC of BVH.

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ACTIVITIES OF THE COMMITTEE IN 2019 In 2019, the RAC organized 02 direct meetings with the contents as follows:

1.

2.

3.

Evaluate the work in 2019 and the implementation plan in 2020;

Delegate tasks to members;

Discuss on the directions to draft the regulations of BVH in the field of HR management.

Besides, the RAC proceeded to organized 35 meetings in the form of opinion collection in order to evaluate, review the recommendations of BVH and its Subsidiaries with 100% charter capital owned by BVH in order to propose to the BOD for consideration and decision upon the issues related to the field of senior HR management as follows: • The regulation on the organization and operation of the Internal Audit Block and the responsibilities of the Divisions of the Internal Audit Block; • Revised and issued the regulation Representatives of BVH (3rd Edition);

on

the

• Staff activities of BVH; • Evaluation on the operated results of the BOD of BVH and of the BOD’s members (3rd time); • HR strengthening of the leaders of the Operation Management Block; • Re-appointment of the capital representatives and reappointment of the Chairman of the Member’s Council of BVGI and BVL; • HR strengthening on the capital representatives of BVH at the enterprises with capital invested by BVH;

• Revised, supplemented regulation on the remuneration regime, operation expenses of the members of the Member’s Council, Supervisory members, Committees of the BOD, the Corporate governance officiers of BVH, CEO of BVH and the bonus regime for management tittles of BVH. • Settlement of the 2019 salary fund and the salary plan in 2019 of BVH and its 100% owned Subsidiaries; • HR strengthening of BVH participating in the corporate governance and management of BVTM. • Approval of the planning on the Deputy CEO of BVI for the period of 2019-2020. • The approval of the planning, appointment, reappointment of the tittles on CEO, DCEO, Chief Accountant of the Subsidiaries of the period of 20192021. • The settlement of the 2018 salary funds, and the 2019 salay plan of BVH and its 100% owned Subsidiaries.

DIRECTIONS IN 2020 In 2020, the RAC continues to review in order to propose the supplementary strategy on the business activities of BVH in the period of 2016 – 2020, especially focusing on the strategy development of the senior HR resources of BVH, consult to the BOD on the regulations regarding the HR management within the scope of BVH, improve the efficiency of the corporate governance in the era of 4.0 digital business. The RAC continues to maintain its functions and responsibilities in consultancy, assistance to the BOD in the field of completing the regulations on the benefits, procedures, regulations related to the corporate governance of the senior HR currently implemented at BVH and its 100% owned Subsidiaries i.e. BVL, BVGI, BVF and BVI.

Overview

Development Strategy

Business Performance

Corporate Governance

Besides, the RAC has been implementing the consultancy to the BOD in supplementing the BOD’s independent members; strengthening the corporance governance model of BVH, focusing on the internal audit management structure, risk management aligned with the current new regulations i.e. The Decree No.05. Simultaneously, the RAC participated and contributed to the implementation of the regulations of the Secretary Board, the Government in fostering the innovation and development of the State enterprises, as well as other policies related to the politic documents prepared for the Party Congress at all levels.

Sustainable Development

Financial Statements

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BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

OPERATION OF THE STRATEGY AND INVESTMENT COMMITTEE FUNCTIONS AND RESPONSIBILITIES The Strategy and Investment Committee (“SIC”) is a body of the management structure of BVH, established upon the decision of the BOD. The main functions of the Committee are to assist the BOD of BVH in the process of approving the consultancy and recommendation regarding the contents related to the fields of strategy and investment, specifically as follows: • Consult, recommend regarding the issues on strategy and investment as well as the business strategy of BVH and its Subsidiaries; • Consult, recommend regarding issues on the strategic investment, drafting the policies and principles on short-term, mid-term and long term investment, strategy and policies on investment risk management, research, revise and evaluate the investment portfolio upon the competence of the BOD.

MEMBERS OF SIC The SIC in 2019 operated with 01 Chairman – an BOD’s member of BVH as well as being the Director of the Strategy and Investment Block; 01 member as the representative from SML; 01 member as the DCOF of BVH. All members have tremendous experiences in the field of constructing and managing the investment projects, improving the roles of consultancy to the BOD upon the decision related to the strategic development and other investment activities of BVH. HR of the SIC up to 31/12/2019: Mr. NGUYEN MINH HOANG BOD’S Member Chairman

Nationality: Vietnamese Qualification: MSc. Business Management Experience: 21 years in finance Current positions: • BOD’s member of BVH for the term 2018 - 2023 (from 27/6/2018); • Chairman of SIC; • Director of the Strategy Investment Block of BVH; • BOD’s member of BVL; • Chairman of the Representative Board of BVIF.

Mr. PHAM NGOC TU DCOF Member

Nationality: Vietnamese Qualification: MSc. Economics Experience: 17 years in finance Current positions: • DCOF of BVH (from 18/5/2015); • Member of SIC of BVH;

Mr. TERUO SHIMMEN Member

Nationality: Japanese Qualification: BSc. International research Experience: 28 years in insurance Current positions: • Member of the MC at BVL; • Member of the Audit Committee of BVH; • Head of representative office of SML in Hanoi.

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ACTIVITIES OF THE COMMITTEE IN 2019 In 2019, the SIC organized 02 direct meetings with the contents as follows:

1.

2.

Summarise all tasks in 2019 and the plan in 2020;

Delegate tasks to its members.

Besides, the SIC proceeded 14 meetings upon the form of opinion collection regarding the contents as follows:

• Opinion collection regarding the procurement plan on fixed assets, fundamental construction, real estates and IT in 2019; • Opinion collection regarding the 2019 business plan; • Opinion collection regarding the increase of capital for the Subsidiaries; • Opinion collection regarding the Solutions to distribute PAT n 2018 of Subsidiaries; • Opinion collection regarding the business lines of BVI; • Opinion collection regarding the change of purposes in the use of land, the proposal to rearrange the land of BVH at current use; • Opinion collection regarding the growth scenarios for the period of 20212025 of BVH; • Opinion collection regarding the investment projects upon the competence of the BOD.

ORIENTATIONS ON THE OPERATION IN 2020 Upon the role of consultancy and recommendation to the BOD regarding the issues related to the strategy and investment, in 2020, the SIC shall continue to proactively consult in the implementation and completion of the Strategy plan for the period of 2016 - 2020, simultaneously to provide opinions regarding the development strategy of BVH for the period of 2021 - 2025 as well as providing the consultancy on the strategic investments of BVH upon the delegation from the BOD as stipulated by the law and the internal regulations of BVH.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

OPERATION OF THE ASSETSLIABILITIES COMMITTEE (“ALCO”) FUNCTIONS AND RESPONSIBILITIES The ALCO committee has the functions on consulting and revising to the BOD regarding the contents as follows:

1.

Evaluate, review the business performance, financial results and the business development, management and development of capital and assets of BVH and its Subsidiaries;

The ALCO committee implements the rights and responsibilities as follows:

1.

Recommend on the policies, strategies and plan on the management of assets and liabilities, risk management related to the assets and liabilities for various periods of time;

2. Evaluate and recommend on the policies,

2. Consider, evaluate and recommend on the

solutions to effectively manage the mechanism, balance and the speed of growth of the assets and liabilities of BVH and of BVH regarding its Subsidiaries with the purpose of using effectively the financial resources and ensuring the solvency ratios;

solutions to ensure the mechanism of asset and liabilities and the balance of growth rate of the balance sheets regarding the plan, the business development strategy, and the scope of charter capital;

3. Monitor

the external environment and determine the impacts upon the profits, the balance sheets and the solvency ratios according to the hypothesis;

4. Evaluate

and provide the solutions to implement the risk management on the impact possibilities to the balance sheets and the business performance of BVH and its Subsidiaries.

3. Consider, evaluate and recommend on the efficiency of using assets and liabilities in order to ultilise the profits and to balance the risks of BVH and its Subsidiaries;

4. Evaluate the solvency upon the actual statistics, as stipulated by BVH and the law (if any), the position for safe capital, the balance between assets and liabilities of BVH and its Subsidiaries;

5. Evaluate and recommend on the solutions to risk management potentially having impacts on the business performance and the balance sheets. The recommendations on investment limit, yields, risk limits and other indices for BVH and its Subsidiaries.

MEMBERS OF THE ALCO COMMITTEE The AlCO committee includes: the CEO of BVH as the Chairman of the Committee, COF/DCOF of BVH as the standing member and the Secretary Board with 03 members. The remaining members come from the Block/Division of BVH, representatives from Subsidiaries, including 02 presentatives from each Subsidiaries (Chairman of the Member’s Council/ BOD and CEo of Subsidiaries).

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ACTIVITIES OF THE ALCO COMMITTEE IN 2019 In 2019, in order to evaluate the impacts on the business performance of BVH and its Subsidiaries, the ALCO committee organized the regular meetings with the contents specifically as follows:

1.

Evaluate the financial health and the KPIs of the Subsidiaries; the progress of capital use; solvency ratios, the relevance between assets and liabilities;

2. Review the operating efficiency of the investments of the Strategic Investment Block;

3. Reports of the Finance Management Block with the contents as follows: • Financial performance, relevance of assets and liabilities; • The status of capital usage, capital demand; • Solvency and liquidity risks.

4. Summarise the main issues of each Subsidiaries.

In 2019, the ALCO committee started to construct and to transfer the database to implement the ALCO reports throughout the Group via Power BI aside from the reporting system maintenance according to the old format. ORIENTATIONS ON THE OPERATION IN 2020 In 2020, the ALCO committee yields to focus on improving the efficiency of the assetsliability management of BVH and its Subsidiaries, via the evaluation of the market impacts, solvency risks and other risks potentially affecting the relevance between assets and liabilities; propose the recommendations to improve the capital usage as well as proving the management information in-time and indepth, specifically as follows:

Overview

Development Strategy

Business Performance

1.

Related Blocks/ divisions should have frequent discussions, synergize to implement the evaluation and recommendations regarding the policies, strategies and management plan on assets and liabilities of BVH and its Subsidiaries for various periods of time; upon such evaluation, to update on the changes in the macro economies as well as the business environment and the actual business performance of the Group.

2.

Evaluate, review the influential factors and propose the recommendations on the solutions to ensure the relevant mechanism of assets and liabilities, to balance the growth rate of assets from the balance sheets in order to ensure the responsibilities of customers, being relevant to the plan, and the sustainable development plan of the Group;

3.

4.

Strengthen the evaluation, management, adjustment of assets and liabilities of BVH and its Subsidiaries qualitatively and quantitatively;

Diversify the means of communications to discuss, provide opinions via email as well as the application of IT such as online chat, workplace, etc. continue and foster the application of Power BI into the business activities such as tracking, analyzing, evaluating and strucsting the ALCO reports.

Corporate Governance

Sustainable Development

Financial Statements

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BOARD OF DIRECTORS’ SUBORDINATING COMMITTEE REPORT

CORPORATE GOVERNANCE OFFICIERS OF BVH FUNCTIONS AND RESPONSIBILITIES The Corporate Governance Officer (CGO) is a body of the corporate governance structure of BVH, established by the BOD. The main functions of the CGO are to assist the BOD of BVH regarding the areas as follows: • Prepare the meetings of the BOD, the Supervisory Board and the AGM upon the request of the BOD or the Supervisory Board; • Participate in the meetings of the BOD, the Supervisory Board and to draft meeting minutes; • Consult on the procedures of the meetings, the contents upon the direction of the BOD; • Ensure the resolutions of the BOD relevant as stipulated by the law; • Provide the information, meeting minures of the BOD and other information of the BOD’s members and the members of the Supervisory Board.

MEMBERS OF CGO According to the Law on Enterprise, the charter of BVH, the regulation on corporate governance of BVH, the BOD established the Resolution no. 56/2018/NQ-HDQT dated 11th July 2018 regarding the CGO, the CGO include 03 members as follows: 01 general CG (Head of the Corporate Secretary Division), 02 CGs (Head of Legal Compliance Division and Deputy Head of the Corporate Secretary Division). The CGs are the heads of functional divisions of BVH with highly extensive experiences in finance, legal compliance, risk management; to consult and propose to the BOD regarding the activities of the BOD in the fields of corporate governance. HE of the CGO as at 31/12/2019:

Ms. LUONG THI BICH NGOC Corporate Governor Cum Secretary of BVH (General CG)

Ms. LE THI THANH CHAU Corporate Governor Cum Secretary of BVH

Year of birth: 1982

Year of birth: 1981

Nationality: Vietnamese

Nationality: Vietnamese

Qualification: MSc. Banking and Finance, Bsc. Banking and Finance, Auditor Certificate of the MOF;

Qualification: MSc. Risk management, BSc. Accounting and Audit;

Experience: 14 years in finance and corporate secretary.

Current positions:

Current positions: • The CG of BVH cum the secretary of BVH (from 11/7/2018); • Head of Corporate Secretary Division. Past experiences: • Deputy Head of Corporate Secretary Division; • Kiểm toán viên - Công ty cổ phần kiểm toán tư vấn thuế (ATC).

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Experience: 11 years in finance and risk management • The CG of BVH cum the secretary of BVH (from 11/7/2018); • Deputy Head of Corporate Secretary Division; • BOD’s member of HiPT. Past experiences: • Deputy Head of Risk Management Division.


ACTIVITIES OF CGOS IN 2019 In 2019, the CGOs of BVH implemented the responsibilities as stipulated according to the funsctions and responsibilities and upon the direction, request of the BOD, BOD’s Chairman, specifically as follows: • Consulted to the BOD of BVH regarding the organization of the 2019 AGM as stipulated and other related tasks between BVH and the shareholders of BVH;

• Provided the financial information, copies of meeting minutes of the BOD and other imformation of the BOD’s members and the members of the Supervisory Board;

• Prepared the meetings of the BOD, the Supervisory Board and the 2019 AGM upon the request of the BOD and the Supervisory Board, ensuring the relevance to the operation plan of the BOD and the Supervisory Board in 2019 and to comply with the law, the Charter of BVH;

• Supervised and reported to the BOD on the operation of the company information disclosure;

• Participated and recorded, drafted the meeting minutes of the BOD, the Supervisory Board and the 2019 AGM of BVH; • Consulted on the procedures to draft the resolutions of the BOD, of the AGM as stipulated by the law; coordinated to implement, foster the implementation of the resolutions, decisions, official announcements, conclusions of the BOD; of the AGM to ensure the deadlines as stipulated;

• Researched, proposed to the BOD regarding training programmes for BOD’s members and the members of the Supervisory Board; • Implemented the filing activities, date confidentiality, document issuance of the BOD and other documents as stipulated; • Implemented other tasks upon the directions of the BOD.

ORIENTATIONS ON THE OPERATION IN 2020 With the consultation role to the BOD regarding the issues related to the operation of the BOD, in 2020, the CGOs shall continue to proactively consults in the organization of the BOD meetings quarterly, the meetings of the Supervisory Board, the organization of the 2020 AGM and other contents related to the functions and responsibilities of the CGs as well as upon the directions of the BOD.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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SUPERVISORY BOARD REPORT

Protect the rights and benefits of shareholders, investors is the essential tasks of the Supervisory Board. Upon our responsibilities, the Supervisory Board has been under continuous improvement on the activities to meet the expected demand from the investors and shareholders. RIGHTS AND RESPONSIBILITIES OF THE SUPERVISORY BOARD The Supervisory Board (SB) is a body of the corporate governance structure, voted by the AGM, the operation of the SB comply with the regulations as stipulated by the law, the Charter of BVH and the related regulations, and internal rules. According to the Law on Enterprise and the Charter of BVH, the SB have rights and responsibilities as follows:

252

1.

Implement the supersion on the BOD, CEO and other management tittles in the corporate governance and management of Baoviet Holdings;

2.

Implement the supervision on the financial performance of Baoviet Holdings, review the relevance, legality, honesty and carefulness in the corporate governance and the management of the business activities; the systematication, unification and relevance of the accounting activitites, statistics and the drafting of the financial reports;

3.

Revise the suffication, legality and honest of the reports on the business performance, annual and halfyear financial reports of Baoviet Holdings;

4.

Review, inspected and evaluated the effectiveness and efficiency of the internal audit system, the risk management system in order to provide the early and in-time warning to Baoviet Holdings;

5.

Recommend to the BOD or the AGM regarding the solutions on the revision and supplement, renovation of the management organization, the supervision and management of the business performance of Baoviet Holdings;

6.

Have rights to participate and provide opinions in the meetings of the AGM, the BOD and other meetings of the Company;

7.

Recommend and propose to the AGM for approval on the organization of the independent audit implementing the financial reports of Baoviet Holdings.

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HR OF THE SUPERVISORY BOARD The 2019 AGM of Baoviet Holdings and the first meeting of the Supervisory Board voted on the tittles of the Supervisory Board (SB) as follows: No.

Fullname

Tittles

Rate of ownership at BVH

Dated voted to participate in the SB

1

Mr. Ong Tien Hung

Head of Supervisory Board

29/11/2012: voted to be SM 27/06/2018 revoted as SM 29/06/2019 voted to be Head of SB

0.01% (67,239 shares)

2

Ms. Tran Thi Phuong

Supervisory Member

27/06/2018: voted to be SM

0.00% (1,500 shares )

3

Mr. Vu Thanh Hai

Supervisory Member

29/06/2019: voted to be SM

0.00% (480 shares )

The SB has 03 Supevisory members (SM), including -1 Head of Supervisory Board working as executive member, and 02 concurrent SMs. The SMs hold sufficient qualifications and eligible for being SMs as stipulated by the 2014 Law on Enterprise and the Charter of Baoviet Holdings (which means each SM is an auditor or accountant; Head of SB

is a professional auditor). Each SM works independently without holding any managerial position at Baoviet Holdings nor working at the Accounting Department nor working as independent auditors for the financial reports of BVH.

OPERATED RESULTS OF THE SUPERVISORY BOARD Upon the rights and responsibilities as stipulated and the Operation plan of the Supervisory Board approved by the 2019 AGM of Baoviet Holdings, the operation of the SB in 2019 reached the results as follows: Meetings of the SB The SB organized 04 meetings (02 regular and 02 open meetings) with the main contents as follows: Date of meeting

22/03/2019

Contents

• Approval on the resignation letter of Mr. Nguyen Ngoc Thuy

No. of SB participated

Rate

3/3

100%

3/3

100%

3/3

100%

3/3

100%

• Evaluation on the operated results of the SB from the meeting dated 28/09/2018 up to now and the key tasks of the SB in QII and QIII.2019.

05/04/2019

• Approval of the reports of the SB submitted to the 2019 AGM of BVH; • Approval of the reports of the SB at the 2018 Annual Report. • Approval of the official letter to the BOD regarding some comments, evaluations of the SB on the Draft Consolidated Financial Reports of BVH in 2018.

29/06/2019

• Vote on the tittle Head of SB • Evaluation on the operated results of the SB from the meeting dated 05/04/2019 up to now and the key tasks of the SB in QIII and QIV.2019.

12/08/2019

• Approval of the operation plan of the SB between the 2 terms of the AGM 2019-2020. • Approval of the Draft Delegation of tasks to SMs for the operation period of the SB from July 2019 to 2023

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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SUPERVISORY BOARD REPORT

In the meetings, the SMs participated fully, working at high committment spirit. The organisation of the meetings and the issuance of the official documents of the SB were implemented as stipulated by the Law on Enterprise, and the Charter of BVH as well as the Regulations on the organisation and operation of the SB.

3. 2.

Besides, in order to implement the tasks of the SB, aside from direct meetings, the Head of the SB organised to request for opinions from the SMs via emails regarding the main contents as follows:

1.

4.

5.

No.

Date

Contents

1

25/07/2019

Recommendations of the SB regarding the Seperated and Consolidated Financial Reports in QI. 2019

2

05/08/2019

Delegation of tasks to SMs

3

24/09/2019

Opinions on the Interim separated and consolidated FRs in 2019

4

11/11/2019

The development project on implementing Talisman Software – Phase 1 and Insure J Project

5

08/12/2019

Time for payments on the remaining expenses of the PM softward of the Finance & Management Block

SUPERVISION OF THE GROUP MANAGEMENT BY THE BOD 2019 was the year the Group encountered many difficulties in business operations, but under the close guidance of the Board of Directors, the drastic management of the Chief Executive Officer, in 2019 the whole Group has basically achieved the following business targets. Specifically: Total consolidated revenue reached VND 44,500 billion (equivalent to nearly USD 2 billion). Nonlife insurance sector: Baoviet Insurance Corporation increased its premium revenue by 7.6% and continued to affirm its leading position in the market. Life insurance sector: Baoviet Life Corporation’ insurance premium revenue grew by 18% and continues to consolidate the No. 1 position in the market in terms of total revenue. In 2019, the Board of Directors held 06 regular meetings, in addition to promptly issue resolutions and decisions, the Board of Directors consulted the Board members in writing. In 2019, the Board of Directors issued 104 Resolutions and 43 Decisions to: amend and supplement the Group’s Charter, Group Management Regulation, ...; successfully organized the 2019 Annual General Meeting of Shareholders and implemented the Resolutions of the Annual General Meeting of Shareholders; for the

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policy of strengthening the organizational structure and rearranging personnel at the Parent Company; successfully completed the private placement for strategic shareholder Sumitomo Life to meet the Group’s capital raising strategy for the 2016-2020 period; continue to closely cooperate and promote the experience and strengths of Sumitomo Life strategic shareholders in the field of insurance premiums actuary, information technology; business direction and direction in accordance with the Resolution of the Annual General Meeting of Shareholders 2019; decide the jobs under the authority of the Board. During the Board meetings in particular and the Board’s activities in general, all members of the Board of Directors participated fully, worked with high sense of responsibility, promoted the experience and leadership capacity of each BOD member. The Board of Directors has operated in accordance with the rights and duties stipulated in the Group Charter. Resolutions and decisions of the Board of Directors were issued in accordance with the reality, timely meeting management requirements and business development needs of the Group. The BOD has successfully fulfilled its corporate governance duties.


SUPERVISION ON THE MANAGEMENT TASKS OF CEO In 2019, upon the close and in-time directions of the BOD, the CEO exerted significant efforts in his regular management and direction, in-timely set out and implemented the business solutions to meet the targets on 2019 business plan approved by the 2019 AGM and the resolutions and decisions by the BOD. Throught the management, the CEO

STT

complied to the decentralization of corporate governance structure as stipulated by the Charter, the regulations on the corporate governance, and other internal regulations of BVH as well as the resolutions and decisions of BOD. In 2019, BVH implemented the business plan with the key targets as follows (estimated figures):

2019 plan VND Billion

Chỉ tiêu

2019 Estimates VND Billion

Rate

1

Total revenue

1,544

1,544

100.00%

2

PAT

1,080

1,097

101.6%

3

ROE (%).

