1 Cathay Life Insurance Ltd. (Vietnam) 30 May ACCOUNTING & FINANCE CONTENTS THIS MONTH: :  ACCOUNTING: 1. Budget 2009 Preparation 2. Fund splitting 3. Action for new PIT law 4. PIT Comparison &example  FINANCE: 1. Payment guideline at CSC 2. Monthly forecast expenses 3. Open bank account -IVB NEXT MONTH: :  ACCOUNTING: 1. Preparation for Auditing 2. Preparation for closing all exp at year-end 3. Improvement acc.system 4. Support HR register PIT  FINANCE: 1. Survey & due with Banks 2. Arrange for physical cash count 3. Guideline for Cash management at HN

2 Cathay Life Insurance Ltd. (Vietnam) 30 May I.BUDGET 2009 PREPARATION oOpened the 2nd meeting for reviewing the Budget 2009 (attending of Department Director, BOD & Chairman) oCollected the Budget 2009 (with approved of E.V.P) from Related Department oConsolidated for the Total Company Budget 2009 oPrepared the Approval Report for Total Company Budget 2009 oSend the to Parent Company the final Budget with approved by BOD & Chairman