15.4

15.7

101.94%

In 2019, BVH fostered the intensive investment and training, improve the quality, capability of key staff. Regarding IT: BVH and its Subsidiaries focused on quick implementation of the progress on key IT projects and some modern IT applications in order to meet the daily business activities, corporate governance such as: BVFR, BVOffice. Regarding the Digitalisation project: organized training on Power BI for the Blocks, Divisions of BVH with positive results; BVGI completed the data connection from Insure J into Sunaccount for XCG, improved BVcare, BVdirect, Eclaim, BVoffice, BVpay and BVpay Pro. Golive some tourism products e.g. (Agency Portal); connect E-envoice i.e. Sinvoice for the products InsureJ; BVL implemented LIPA01 into business, continue to develop Chatbot, customer portal i.e. Mylife; BVSC continued to implement the software i.e. Front office based on FSS and other key IT projects. Implemented Brokerdesk – Broker support application; SD-WAN network system; developed the application on deposit – payment with Vietinbank; implemented the integrated connection system in order to reboost the customer transactions.

Continued to implement the Synergy Project of BVH in order to foster the existing strength of the Finance- Insurance BaoViet Group; strengthen the modernization of the brand image. Launched new products and breakthrough in order to meet the dynamic demand of customers.

SUPERVISION ON THE PROGRESS OF ORGANISING THE 2019 ANNUAL GENERAL SHAREHOLDERS’ MEETING AND THE APPROVAL OF THE RESOLUTIONS OF THE 2019 ANNUAL GENERAL SHAREHOLDERS’ MEETING OF BAOVIET HOLDINGS Throughout the supervision, the SB realized that the organization of the AGM meeting and the approval of the resolutions of the 2019 AGM of Baoviet Holdings complied fully as stipulated by the law and the Charter of Baoviet Holdings.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

255


SUPERVISORY BOARD REPORT SUPERVISION ON THE IMPLEMENTATION OF THE 2019 ANNUAL GENERAL SHAREHOLDERS’ MEETING OF BAOVIET HOLDINGS Baoviet Holdings implemented the resolutions of the 2019 AGM with the contents as follows: • In 2019, BVH implemented the business targets approved by the 2019 AGM with the contents as mentioned above. • BVH completed the dividen payouts for the fiscal year 2018 with the rate of 10% i.e. 10,000Dong/share calculated over the charter capital of 7,008,864,340,000 and the use of profit after taxe in the fiscal year 2018 in order to plan on the funds as stipulated by the resolution No. 01/2019/NQ-ĐHĐCD-TĐBV dated 29/06/2019 approved by the 2019 AGM.

REVISION OF THE FINANCIAL REPORTS AND THE REPORT ON THE BUSINESS PERFORMANCE • In 2019, the SB often discussed, cooperated with the Finance Management Block, the indepenedent Auditors and other related bodies to review on the drafting, audit of the seperated financial reports of the Parent company and the consolidated financial report of BVH in 2019. • Via the Halfyear seperated and consolidated financial reports of BVH revised, audited by EY Vietnam, the SB provided the comments as follows: »» All of such reports have been drafted upon the selection of relevant accounting practices and applied this practice in such unified manners, implemented the evaluation and estimatation relevantly, carefully and complied with the the regulations and the Accounting standards and the Accounting Regime of Vietnam; »» The Halfyear consolidated financial reports in 2019 were presented clearly with the information on the events in the first 6 months of the fiscal year 2019 according to VAS; »» All of such reports were audited by EY Vietnam without any obmission of the auditors; »» The SMs agreed on the figures presented in the 2019 Halfyear Seperated and Consolidated Financial Reports of BVH revised and audited by EY Vietnam. • At the moment, the annual financial reports have been incompleted and unaudited, hence, the SB temporarily provided the evaluations regarding the Halfyear reports. Upon the official audited 2019 financial reports, should the SB supplement the comments afterwards.

OTHER ACTIVITIES OF THE SB Aside from the above activities, the SB and the SMs proceeded the other activities as follows:

256

1.

Supervised on the procedure organization the BOD’s meetings;

2.

Provided opinions regarding the Draft Charter (10th and 11th Revised, supplemented Editions) and the regulation on the corporate govenance of BVH (4th revised, supplemented Edition).

3.

Provided opinions regarding the Draft regulation on the Supervisory members at the Enterprised invested by BVH (1st and 2nd Editions);

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on

4.

Provided opinions regarding the Draft revised, supplemented regulations on the financial supervision, evaluation on the operation efficiency and the financial information disclosure regarding the enterprises invested by BVH;

5.

Provided opinions regarding the Draft regulation on Investment of BVH (revised, supplemented);

6.

Provided opinions regarding the supports to the leaders of BVH in some management related activities;

7.

Supevised the contents, scope, progress of the revision, audit of the 2019 financial reports according to the Contract on the audit service provision signed with EY Vietnam.


COOPERATION OF THE SB In 2019, the SB cooperated strictly with the BOD, CEO upon the principles for the legal and maximum benefits of BVH and shareholders as stipulated by the law and the Charter of BVH; The SMs were all invited and participated fully to the BOD’s meetings in order to update on the progress and the implementation of the supervision on the corporate

governance. Via the supervision task, the SB provided some recommendations, proposals to the BOD in order to foster the corporate governance, to complete the internal audit system, to meet the demand on business development. In order to complete the tasks, the SB often met, discussed via emails with the Blocks, functional Division of BVH in order to keep updated on the the corporate governance and management related information of the BOD and CEO.

DIRECTIONS ON THE OPERATION OF THE SUPERVISORY BOARD IN 2020 In order to complete its roles, responsibilities, as well as imprvoing the capacity in corpporate governance, management and the transparancy for the legal, maximum benefits of BVH and its shareholders, the SB will focus on the implementation of the contents as follows:

1.

Implement the functions and responsibilities as stipulated by the law, the charter of BVH and the regulation on the operation and organisation of the SB and other internal regulations of BVH, in which fostering the supervision on the financial performance of BVH;

2.

Research, update in time the new policies, supervise, recommend, propose for revision, supplement regarding irrelevant matters in order to ensure the sufficient compliance, in time regulations as stipulated by the law and to improve the efficiency of the internal audit system.

3.

Cooperate with the BOD, CEO and other Blocks, Divisions of BVH to keep updated on the information, provide opinions in order to serve better in the act of corporate governance of BVH.

Upon the tasks given by shareholders, with the young senior leaders gifted with high qualifications, capabilities in corporate goverannce and management as well as the committment and creativity at work, in 2019, upon the close directions from the BOD and the proactivity and fierceness of the CEO, Baoviet Holdings completed the business targets assigned by the AGM. Based upon the foundation and the directions on “Solidarity - Sharing - Synergy - Innovation - Piorneer”, in 2020, with the slogan “Learning - Application - Creativity”, the SB believes that the BOD, the CEO and the Board of Management shall lead Baoviet Holdings to complete all the targets and plans approved by the 2020 AGM.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

257


REMUNERATION POLICY FOR THE BOD, THE SUPERVISORY BOARD AND THE MANAGEMENT BOARD

WAGE REGIME Salaries of full-time Board members and Supervisory Board are determined in accordance with the Government’s Decree No. 53/2016 / ND-CP of June 13, 2016. Accordingly, the salary is linked to the level of accomplishment of the Baoviet’s production and business targets.

AWARD POLICY FOR THE BOD, THE SUPERVISORY BOARD AND THE MANAGEMENT BOARD Award budget of members of the Board of Directors and the Supervisory Board were extracted from the profit after tax of the company based on the results of the 2018 business plan that approved by the General Meeting of Shareholders in Decision No. 01/2019/NQ-ĐHĐCĐ-TĐBV dated on June 29, 2019, that equal to 652,000,000 dong (0.06% of profit after tax).

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ALLOWANCES OF THE MEMBERS OF THE BOARD OF DIRECTORS, SUPERVISORY BOARD AND MANAGEMENT BOARD

Use of car of Baoviet Holdings

• Members of the Board of Directors, Controllers and the Executive Board may use company’s cars to perform the management, administration, inspection and supervision of Baoviet’s business activities according to their powers and responsibilities of each member respectively. • Full-time members of the Board of Directors, Head of the Supervisory Board are equipped with Taxi cards and / or granted Taxi technology accounts to serve business travel according to Baoviet’s prescribed norms.

• Baoviet equips a mobile phone up to 01 time for a period of 02 consecutive years for members of the Board of Directors and the Supervisory Board;

Use of telephone

• Baoviet pays mobile phone charges and assigns fixed telephone charges at private houses to the full-time members of the Board of Directors and the Supervisory Board according to our regulations.

Social insurance, health insurance and other types of insurance

• In addition to participating in compulsory social insurance, members of the Board of Directors and Supervisory Board can also participate in Health Insurance, Cancer Insurance, An Phat Tron Doi Insurance, Huu Tri Vung Nghiep Insuarance and An Nghiep Thanh Cong Insuarance.

Periodic health check regime

• Members of the Board of Directors and the Board of Supervisors received annual health checks at high quality medical hospitals in Vietnam and were paid at the actual cost incurred.

Business allowance

• Members of the Board of Directors and Head of Supervisory Board are allowed to use business-class air tickets and stay at hotels (domestic and foreign) according to the 5-star hotel standard at work places or contracted under business trips according to the prescribed rate Baoviet’s regulations. • Supervisors are allowed to use the general airline ticket class and be paid for room charges according to the actual arising or contracting trips but not exceeding Baoviet’s prescribed level.

In addition to the expenses mentioned above, members of the Board of Directors and the Supervisory Board are on business trips and are entitled to additional accommodation allowances to offset other expenses incurred.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

259


REMUNERATION POLICY FOR THE BOD, THE SUPERVISORY BOARD AND THE MANAGEMENT BOARD

PRINCIPLES OF REMUNERATION

THE ACTUAL REMUNERATION IN 2019

Payment of monthly remuneration to non-specialized members of the Board of Directors and the Supervisory Board shall comply with the Resolution of the Annual General Meeting of Shareholders of Baoviet Holdings.

The actual compensation budget is 2,040,000.000 dong that determined based on the number of single-office holding managers in 2019 and the working time of each person:

The remuneration fund in 2019 for non-specialized members of the Board of Directors and the Supervisory Board of Baoviet approved by the Annual General Meeting of Shareholders in 2019 is as follows: • Remuneration for the BOD members: VND20 million/person/month.

THE ACTUAL COMPENSATION BUDGET FOR BOD

1,800,000,000 VND

• Remuneration for the Supervisory Board members: VND10 million/person/month. Pursuant to Decree No. 53/2016/ND-CP regulations on management of employees, salaries, remuneration and bonuses of joint-stock Companies, the actual compensation budget was determined based on the number of single-office holding managers and the working time of each person. Besides, the maximum compensation budget of multiple-office holding managers shall not exceed 20% that of single-office holding managers.

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THE ACTUAL COMPENSATION BUDGET FOR CONTROL BOARD

240,000,000 VND


POLICY OF SHAREHOLDER RELATIONS

Protection of rights and interests of shareholders and investors is one of the core i ssues integrated in Baoviet’s corporate governance. As a listed enterprise with nearly 10,000 shareholders, Baoviet has always directed its shareholder relations activities towards protecting and fully exercising shareholders’ rights, complying with the law, and ensuring information disclosure. transparency and equal treatment of shareholders.

NCREASE TRANSPARENCY OF INFORMATION

Overview

Development Strategy

IMPROVING THE RELIABILITY OF INFORMATION PROVIDED TO THE MARKET

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

261


POLICY OF SHAREHOLDER RELATIONS

DIVERSIFY INFORMATION SHARING CHANNELS FOR SHAREHOLDERS AND INVESTORS

Phương tiện thông tin đại chúng

Website

Information is the basis of all investment decisions thus Baoviet strives to diversify and improve sharing information channels, enabling shareholders and investors fully and timely access to information related to our development strategy, business performance, and corporate governance... In addition to regulatory information disclosure as per Circular No. 155/2015/ TTBTC, Baoviet proactively and timely discloses information that is deemed essential and may affect investors’ benefits, announces the launching of new products and services, the progress of the cooperation with strategic investor, aiming to allow investors to timely absorb the information related to Baoviet’s business operations. The maintenance of the bilingual Vietnamese - English Investors News (IR Newsletter) with analytical information about the specific business targets of Baoviet’s business activities has received positive feedbacks from investors and analysts because of the close-up view of business operations in the Baoviet Holdings - parent company and its subsidiaries.

Báo cáo thường niên

INCREASE INFORMATION TRANSPARENCY, AND CREDIBILITY OF INFORMATION DISCLOSED TO THE MARKET

Bản tin Nhà đầu tư

ĐHĐCĐ

Hội nghị chuyên gia phân tích

Kênh công bố thông tin của SGDCK, UBCKNN

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With a view to provide a greater financial reporting credibility, Baoviet annually reports financial accounts in accordance with the Vietnam Accounting Standards (VAS) and International Financial Reporting Standards (IFRS). While complying with the regulatory requirements to have the semi-annual Financial Statements reviewed and annual Financial Statements audited, Baoviet also conducted review for the quarterly Financial Statements to ensure the credibility of the disclosed financial information. While having its financial information audited as most enterprises nowadays do, Baoviet is a pioneer in conducting independent audit for non-financial information to increase the information credibility as it is guaranteed by Internal Audit Block.

By fully meeting the critical requirements of effective information disclosure and enforcement of shareholder relations policies, business results grew steadily, taking the leading position in the life and non-life insurance market in Vietnam, BVH continues to be voted into the Top 50 best listed companies (Forbes 50) and Baoviet brand value is valued at USD 267 million, double in value compared to 2018, contributing to enhance the brand reputation of BVH stock.


Investor Relations initiatives in 2019 to increase information transparency and credibility

PROACTIVE AND TRANSPARENT INFORMATION DISCLOSURE

INCREASE DATA CREDIBILITY

Keep reporting financial accounts in accordance with both VAS and IFRS; Have the semi-annual Financial Statements reviewed and annual Financial Statements audited; Have the quarterly Financial Statements reviewed .

Conduct information disclosure in compliance with Circular No. 155/2015/TT-BTC; Timely disclose information deemed essential and may impact on investors’ benefits;

ENHANCE COMMUNICATIONS WITH INVESTORS

Organize more investors meetings and better understand their needs of information; Addressing issues that concern investors. Respond to investors’ inquiries.

Keep Investor Relations section on website regularly updated in English and Vietnamese.

ENSURE THE BENEFITS AND MAINTAIN EQUAL TREATMENT FOR SHAREHOLDERS The adoption of policies to ensure the benefits of shareholders and maintain equal treatment for majority and minority shareholders remains Baoviet’s focus, with a view to make sure that shareholders have equal access to information, including dividend payout schedule and ratio, public offering, invitation to the Annual General Meeting of Shareholders (AGM) and ad-hoc shareholder meetings, and facilitate shareholders’ exercise of their voting rights...

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

263


POLICY OF SHAREHOLDER RELATIONS STREAMLINE THE ANNUAL GENERAL MEETING OF SHAREHOLDERS (AGM) ORGANIZATION PROCESSES IN COMPLIANCE WITH LEGAL REGULATIONS AND INTERNATIONAL BEST PRACTICE On the basis of the prevailing legal regulations and international best practice of corporate governance such as Asean Corporate Governance Scorecard, OECD and IFC Corporate Governance Principles, Baoviet continued to streamline the processes and procedures of organizing and voting at the AGM, selecting a convenient meeting venue and time, publishing the AGM invitations in three successive issues of a national newspaper, posting a full set of meeting materials on the company website as prescribed by the laws 21 days prior to meeting date,

encouraging shareholders to access these documents in order to assist with their discussion and voting at the AGM. Baoviet also encourages shareholders to be fully aware of their rights, including the rights to vote, receive dividends, nominate another shreholder to the Board of Directors and Supervisory Board, approve annual financial statements, and access to Baoviet business operations’ information.

MAINTAIN A STABLE POLICY OF PAYING ANNUAL DIVIDEND IN CASH Baoviet understands it well that one of the shareholders’ crucial rights is to receive dividend. Thanks to maintaining a stable policy of paying dividend in cash since public listing, Baoviet aims to guarantee periodic dividend payout to bring a steady income to shareholders. In 2019, Baoviet set aside VND700 billion for dividend payout, making the total dividend paid to shareholders increase to over VND8,000 billion since our initial public offering.

In addition, Baoviet has standardized the process of paying dividends with simple procedures, using a professional securities company to pay dividends to shareholders who have not deposited, facilitate shareholders to receive cash directly or receiving via bank transfer with simple procedures.

Dividend Payment Process at Baoviet Holdings

AGM APPROVE THE DIVIDEND PAYOUT RATIO

BOD ISSUED RESOLUTION AND DISCLOSE THE PAYOUT RATIO

CONCLUDE THE DIVIDEND’ RIGHTS PAIDOUT SHAREHOLDER LIST (WITH VSD)

EXECUTE DIVIDEND (30 DAYS AFTER THE CONCLUDED DATE)

2020 ORIENTATION • Meet more investors to better understand their needs, seek opportunities to cooperate with more Vietnamese and international investors; For 2020, Baoviet plans to increase the effectiveness and professionalism of Investor Relations function, with a focus on:

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• Refine Investor Relations section on website to make it more userfriendly and easier to navigate; • Continue to disclose information in English and Vietnamese for all materials published on Baoviet Holdings website; • Improve quantity and quality of analysis reports regarding BVH conducted by domestic and regional top financial institutions.


INFORMATION ON THE OWNERSHIP OF THE INTERNAL PERSONEL AND THE SHARE TRANSACTIONS OF THE INTERNAL PERSONAL In 2019, BVH did not have any share transations by the internal personal, including BOD’s members, the Supervisory Board, the Board of Management, Chief Accountant, the Authorised person for information disclosure, corporate secretary, the corporate governance officer, big shareholders and the related people to the above. The information on the ownership of the intenal shareholders in 2019 is presented as follows: (Representing the State ownership of MOF)

No.

(Representing the ownership of SML)

Fullname, tittle

Limited for transfer shares

Free for transfer shares

Private ownership

Represented ownership

End of term owned shares

End of term owned share rate

I

THE BOARD OF DIRECTORS

1

Dao Dinh Thi Chairman

55,045

174,119,770

174,174,815

23.46%

2

Do Truong Minh BOD’s member, CEO

15,000

112,141,830

112,156,830

15.11%

3

Kenji Yoneda BOD’s member

0

81,972,711

81,972,711

11.04%

4

Teruo Shimmen BOD’s member

0

81,972,710

81,972,710

11.04%

5

Than Hien Anh BOD’s member

44,630

49,062,050

49,106,680

6.62%

6

Nguyen Minh Hoang BOD’s member

0

49,062,050

49,062,050

6.61%

7

Nguyen Xuan Viet BOD’s member

83,835

49,062,050

49,145,885

6.62%

8

Tran Thi Dieu Hang BOD’s member

0

49,062,050

49,062,050

6.61%

Total II

SUPERVISORY BOARD

1

Ong Tien Hung Head

2

Tran Thi Phuong Member

3

Vu Thanh Hai Member Total

198,510

646,455,221

646,653,731

87.11%

67,239

0

67,239

0.01%

1,500

0

1,500

0.00%

480

0

480

0.00%

69,219

0

69,219

0.00%

III

MEMBER OF THE BOM, CHIEF ACCOUNTANT AND THE AUTHORIZED PERSON FOR INFORMATION DISCLOSURE

1

Nguyen Anh Tuan COO

2

Pham Ngoc Tu DCFO

3

Overview

0

0

0

0.00%

3,614

0

3,614

0.00%

Nguyen Xuan Hoa Chief Accountant cum. Head of Accounting Division

40,314

0

40,314

0.01%

Total

43,928

0

43,928

0.01%

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

265


POLICY OF SHAREHOLDER RELATIONS TRANSACTIONS WITH RELATED STAKEHOLDERS In 2019, Baoviet Holdings proceeded the transactions with the related parties including the Subsidiaries of BVH via the investment activities, and the provision/ receive of services. The information regarding the transactions is listed as follows: No.

266

Name of organization / individual

Relation to the Company

1

Ministry of Finance

Major Shareholders

2

Sumitomo Life Insurance

Major Shareholders

3

Baoviet Invest Ltd.

Subsidiary

4

Baoviet General Insurance Corporation

Subsidiary

5

Baoviet Life Corporation

Subsidiary

6

Baoviet Fund Management Company

Subsidiary

7

Baoviet Securities Joint Stock

Subsidiary

8

Bao Viet Value Investment Fund (BVIF)

Subsidiary

9

Au Viet Bao Viet Company Limited

Subsidiary

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Head office address / Contact address

Amount of transaction (VND)

No. 28 Tran Hung Dao, Hoan Kiem, Hanoi

(482,509,800,000) 4,011,741,161,610

7-18-24, Tsukiji, Chuo-ku, Tokyo, 104-8430, Japan

577,039,680 (122,509,091,000) 25,656,615,689 306,367,683 61,422,725,504 20,000,000

71 Ngo Si Lien, Dong Da, Hanoi

(5,705,920,541) (6,287,377,313) (4,813,352,203) 41,217,196,023 77,923,318,524 637,500,000 3,358,906,227

104 Tran Hung Dao, Hoan Kiem, Hanoi

2,123,911,601 171,818,182 (300,000,000,000) 953,329,358,389

Floor 37, Keangnam Hanoi Landmark Tower, Pham Hung, Tu Liem, Hanoi

Investing capital in the Group Office rental revenue BVH paid dividends in 2018 Profit transferred to BVH IT service revenue Office rental and car park revenue Revenue from training services Management expenses of the building and marketing consulting expenses Energy expenses Cost of repairing other properties and services Profit transferred to BVH IT service revenue Training services revenue Cost allocation on floors 1-72 Tran Hung Dao office and billboards Office rental revenue Sales of car liquidation The Group transferred money to increase its capital contribution Profit transferred to BVH IT service revenue

2,742,022,088

Training services revenue

3,358,906,227

Cost allocation on floors 1-72 Tran Hung Dao office and billboards BVH transferred money to increase its capital contribution

33,579,331,147

Profit transferred to the BVH

1,562,504,662

IT services revenue

252,000,000 12,984,357,900

72 Tran Hung Dao, Hoan Kiem, Hanoi

BVH paid dividends in 2018

93,842,216,911

(1,150,000,000,000) 6th Floor, Bao Viet Building, 72 Tran Hung Dao, Hoan Kiem, Hanoi

Notes

3,146,570,960 27,700,000 (533,275,206)

Training services revenue Dividends in 2018 IT services revenue Training services revenue Consulting expenses

0 0

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

267


ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019

PROACTIVELY USING THE ASEAN CORPORATE GOVERNANCE SCORECARD

ACGS As one of listed enterprises in Vietnam, Baoviet determines that building a robust governance structure based on the application of international practices is critical to sustainable development in long-term. Baoviet thus has gradually applied good corporate governance standards in the world such as the OECD Principles of Corporate Governance and the ASEAN Corporate Governance Scorecard in improving the efficiency of the corporate governance system in Baoviet. Our BOD, fully aware of the importance of corporate governance, has focused on increasing the corporate governance quality and capacity in the delivery of Baoviet business strategy. This aims at shaping a steady governance structure that adopts international best practices, leveraging the consolidated strength of groupwide resources, which allows us to control and supervise our business operations in a responsible, transparent, and effective way.

Baoviet not only complies Vietnamese legal regulations (include: 2014 Enterprise Law, the corporate governance regulations in Circular No121/201/TT-BTC by the Ministry of Finance, regulations on listing and monitoring on the Ho Chi Minh City Stock Exchange), but also apply the regional and international standards.

COMPLETE THE SYSTEM OF INTERNAL GOVERNANCE REGULATIONS TO EFFECTIVELY OPERATE THE CORPORATE GOVERNANCE MODEL In addition to establishing a solid corporate governance structure that observes Vietnamese legal regulations and adopts international corporate governance standards, Baoviet Holdings has developed and rolled out internal policies so as to create a consistent group-wide corporate governance structure. This enables us to control and supervise the business operations in a professional, 268

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transparent, and effective way, ensuring shareholders’ benefits and in alignment with the benefits of other stakeholders including customers, employees, and the community. In 2019, after changing several business lines and successfully issuing private shares, Baoviet actively


In addition, in 2019, the Board of Directors directed to review and finalize and issue important internal management regulations such as Baoviet Corporate Governance Regulation; Investment Regulation; Regulations of Baoviet Group’s capital representatives at enterprises with contributed capital of the Group, the Regulation on Financial Management; Regulations in the field of personnel organization, ...

amended and supplemented the Article and management regulations of Baoviet and submitted to the Annual General Meeting of 2020 for approval. This Charter and Regulation also referred to international practices on corporate governance and reference to the charter of large enterprises in the market, aimed at creating better conditions for governance, supporting in conducting business activities of Baoviet. No.

DOCUMENTS CORPORATE GOVERNANCE Charter of Baoviet Holdings (11th Revised and Supplemented Edition) dated 30/12/2019 Regulation on the organisation and operation of Internal Audit Block (Decision No.228/2019/QD-HDQT dated 06/03/2019) Regulation on Operation of Supervisory Board of Baoviet Holdings (issued as attachment of Decision No. 1151/2019/QD-HDQT dated 09/09/2019) Regulation on Strategic Management of Baoviet Holdings (issued as attachment of Decision No. 1196/2019/QD-HDQT dated 16/09/2019) ORGANISATION AND OPERATION OF FUNCTION OF BLOCKS Decision No. 481/2019/ QD-TDBV dated June 10, 2019regarding the issuance of regulation on the functions, duties and organizational structure of Operation Management Block and its divisions Decision No.293/2019/QD-TDBV dated March 07, 2015 regarding the issuance of regulation on the functions, duties and organizational structure of Financial Management Block and its divisions Decision No.882/2015/QD-TDBV dated 19/6/2015 regarding the issuance of regulation on the functions, duties and organizational structure of IT center and its divisions. LABOUR FORCE, HUMAN RESOURCES, SALARY LABOUR FORCE Labor regulations 2019 issued as attachment of Decision No. 1356/2019/ QD-TGD dated 23/10/2019 Collective labor agreement 2019 Decision No. 1355/2019 / QD-TGD dated 23/10/2019 on the issuance of the Regulation on termination of labor contracts at Baoviet Holdings SALARY, REMUNERATION AND SOCIAL WELFARE Regulations on remuneration, bonus and operating expenses for members of Supervisory Board, BOD, CEO and Management Board of Baoviet Holdings (Issued as attachment of Decision No.637/QD-HDQT dated 22/05/2019) Regulations on remuneration, bonus and operating expenses for Member’s Council and Supervisory Board members in subsidiaries owned by Baoviet Holdings (Issued together with Decision No. 562/QD-HDQT dated 10/04/2017) Regulation on financial inspection, evaluation of operating efficiency and the disclosure of financial information for enterprise with the investment from Baoviet Holdings (issued as an attachment of the decision No. 693/2019/QD-HDQT dated 07/06/2019) Decision No. 1622/2018/QD-TĐBV dated November 5, 2018 promulgating the Regulation on management of operating costs of Baoviet Holdings INVESTMENT Decision No. 1163/2010/QD-HDQT dated 15/9/2010 to issue the regulation on Investment and asset management of Baoviet Holdings Regulation on tender selection (issued as attachment of Decision 638/2019/QD-HDQT dated 22/05/2019) MARKETING - BRAND - COMMUNICATION Decision No. 1174/2017/QD-HDQT to issue the regulation on the information disclosure of Baoviet Holdings Decision No. 802/2019/QD-HDQT dated 27/06/2019 to issue the regulation on internal information management of Baoviet Holdings Decision No. 803/2019/QD-HDQT dated 27/06/2019 to issue the regulation on spokesman of Baoviet Holdings INFORMATION TECHNOLOGY Decision No. 61/2013/QD-TGD dated 11/01/2013 regarding theinformation security for Baoviet Holdings IT system (3rd amendment)

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019 COMPLIANCE OF THE REGULATION ON INFORMATION DISCLOSURE AND TRANSPARENCY Upon the validation of the Circular No. 155/2015/TTBTC dated 01/01/2016, Baoviet Holdings has practised serious implementation of the regulations on information disclosure as stipulated by the Circular. Any extraordinary information have been disclosed in due time to ensure the transparency to all shareholders and investors. Baoviet Holdings also yield to disclose all the information billingually in Vietnamese and English so that foreign investors can easily access, research and analyse the information about the enterprise. All the essential internal corporate governance regulations of Baoviet Holdings,

such as the regulation on corporate governance, regulations on business ethics and standards, etc have been translated and uploaded onto the website of Baoviet Holdings in both Vietnamese and English. The programs and agendas of the AGMs, meeting minutes and resolutions of the AGMs have also been uploaded in bilingual languages of Vietnamese and English. Such important stepping stone toward the International standards indicates the assurance for shareholders and equality amongst shareholders, especially towards foreign shareholders and investors.

STRENGTHEN THE CAPACITY TO EXERCISE CORPORATE GOVERNANCE VIA CORPORATE GOVERNANCE TRAINING AND COACHING COURSES Members of the Board of Directors (including foreign board members are representatives of strategic shareholders - Sumitomo Life Insurance Company), members of the Supervisory Board, General Director, Company Secretary, and officials Other managers have participated in the Corporate Governance Course organized by the State Securities Commission and have been granted a certificate of corporate governance training. In addition, members of the Board of Directors, Supervisory Board, Executive Board and other managers also participated in advanced training courses on risk management and internal control; sustainable development management and training courses on corporate governance according to ASEAN governance scorecards, experience in organizing GMS by the City Stock Exchange. HCM organized. Information about members is listed at the Internal shareholders list at Ownership of internal shareholders, page 273 and 274 of this report. 
 In addition to regulatory training courses, with the commitment to adopt the international best practices in corporate governance, Baoviet keeps updated with domestic and international corporate governance knowledge and practices, simultaneously being proactive in sharing the information related to corporate governance and organisational stucture to the foreign strategic partner - Sumitomo Lifein the development of the corporate governance structure toward the International.

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List of board members with company management training certificate: Mr. Dao Dinh Thi Chairman of the Board participated in the course of “Building and operating an effective Board of Directors: The role of the Chairman & successor plan” (CG Certification 2015). Mr. Do Truong Minh Member of the Board of Directors, Chief Executive Officer (CG Certification 2015). Mr. Nguyen Minh Hoang Member of the Board, Head of Strategy and Investment (CG Certification 2015). 
 Ms. Tran Thi Dieu Hang Member of the BOD participated in the course: Master’s program of Audit Committee (CG Certification 2015). Mr. Nguyen Xuan Viet Member of the Board (CG Certification 2015).


QUALITY IMPROVEMENT IN THE CORPORATE GOVERNANCE AS THE FOUNDATION FOR A BREAKTHROUGH DEVELOPMENT AND EXPANSION OF BUSINESS ACTIVITIES In order to improve the quality of corporate governance for a breakthrough development in the business activities, Baoviet Holdings have set the objectives to continue focusing on the implementation and completion of the upcoming periods as follows: • Continue to reinforce corporate governance model that promotes the co-ordination between Holdings and subsidiaries, as well as cross-subsidiary cooperation by establishing policies and procedures that ensure the group-wide consistency and compliance, and rigorously implement the Group Synergy Project; • Promote Baoviet Holdings’ centralized management across the group in the area of finance, human resources management and training, information technology, branding, investment, basic construction; Refine the policies on internal governance mechanism of the group in order to enhance the coordinating role of the parent company, creating strong connection and maximizing resources of subsidiaries; Focus on improving the efficiency of group-wide internal audit, risk management, and compliance;

• Keep updated with domestic and international corporate governance knowledge and practices, exchange the corporate governance experience and expertise as well as international best practices with our foreign strategic partner Sumitomo Life, and investigate how to incorporate these in Baoviet’s operations; • Adopt ASEAN Corporate Governance Scorecard to strengthen Baoviet Holdings’ corporate governance capacity and practices in Vietnam, and expand business to regional markets; • Strengthen risk management and internal audit to provide the information required for corporate governance activities; • Continue to foster the operations efficiency of the functional Councils/Committees supporting the Board of Directors.

ASSESSMENT ON THE CORPORATE GOVERNANCE OF BAOVIET HOLDINGS ACCORDING TO ASEAN CORPORATE GOVERNANCE SCORECARD Provide the basis standards and systems to allow the management agencies, investors with ability to evaluate the status of the business’ corporate governance.

1

2

Allow the company to selfassess the quality of its corporate governance and promote the company to improve their practical corporate governance.

Overview

Development Strategy

Business Performance

Build a system of analysis and corporate governance according to the business lines in the hope that the system can support the improvements of the practices on corporate governance in Vietnam.

3

4

Support the management agencies in identifying the strengths and weaknesses of the regulations and practical corporate governance, thereinafter proposing the relevant revolutionary solutions.

Corporate Governance

Sustainable Development

Evaluate the progress of corporate governance throughout the years.

5

6

Support to improve the awareness and knowledge of good practices on corporate governance.

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019

ASSESSMENT ON THE CORPORATE GOVERNANCE OF BAOVIET HOLDINGS ACCORDING TO THE ACGS Under the guidelines and direction of the BOD, in recent years, in addition to the compliance with the corporate governance regulations in Vietnam, Baoviet proactively adopts the international and regional best corporate governance practices. During the process to formulate the internal corporate governance system, Baoviet refers to the benchmarks of corporate governance regulated in the ACGS.

General assessment on the corporate governance practices of BVH in 2019: Good practices

Bad practices, areas for improvements

Criteria

Assessment Result

Explanation

IN RESPECT OF RIGHTS OF SHAREHOLDERS

Right of shareholders

Shareholders have the right to participate in the amendments of the Holdings’ charter, the issuance of additional shares, the nomination of BOD members and inspectors and approval on the matters under the AGM’s authority.

Voting in absentia

Based on the documents disclosed on BVH’s website, shareholders can vote in absentia and send those votes to the BVH before the commencement of the AGM. Such votes are considered valid and counted in the number of votes for/ against/abstained at the meeting.

Dividend payout

Ensuring the dividend payout within 30 days after AGM’s approval.

Provision of GMS’s notifications and documents

Provide the rationale and adequate information for each agenda item which require shareholders’ approval in the notice of AGM.

Nominate and vote for BOD candidate

Giving the equal rights for shareholders regardless of major or minor shareholders to nominate the candidate and vote for BOD members at the GMS.

Attendance of BOD, BOM, SB, and shareholders

AGM Minutes were comprehensive and contained the attendance of BOD, BOM, SB. BVH also encourages the attendance of shareholders especially institutional shareholders.

Disclosure of GSM’s Resolutions and meeting minutes

Deadline for disclosure of AGM’s notices and documents

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• Resolutions and Meeting Minutes of AGM are disclosed publicly and promptly within 24 hours after AGM in both English and Vietnamese version; Meeting minutes recorded all questions of shareholders and answers of the Chairing Board in the discussion session; • Voting results were released together with the AGM Resolutions and Meeting Minutes. The notices and materials of AGM were not disclosed at least 21 days before the meeting.


Criteria

Assessment Result

Explanation

VỀ ĐỐI XỬ BÌNH ĐẲNG VỚI CỔ ĐÔNG

Meeting’s notice and documents

• Disclosed meeting’s notice and related documents in both English and Vietnamese version on BVH’s website;
 • Provide shareholders with the rationale and explanation for each agenda item which require shareholders’ approval in the notice of AGM.

Information Disclosure of BOD candidate’s profile, dividend payout policy

Fully disclose the profiles of candidates for BOD members, and dividend payout policy in AGM’s documents and Annual Reports.

Quality and time for disclosure of English version of AGM’s documents

Fully disclose all AGM documents in English, and release the English version of those documents on the same date as the local language version. Do not having policy requiring a committee of independent BOD members to review significant related party transactions (RPTs) to determine whether they are in the best interests of the company and shareholders.

RPTs of BOD members and senior manages

Do not have a policy requiring board members to abstain from participating in the board discussion on a particular agenda when they are conflicted. Regulate the policy in its Charter and Corporate Governance Regulation requiring BOD members to disclose their interest in transactions and any other conflicts of interest.

IN RESPECT OF ROLE OF STAKEHOLDERS

Sustainability Report

Interaction with communities, corporate social responsibilities & policy for employees

Overview

Development Strategy

BVH has been the first company in Vietnam that implemented the independent audit for the Sustainability Report and continued to implement the audit for the Sustainability Report in 2016-2019 by the Internal Audit Block of BVH. • BVH disclosed policies and practices for interaction with the communities, environmentally-friendly value chain, and corporate social responsibilities.
 • Disclosed policies and practices in dealing with customers’health and safety, as well as policies on the health, safety, and welfare, training programmes for employees.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019

Criteria

Assessment Result

Explanation

IN RESPECT OF ROLE OF STAKEHOLDERS Contact details for shareholders’ complaints

Provide contact details via the BVH’s website or Annual Report which stakeholders (e.g. customers, suppliers, general public etc.) can use to voice their concerns and/or complaints for possible violation of their rights.

Whistle-blowing system

Formulated, issued and disclosed on BVH’s website regarding the Code of Conduct, Regulation on Anti Money Laundering in order to direct the corporate culture and prevent the illegal or unethical behavior. The Human Resource Division and Legal and Compliance Division of Operations Block are responsible for receiving complaints about these behaviors.

Practices, processes and procedures for contractor selection and protection rights of creditors

Completed and disclosed in the annual sustainable development report. In addition, Baoviet has issued Regulation on contractor selection and guides on implementation procedures in compliance with the law.

Long-term incentives for employees

BVH implemented ESOP in the first quarter of 2018 and removed the first transfer restriction (60% of shares in ESOP) in May 2019.

IN RESPECT OF DISCLOSURE AND TRANSPARENCY

Annual Report

Disclosure of RPTs and insider trading

• Clearly identified the information of shareholders, the ownership structure, subsidiaries, associates, joint ventures, financial and non-financial performance indicators in the Annual Report. • Quality of the Annual Report: Provided detailed information of BVH, got rewards in the competition of Annual Report and Sustainability Report domestically and internationally. Released the detailed information of material/significant RPTs and the trading of the BVH’s shares by insiders in the financial statements and Corporate Governance Report in the Annual Report. • Published the information in both English and Vietnamese version;

Website

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• Provided shareholders, domestic and foreign investors with the information on the business operations, financial statements and downloadable annual reports, notices and meeting minutes of AGM, BVH’s CG documents (Charter, Code of CG, Code of Conduct and Business Ethics).

Press conferences and media briefings

Have organized press conferences and media briefings to disclose material information and business performance of Baoviet.

Analyst’s meeting

Organized 4 analyst’s meeting in 2019 (Quarterly) to discuss and listen to the opinion of analysts regarding the market prospects and business operations of BVH.

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Criteria

Assessment Result

Explanation

IN RESPECT OF RESPONSIBILITIES OF THE BOARD Definition of BOD responsibilities and CG policy

Disclosed in the BVH’s Charter and the Corporate Govenrnance Regulation.

Directorships of BVH’s BOD member at other PLCs in Vietnam

Set a limit of five directorships that an individual BOD member may hold simultaneously in other PLCs in the BVH’s Code of CG, and did not have any BOD members who serve on more than two boards of PLCs outside of Baoviet. • Organized six (06) meetings in 2019;

BOD Meeting

• Documents for BOD meetings were provided to the Board members at least five business days in advance of the BOD meetings; • Disclosed information on the attendance of board members to BOD meeting.

Independence of the BOD

• Limited presence of independent directors on BOD: The BOD only had one independent member out of eleven members compared to the requirement of the ACGS that the independent BOD member should account for at least 50% of the BOD. • The Chairman is not independent BOD member. • Did not organize a meeting for only non-executive BOD members during the year without any executives present. • Established Committee of the BOD according to recommendations of ACGS (including Remuneration and Nomination Committee, Audit Committee, Strategy and Investment Committee, Asset - Liability Commitee) and Internal Audit Block.

Competence of BOD Committee

• Terms of references and operating activities of members of Committee were disclosed in the Annual Report. • Limited presence or no presence of independent BOD member in the BOD Committees. The Chairman of BOD’s Committee is not independent BOD member. • The Committees rarely made direct meetings but only collecting members’ opinion via written form.

BOD Appraisal and Committee Appraisal

• Remuneration and Nomination Committee evaluated the BOD’s performance, the Committee’s performance and each BOD member’s performance according to criteria approved by the BOD in the BOD’s operating regulation. • Assessment results were published on the Annual Report.

BOD’s Training and succession planning

Overview

Development Strategy

• Disclosed information of succession planning for CEO and key senior managers; • Formulated the orientation programs and education activities designed for new and current BOD members.

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019

RECOMMENDATIONS FOR IMPROVEMENT OF BVH’S CORPORATE GOVERNANCE With an aim of being pioneer to apply and step by step approaching the regional and international corporate governance standards, Baoviet needs to implement the following works in the future:

SHORT-TERM PLAN improve benchmark relating to “Disclosure and Transparency” and enhance the “Rights of Stakeholders” as following:

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1.

3.

5.

Continue to improve BVH’s website to keep updated and disclose information for shareholders, customers, investors domestically and internationally to be easier to approach.

Research to formulate the whistleblowing system/policy of BVH in addition to the general terms regulated in the Code of Conduct and Business Ethics of Baoviet.

Build up the succession planning, orientation programs and training courses for new BOD member and incumbent BOD member in order to ensure the successors team holding the managerial positions of Baoviet.

2.

4.

In respect of the documents for the meeting of GSM: disclose the meeting notification and related meeting documents 21 days prior to the date of the GSM’s meeting in order for the shareholders to have enough time to consider and decide the voting on the meeting agenda.

Continue to comply with the disclosure and transparency regulations according to Circular 155/2015/TT-BTC and benchmarks at the ACGS; try to implement better than the regulations in Circular 155/2015/ TT-BTC in order to provide domestic and foreign shareholders and investors with sufficient information.

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MEDIUM AND LONG-TERM PLAN Enhance the responsibility of the BOD

1.

Build up a detailed roadmap to approach requirements relating to the independent BOD member ratio in the BOD according to the ACGS and the Law of Vietnam.

2.

Enhance the participation of independent BOD members in the BOD’s Committees to improve the performance of the Committee in advising and consulting to the BOD; strengthen the independence of the BOD’s Committee.

Research to formulate regulations regarding related party transactions in order to protect the legal rights and interests of BVH as following:

3.

• A policy requiring a committee of independent directors to review material/significant related party transaction to determine whether they are in the best interests of the company and shareholders. • A policy covering the review and approval of material/significant related party transactions. • A policy requiring board members to abstain from participating in the BOD meeting on a particular agenda when they are conflicted.

4.

Consider to hire an independent third party to evaluate the performance of the BOD, of member of the BOD and BOD’s Committee according to the best international corporate governance.

In respect of BOD meeting and participating BOD meeting:

5.

• Organize open meeting for the BOD in addition to quarterly meeting in order to discuss important agenda regarding business orientation and key initiatives (at least 6 times per year); • Consider to require a minimum quorum of at least 2/3 for BOD decisions; • A policy of which the non-executive BOD member meet separately at least once during the year without any executive BOD member present in order to evaluate all aspects of business management of the Company.

Overview

6.

Consider to hire an independent third party to evaluate and consult the activities of the internal audit, risk management and compliance of Baoviet, especially for the risk appetite framework and compliance in order to have the verification/statement of the third party on the adequacy of the company’s internal controls/risk management systems.

7.

Continue to enhance the role of internal audit, risk management and compliance in the internal corporate governance framework of BVH in order to (i) ensure the performance and adequacy of the risk management and internal audit system, (ii) contribute to improve the corporate governance practices and (iii) strengthen the line of defense to preserve the investment capital and to create sustainable value in long-term for shareholders.

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019 ASSESSMENT ON THE CORPORATE GOVERNANCE PRACTICES OF BAOVIET HOLDINGS ACCORDING TO THE ASEAN CORPORATE GOVERNANCE SCORECARD Implemented the practice(s) well

Have not implemented the practice(s) fully

Have not implemented the practice(s)

There are no case in Baoviet

PART A - RIGHT OF SHAREHOLDERS

Code

Criteria

A.1

Basic Shareholder Rights

A.1.1

Dividends are paid in an equitable and timely manner; that is, all shareholders are treated equally and paid within 30 days after being declared for interim dividends or approved by shareholders at general meetings for final dividends.

A.2

Right to participate in decisions concerning fundamental corporate changes.

Actual CG practices at BVH

Note/Recommendations for improvement

Do shareholders have the right to participate in:

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A.2.1

Amendments to the company’s constitution?

A.2.2

The authorisation of additional shares?

A.2.3

The transfer of all or substantially all assets, which in effect results in the sale of the company?

Regulated in the Charter of BVH.

A3

Right to participate effectively in and vote in general shareholder meetings and should be informed of the rules, including voting procedures that govern general shareholder meetings.

A.3.1

Do shareholders have the opportunity, evidenced by an agenda item, to approve remuneration (fees, allowances, benefit-in-kind and other emoluments) or any increases in remuneration for the non-executive directors/ commissioners?

Clearly regulated in the AGM

A.3.2

Does the company provide non-controlling shareholders a right to nominate candidates for board of directors/ commissioners?

Regulated in the Charter of BVH.

A.3.3

Does the company allow shareholders to elect directors/ commissioners individually?

Clearly regulated in the BOD member’s election regulation.

A.3.4

Does the company disclose the voting and vote tabulation procedures used, declaring both before the meeting proceeds?

Disclosed in the meeting documents prior to the date of GSM’s meeting and before the opening session of GSM’s meeting.

A.3.5

Do the minutes of the most recent AGM record that there was an opportunity allowing for shareholders to ask questions and the questions raised by shareholders and answers given recorded?

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Baoviet recorded and disclosed questions and answers in the discussion session in the meeting minutes of the AGM. Disclosed the meeting minutes in English version.


Code

Actual CG practices at BVH

Criteria

Note/Recommendations for improvement

A.3.6

Does the company disclose the voting results including approving, dissenting, and abstaining votes for all resolutions/each agenda item for the most recent AGM?

Fully disclosed those contents in the Resolutions of AGM.

A.3.7

Does the company disclose the list of board members who attended the most recent AGM?

Disclosed those contents in the meeting minutes of AGM.

A.3.8

Does the company disclose that all board members and the CEO (if he is not a board member) attended the most recent AGM?

Disclosed those contents in the meeting minutes of AGM.

A.3.9

Does the company allow voting in absentia?

Regulated in the Charter and Regulations on organizing the meeting of the GSM.

A.3.10

Did the company vote by poll (as opposed to by show of hands) for all resolutions at the most recent AGM?

Announced in the organizing the AGM.

A.3.11

Does the company disclose that it has appointed an independent party (scrutineers/inspectors) to count and/ or validate the votes at the AGM?

Announced at the AGM, recorded in the meeting minutes of the AGM

A.3.12

Does the company make publicly available by the next working day the result of the votes taken during the most recent AGM/EGM for all resolutions?

A.3.13

A.3.14

A.3.15

Does the company provide the rationale and explanation for each agenda item which require shareholders’ approval in the notice of AGM/circulars and/or the accompanying statement?

Does the company give the opportunity for shareholder to place item/s on the agenda of AGM?

Markets for corporate control should be allowed to function in an efficient and transparent manner

A.4.1

In cases of mergers, acquisitions and/or takeovers requiring shareholders’ approval, does the board of directors/commissioners of the company appoint an independent party to evaluate the fairness of the transaction price?

A.5

The exercise of ownership rights by all shareholders, including institutional investors, should be facilitated.

A.5.1

Overview

Business Performance

Corporate Governance

Meeting documents of Baoviet provided shareholders with sufficient information and explanation for each agenda item which require shareholders’ approval. • Disclosed meeting documents in English version. Shareholders have the opportunity to ask questions to the BOD, including issues regarding the annual independent audit, suggest/place items on the agenda of the AGM, and raise the solutions. Recorded in the meeting minutes of AGM.

There is no case in Baoviet.

Baoviet disclosed clearly this content in Annual Report (Investor Relation, Policy to encourage shareholders to carry out their rights, to attend and vote at the GSM’s meeting).

Does the company disclose its practices to encourage shareholders to engage with the company beyond AGM?

Development Strategy

on

Baoviet disclosed the meeting notification, authorization letter form, meeting agenda and documents 22 days prior to the date of 2018 AGM, and shall try to disclose the AGM documents in line with this benchmark.

Does the company provide at least 21 days notice for all AGMs and EGMs?

A.4

Regulations

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019

PART B – EQUITABLE TREATMENT OF SHAREHOLDERS

Code

Criteria

B.1

Shares and voting rights

B.1.1

Do the company’s ordinary or common shares have one vote for one share?

B.1.2

re the company has more than one class of shares, does the company publicise the voting rights attached to each class of shares (e.g. through the company website / reports/ the stock exchange/ the regulator’s website)?

B.2

Notice of AGM

B.2.1

Does each resolution in the most recent AGM deal with only one item, i.e., there is no bundling of several items into the same resolution?

B.2.2

Are the company’s notices of the most recent AGM/ circulars fully translated into English and published on the same date as the local-language version?

Actual CG practices at BVH

Note/Recommendations for improvement

Baoviet clearly disclosed that the Company has only ordinary share in the notification letter for record date, in financial statement and annual report.

Fully implemented

Does the notice of AGM/circulars have the following details:

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B.2.3

Are the profiles of directors/commissioners (at least age, academic qualification, date of first appointment, experience, and directorships in other listed companies) in seeking election/reelection included?

Baoviet disclosed the profiles of BOD candidates.

B.2.4

Are the auditors seeking appointment/reappointment clearly identified?

Baoviet implemented this standard according to the submission to the AGM to approve the list of independent auditors.

B.2.5

Has an explanation of the dividend policy been provided?

Baoviet formulated dividend policy and disclosed in annual report and AGM documents.

B.3

Insider trading and abusive self-dealing should be prohibited

B.3.1

Does the company have policies and/or rules prohibiting directors/commissioners and employees to benefit from knowledge which is not generally available to the market?

Regulated in the Corporate Governance Regulation and Code of Conduct and Business Ethics of BVH.

B.3.2

Are the directors / commissioners required to report their dealings in company shares within 3 business days?

Baoviet followed this criteria according to the provisions in Circular 155/2015/ TT-BTC

B.4

Related party transactions by directors and key executives

B.4.1

Does the company have a policy requiring directors / commissioners to disclose their interest in transactions and any other conflicts of interest?

Regulated in the Charter and Corporate Governance Regulation of BVH.

B.4.2

Does the company have a policy requiring a committee of independent directors/ commissioners to review material/ significant RPTs to determine whether they are in the best interests of the company and shareholders?

Baoviet should consider the addition of this provision in the Corporate Governance Regulation or the BOD Regulation in compliance with this standard.

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Actual CG practices at BVH

Note/Recommendations for improvement

Code

Criteria

B.4.3

Does the company have a policy requiring board members (directors/commissioners) to abstain from participating in the board discussion on a particular agenda when they are conflicted?

Baoviet only regulated that BOD members do not have the right to vote on this issue, not yet regulated that the BOD members do not participating in the BOD Meeting.

B.4.4

Does the company have policies on loans to directors and commissioners either forbidding this practice or ensuring that they are being conducted at arm’s length basis and at market rates?

Regulated in the Charter and Corporate Governance Regulation of BVH

B.5

Protecting minority shareholders from abusive actions

B.5.1

Does the company disclose that RPTs are conducted in such a way to ensure that they are fair and at arms’ length?

Baoviet disclosed the policy of ensuring the equitable treatment and transparency in RPTs in annual report.

B.5.2

In case of related party transactions requiring shareholders’ approval, is the decision made by disinterested shareholders?

Baoviet clearly state this content in the RPTs in the annual report.

PART C – ROLE OF STAKEHOLDERS

Code

C.1

Actual CG practices at BVH

Criteria

Note/Recommendations for improvement

The rights of stakeholders that are established by law or through mutual agreements are to be respected.

Does the company disclose a policy and practices that address the followings: Baoviet disclosed this policy in the annual report and sustainability report.

C.1.1

The existence and scope of the company’s efforts to address customers’ welfare?

C.1.2

Supplier/contractor selection procedures?

Baoviet implemented well this standard and disclosed in the sustainability report.

C.1.3

The company’s efforts to ensure that its value chain is environmentally friendly or is consistent with promoting sustainable development?

Baoviet disclosed this policy in the annual report and sustainability report.

C.1.4

The company’s efforts to interact with the communities in which they operate?

Baoviet disclosed its strategy and policy regarding this content in the sustainability report

C.1.5

Overview

Baoviet issued the Code of conduct and the regulation on the anti money laundering.

The company’s anti-corruption programmes and procedures?

Development Strategy

Business Performance

Corporate Governance

Published the English version of this document on BVH’s website.

Sustainable Development

Financial Statements

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Code

Actual CG practices at BVH

Note/Recommendations for improvement

C.1.6

How creditors’ rights are safeguarded?

Baoviet use the equity for business operations.

C.1.7

Does the company have a separate report/ section that discusses its efforts on environment/ economy and social issues?

Baoviet disclosed this policy in the annual report and sustainability report.

C.2

Where stakeholder interests are protected by law, stakeholders should have the opportunity to obtain effective redress for violation of their rights.

C.2.1

Does the company provide contact details via the company’s website or Annual Report which stakeholders (e.g. customers, suppliers, general public etc.) can use to voice their concerns and/or complaints for possible violation of their rights?

C.3

Performance-enhancing mechanisms for employee participation should be permitted to develop.

C.3.1

Does the company explicitly disclose the health, safety, and welfare policy for its employees?

C.3.2

Does the company explicitly disclose the policies and practices on training and development programmes for its employees?

C.3.3

Does the company have a reward/compensation policy that accounts for the performance of the company beyond short-term financial measures?

C.4

Stakeholders including individual employee and their representative bodies should be able to freely communicate their concerns about illegal or unethical practices to the board and their rights should not be compromised for doing this.

C.4.1

Does the company have a whistle blowing policy which includes procedures for complaints by employees and other stakeholders concerning alleged illegal and unethical behaviour and provide contact details via the company’s website or annual report?

C.4.2

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Criteria

Does the company have a policy or procedures to protect an employee/person who reveals alleged illegal/unethical behaviour from retaliation?

THANK YOU FOR YOUR TRUST Integrated Report 2019

Baoviet provided contact details of investor relations unit in the annual report and on BVH’s website.

Baoviet clearly stated in the annual report and sustainability report.

Baoviet implemented ESOP for employees in the first quarter of 2018

Regulated in the Code of Conduct and Business Ethics of BVH; published the English and Vietnamese version of this Code on BVH’s website. Need to formulate detailed procedures and the policy to protect the employee/ person who reveals alleged illegal/ unethical behaviour from retaliation?


PART D – DISCLOSURE AND TRANSPARENCY

Code

Actual CG practices at BVH

Criteria

D.1

Transparent ownership structure

D.1.1

Does the information on shareholdings reveal the identity of beneficial owners, holding 5% shareholding or more?

D.1.2

Does the company disclose the direct and indirect (deemed) shareholdings of major and/or substantial shareholders?

D.1.3

Does the company disclose the direct and indirect (deemed) shareholdings of directors (commissioners)?

D.1.4

Does the company disclose the direct and indirect (deemed) shareholdings of senior management?

D.1.5

Does the company disclose details of the parent/holding company, subsidiaries, associates, joint ventures and special purpose enterprises/ vehicles (SPEs)/ (SPVs)?

D.2

Quality of Annual Report

Note/Recommendations for improvement

Baoviet clearly disclosed in the annual report, half-year and annual corporate governance report in compliance with the law. Baoviet clearly disclosed in the annual report, half-year and annual corporate governance report in compliance with the law. Baoviet clearly disclosed in the annual report.

Does the company’s annual report disclose the following items: D.2.1

Corporate objectives

D.2.2

Financial performance indicators

D.2.3

Non-financial performance indicators

D.2.4

Dividend policy

D.2.5

Biographical details (at least age, academic qualifications, date of first appointment, relevant experience, and any other directorships of listed companies) of all directors/ commissioners

D.2.6

Attendance details of each director/commissioner in all directors/commissoners meetings held during the year

D.2.7

Total remuneration of each member of the board of directors/commissioners

Baoviet clearly disclosed in the annual report

Baoviet disclose in the Corporate Governance report in annual report.

Corporate Governance Confirmation Statement

D.2.8

Does the Annual Report contain a statement confirming the company’s full compliance with the code of corporate governance and where there is non- compliance, identify and explain reasons for each such issue?

D.3

Disclosure of related party transactions (RPT)

D.3.1

Does the company disclose its policy covering the review and approval of material/significant RPTs?

D.3.2

Does the company disclose the name, relationship, nature and value for each material RPTs?

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Baoviet disclose a statement confirming the Holdings’ full compliance with the corporate governance regulation in the Corporate Governance report in annual report.

Baoviet clearly disclosed this content in related party transaction report in the annual report.

Financial Statements

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Code

Criteria

D.4

Directors and commissioners dealings in shares of the company

D.4.1

Does the company disclose trading in the company’s shares by insiders?

D.5

External auditor and Auditor Report

Actual CG practices at BVH

Note/Recommendations for improvement

Baoviet clearly disclosed in the annual report and the regular corporate governance report in accordance with the law.

Where the same audit firm is engaged for both audit and non-audit services D.5.1

Are the audit and non-audit fees disclosed?

D.5.2

Does the non-audit fee exceed the audit fees?

D.6

Baoviet do not have the non-audit fee.

Medium of communications

Does the company use the following modes of communication? D.6.1

Quarterly reporting

Baoviet fully disclosed this content.

D.6.2

Company website

Baoviet developed English version of BVH’s website in parallel with Vietnamese content.

D.6.3

Analyst’s briefing

Organized 02 analyst’s meeting in 2019.

D.6.4

Media briefings /press conferences

Baoviet promoted its business on mass media.

D.7

Timely filing/release of annual/financial reports

D.7.1

Are the audited annual financial report / statement released within 120 days from the financial year end?

D.7.2

Is the annual report released within 120 days from the financial year end?

D.7.3

Is the true and fairness/fair representation of the annual financial statement/reports affirmed by the board of directors/commissioners and/or the relevant officers of the company?

D.8

Company website

Does the company have a website disclosing up-to-date information on the following:

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D.8.1

Financial statements/reports (latest quarterly)

D.8.2

Materials provided in briefings to analysts and media

D.8.3

Downloadable annual report

D.8.4

Notice of AGM and/or EGM

D.8.5

Minutes of AGM and/or EGM

D.8.6

Company’s constitution (company’s by-laws, memorandum and articles of association)

D.9

Investor relations

D.9.1

Does the company disclose the contact details (e.g. telephone, fax, and email) of the officer/office responsible for investor relations?

THANK YOU FOR YOUR TRUST Integrated Report 2019

Fully disclosed this information and keep it updated.

Baoviet disclosed in the annual report and BVH’s website


PART E – RESPONSIBILITIES OF THE BOD

Code E.1

Actual CG practices at BVH

Criteria

Note/Recommendations for improvement

Board Duties and Responsibilities

Clearly defined board responsibilities and corporate governance policy E.1.1

Does the company disclose its corporate governance policy / board charter?

Baoviet disclosed the Corporate Governance Regulation on BVH’s website in English and Vietnamese version.

E.1.2

Are the types of decisions requiring board of directors/ commissioners’ approval disclosed?

Resolutions of the BOD were disclosed in compliance with the Law and reported at the Corporate Governance Report and Annual Report.

E.1.3

Are the roles and responsibilities of the board of directors/ commissioners clearly stated?

Regulated in the Charter, Corporate Governance Regulation, BOD Regulation and reported at the Annual Report.

Corporate Vision/Mission E.1.4

Does the company have a vision and mission statement?

Baoviet fully disclosed his content in the annual report

E.1.5

Does the board of directors play a leading role in the process of developing and reviewing the company’s strategy at least annually?

BVH’s BOD conducted the annual review of strategy and reported in the annual report.

E.1.6

Does the board of directors have a process to review, monitor and oversee the implementation of the corporate strategy?

Baoviet complied with this standard. The BOD directed the formulation of the strategy and supervised the implementation and regular review of the strategy at the BOD meeting.

E.2

Board structure

Code of Ethics or Conduct E.2.1

Are the details of the code of ethics or conduct disclosed?

E.2.2

Does the company disclose that all directors/ commissioners, senior management and employees are required to comply with the code?

E.2.3

Does the company disclose how it implements and monitors compliance with the code of ethics or conduct?

Baoviet disclosed the Code of Conduct and Business Ethics on BVH’s website in English and Vietnamese version.

Board Structure & Composition E.2.4

E.2.5

Overview

Do independent directors/commissioners make up at least 50% of the board of directors/commissioners?

Does the company have a term limit of nine years or less or 2 terms of five years1 each for its independent directors/ commissioners? (The five years term must be required by legislation which pre-existed the introduction of the ASEAN Corporate Governance Scorecard in 2011 )

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Baoviet did not meet this standard. According to Clause 2 Article 151 of the Enterprise Law, the independent BOD member is “not being a person having been a member of the BOD or the Inspection Committee for at least 05 preceding years”. Thus, Baoviet satisfy this standard Currently, the BVH’s BOD does not have the independent BOD member according to the criteria regulated in the Law on Enterprise.

Financial Statements

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Criteria

Actual CG practices at BVH

Note/Recommendations for improvement

E.2.6

Has the company set a limit of five board seats that an individual independent/non-executive director/ commissioner may hold simultaneously?

Baoviet clearly regulated this requirement in the Corporate Governance Regulation of BVH.

E.2.7

Does the company have any executive directors who serve on more than two boards of listed companies outside of the group?

Baoviet do not have this case.

Nominating Committee E.2.8

Does the company have a Nominating Committee (NC)?

E.2.9

Does the Nominating Committee comprise of a majority of independent directors/commissioners?

E.2.10

Is the chairman of the Nominating Committee an independent director/commissioner?

E.2.11

Does the company disclose the terms of reference/ governance structure/charter of the Nominating Committee?

E.2.12

Is the meeting attendance of the Nominating Committee disclosed and if so, did the Nominating Committee meet at least twice during the year?

BVH have the Remuneration and Nomination Committee of the BOD.

Baoviet have not met this standard yet.

Baoviet followed this standard and reported in the annual report.

Remuneration Committee/ Compensation Committee E.2.13

Does the company have a Remuneration Committee?

E.2.14

Does the Remuneration Committee comprise of a majority of independent directors/commissioners?

E.2.15

Chairman of Remuneration Commitee is independent BOD member

E.2.16

Does the company disclose the terms of reference/ governance structure/ charter of the Remuneration Committee?

E.2.17

Is the meeting attendance of the Remuneration Committee disclosed and, if so, did the Remuneration Committee meet at least twice during the year?

BVH have the Remuneration and Nomination Committee of the BOD.

Baoviet have not met this standard yet

Baoviet followed the annual report.

this

standard

in

Audit Committee 1 E.2.18

Does the company have an Audit Committee?

Baoviet have the Inspection Committee.

E.2.19

Does the Audit Committee comprise entirely of non-executive directors/commissioners with a majority of independent directors/commissioners?

Bảo Việt chưa đảm bảo chuẩn mực này.

E.2.20

Is the chairman of the Audit Committee an independent director/commissioner?

Head of the Inspection Committee is the independent member elected by the GSM and not being the capital representative of major shareholders. Head of Inspection Committee works full-time at BVH.

E.2.21

Does the company disclose the terms of reference/ governance structure/charter of the Audit Committee?

Baoviet followed this requirement and reported in the annual report.

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This criterion applies to the Supervisory Board for enterprises operating under the model of the General Meeting of Shareholders, the Board of Directors, and the Supervisory Board (As advised by the ACGS Evaluation Expert of ASEAN) THANK YOU FOR YOUR TRUST Integrated Report 2019


Code

Actual CG practices at BVH

Criteria

E.2.22

Does at least one of the independent directors/ commissioners of the committee have accounting expertise (accounting qualification or experience)?

E.2.23

Is the meeting attendance of the Audit Committee disclosed and, if so, did the Audit Committee meet at least four times during the year?

E.2.24

Does the Audit Committee have primary responsibility for recommendation on the appointment, and removal of the external auditor?

E.2

Note/Recommendations for improvement

Baoviet followed this requirement and reported in the annual report.

Board Processes

Board meetings and attendance Are the board of directors meeting scheduled before the start of financial year?

The BOD approved its annual plan, including the scheduled BOD meetings before the start of fiscal year.

E.3.2

Does the board of directors/commissioners meet at least six times during the year?

In 2018, BVH’s BOD organized 6 direct meetings and over 70 indirect meetings via the opinion collection from BOD members in writing in order to deal with works under the BOD’s authority. Those meetings have been reported in the annual report.

E.3.3

Has each of the directors/commissioners attended at least 75% of all the board meetings held during the year?

Baoviet followed this requirement and reported in the annual report.

E.3.4

Does the company require a minimum quorum of at least 2/3 for board decisions?

Currently, Baoviet require a minimum of a half for BOD decisions according to the Enterprise Law and the Charter. However, in practice, BVH’s BOD resolutions are often agreed by at least 7 out of 9 members, mostly 9 out of 9 members.

E.3.5

Did the non-executive directors/commissioners of the company meet separately at least once during the year without any executives present?

Baoviet have not followed this standard yet.

E.3.1

Access to information E.3.6

Are board papers for board of directors/commissioners meetings provided to the board at least five business days in advance of the board meeting?

Baoviet complied with this standard and disclosed documents in English and Vietnamese version.

E.3.7

Does the company secretary play a significant role in supporting the board in discharging its responsibilities?

Baoviet clearly disclosed in the Charter and annual report.

E.3.8

Is the company secretary trained in legal, accountancy or company secretarial practices and has kept abreast on relevant developments?

Baoviet followed this standard.

Board Appointments and Re-Election E.3.9

Does the company disclose the criteria used in selecting new directors/commissioners?

Disclosed in the BOD’s notification regarding the election of new BOD member at the meeting of the GSM.

E.3.10

Does the company disclose the process followed in appointing new directors/commissioners?

Baoviet approved the regulation on electing new BOD member.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019 Code

Criteria

Actual CG practices at BVH

Note/Recommendations for improvement

Does the company disclose the process followed in appointing new directors/commissioners? E.3.11

Are all directors/commissioners subject to reelection every 3 years; or 5 years for listed companies in countries whose legislation prescribes a term of 5 years2 each?

Tenure of BVH’s BOD member is 5 years.

The five years term must be required by legislation which pre-existed the introduction of the ASEAN Corporate Governance Scorecard in 2011 Remuneration Matters

E.3.12

E.3.13

Does the company disclose its remuneration (fees, allowances, benefit-in-kind and other emoluments) policy/practices (i.e. the use of short term and long term incentives and performance measures) for its executive directors and CEO?

Disclosed in the annual report.

Is there disclosure of the fee structure for nonexecutive directors/commissioners?

E.3.14

Do the shareholders or the Board of Directors approve the remuneration of the executive directors and/or the senior executives?

E.3.15

Does the company have measurable standards to align the performance-based remuneration of the executive directors and senior executives with long-term interests of the company, such as claw back provision and deferred bonuses?

The BOD approved the bonus level of the BOM The general assembly of shareholders approved the bonus fund for business plan fulfillment of the BOM

Internal Audit E.3.16

Does the company have a separate internal audit function?

Baoviet have the Internal Audit Block.

E.3.17

Is the head of internal audit identified or, if outsourced, is the name of the external firm disclosed?

Baoviet disclosed the name, CV and related persons of the Chief of Internal Audit Block in the annual report.

E.3.18

Does the appointment and removal of the internal auditor require the approval of the Audit Committee?

Baoviet followed this standard upon the appointment of Head of Block/Division of Internal Audit Block.

Risk Oversight

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E.3.19

Does the company disclose the internal control procedures/risk management systems it has in place?

E.3.20

Does the Annual Report disclose that the board of directors/commissioners has conducted a review of the company’s material controls (including operational, financial and compliance controls) and risk management systems?

E.3.21

Does the company disclose the key risks to which the company is materially exposed to (i.e. financial, operational including IT, environmental, social, economic)?

E.3.22

Does the Annual Report contain a statement from the board of directors/commissioners or Audit Committee commenting on the adequacy of the company’s internal controls/risk management systems?

THANK YOU FOR YOUR TRUST Integrated Report 2019

Baoviet followed this requirement in the annual report.

Disclosed in the annual report i.e. Internal Control, Risk management councils


Code E.4

Actual CG practices at BVH

Criteria

Note/Recommendations for improvement

People on the Board

Board Chairman E.4.1

Do different persons assume the roles of chairman and CEO?

E.4.2

Is the chairman an independent director/commissioner?

Baoviet have not met this standard yet.

E.4.3

Are any of the directors a former CEO of the company in the past 2 years?

Baoviet do not have this case.

E.4.4

Are the role and responsibilities of the chairman disclosed?

Baoviet disclosed in the Charter, Corporate Governance Regulation, BOD Regulation and annual report.

Lead Independent Director E.4.5

If the Chairman is not independent, has the Board appointed a Lead/Senior Independent Director and has his/her role been defined?

Skills and Competencies E.4.6 E.5

Baoviet has non-excecutive director having skills and strong competencies in main operating business of Baoviet.

Baoviet followed this standard.

Board Performance

Directors Development E.5.1

Does the company have orientation programmes for new directors/commissioners?

E.5.2

Does the company have a policy that encourages directors/commissioners to attend on-going or continuous professional education programmes?

Baoviet established the learning map for each level of executives and are under reviewing the training courses for new BOD member and training sessions for BOD members.

CEO/Executive Management Appointments and Performance E.5.3

E.5.4

Does the company disclose the process on how the board of directors/commissioners plans for the succession of the CEO/Managing Director/President and key management? Does the board of directors/commissioners conduct an annual performance assessment of the CEO/Managing Director/President?

Specifically regulated in the BOD Regulation and reported the performance evaluation in the BOD’s report in 2017 annual report.

Board Appraisal

E.5.5

The BOD implemented this succession planning, but not disclosed to the public.

Did the company conduct an annual performance assessment of the board of directors/commissioners and disclose the criteria and process followed for the assessment?

Implemented the performance evaluation and disclosed in the annual report.

Board Appraisal E.5.6

Did the company conduct an annual performance assessment of the individual directors/commissioners and disclose the criteria and process followed for the assessment?

Implemented the performance evaluation and disclosed in the annual report

Director Appraisal E.5.7

Overview

Did the company conduct an annual performance assessment of the individual directors/commissioners and disclose the criteria and process followed for the assessment? Development Strategy

Business Performance

Corporate Governance

Implemented the performance evaluation and disclosed in the annual report.

Sustainable Development

Financial Statements

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ASSESSMENT REPORT ON CORPORATE GOVERNANCE IN 2019 ASSESMENT OF BOD MEMBER,REPRESENTATIVE OF SUMITOMO LIFE ON THE CORPORATE

As the BOD members and representatives of Sumitomo Life, the foreign strategic partner at BVH, one of our top interests is corporate governance system of BVH. From our point of view, corporate governance system of BVH has been steadily improving to meet the International Standards over the years.

Mr. Kenji Yoneda - BOD members of BVH

We admire the awarding and appreciate the efforts of the Chairman and CEO in developing BVH as one of the best financial institutions in the region not only in terms of its business performance but also in terms of its internal control and governance system. In the point of corporate governance, risk management and compliance, our assessments are as follows:

Corporate governance

Risk management and compliance

BVH has been operating in compliance with the regulation on information disclosure and transparency. For example, agendas of AGMs, meeting minutes and resolutions have been disclosed bilingually in both Vietnamese and English on the website. It has made the foreign stakeholders catch up the information easier. We recognize that BVH consistently has been meeting International standards on ensuring shareholders’ rights.

Recently, BVH has revised a lot of the regulatory systems of internal governance mechanism to properly manage the possible risks during the implementation of all daily business operations.

Furthermore, BVH has been making efforts to educate the members of BOD and secretary division through the training and coaching courses on the corporate governance and ASEAN corporate governance scorecard. With using the scorecard, BVH has been able to find deficiencies and improve them since 2017. We believe those efforts have improved the corporate governance of BVH definitely and BVH will make further development in corporate governance with implementing such PDCA cycle.

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For example, BVH has been steadily improving the compliance framework at Holdings and subsidiaries in accordance with international standards. In accordance with these internal governance mechanisms, the risk management and compliance system of BVH is continuously strengthened. We are pleased with these accomplishments and expect further improvement in the future. Sumitomo Life, as the foreign strategic partner, has been supporting BVH in these area with providing our knowledge and experience, and will continue to support BVH’s initiatives to become a company globally acclaimed with the good corporate governance.


INTERNAL CONTROL AND INTERNAL AUDIT Baoviet Holdings employs the “3 lines of defense” framework in ensuring the effectiveness and coherence of its internal control and risk management process: BOARD OF DIRECTORS AUDIT COMMITTEE

THE 3RD LINE

OPERATIONS

COMPLIANCE

ASSURANCE, CONSULTING

Operations Management Block

Risk Management Division

Strategy and Investment Block

Legal and Compliance Division

Financial Management Block Information Technology Center Education and Training Center

100% CAPITAL OWNED SUBSIDIARIES

Functional Blocks /Divisions at Head Office

Risk Management, Inspection - Internal Control Division

Branches

Legal and Compliance Division

Internal Audit Block

STATE MANAGEMENT AGENCIES

THE 2ND LINE

COORDINATION

HOLDINGS

THE 1ST LINE

EXTERNAL AUDIT

BOARD OF MANAGEMENT RISK MANAGEMENT COUNCIL

AUDITING

The 1st line of defense includes front offices and business units. Their key responsibilities are to identify, assess, prevent, report and monitor risks emerging from day-today business process and other processes; safeguard their operations through self assessment of their risk management and control measures’ effectiveness. The risk management and legal & compliance funtions fit in the 2nd line of defense with responsibilities to build up policies and process regarding risk management and compliance; provide independent and objective feedback and recommendations towards the 1st line; manage risks by establising the risk appetite, risk limits, procedures/instructions, monitoring, delivering early warnings, managing risk portfolio; monitor and investigate compliance through the compliance framework and dashboard.

Overview

Development Strategy

Business Performance

Corporate Governance

The 3rd line of defense is the internal audit function, which reports functionally to the Board of Directors. The internal audit is designed to provide independent and objective assurance and consulting on the 1st and 2nd line to support them to improve the risk management and internal control process, as such to support the Board of directors and the Board of managment to enhance the Group’s coporate governance and safeguard assests, reputation and sustainability. The Internal Audit, Internal Control & Inspection, Risk Management, and Legal & Compliance functions at Baoviet Holdings and its subsidiaries act as active assistants to the Board of Directors, Member Council and Board of Management in ensuring the effectiveness of the Internal Control system across the Group.

Sustainable Development

Financial Statements

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INTERNAL CONTROL AND INTERNAL AUDIT

INTERNAL CONTROL SYSTEM DEFINITION In accordance with the Governance Regulation of Baoviet Holdings, Internal Control is a process issued by and taken effect in Baoviet Holdings, designed and maintained to provide reasonable assurance regarding the achievement of organization’s objectives.

OBJECTIVES

COMPLIANCE

FINANCIAL AND NON – FINANCIAL REPORTS

Compliance with applicable laws and Bao Viet Holdings’regulations.

Reliability, timeliness and transparency of financial and non - financial reports

OPERATION

Effectiveness and efficiency of operations, including operational and financial performance and safeguarding assets against loss

MAIN COMPONENTS OF BAOVIET HOLDINGS’ INTERNAL CONTROL SYSTEM AND ASSESSMENT BY THE INTERNAL AUDIT The Internal Audit Block assesses the effectiveness of Baoviet Holdings’s Internal Control System at all levels based on 17 principles supporting 05 components under COSO 2013 Framework. (The below table represents the evaluating methodology of Baoviet Holdings’ Internal Audit. The assessment results are illustrative only) Exist / effective

Potential improvement sections

Effective

Components and Principle Principles

Internal Audit’s assessment Description at Baoviet Holdings

control

CONTROL ENVIRONMENT 1. BVH demonstrates a commitment to integrity and Issue Code of ethics. ethical values 2. The board of directors demonstrates independence from management and exercises oversight of the development Clearly and coherently defines the internal and performance of internal control accountabilities of individuals and control departments in Governance and other related 3. Management establishes, with regulations and processes issued by Baoviet board oversight, structures, Holdings. reporting lines, and appropriate authorities and responsibilities in the pursuit of objectives.

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Control existence

Control effectiveness

Conclusion


Components and Principle

Internal Audit’s assessment

Principles

Description at Baoviet Holdings

control

4. BVH demonstrates a commitment to attract, develop, and retain competent individuals in alignment with objectives

Issue and execute consistently regulations on recruitment, training, appointment, staff rotation, remuneration & compensation, performance management...

Control existence

Control effectiveness

Conclusion

5. BVH holds individuals accountable for their internal Refer to Principle 2 and 3. control responsibilities in the pursuit of objectives RISK ASSESSMENT BVH has formulated the 2016- 2020 risk management strategy and set an unified annual risk management objectives for the 6. BVH specifies objectives with Holdings and all subsidiaries in order to sufficient clarity to enable the support the risk identification, assessment, identification and assessment mitigation as well as the alignment between of risks relating to objectives. objectives and risks at all levels (i.e. strategic, annual, corporate, subsidiary, department, process, individual).

7. BVH identifies risks to the achievement of its objectives across the entity and analyzes risks as a basis for determining how the risks should be managed.

The risk management regulations have been issued to identify, control, and report on major risks, including insurance risk, operational risk, market risk, credit risk, liquidity risk, reputation risk, strategic risk, sustainability risk. The risk management regulations clearly define the risk management organizational structure, authorities and responsibilities at all levels; ways to identify major risks and risk management standards in the business performance of Baoviet Holdings and subsidiaries. Issue risk management policy, risk appetite and limits for each period.

8. BVH considers the potential for Fraudulent risk is among types of risk identified fraud in assessing risks to the and assessed in the Risk Management achievement of objectives Regulation, Risk Management Policy. Risk related issues (such external factors as policies, mechanism, politics‌) are included 9. BVH identifies and assesses in the Board of Management reports as well as changes that could significantly thoroughly analysed, assessed and resolved impact the system of internal at quarterly meetings of the Risk Management control Committee (RMC) and Assets - Liabilities Management Committee (ALCO). CONTROL ACTIVITY 10.

BVH selects and develops control activities that contribute to the mitigation of risks to the achievement of objectives to acceptable levels.

Control measures are established, applied in all activities, at all levels and are integrated in all business processes as well as daily operations.

Main control types include: Directive control, Preventive control, Detective control, Manual control, Automatic control; among which 11. BVH selects and develops automatic control via the IT system plays an general control activities over important role in mitigating errors and human’s technology to support the impact on control efficiency. achievement of objectives. Main control measures include: performance 12. BVH deploys control activities appraisal for the Board of Management, for through policies that establish each department and division; examination what is expected and procedures and approval; Key Performance Indicators (KPIs) analysis. that put policies into action.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

293


INTERNAL CONTROL AND INTERNAL AUDIT

Exist / effective

Potential improvement sections

Effective

Components and Principle Principles

Internal Audit’s assessment Description at Baoviet Holdings

control

INFORMATION AND COMMUNICATION 13. BVH obtains or generates and uses relevant, quality information to support the functioning of internal control

External information which relates to or may impact Baoviet Holdings is regularly collected, compiled, analyzed, assessed, and handled by Branding - Communications Division.

14. BVH internally communicates information, including objectives and responsibilities for internal control, necessary to support the functioning of internal control.

The Board of Management of Baoviet Holdings builds a social network (workplace) across the Group which ensures essential information to be clearly communicated in a timely, clear and effective manner to stakeholders at all levels.

The Board of Management authorizes the Chief Financial Officer, the person in charge 15. BVH communicates with external of information disclosures, and the Chief parties regarding matters Operating Officer, Spokesperson of Baoviet affecting the functioning of Holdings, to release information to customers, internal control partners, shareholders, government authorities. MONITORING

16. BVH selects, develops, and performs ongoing and/or separate evaluations to ascertain whether the components of internal control are present and functioning

17. BVH evaluates and communicates internal control deficiencies in a timely manner to those parties responsible for taking corrective action, including senior management and the board of directors, as appropriate

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Ongoing monitoring: the division manager checks and monitors the internal control execution of his/ her staff in their daily work Develop and go-live applications for realtime financial and investment reports to regularly monitor the business and investment performance of the Holdings and subsidiaries to support the Board of management in decision making. Independent/periodic monitoring: the periodic monitoring is implemented by the Audit Committee. The Audit Committee provides the Board of Directors with assessments on the comprehensiveness and efficiency of the internal control system of Holdings’ Internal Audit and subsidiaries’ inspection divisions and external auditors.

Control existence

Control effectiveness

Conclusion


INTERNAL AUDIT ACTIVITIES

In 2019, with the issuance and coming into effect of the Decree No. 05/2019/ND-CP dated January 22nd 2019, the Internal Audit Block has focused on reviewing its activities and controlling regulations to ensure their compliance with Vietnamese law and at the same time conformity with the international standards and practices.

FUNCTIONS AND RESPONSIBILITIES To provide the Audit Committee, Board of Directors and Chief Audit Executive with independent and objective evaluations on the appropriateness, effectiveness and efficiency of Internal Control, Risk Management and Corporate Governance processes of auditees basing on assurance and consulting activities in order to help the Group accomplish its objectives.

OPERATING PRINCIPLES

Formulating and proposing to the Audit Committee and BOD to approve the selection of audit process, auditees, audit scope, audit frequency and audit schedule.

INDEPENDENCE

OBJECTIVITY

Performing audit work with integrity, fairness and unbiasedness.

Performing audit engagements, delivering findings, conclusions and issuing internal audit reports.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

295


INTERNAL CONTROL AND INTERNAL AUDIT

ORGANIZATIONAL STRUCTURE CHIEF AUDIT EXECUTIVE

DEPUTY CHIEF AUDIT EXECUTIVE

Internal Audit for General Insurance Division

Internal Audit for Investment Activities

Internal Audit for Life Insurance Division

Perform auditing at Baoviet General Insurance’s Headquarters (excluding investment activities) and 79 branches.

Perform auditing at Baoviet Holdings, Baoviet Fund, and investment activities (excluding advances from surrender value) at the Headquarters of Baoviet General Insurance and Baoviet Life.

Perform auditing at Baoviet Life’s Headquarters (excluding investment activities) and 76 branches.

APPROACH Baoviet Holdings Internal Audit adopts a risk-based approach (ORCA) to conduct its auditing activity, which means the Internal Audit bases on the risk assessment results to determine audit objectives, auditees, audit scopes and methodologies.

OBJECTIVES (Key objectives of the Group)

ALIGNMENT (Risks threatening the accomplishment of the Group’s objectives)

CONTROLS (Control measures to mitigate Risk)

ORCA Methodology

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RISKS (Risks threatening the accomplishment of the Group’s objectives)


THE INTERNAL AUDIT PROCESS

STAGE I annual audit plan Preparation

STAGE II detailed plan preparation and execution

STAGE III Reporting and completion

STAGE IV Follow-up

STAGE V quality assurance

STAGE OF INTERNAL AUDIT

Expectaion of stakeholders

Detailed audit plan

Detailed audit report

Internal audit quality assurance Off-site Follow-up

Overview of interprise

Execution

Expectation of stakeholders

Summary report

On-site Follow-up Risk Assessment

Filing & reviewing

Strategy/Annual plan

External quality assessment

Periodical report

Completion

Plan approval

Reassessment of strategy plan

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

297


INTERNAL CONTROL AND INTERNAL AUDIT

STANDARDS IMPLEMENTATION Baoviet Holdings’ Internal Audit is organised and operated in line with Vietnamese law, the international standards and practices which are consistent with the International Professional Practices Framework – IPPF of The Institute of Internal Auditors – IIA. IIA IPPF initiatives by Baoviet Holdings’ Internal Audit

Standard No.

Standard title

IIA IPPF initiatives by Baoviet Holdings’ Internal Audit

Purpose, authority and responsibility

The charter of Baoviet Holdings’Internal Audit Block, which is approved by the Board of Directors, clearly sets its position, function, responsibilities, authority, audit population, audit scopes, operating principles (independence and objectivity), reporting lines, standards.

Organisational independence

The Chief Audit Executive and other management positions in the Internal Audit Block are appointed and dismissed by the Board of Directors.

1000

1110

The Chief Audit Executive reports functionally to the highest governing level of the Holdings – the Board of Directors. The audit, budget and resources plans of the Internal Audit Block are approved by the Board of Directors. Individual objectivity

1120

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The individual objectivity of internal auditors is clearly stated in the Charter of the Internal Audit Block approved by the Board of Directors and the Code of Ethics approved by the Audit Committee. The individual objectivity of internal auditors are assured and strictly monitored by continuously training auditors to improve awareness and assigning members of each engagement.


Standard No.

Standard title

IIA IPPF initiatives by Baoviet Holdings’ Internal Audit

Proficiency

The professional learning map of the Internal Audit Block is drawned up and deployed based on the IIA’s Global Internal Audit Competency Framework. Training forms for internal auditors: • Training according to the Holdings’ general learning map; • Regular training one by one on the job; • Professional update training is delivered by reputable advisors and lecturers from the Big 4 accounting firms;

1210

• Training through professional certificates (CIA, ANZIIF, LOMA, ACCA, CPIA, CFA, CPA Vietnam…); • Self-training on emerging risks as well as emerging trends relating to internal control, risk management, corporate governance, internal auditing are continuously updated. Baoviet Holdings’ internal auditor attended the US-Asia International Conference 2019 in Japan to share information, experience on internal audit between Sumitomo Life and its invested capital companies.

1300

The Quality Assurance and Improvement Program

Periodic internal assessments are implemented through reviewing and reporting performance results to the Audit Committee and BOD on a quarterly basis. Planning

2010

2050

Ongoing internal assessments are implemented through examining auditee satisfaction after each engagement.

The 2016 – 2020 audit objectives have been developed based on the strategy and the top risks in the 2016 – 2020 period of the Group and the trends of development of Internal Audit all over the world to orientate Internal Audit Block’s activities in the next 5 years. Strategic audit plans, annual audit plans and detailed audit plans (for each engagement) are developed based on the results of general risk assessment and detailed risk assessment of each audited entity.

Coordinating with internal and external assurance providers

The regulation of coordination between the Internal Audit Block and other internal assurance functions within the Holdings (including Supervisory Board, Risk Management Division, Legal & Compliance Division at the Holdings, Inspection – Internal Control functions in wholly owned subsidiaries and Supervisors of the Holdings at wholly owned subsidiaries) has been issued and implemented. The Internal Audit Block communicates with the external auditor of the Holdings.

2060

Reporting to Senior Management and the Board

Audit reports are distributedtothe Board of Directors, Audit Committee, and CEO of Holdings. Quarterly, the Chief Audit Executive reports to the BOD, the Audit Committee & the CEO on the internal audit performance at the Board of Director meetings. Resource limits affecting the Internal Audit activities are reported to the Audit Committee and the BOD.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

299


INTERNAL CONTROL AND INTERNAL AUDIT

General Insurance

13

THE INTERNAL AUDIT’S PERFORMANCE IN 2019

jobs

34

Life Insurance

15

Completed

100%

the audit plan approved by the BOD

jobs

jobs

Investment

06

jobs

TYPICAL AUDIT/EVALUTION ACTIVITIES

300

1.

2.

3.

AUDIT ON INTERNAL CONTROL OVER FINANCIAL REPORTING FOR 6 MONTHS PERIOD ENDED 30 JUNE 2019 IN BVL, BVH AND BVF

CONSULTATION ON PROCESS OF BAOVIET HOLDINGS’ SUSTAINABILITY MATERIALITY ASSESSMENTT

ASSESSMENT OF BVGI’S PERFORMANCE IN 2018 AND FIRST HALF OF 2019 ACCORDING TO RESOLUTION NO. 70/2019/ NQ-HDQT DATED SEPTEMBER 23, 2019

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86%

of the Internal Audit’s recommendations have been fully or partially completed, which contributed in the prevention / mitigation of potential risks that may affect the entities’ ability to achieve their objectives. Average percentage of completed recommendations (fully/partially) (%) Average percentage of not-yet-completed recommendations (%)

100%

93%

89%

90% 80%

86%

75%

70% 60% 50% 40% 30%

25%

20%

14%

11%

10%

7%

General insurance

Life insurance

COMPLETE THE INTERNAL AUDIT HANDBOOK FOR

25

Investment

Internal Audit Block

PROCESSES

PROFESSIONAL CERTIFICATES (Number of staffs completed or studying)

06

Overview

Development Strategy

06

Business Performance

03

Corporate Governance

03

Sustainable Development

02

Financial Statements

02

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INTERNAL CONTROL AND INTERNAL AUDIT

OBJECTIVES FOR 2020

COMPLETE THE 2020 AUDIT PLAN APPROVED BY THE BOD

ESTABLISH AUDIT OBJECTIVES FOR THE PERIOD 2021 - 2025

2021 - 2025 GIAI ĐOẠN KIỂM TOÁN CHO XÂY DỰNG MỤC TIÊU

ĐƯỢC HĐQT GIAO KIỂM TOÁN NĂM 2020 HOÀN THÀNH KẾ HOẠCH

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COMPLETE OVERALL RISK ASSESSMENT MODEL AND INTERNAL AUDIT PROCESS

CONTINUE TO INNOVATE AUDIT METHODS, PROMOTE THE APPLICATION OF INFORMATION TECHNOLOGY SOLUTIONS TO INCREASE LABOR PRODUCTIVITY

LAO ĐỘNG NHẰM TĂNG NĂNG SUẤT CÔNG NGHỆ THÔNG TIN DỤNG CÁC GIẢI PHÁP TOÁN, ĐẨY MẠNH ỨNG PHƯƠNG PHÁP KIỂM TIẾP TỤC ĐỔI MỚI

NỘI BỘ QUY TRÌNH KIỂM TOÁN RỦI RO TỔNG THỂ VÀ MÔ HÌNH ĐÁNH GIÁ HOÀN THIỆN


RISK MANAGEMENT

Bao Viet Holdings has effectively implemented the risk management system, ensuring safe business operations and made an important contribution to the successful implementation of the development strategy of the business.

01

Insurance risk management

05

Concentration risk management

Credit risk management

02

06

Operational risk management

Market risk management

03

07

Reputation risk management

04

Liquidity risk management

08

Strategic risk management

Bao Viet Holdings implements a consistent risk management framework throughout the system and actively takes proactive risk management measures to identify critical risks to focus on management, enhanced the risk management policies, measures and models to assess and mitigate risks, ensuring that all the risks are managed in a timely and effective manner. In 2019, risk management activities contributed positively to the business results of Bao Viet Holdings. Bao Viet Holdings has maintained a prudent risk management policy, ensured strong financial position and fully complied with regulations on financial safety ratios in all business activities.

STRATEGY & POLICY

SCOPE

RISK ANALYSIST

SELECTION OF MEASURE

IMPLEMENT MEASURE

CONTROL

Future effect

Effectiveness

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

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RISK MANAGEMENT

OUTSTANDING RESULTS IN 2019

1.

Review the risk management strategy for the 2016-2020 period, review annual risk management policies and risk appetite.

2.

Organize periodically RMC meetings at Bao Viet Holdings and Subsidiaries.

3.

Issued the Bao Viet Holdings’ regulation on the evaluation, classification and determination of deposit investment limit for commercial banks and financial companies.

4.

Amending and supplementing the regulation on risk management in corporate bond investment.

5.

Assisting the Bao Viet holdings’ subsidiaries in developing risk management models and reviewing annual risk management policies.

RESPONSIBILITY FOR RISK MANAGEMENT The Holding’s Board of Directors (BOD) takes responsibility in deciding the corporate governance structure, function and duty of the Bao Viet Holdings’ Risk management system; issue risk management strategy and policies as well as supervise risk management activities of the entire Bao Viet Holdings. The Chief Executive Officer of Bao Viet Holdings (CEO) shall be accountable to the BOD for implementing risk management strategy and policies; provide suitable resources for risk management activities requirement; issue regulation and guidelines on internal risk management; supervise the implementation to ensure all the business activities are safe and effective, complying with the government and the internal regulation.

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The Risk Management Council of Bao Viet Holdings (RMC) is an advisory body under CEO. The Divisions, Centers and Functional Departments at Bao Viet Holdings are responsible for implementing the strategy, policies, processes and annual plans on risk management in their functional operation, summarizing and report to CEO; review, identify risks and assess the impact level to propose to RMC appropriate risk handling measures; Implement the working coordination and information sharing with RMC’s standing. Subsidiaries of Bao Viet Holdings manage risks separately by establishing their own risk management strategy and policy in accordance with strategy and policy of Bao Viet Holdings.


RISK MANAGEMENT PROCESS

SUPERVISION AND REVIEW

IDENTIFIED, DETERMINING RISKS

Measure and assess risks Record, track risks Risk handling Prepare risk report

HOLDINGS

SUBSIDIARIES

FUNCTIONAL BLOCKS/DIVISIONS

TRACKING AND REVIEWING RISK

THE ORGANIZATIONAL STRUCTURE OF RISK MANAGEMENT

BOD BVH

CEO BVH RMC BVH Chairman: CEO of BVH Members: • Heads of Blocks • CEOs of Subsidiaries

Capital Representative Chairman: CEO of Subsidiary

Operational Block BVH

Member Council/BOD Subsidiaries

Risk Management Division

CEOs Subsidiaries

Members: • DCEOs • Heads of Departments/ Divisions

RMC Subsidiaries

Risk management Subsidiaries

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

305


RISK MANAGEMENT

RMC’S ACTIVITIES IN 2019 In 2019, Bao Viet Holdings and subsidiaries held regular RMC meetings to review and monitor the implementation of risk management in whole Bao Viet Group, continue to improve the risk management framework, to focus on identifying the significant risks need to manage, strengthening policies, measures and models to assess and mitigate risk in an overall manner, to ensure that all risks are managed in a timely and effective manner. In the RMC meetings, the issues are discussed and resolved in the RMC meetings, including: • Update regulations on risk management, discuss on strategic contents, such as: Risk management policy, Risk appetite statement and the key Risk limits... • Review, analyse, evaluate all the risks and propose appropriate control measures such as insurance risks, credit risks, operating risks, liquidity risk, market risk and other significant risks.

Risk control was implemented via the strong coordination amongst the RMC and other Committees, Blocks, Centres, and Departments of Bao Viet Holdings as well as amongst Bao Viet Holdings and subsidiaries. • Coordinate with Strategy and Investment Committee to share information, data, and provide recommendations and solutions related to risk management in strategic and investment field of Bao Viet Holdings; • Coordinate with Audit Committee to review material potential risks, especially those related to the compliance of policies, standards, procedures and legal regulations in order to promptly provide relevant solutions; coordinate to develop the risk indicators; • Coordinate with Assets-Liabilities Committee (ALCO) to exchange information on risks related to the balance of assets and liabilities at the RMC meetings. Representatives from the RMC shall be invited to the periodical meetings of ALCO to provide opinions and recommendations on related risks.

RISK MANAGEMENT STRATEGY AND POLICY Bao Viet Holdings has issued Risk management strategy for the period 2016-2020 to realize the Bao Viet Holdings’ business strategy and concretized by annual Risk management policy. Including specific objectives and solutions to improve the legal framework on risk management at Bao Viet Holdings and subsidiaries, towards international practices and standards, issued the Risk appetite statement and key risk limits; identify effective measures and measures to improve enterprise value, contribute to growth and sustainable development.

RISK APPETITE An effective Enteprise risk management requires developing risk appetite framework towards leading practices. Risk appetite is aggregate amount of risk a company is willing to accept in pursuit of its business objectives and strategic goals. Risk appetite has the content as below:

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THE MAJOR RESULTS OF RISK MANAGEMENT IN 2019 INSURANCE RISK MANAGEMENT The insurance activities are carried out by Bao Viet Life (BVL) and Bao Viet General Insurance (BVGI) - subsidiaries of Bao Viet Holdings. Insurance is one of the core busineses

Life insurance

General insurance

Insurance risk management is always focused on all aspects of business operations of Bao Viet Life. Bao Viet Life uses several methods to assess and monitor insurance risk exposures. These methods include internal risk measurement models, sensitivity analyses, scenario analyses and stress testing. The theory of probability and actuary are applied to the pricing and list of the types of insurance products that can be provided, such as:

Insurance risk management activities of Bao Viet General Insurance includes application of strict control procedures such as: risk assessment in underwriting, reinsurance, loss assessment, compensation settlement, calculating, analyzing experience rates (according to historical data) and periodically reviewing and evaluating the effectiveness of insurance products to adjust the premium rate, adjust coverage,... ensure loss rates in acceptable levels.

• Bao Viet Life has introduced and implemented strict regulations and processes on product design and management; monitor implementation experience; periodically assess sales and profit of products; scenario analysis; timely improve products, re-charge when reality is different from the assumption.

Bao Viet General Insurance applies risk transfer solutions to share risks with other insurers through coinsurance, reinsurance and risk sharing with the insured itself and deductible applied. The reinsurance program of these factors is built based on relevant legal requirements, financial capacity, business strategy, solvency margin requirements, risk portfolio, loss portfolio... of Bao Viet General Insurance.

• Set up insurance underwriting limits, procedures for approving transactions related to new premium or transactions exceeding the limits issued specifically and strictly. • Diversify products and services and determine the principles of pricing, reinsurance and diversification principles of risk sharing.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

307


RISK MANAGEMENT

CREDIT RISK MANAGEMENT Bao Viet Holdings and subsidiaries have implied synchronously solutions to manage credit risk.

CREDIT RISK

TERM DEPOSIT

INSURANCE

MARGIN ACTIVITIES

Manage credit risk of term deposit investment

Manage credit risk of bond investment

As at 16 October 2019, Regulation on evaluating, categorizing and setting up the credit limit for commercial banks and financial companies accompanied by the Decision 1321/2019/QD-TDBV is issued. The regulation is developed based on Circular 52/2018/TT-NHNN dated 31 December 2018 of State Bank of Vietnam in order to standardize the internal credit rating modelapplied at the Holdings and Subsidiaries.

In Bond investment, credit risk arises mainly from corporate bond portfolio. Government bond accounts mainly in bond portfolio (86%) so the risk of bond investment is considered fairly low.

These limits are periodically reviewed. The implementation of deposit limit permits The Holdings not only to mitigate credit risk but also to reflect the economic situation, macro policies and regulatory requirements. Credit risk are reported and evaluated in risk monthly report to ensure timely response to any deterioration in the credit quality of the counter-party.

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The Holdings has established annual plan, approved limit for each type of bonds matching with investment strategy and asset - liability structure, issued Regulation on risk management ofcorporate bond investment accompanied by the Decision 1762/2019/QD-TDBV as at 26 December 2019 (replaced the Regulation on risk management in corporate bond investment accompanied by the Decision 2688/2016/QD-TDBV dated the 22th December 2016) in order to manage tightly financial and non-financial positions and movements of collateral assets.


Manage insurance credit risk

Manage credit risk from margin activity

Credit risk in insurance activities mainly arises at Bao Viet General Insurance. In order to manage this risk, Bao Viet General Insurance has issued regulations, guidelines and required related parties to strictly comply with regulations on insurance debt.

To manage credit risk from margin activity, in 2019, Bao Viet Security Company continues ranking and categorizing customers quarterly. All customers are carefully reviewed for ranking condition and corresponding credit limit before approval of Bao Viet Security Company’s CEO. Besides, credit risks are also controlled by criteria of stock portfolios qualified for margin transactions, safety margin requirement, disposal scheme of collateralassets to maintain capital safety for margin transactions of Bao Viet Security Company.

In order to manage credit risk for reinsurance recipients, the reinsurance ceding is only carried out for reinsurance companies that meet the criteria for rating assessment according to current regulations.

As at 31 December 2019, the outstanding balance of margin activity has decreased by 12% compared to the end of 2018.The margin loans given in 2019 are timely paid and the collateralassetratios remain at a safe level. Credit risk of margin activity is considered relatively low.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

309


RISK MANAGEMENT

MARKET RISK MANAGEMENT Bao Viet Holdings’ objective is to manage and control market risk exposures while maintaining a market risk profile consistent with its investment strategy. We uses a variety of tools to control market risk for each type of financial asset.

MARKET RISK

INTEREST RATE

EQUITY PRICE

FOREIGN RATE

FUND CERTIFICATES

Interest rate risk Deposit and Bond portfolios of Bao Viet Holdings and subsidiaries are exposed to the risk of interest rate fluctuation. These movements in interest rate have affected on the fair value of portfolio, interest income and reinvestment. Moreover, they also have effect on insurance business, when interest rates change, that affect the business result of insurance company as well as benefits of policyholders. Bond and deposit investments account for a significant portion of the financial investment portfolio, and are appropriately held to meet future payables. In 2019, interest rates on term deposits tend to move flatly and slightly decrease atthe end of 2019 due to Decision 2415/QD-NHNN dated 18 Novemeber 2019 of State Bank of Viet Nam. Average deposit rates are slightly higher than at the end of 2018. For products in Life Insurance business, interest rate risk related to traditional policies can be mitigated through sharing of returns with policyholders under the discretionary participation mechanism.

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In additions, Bao Viet Holdings has always focused in forecasting the market interest rates and reporting them periodically to support timely management and investment decisions. Currently, Bao Viet Holdings has managed this risk by Duration and PVO1 tool to evaluate sensitivity of interest rate on term deposit and bonds... Bao Viet Holdings has periodically reviewed and selected appropriate reinvestment duration to mitigate interest risk while maintaining the profitability and liquidity of Bao Viet Holdings and subsidiaries.


Equity price risk Bao Viet Holdings has invested in listed and non-listed equities. Listed equities are directly exposed to risk of price fluctuations, while the value of unlisted stocks can also move adversely if the market conditions and company’s performance deteriorate. Investments are diversified by sectors and the equities are kept at a relatively low proportion in investment portfolio. Bao Viet Holdings manages equity price risk by setting limits for investing in one industry, one company or Bao Viet Holdings of companies; analysing systematic risk to investment portfolios when the market fluctuates significantly. As at 31 December 2019, proportion of equity is 3,4% of the Bao Viet Holdings’ financal investment portfolio, lower than 2018 (4%). Bao Viet Holdings uses Value at risk (‘VaR’) tool to monitor and limit listed equity price risk. VaR is a method which estimates the maximum losses can occur when there are fluctuations in the market price of a certain period of time (1 day, 1 week, 1 month, 1 year), with a given confidence level (95%).

Overview

Development Strategy

Business Performance

Corporate Governance

The VaR (95%, 1 month) in 2019 is 231VND bil, which is 5VND bil higher than 2018 due to the higher average market value of the portfolio. The relative VAR (95%, 1 month) in 2019 is around 9,5% (compared to 10% in 2018). Moreover, Bao Viet Holdings also uses stress-testing method to evaluatethe potential impacts on investment portfolio under certain scenarios. Those scenarios are updated and reported in monthly risk report. For the non-listed stocks, Bao Viet Holdings uses the basic analysing methods, monitorsand supervises financial and non-financial performance of companies which Bao Viet Holdings invested through capital representatives. The information of non-listed equities has been updated periodically in the monthly risk report that helps Board of management to make timely decisions.

Sustainable Development

Financial Statements

311


RISK MANAGEMENT

Foreign currency risk

Fund certificates

Foreign currency risk is the risk of loss resulting from changes in exchange rates. Fluctuations in exchange rates between VND and other currencies in which Bao Viet Holdings conducts business may affect its financial condition and business performance. Subsidiary that have the highest impact due to foreign currency risk are Bao Viet General Insurance, although the total exposure is not significant.

The volatility of price of Bao Viet Holdings’ fund certificates has reviewed, controlled and assessed regularly by Bao Viet Fund (BVF). The Net Asset Value (NAV) per fund unit may increase or decrease, depending on the total assets and the total liabilities. This risk stems from the price reduction of securities, such as bonds, listed and unlisted securities in the Fund portfolio investment.

A part of Bao Viet General Insurance’s reinsurance liability is denominated in USD, liabilities are offset and only paid differential amount. Thus, its impact to profit of Bao Viet General Insurance is immaterial.

Bao Viet Fund ‘s investment is carried out through a rigorous appraisal process, following on the fund’s objectives to grab the opportunities in high-yield, high-growth investment at the acceptable risk. Moreover, Bao Viet Fund has monitored closely the changes and trends of the economic factors as well as performance and future prospects to design appropriate investment strategies.

LIQUIDITY RISK MANAGEMENT Bao Viet Holdings and Subsidiaries identify the objective which is maintaining the balance of financial resources to ensure that financial commitments are fulfilled when they come due, maintain appropriate liquidity position, solvency level to comply with regulations and daily operation requirement. To prevent and mitigate this risk, Bao Viet Holdings has analysed the remaining duration of financial liabilities and anticipated cash flow, historical liquidity requirement to recognize the fluctuations and influent factors. Bao Viet Holdings’ liquidity position is regularly monitored, and is reported to the Asset-Liability Committee (ALCO). The solvency ratios of the Bao Viet Life and Bao Viet General Insuarance are based on regulations promulgated in Circular No. 50/2017/TT-BTC dated the 15th May 2017 and Circular No.01/2019/TT-BTC dated the 2nd January 2019by the Ministry of Finance. Bao Viet Life and Bao Viet General Insuarance has always maintained appropriate liquidity position to ensure compliance with regulatory capital requirements and fulfill financial commitments.

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CONCENTRATION RISK MANAGEMENT Concentration risk can arises from insurance business and financial investment activities. Measure, monitor and manage concentration risk: • Concentration risk measured by asset structure, total investment value, premium revenue, value of payment/compensation by customer, location and or business sector. • Concentration risk is monitored by reporting to Executive Board and RMC • Concentration risk is managed by investment limits, functional process, decentralization procedures for making decision

Insurance business

CONCENTRATION RISK

Financial investment

Manage the concentration risk from insurance business

Manage concentration risk from financial investment

At Bao Viet Insurance, the concentration risk can arise from insurance types such as freight insurance, shipping insurance, aviation insurance, petroleum insurance, property insurance, human insurance, technical insurance ... Therefore, besides the concentration risk in the same category, Bao Viet Insurance also faces concentration of risks e.g. combination of vessel and cargo insurance, asset and human insurance, etc. Bao Viet Insurance has regulations on concentration risks management and purchase the reinsurance contracts to limit liability when the insurance event occurs.

In order to mitigate the concentration risk from financial investment, Bao Viet Holding’ investment strategy based on principle of investment portfolio diversification:

At Bao Viet Life,the underwriting strategy is designed to ensure that insured risks are well diversified in terms of the type and insured benefits. Insurance underwriting is largely achieved through diversification across industry sectors and geography, the health and occupational characteristics of people working in each sector, The actual compensation cases and the process of evaluating insurance products, the claim payment process is regularly reviewed. Underwriting limits are implemented to ensure appropriate risk selection criteria. For example, Bao Viet Life has the right not to renew individual policies with high risks, impose deductibles and has the right to reject the payment of fraudulent claims.

Overview

Development Strategy

Business Performance

Corporate Governance

• Diversify with a variety of assets (eg: investing in stock, bond, deposit, fund certificate…); • Diversify with one asset (eg: investing in bond including: government bonds, corporate bonds or local government bonds...); • Diversification of industry: expanding the scope of investment in companies, areas without cross-ownership; • Diversification by market capitalization: allocate investment assets in stocks of different company.

Sustainable Development

Financial Statements

313


RISK MANAGEMENT

OPERATIONAL RISK MANAGEMENT Operational risks are reported in risk dashboards at periodic Risk Management Coucil of Bao Viet Holdings and subsidiaries. Each subordinate operational risk is clearly defined and assessed. Critical risks are analyzed then appropriate actions are carried out to minimize loss from those risks. Financial Control & Reporting Legal & Compliance People

OPERATIONAL RISK

Process & Procedure Systems & Information Business Continuity

One of the key responsibilities in 2019 is to develop the infrastructure and to apply information technology in accordance with international standards, to ensure the synchronization, modernity, efficiency and security. Bao Viet Holdings and Subsidiaries continue to reinforce risk management related to information technology system, focus on information security and business continuity at Bao Viet Holdings, such as:

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• Implement a disaster recovery (DR) site to improve the availability of information technology systems to provide services to customers and operation businesses that are stable and continuous. • Periodically implement Rehearsal Emergency Response with risks of information technology incidents such as network attacks, disaters, IT system failured to ensure business continuity.


REPUTATION RISK MANAGEMENT Reputation risk may arise from the influence of other risks, especially from the compliance risk such as staff members who violate the law, issues in the business operation of the Subsidiaries that influence the reputation of the whole system; from internal information leakage; from uncontrolled utterances that affect corporate reputations; from informal sources, non-compliance with disclosure information regulations (slow, inadequate, timely disclosure ...), the activities of business, behaviours ofstaff or third party negatively affect the image of the business, expectation, belief of the stakeholders. In 2019, reputational risk is well controlled through the following activities: • Tracked attitudes and reactions of stakeholders including the authority, customers, and employees. • Monitoredand tracked articles by press agencies, social media, internetand indicators from customer service center.

STRATEGIC RISK MANAGEMENT Strategic risk is the risk when the business develops the strategy that does not appropriate for their ability; business is not able to identify and respond in a manner consistent with the opportunities and challenges posed by market developments, false forecast of market volatilities, ineffective investment in new markets or inadequate IT systems development whichcan not supported to the business growth. Bao Viet Group manages strategic risksthrough measures such as: • Measures by financial and non-financial indicators of strategy implementation annually. • Issued monthly/quarterly macroeconomic reports and annual reports on business results and results of strategy implementation; analyze scenarios of changes in macroeconomic and internal factors to consider the feasibility of the strategy. • Review and adjusted strategy when significant movements such as macro environment, business environment or internal factors/activities of Bao Viet Holdings happen.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

315


RISK MANAGEMENT

RISK MANAGEMENT PLAN IN 2020

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In 2020, Bao Viet Holdings continues to implement risk management strategies and policies; risk appetite statement and key risk limits; apply operational procedures according to international practices; enhance the awareness and culture of risk management, proactively considering risk factors in daily business activities; effectively allocate and use the resources to support the business of the Holdings and subsidiaries with the highest efficiency, focus on solutions to manage and mitigate risks, improve the effectiveness of enterprise risk management system. 1.

Strengthen corporate and support between Holdings and subsidiaries to enhance effectiveness of risk management framework.

2. Continue to mantain and improve the effectiveness of RMC meeting of Holdings and subsidiaries; improve the effectiveness of information exchange, coordination between the three layers of defense.

3. Use qualitative and quantitative method to identify, assess and mitigate risks, improving overall risk management ability to support insurance, investment and financial service effectively.

4. Improve the quality of risk report in order to advise the Executive Board to make decisions; to ensure that the key risks are managed and responsed promptly.

Overview

5. Enhance risk management for the information technology system at Bao Viet Holdings and susidairies; continue to implement the information security solution and improve the safety of the system, monitor and alert the risk to customers, staff and related functions. Training and communication to raise awareness about safety, information security and regulations, policies on information security to the whole staffs to ensure that the information technology system is safe and maintain business operations.

6. Continue to promote risk management culture, organize training, update risk management knowledge in Bao Viet Holdings, and develop human resources of risk management department in Bao VietHoldings and subsidiaries.

1.

Proposing the development of Risk management strategy 2021-2025; continue to implement the Risk management policy, the Statement of Risk appetitle and the key risk limits.

2.

Organize periodically RMC meetings at Bao Viet Holdings and Subsidiaries.

3.

Improve risk management structure in subsidiaries with 100% of charter capital owned by Holdings.

4.

Review risk management models, focus on managing key risks; Issue risk management report.

5.

Continue to implement and review the security, confidentiality policies and information system security; rehearsal of the situation in which the IT system trouble occurs.

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

317


LEGAL AND COMPLIANCE

Legal and compliance function has been put in place at Baoviet Holdings promptly upon the equitization of Vietnam Insurance Corporation in 2007. Legal and compliance plays a crucial part in optimizing internal control system as it shapes and sets up a framework for enterprises to keep possible risks under control during the implementation and management of all business operations. Therefore, Baoviet’s legal and compliance function aims to monitor the group-wide compliance at Holdings and its subsidiaries by designing a compliance framework and plan in accordance with compliance and corporate governance international standards.

Legal and Compliance Division has the role of ensuring that all management and business activities of Baoviet Holdings strictly comply with legal regulations, thereby reducing legal risks and protecting legitimate interests of Baoviet Holdings. At the same time with the current technology 4.0 trend, the guarantee of not violating the law is not enough, so Legal and Compliance Division also needs to provide the most appropriate or best solutions in dealing with specific legal cases. Legal and Compliance Division has the role of building, communicating culture of legal compliance throughout Baoviet’s system, ensuring the sustainable existence and development of BaovietHoldings in the present as well as in the future. 318

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DUTIES AND RESPONSIBILITIES Pursuant to Decision No. 432/2015/QD-HDQT dated 02 April 2015 by Baoviet Holdings Board of Directors (BOD) regarding Baoviet Holdings’ organizational structure amendments, Guideline No. 17-HD/BTCTW dated October 5, 2018 of the Central Organization Commission and Resolution No. 02-NQ/ĐUBV dated November 22, 2018 of the Standing Committee of Baoviet Holdings’ Party Committee on consolidating organizational structure of functional divisions of the Operations Management Block and consolidating advisory bodies of Baoviet Holdings’ Party Committee with functional divisions having similar functions and tasks, the CEO of Baoviet Holdings issued Decision No. 481/2019/ QD-TDBV dated April 10, 2019 temporarily stipulating definition of duties, responsibilities, and organizational structure of Operations Management Block and its subordinate divisions replacing Decision No. 881/2015/QD-TDBV dated June 19, 2015, according to which the Legal and Compliance Devision has the following main duties and responsibilities include:

1.

Inspection and supervision of the Party Committee.

2. Legal Activities. 3. Compliance Activities.


2019 LEGAL AND COMPLIANCE ACTIVITIES With the aforesaid duties and responsibilities, in 2019 Legal and Compliance Division under Operations Management Block has fulfilled the key legal and compliance tasks as follow:

IN RESPECT OF INSPECTIONAL AND SUPERVISORY WORKS OF THE PARTY

IN RESPECT OF COMPLIANCE WORKS

• Having completed the 2019 Monitoring and Supervision Program of Standing Committee of Baoviet Holdings’ Party Committee and the Party Committee’s Inspection Commission of Baoviet Holdings in accordance with the orientation, goals and guidance of the Party Committee of Central Business Block; • Organizing 09 examinations at Party Committees, Party Cells according to the 2019 Monitoring and Supervision Program including scheduling, field inspection and releasing conclusion notices to the object monitored by the Party; • Having completed fully and promptly reports related to inspection and supervision activities, anti-corruption ... at the request of the Party Committee of the Central Businesses Block, the Central Committee for Internal Affairs including quarterly/six-month/yearly reports.

• Building the 2019 compliance plan of Baoviet Holdings approved by the CEO; guiding the formulation and issuance of the 2019 compliance plan for subsidiaries; • Continuing to amend the Compliance Regulation to ensure the suitability with compliance implementation at Baoviet Holdings in the present and in the next years; giving comments for member units to build and issue the Compliance Policy of Units; • Building directive documents of Baoviet Holdings and its subsidiaries approved by the Holdings Senior Management on developing, implementing an annual compliance plan and other related work; • Keeping communicating, training and applying regulations on conduct and professional ethics in the Group based on the Code of Conduct and professional ethics; • Issuing legal news and communicating to Baoviet Holdings’ employees.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

319


LEGAL AND COMPLIANCE

IN RESPECT OF LEGAL WORKS

• Acting as a contact point regarding the draft or review of legality approximately 40 documents and transactions, some of which are important documents such as BaovietHoldings’ Charter, Subsidiaries’ Company Charter, Investment Regulation, Capital Representative Regulation, other policies and regulations... and 27 ISO processes governing key business lines across the group, contribute to the completion of legal procedures for corporate governance, management, and business operations. Baoviet Holdings has been awarded with ISO 9001 – 2018 Certificate, 5S Certification... • Acting as a contact point to build, complete, amend for the first time the Regulation on contractor selection to provide consulting services, non-consulting services and regular procurement of Baoviet Holdings with 07 detailed instruction procedures in order to improve efficiency in selecting bidders to meet the Holdings’ requirements of management, business and regular procurement, to ensure the quality and schedule of packages in which the Legal and Compliance participates in Evaluation Groups, Bid Solicitor and the Expert Groups; • Giving legal advisory for Holdings Senior Management, Blocks/Centers/Divisions on solving legal issues arising in the management, administration and business process of the group in the fields of investment and real estate, bidding activities, and other business activities of Baoviet Holdings. Especially in 2019, BaovietHoldings has implemented successfully the private placement shares project, in which the Legal and Compliance Division has coordinated with the legal company to complete the role of legal consultant for the project;

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• Supporting legally, co-operating with the Blocks/ Centers/Branches and the functional Divisions of BaovietHoldingsto settle requirements of work, legal issues; ensuring timely the rights and interests of the Holdings according to functions of Legal and Compliance Division; contributing to reduce the cost of hiring legal consultants in 2019; • Reviewing the Holdings’ contracts and transactions to minimize financial risks such as administrative fines and contract violations; • Researching on new legal regulations and policies in order to give legal advisory for Holdings Senior Management, Blocks/Centers/Divisions in relation with any arising issues; • Gave legal advisory for Holdings Senior Management, Blocks/Centers/Divisions and co-operated with law firm to assist and consult various legal issues in the management and business operations; • Worked with relevant Blocks/Divisions to enhance supervision effectiveness: Legal and Compliance Division, Operations Management Block cooperated with Internal Audit Block to successfully develop Coordination policy in the areas of legal, compliance, risk management, and internal audit, establishing legal procedures that support with cross-functional coordination in 2018, and many years to come.


2020 PRIORITIES

In 2020, Baoviet Holdings’ Legal and Compliance Division will focus on the following tasks:

1. Acting as a contact point in updating, amending and supplementing the current

documents of Bao Viet Group under the new organizational model orientation.

2. Coordinating with the Centers/Branches and the functional Divisions of

BaovietHoldings in updating and issuing many important internal documents such as the Statute of BaovietHoldings, Corporate Governance Regulation, Investment Regulation, Capital Representative Regulation, Regulation on contractor selection to ensure compliance with relevant laws and the internal regulations of the Holdings.

3. Coordinating with Baoviet Holdings’ subsidiaries with 100% charter capital owned

by Baoviet Holdings in updating, amending and issuing their Statutes.

4. Promoting its leadership role in researching on latest policies and regulations,

giving advisory for legal advisory for Holdings Senior Management, Centers/Divisions in relation with any arising issues.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development

Financial Statements

321


05

SUSTAINABLE DEVELOPMENT


SUSTAINABILITY


SUSTAINABLE DEVELOPMENT


326 Facts and Figures in 2019 328 Overview of sustainable development activities in Baoviet 331

Report on environmental and social impacts

334 Engaging business with SDGs 342 Contributions to the sustainable development of local communities

350 Customer health and safety


FACTS AND FIGURES IN 2019

SUSTAINABLE ECONOMIC GROWTH

130,000 BILLION VND Return investment

PROTECT THE ENVIRONMENT

44,848

BILLION VND (+7.2% ) Consolidated revenue

700

BILLION VND Dividends paid to shareholders

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2,200

BILLION VND Contributed to the state budget

1,200 500 POSTERS Calling actions of employees in using energy resources at office

5S 7,000

BULLETINS QUALIFICATION Promoting Working environment sustainable development in internal network

REDUCED

M2 Waste water throughout Baoviet offices


105,365

TRAINING HOUR for employees

INVESTMENT IN HUMAN RESOURCE DEVELOPMENT

96,714

TRAINING HOUR of Professional expertise

96.5%

EMPLOYEES Joined the community activities in 2019

VND

35

18006966 FREE CALL CENTER

General health advisory

BILLION

Investment in education and youth projects, construction national standard schools

VND

18

CONTRIBUTE TO THE COMMUNITY DEVELOPMENT

BILLION

Investment in the Education Security Welfare program since 2005

3,700 POOR FAMILIES

Received free medical treatment

2,000 BLOOD UNITS Donation to patients in need

ENGAGING SUSTAINABLE DEVELOPMENT IN CORPORATE GOVERNANCE

27

19600

ISO STANDARD Compliance with business operations training

ISO STANDARDS Regulating important business operations training

Core team for sustainable development with

18

MEMBERS

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

327


OVERVIEW OF SUSTAINABLE DEVELOPMENT ACTIVITIES IN BAOVIET

SOCIAL RESPONSIBLITY

Through communication exchanges with stakeholders and analyzing the impacts of Baoviet, the effects and opportunities from sustainable development trend, Baoviet has perfected the sustainable development model with a vision to 2025.

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EVIRONMENTAL PROTECTION


OVERVIEW OF SUSTAINABLE DEVELOPMENT MODEL IN BAOVIET

Baoviet always engages Economic Growth with Environmental Protection and Social Responsibility - three factors that play a fundamental role for Baoviet’s long-term success. In particular, Economic goals are the most important goals of Baoviet as the implementation of this goal is a condition for implementing Social and Environmental goals.

ECONOMIC GROWTH

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

329


OVERVIEW OF SUSTAINABLE DEVELOPMENT MODEL IN BAOVIET Along with ensuring the goals of economic growth, society and community interests, and environmental protections, we realized that “Corporate governance” and “Human resource development” are also two important factors that ensure the sustainable development of Baoviet. Therefore, Baoviet will prioritize the integration of these two factors in the medium and long-term sustainable development model. Sustainable development goals are actively and proactively shared by Baoviet with stakeholders in order to identify the concerned issues. These issues continue to be assessed and reviewed by us in relation to our current operation and sustainable development strategies, thereby identifying key issues to conduct the review, improvement as well as shown in the 2019 Sustainability Report. Baoviet’s 2019 Sustainability Development Report highlight the activities of Baoviet Holdings and its subsidiaries in relation to sustainable development issues in 2019. The approach of Baoviet’s sustainable development issues is conducted from its long-term economic growth goals combined with social development and environmental protection goals, therefore contributing to the overall development of the community.

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At the 2019 Annual Report, Baoviet has integrated the presentation of sustainable development content in 2020 - 2025 visions to daily business operations across the Group. Chapter V 2019 Annual Report focuses on activities of social responsibility and environmental protection, including Baoviet materialities. In 2019, the sustainability development report will also be reviewed and ensured by the Internal Auditing Division of Baoviet Holdings.

The content of sustainable development is prepared by Baoviet as an Independent Report according to the latest Sustainable Reporting Reporting Guidelines - GRI Sustainability Reporting Standards.

View Sustainable Development Report


REPORT ON ENVIRONMENTAL AND SOCIAL IMPACTS COMMITMENTS & ORIENTATIONS In 2019, Baoviet Board of Management closely followed the direction of the Board of Directors, actively implemented activities related to environmental protection and social responsibility in accordance to Baoviet strategic direction on Sustainable development. Aiming to bring a better living standard to the community, Baoviet also invested in community projects to maximize the benefits for local people and the influence of Baoviet in that locality.

Social responsibility and community activities Recently, Baoviet launched the first specialized insurance for cancer in Vietnam (Baoviet K-care). As an insurance product specifically designed for cancer, Baoviet K-Care offers four diverse and great insurance benefits for applicants including: Cancer Insurance Benefits (early and late stage), hospitalization benefit, death by cancer and insurance participants will be paid a fixed amount of indemnity up to 1 billion, in order to help the insureds financial in cancer treatment. Baoviet invests in developing micro insurances such as agricultural insurance, student insurance, motor vehicle insurance to help low-income participants in rural areas to be able to access insurance services for living and production activities. In addition, our specialized pension insurance also bring a stable income for employees after their retirement while sharing the financial burden with the State’s social insurance budget.

Overview

Development Strategy

Business Performance

Corporate Governance

Green business and environmental protection activities Realizing the impacts of climate change and human activities on the environment, Baoviet has enhanced the application of information technology to digitize transactions and operation activities to minimize the effects toward the environment. In 2019, Baoviet focuses on engaging SDGs in supply chain assessment and operational risk assessment through integrating accountability obligations in contracts. negotiate with the main contractor; Project investment management processes and equity capital investment processes..

Sustainable Development Financial Statements

331


REPORT ON ENVIRONMENTAL AND SOCIAL IMPACTS

Baoviet understands that building a good future requires the efforts of all of us today, in which enterprises play a positive role in realizing this future. Aiming to that vision, we also need to build a specific roadmap to make up for the limited resources that people have overexploited in the past and in the present.

ECONOMIC IMPACTS

SOCIAL IMPACTS

ENVIRONMENTAL IMPACTS

01

01

01

Contribute to the economy development

Create jobs

Minimize impacts from waste disposal and energy consumption

02

332

02

02

Support local economic development

Share the burden with the uncertainties of customers’ health and property

Green business activities

03

03

03

Pioneer in implementing the State’s policies

Join hands for community development

Spread the awareness of environmental protection

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ECONOMIC IMPACTS

SOCIAL IMPACTS

ENVIRONMENTAL IMPACTS

Contribute to the economy development

Baoviet always focuses on fulfilling community development goals because a healthy, safe and wealthy community is a critical condition for enterprises in insurance and financial services can be developed and be able to serve the community in long term.

Minimize impacts from waste disposal and energy consumption

Operating in the field of Insurance - Investment - Finance - Banking, Baoviet prosperity has made an important contribution to these industries in particular and the country’s economy in general. Support local economic development

With more than 250,000 employees, over 200 branches and more than 700 insurance offices in 63 provinces and cities, Baoviet provides products and services for people nationwide, contributes to creating jobs for workers, contributes for the development of local suppliers and local budgets. Pioneer in implementing the State’s guidelines

Baoviet is always at the forefront of implementing the State policies, implementing social insurance programs, agricultural insurance programs, pension insurance, export credit insurance, aquatic exploitation insurance, disaster risks insurance.

250,000 EMPLOYEES

Overview

Development Strategy

Create jobs

With operations throughout the country, Baoviet contributes to creating jobs for local people. At the same time, the sustainable development orientations of Baoviet, when deployed to units and implemented by officials, will create a spillover effect throughout the community. Share the burden with the uncertainties of customers’ health and property

With a base of more than 17 million customers, Baoviet offers a wide range of insurance and financial products, giving customers peace of mind against life risks. In addition, micro insurance products are still deployed by Baoviet every year to help lowincome customers, in rural areas, have access to insurance services for life and production activities. , Agriculture.

With 90% of the equity portfolio, Baoviet’s capital contribution focuses on core businesses of insurance - investment, finance, banking environment-friendly industries. Therefore, the environmental impact of Baoviet is mainly through waste discharge and energy consumption at 200 branches and 700 transaction points, etc. In order to minimize this impact, Baoviet has developed an environmental protection project at its office and was approved by the Department of Natural Resources and Environment. This project includes the analysis of sources of waste potentially harmful to the environment, Baoviet also conducts quarterly environmental monitoring reports at Baoviet’s office building and solutions. to reduce pollution.

Join hands for community development

Up to now, Baoviet has invested nearly VND 400 billion for social security activities, focusing on poverty reduction for people in difficult areas; invest in building schools and scholarship programs for poor studious children. With practical action, Baoviet wishes to join hands with the business community, ministries and sectors to actively implement the national target program on sustainable poverty reduction in the period of 2016 - 2020, completing the targets set by the National Government. association.

Business Performance

Corporate Governance

Sustainable Development Financial Statements

333


ENGAGING BUSINESS WITH SDGs

The challenges from climate change and the negative impacts from people to the environment have affected not only the present but also future generations. As an enterprise providing financial services, Baoviet’s business activities have a negligible impact on the environment, however, we always focus on monitoring the use of energy and natural resources that contributed to the reduction of the greenhouse gas intensity and the other impacts on the environment.

In our bussiness operations, Baoviet understands that balancing and reducing the direct and indirect enegy consumption will help reducing environmental impacts. In term of energy consumption in Baoviet buildings, we applied BMS (Building Managenment System) and enhanced the internal communication to raise the awareness of environmental protection among employees.

We believe that the Sustainable Development Goals (SDGs) will become easier to be archived when our stakeholders, especially stakeholders in Baoviet's value chain, together join hand in engaging SDGs to business operation. Therefore, we can reduce the consumption of energy resources, raise the awareness and contribute to environmental protection.

BAOVIET JOIN HAND FOR

Green PLANET

CLIMATE ACTION

PEACE, JUSTICE AND STRONG INSTITUTIONS

GRI

307

GRI

302

GRI

305 AFFORDABLE & CLEAN ENERGY

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EVALUATE WASTE TREATMENT FACILITIES

RAISE AWARENESS OF ENVIROMENTAL PROTECTION

REDUCE ENERGY & RESOURCES CONSUMPTION

APPLY SDGS CRITERIA IN SUPPLY CHAINS & INVESTMENTS COMMUNICATE WITH STAKEHOLDERS TO DETERMINE MATERIALITIES

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

335


ENGAGING BUSINESS WITH SDGS

SOLUTIONS FOR SUPERVISING AND CONTROLLING ENERGY CONSUMPTION

LIGHTING AND ENERGY MANAGEMENT SYSTEM

M

EN IT TRA M NC A SY NAG E AN ST EM D EM E NT

CAMERA SYSTEM

FIRE ALARM SYSTEM

AI R AN -CO D N VE DI T SY NTI ION ST LA IN EM TIO G N

AN CA AG R P EM AR EN KIN TS G YS TE M

EX

EL E SY VAT ST OR EM

RADIO SYSTEM

Understanding the impacts of climate change and human activities on the environment, Baoviet has increased internal communication to raise employees' awareness of environmental protection through savings energy consumption at headquarters and branches. In addition, we also invest in the application of information technology, in order to digitize business transactions, reduce paper waste into the environment. In order to monitor and use energy, in addition to raise employees' awareness, Baoviet determined that the application of advanced technology solutions will be an energy-saving support tool. Baoviet Building have applied

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and promoted the performance of the BMS (Building Management System), which is a synchronous system that allows the control and management of all technical systems in the building such as electrical systems, water supply systems, air-conditioning, ventilation, environmental warnings, security, fire alarm - fire protection, etc., ensuring the correct and timely operation of the equipment in the building. In terms of working space, all offices in Baoviet have proper windows and sunshades to be ventilated with natural sunlight, limit exposure to ultra-violet radiation, and against heat loss during air-conditioning. When renovating the offices, Baoviet requested construction companies to provide solutions to limit control the indoor temperature increase caused by the greenhouse effect when there are huge pane of glass windows.


In 2019, Baoviet continues to maintain the Consulting Contract for technical operation inspection and building management services with VNPT Building Management and Operation Joint Stock Company (PMC) - a professional building management operator. Quarterly, PMC consulting unit will conduct field inspection and make a detailed advisory report on the operation of technical systems and building management services to make recommendations to help Baoviet to optimize the operation, save energy, minimize the risk of equipment failure, reduce replacement and repair costs thereby extending the life of the Building.

SOLUTIONS FOR ENERGY SAVING IN OPERATION

01

Organizing management and rational operation according to demands;

02

Setting the maintenance mode for the entire system after being used;

03

Regularly cleaning all heat exchangers, especially air-cooled condensers that avoid dust which will reduce the capacity of the devices;

04

Ensuring the quality of soft water for water chiller systems;

05

Maintaining and repairing damage in time to avoid energy loss for the system;

06

Hiring professional empolyees to manage and operate air-conditioning and ventilation systems in buildings, bringing high efficiency in energy saving.

SAVING ENERGY

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

337


SOLUTIONS FOR WASTE RESOURCES AT WORKPLACE In 2019, Baoviet Holdings has implemented a number of solutions at its headquarter buildings, including:

01

Supplementing the post-treatment wastewater disinfection system for the system as well as microbiological culture for aerobic tanks to improve the aerobic treatment process;

02

Disinfecting water with chlorine before discharging it into the environment;

03

Cleaning the water tank to ensure clean water supply for the buildings;

04

05

Installing a system to measure the amount of wastewater discharged in two buildings 71 Ngo Sy Lien and 72 Tran Hung Dao, Hanoi to control the amount of waste water from the buildings; Making quarterly waste water analysis of buildings for timely solutions in case of indicators exceeding the prescribed standards.

In addition, Baoviet’s environmental protection scheme (approved by Department of Natural Resources and Environment in 2014) continues to be implemented in Baoviet’s buildings. This project includes contents related to solutions to minimize pollution of waste water sources through the addition of probiotics, cleaning of drainage systems to ensure clean ventilation; periodic inspection of wastewater treatment systems, wastewater collection and drainage systems to avoid clogging of waste streams.

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ENVIRONMENTAL COMPLIANCE

COMPLIANCE WITH LAWS AND ENVIRONMENTAL REGULATIONS In 2019, Baoviet Holdings and its subsidiaries, hardly recorded any records / notices related to violations of environmental laws and regulations. The confirmation of no violations is also based on the information of data from the audit results (no record of fines) and the information recorded from the monitoring system of regulation compliance.

Environmental monitoring reports at 71 Ngo Sy Lien and 72 Tran Hung Dao, Hanoi, 2017-2018 are based on the following legal terms:

01

Vietnamese Law on Environmental Protection, 2014;

PERIODIC QUALITY CONTROL OF WASTEWATER

02

Vietnamese standards and regulations, 1998 up to now;

In 2019, Baoviet Holdings installed a wastewater measuring system in two buildings 71 Ngo Sy Lien and 72 Tran Hung Dao, Hanoi to control the flow of waste water into the environment from the buildings. At the same time, Baoviet Holdings also conducts quarterly waste water analysis so that it can take timely solutions if the indicators exceed the prescribed standards.

03

Units participating in monitoring and certification of results have VIMCERTS 006 certificate of environmental monitoring;

04

Units participating in monitoring and certification result of the Vilas Certificate number 372.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

339


ENGAGING BUSINESS WITH SDGS

EVALUATION OF MONITORING RESULTS AND RECOMMENDATIONS OF THE INSPECTION COMMITTEE In addition to the monitoring results on waste water, the inspection team also checked more on environmental factors such as toxic gases, dust concentration in the workplace. Through the results of the actual situation survey and analytical measurements in the work area and around the building site, based on the monitoring report of 2017 - 2018, the inspection team made specific comments as follows: 01

02

03

TOXIC GAS: Values of toxic gases at the inspection sites in the working area and around the unit are within the permitted limits according to TC 3733-2002 / BYT-QD, QCVN 05: 2013 / BTNMT.

WATER ENVIRONMENT: Domestic wastewater: The value of the analyzed criteria in the wastewater sample at the unit is within the permitted limits according to QCVN 14: 2008/ BTNMT, column B.

RECOMMENDATION: Proposing to maintain the control system, minimize the impact to ensure environmental quality according to the regulations.

DUST LEVEL: The value of dust concentration at the inspection sites in the working area and around the unit is within the permissible limits according to TC 3733-2002 / BYT-QD and QCVN 05: 2013/BTNMT.

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In addition to environmental protection and protection activities carried out by individual businesses, Baoviet also cooperates with suppliers to implement environmental protection measures in a more systematic and professional way. . In 2019, Baoviet Group has invested over 2 billion dongs to sign contracts for monitoring, collection, transportation, waste treatment and system maintenance contracts to ensure occupational safety and use. power efficiency. Contracts with environmental suppliers are carried out annually by Baoviet and will continue to expand in the following years.


ENGAGING EMPLOYEES IN GREENIZING BUSINESS ACTIVITIES

5S

PROMOTING 5S STANDARDS IN WORKING ENVIRONMENT

STANDARDS

With the view to bring a healthy, clean, airy and convenient working environment, thereby bringing comfort to employees, increasing labor productivity and applying an effective management system. In 2019, Bao Viet Holdings promoted the 5S standards in the working environment by establishing the annual 5S Monitoring Team, evaluating the implementation process and progress in document management, work space arrangement and stationery recycling activities. The successful and periodic implementation of the 5S program will bring about miraculous change. Unnecessary things will be removed from the workplace, necessary items are neatly and tidy, placed in convenient locations for users, machinery and equipment become clean and protected. maintenance and preservation. From 5S activities, it will enhance the collective spirit, encourage the harmony of everyone, through which employees will have a more positive attitude, be more responsible and more aware of their work.

Overview

Development Strategy

Business Performance

Corporate Governance

STANDARDIZE Cleaning working environment to have no more rubbish and dust. SORT Cleaning working environment to have no more rubbish and dust. SET IN ORDER Arranging everything neatly in a specific order to ensure convenient use SUSTAIN Take care, maintain a clean and favorable working environment SELF-DISCIPLINE Complying voluntarily and strictly with workplace’s regulations.

Sustainable Development Financial Statements

341


CONTRIBUTIONS TO THE SUSTAINABLE DEVELOPMENT OF LOCAL COMMUNITIES

We understand that businesses operate effectively when they bring sustainable values to local communities. With Baoviet, we benefit the local community through the implementation of community development projects that contribute to poverty reduction and improve the living quality of local people, creating jobs for people in localities, narrowing the gap in living standards between urban and rural areas, between regions and regions, improving infrastructure for localities where Baoviet is headquartered.

INVESTMENT

IN EDUCATION

& YOUNG GENERATION Baoviet defines investment in education as an investment for the future and a fundamental investment. Over the years, Baoviet budget priorities are always given to educational development activities like giving scholarships to outstanding students, building schools, funding learning tools for remote areas, sending gifts and scholarships to disadvantaged children.

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DONATE VND 15 BILLION TO BUILD NEW SCHOOL FOR STUDENTS IN QUANG TRI PROVINCE On the occasion of the opening day, Baoviet Holdings, in cooperation with the People’s Committee of Quang Tri, held the inauguration ceremony of Nguyen Hue High School. With the desire to accompany the young generation of Vietnam in the heroic Quang Tri land and join hands with the community for the future generation, Baoviet Holdings has donated 15 billion VND to the construction project of Nguyen Hue High School. in order to support teachers and students of Quang Tri town with qualified facilities to teach and learn well, thereby contributing a small part to improve the locality with best facilities for future generations of the country. In recent years, Baoviet Holdings has actively implemented social security programs in Quang Tri. Apart from the construction of Nguyen Hue High School, Baoviet Group has also donated the construction of Quang Tri Kindergarten, Nguyen Trai Primary School and sponsored many scholarship programs for the province.

FUNDING VND 9 BILLION OF SCHOLARSHIPS FOR FINANCE - INSURANCE STUDENTS In the school year 2019-2020, Baoviet Holdings continues to sponsor scholarships for students of the National Economics University and the Finance Academy with the total amount of VND 650 million and VND 570 million respectively. For the past 5 years (from the 2015-2016 school year to the 2019-2020 school year), Baoviet Holdings has sponsored VND 9 billion for the National Economics University and the Academy of Finance, including scholarships for outstanding students, poor students overcome difficulties, funding for scientific research activities and other educational grants. The program demonstrates the interest of Baoviet Holdings to its adjacent human resources, contributing to attract more talented students to the two leading universities in the country in specialized training in Economics and Finance. Baoviet Holdings also continues to coordinate with the school in sharing new information and tests to improve knowledge of corporate governance, promoting research into highly applicable topics in the industry as well as cooperation in human resource development activities for post-graduated students.

HANDING 100 SCHOLARSHIPS AND BOOKS FOR POVERTY CHILDREN IN DONG NAI PROVINCE Baoviet Life Insurance Company of Dong Nai has granted 20 scholarships (including 20 bicycles, 20 backpacks and 20 notebooks) to disadvantaged children in Ho Chi Minh City. Bien Hoa. The remaining 80 scholarships will be handed to disadvantaged students in the districts of Long Thanh, Trang Bom, Tan Phu, Dinh Quan, Xuan Loc, Vinh Cuu and Long Khanh city. Out of the 100 bicycles, 30 are sponsored by Baoviet Holdings, the remaining 70 bicycles, backpacks, writing exercises are led by leaders, officials, workers and sponsors. is a loyal customer of Baoviet Dong Nai Life Insurance Company to donate and support. The total value of this scholarship award is about 210 million VND. With the sponsorship of Vietnam Children Support Fund, in the past 15 years, Baoviet Life has awarded 26,000 bicycle and backpack scholarships to studious students in difficult circumstances, helping them to keep strong motivation and conditions to rise up in life.

Overview

Development Strategy

Business Performance

Corporate Governance

Sustainable Development Financial Statements

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CONTRIBUTIONS TO THE SUSTAINABLE DEVELOPMENT OF LOCAL COMMUNITIES

REDUCE POVERTY AND IMPROVE MEDICAL SUPPORT With the goal of reducing the disproportionate development between urban and rural areas due to the impact of the economy, Baoviet invests in infrastructure, constructs health stations, schools and houses for compatriots in difficult provinces help them feel secure and focus on working to support themselves and their families. Besides poverty reduction projects in provinces such as Nghe An, Quang Tri, Thai Nguyen, Quang Binh, Tay Ninh, Phu Tho, etc. Baoviet will continue to implement social security activities according to the Decree Decision 30a / 2008 / NQ-CP on the Program of supporting poverty reduction for 61 poor districts of the Government.

SUPPORT 3,700 POOR HOUSEHOLDS FOR FREE MEDICAL EXAMINATION With the desire of contributing to the community to improve the quality of life for Vietnamese people, in 2019, the program “Green Journey - Golden Heart” of Baoviet Life has come to 5 provinces including: Dong Nai , Bac Giang, Thanh Hoa, Quang Binh, Binh Phuoc, Binh Thuan and Ninh Thuan. The program is accompanied by physicians, doctors from central hospitals, free medical examinations and sharing on protection and health care for a total of more than 3,700 poor households. The “Green Journey” of Baoviet Life not only attracted the devoted participation of more than 240,000 “Golden Hearts” - volunteers and consultants Baoviet Life, but also calls for the contribution of dedicated doctors from central hospitals to coordinate free medical examinations, helping people detect their illnesses and raise awareness about disease prevention.

DONATE 2,000 BLOOD UNITS IN THE VOLUNTEER PROGRAM “BAOVIET - FOR YOUR BELIEFS” On September 9, 2019, in Hanoi and Ho Chi Minh City, Baoviet employees, staff, agents and consultants participated in the “Baoviet - For your beliefs - 5th Voluntary Blood Donation Day” - 5th by Baoviet Holdings in collaboration with the Central Business Division, Central Institute of Hematology and Blood Transfusion. The program has collected more than 500 blood units from employees and agents throughout the system. With the message “Baoviet - For your beliefs”, Baoviet believes that this small support will contribute in spreading the spirit of optimism, believing in a bright future as sending blood units to patients in need. From 2013 up to now, more than 1,200 employees and agents in Baoviet Holdings have contributed more than 2,000 blood units, contributing to the community to provide timely blood supply, bringing life for many patients.

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LAUNCHING FREE FAMILIY CALL CENTER OF HEALTH ADVISORY AND YOGA FOR HEALTH CAMPAIGN Over a long journey of changing market perceptions, nowadays, life insurance has been gained recognition as one of the financial solutions for family to prevents risks. With Baoviet Life Insurance, customers not only are provided insurance services, save time with Baoviet wide network, but also received extra benefits outside the contract; including free health advisory for the whole family, reliable fitness and nutrition information. Viet Health Call Center was launched to support advisory quickly and timely for customers and they will receive free and dedicated advise from experienced doctors from the Ministry of Health hotline. Families can have peace of mind with the advice of doctors, at the same time, you can save time to know the right disease and the right place to be examined with the most minimal cost.

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This special value-added service has so far been able to advise 2,000 customers, bringing peace of mind to Vietnamese families in their daily life. In addition, Baoviet also sponsored the largest ever International Yoga Day series in Vietnam, held in 10 provinces and cities across the country, for all registered Yoga lovers. The events are organized with the goal of raising awareness about sports practice and health training. At the same time, the events are also an opportunity for Baoviet and health professionals to share information and researches which were verified by specialized agencies, providing information on prevention of common diseases of different ages, as well as incurable diseases such as cancer or heart disease for the family, contributed to the creation of a healthy environment, prosperity and peace for all Vietnamese families.

Sustainable Development Financial Statements

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CONTRIBUTIONS TO THE SUSTAINABLE DEVELOPMENT OF LOCAL COMMUNITIES

BAOVIET

TOGETHER WE CAN

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VND BILLION

BAOVIET SUPPORT FOR COVID-19 PREVENTION FUND Responding to the call of the Central Commitee of Vietnam Fatherland Front (VFF) for supporting the Covid-19 prevention process, together joining hand with the Party and the State of Vietnam to control the epidemics, having more resources for treatments, social security, Baoviet Holdings has carried out many activities to together fight and win against the epidemics.

With the complicated developments of the SARS -CoV-2 epidemic and responding to the call of the entire population to participate in the prevention and control of the Covid-19 epidemic, representatives of Baoviet Holdings - Mr. Dao Dinh Thi (Secretary of Party Committee, Chairman of Baoviet Holdings) supported the Fund against the Covid-19 epidemic of the Central Committee of the Vietnam Fatherland Front, amounting to VND 3 billion.

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The above donation will be promptly transferred to units and individuals directly engaged in epidemic in subject isolation areas and cases on treatment. Baoviet believes that the cooperation of businesses and the whole society will contribute to spread the optimism spirit, maintaining faith in a bright future as well as taking practical actions to join hands with the community fighting against the disease, for a prosperous, prosperous Vietnam.

Sustainable Development Financial Statements

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CONTRIBUTIONS TO THE SUSTAINABLE DEVELOPMENT OF LOCAL COMMUNITIES

NATURAL DISASTER RECOVERY AND ENVIRONMENTAL PROTECTION Recently, due to the impact of climate change, natural disasters have become more extreme and leave serious destruction for both human and the environment. Therefore, Baoviet realized its role not only as an economic leader but also as a pioneer in ensuring peace and community development.

PLANTING 500 TREES IN "BAOVIET FOR A GREEN VIETNAM" In 2019, at Vietnamese Cultural and Tourism Ancient Village, Hanoi, Baoviet launched planting trees program "Baoviet for a green Vietnam" with the participation of Baoviet Holdings employees. With the motto towards a Clean - Green environment and a sustainable development society, through social activities such as planting trees “"Baoviet for a green Vietnam”, nearly 500 trees (Buoi, Vang Anh, Long Nao) has been planted by Baoviet Holdings here, making a small contribution for the environment and especially ecosystems in tourism areas to be sustainably developed, becoming more and more clean. At the same time, the program also wants to spread and raise awareness to the community in preserving and protecting the environment towards sustainable development.

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SUPPORTING 5 PROVINCES SUFFFERED FROM FLOOD Winter is coming closer, in remote areas, the weather has started to be harsh and frosty. With the spirit of solidarity, Baoviet continues to implement the 9th “Warm winter scarf” program and was implemented in 5 provinces that have suffered from floods: Ha Tinh, Bac Giang, Quang Nam, Tay Ninh and Quang Binh. The program accompanies the HIV/AIDS Support Fund (Ministry of Health) to visit and support the provision of learning materials for children, necessities and cash for disadvantaged households.


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Sustainable Development Financial Statements

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CUSTOMER HEALTH AND SAFETY

INTEGRATED & SPECIALIZED PRODUCT DEVELOPMENT COMPREHENSIVE FINANCIAL SOLUTION FOR THE COMMUNITY

As an enterprise operating in the field of insurance and financial services, customer health and safety are integrated in researches, product developments in order to provide customers with comprehensive protections. By developing integrated and specialized products, while maintaining micro insurance products for low-income workers, Baoviet can realize its commitment to bring financial solutions and protection. Comprehensive for customers and the community. The continuous introduction of voluntary pension products, specialized insurance products, micro insurance products including low-cost products for a large number of people is a way for Baoviet to support support to improve the lives of poor households in rural and urban areas.

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THE FIRST 1 MILLION VIETNAMESE CITIZENS WILL BE RECEIVED VND 20 MILLION IF INFECTED BY SARS-COV-2 By the end of 2019 and in the first months of 2020, the acute respiratory infection caused by SARS-CoV-2 virus (Covid-19) is the focus of the whole world in general and Vietnam in particular when the number of people infected The virus is increasing day by day. With the complicated developments of the SARS-CoV-2 epidemic, with the objective and mission toward a healthy and safety community, Baoviet officially launched the program "Financial support - Join hands win epidemics� started from 3/16/2020. This is the activity of Baoviet and the community to join hands in preventing and repelling the SARS-CoV-2 pandemic. Accordingly, Baoviet will provide financial support of VND 20 million / case of SARS-CoV-2 for the first one million Vietnamese citizens enrolled in the program, aged 18-70 years old andcurrently residing in Vietnam.

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(over 12 months); made truthful medical declarations, complied with the Government’s regulations on epidemic prevention andisolation, and not infected by SARS-COV-2 virus at the time of registration. The protection program is valid for use within 30 days from the date ofsuccessful registration. Baoviet will provide financial support of VND 20 million (via Baoviet Pay e-wallet) when Vietnamese citizens are unknowingly infected with the SARS-CoV-2 virus. With this protection program, Baoviet hopes to partially support the financial difficulties of patients and their families when the main labor force unfortunately reduces/loses their income due to the epidemic. Baoviet believes that the practical and meaningful activities of the program will join the .community in combating epidemics soon, for a healthy, developing and loving world is pervaded in the community.

Sustainable Development Financial Statements

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CUSTOMER HEALTH AND SAFETY LAUNCHED PRODUCT “AN PHAT CAT TUONG” CANCER & ACCIDENT INSURANCE

LAUNCHED "TRON DOI YEU THUONG" FAMILY INSURANCE

According to the summary data of Vietnam traffic situation, in 2019, there were 18,736 accidents. In parallel with traffic accidents, cancer and stroke are also among the leading causes of death in Vietnam as 312 people die from cancer every day, 274 people die from stroke. Therefore, the need for financial support when accidents occurs is essential, especially when the costs of medical examinations and treatments are becoming more and more expensive.

According to statistics of the Ministry of Health, every year in Vietnam there are about 847,000 cases of serious injuries and tens of thousands of patients hospitalized every day. To better protect Vietnamese families, Life Insurance has carefully researched the needs of the insured and launched the product “Tron Doi Yeu Thuong” - a product of protection and health care for the whole family in one contract, protecting Vietnamese families at risk, towards sustainable and prosperous future.

In order to build the best financial solution, helping each individual and family prepare to fully protect against risks and at the same time accumulate finance, Baoviet Life has researched and enhanced the features of current products to launch the “An Phat Cat Tuong” product - a solid financial solution for Vietnamese families at risk of accidents, medical expenses, especially for early-stage cancer and stroke. When there is no risk, the insured will receive the total maturity interest with a high cumulative value. In particular, the contract also receives investment interest from the universal life fund and is guaranteed to increase benefits with committed interest rate. In fact, the published interest rate for universal life insurance products of Baoviet Life is always much higher than the common committed interest and is always one of the highest in the market, reaching 6.55% in the 2019 and 6.5% in 2018.

The product offers insurance benefits against the risk of injury and death for family members, health care benefits, hospitalization support at a maximum of up to VND 4 million/ day, at the same time support the additional costs such as transportation, emergency, surgical allowances to help the insured assured treatment and quickly recover health. Besides, "Tron Doi Yeu Thuong" also offers additional insurance benefits for 36 serious illnesses such as malignant malaria, polio, kidney failure, myocardial infarction, stroke, cancer...

"An Phat Cat Tuong" received the award of "Vietnam 2019 Best new life insurance product" Recently, Baoviet Life’s “An Phat Cat Tuong” life insurance product was honored by the Global Banking & Finance Review Magazine of the United Kingdom (Global Banking & Finance Review) the best new life insurance in Vietnam in 2019. This result is based on the evaluation criteria including the superiority of the product, the credibility of the majority of customers who have chosen the product and the community implications that the product brings to society. “An Phat Cat Tuong” has attracted the attention of many Vietnamese people and was trusted by a large number of customers with 9,230 registered customers in the first month of launch. In just 2 months of implementation, “An Phat Cat Tuong” has provided financial solutions to the community with remarkable results: 15,500 customers participated with a total protection and accumulation fee of VND 288 million.

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LAUNCHED TRAVEL AND CARGO INSURANCE ON DIGITAL PLATFORM

LAUNCHED BAOVIET DIRECT - ELECTRONIC INSURANCE CARDS

Recently, Baoviet Insurance has launched a new generation of E-cargo (named Gadget Easy) and Travel (named Flight Easy) insurance product lines developed on the basis of applying new technology. Customers will be fully proactive in buying, registering, managing and tracking their insurance orders through online software. Along with that, insurance claiming is also easier and faster than ever when the procedures are carried out on the basis of new technology.

Recently, the term InsureTech (Insurance Technology) has become familiar to companies that apply technology to provide cheaper, faster, easier and more effective insurance services. Catching the world trend, Baoviet Insurance has recently promoted the application of new technological achievements in business to improve service quality and interact with customers. Baoviet Direct, a digital insurance application, is a technology product that is deployed based on the “customer-centric” orientation to meet the fast and convenient insurance management needs of each customer.

With Travel Insurance based on Baoviet’s digital technology, customers will be supported in time when flights are delayed making you unable to check-in the hotel, passport, personal identification, or you are allergic to local food or get sick with expensive outpatient or boarding costs. In particular, for Flight Easy insurance, customers will immediately receive compensation when notified by the system and with just a few steps to provide information online without waiting. Waiting or filing troublesome papers. Besides, Gadget Easy benefits will help customers do not need to worry if the “little friends” like phones, cameras... suddenly roll out in the middle of a trip. Customers will quickly receive flexible compensation to repair these little friends and not miss any moment of the trip. In business, the loss and damage of goods during transportation is inevitable, and in many cases can seriously affect the business activities of the business. With many years of prestige in providing financial security for businesses against risks in the process of transporting commercial goods, the application of digital technology to the cargo insurance process now supports businesses. Both businesses and Baoviet save time on implementing procedures, focusing more on their business activities.

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Baoviet Direct is the first mobile insurance management integrated application in Vietnam market for individual customers - marking the breakthrough technology development of Baoviet Insurance, using the power of technology to create more value for customers. Customers will be able to purchase insurance easily, manage insurance benefits, declare and track claims, search for the nearest garage, hospital / clinic, schedule a medical examination / repair. Instant car. In particular, Baoviet ID function - an electronic insurance card with all necessary features: replacing the ordinary guarantee card; update exact all benefits included in the insurance policy that customers have registered with Baoviet Insurance. Now when going to the clinic, you only need to bring your phone, all insurance services are done easily - quickly - conveniently.

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TRANSPARENT


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FINANCIAL STATEMENTS


CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019


For the purpose of environmental protection for the future of sustainable development, Baoviet Group's 2019 Integrated Report uses only the electronic version of Smart Report 4.0 and is fully posted on the website. Please scan the QR code above to see details.


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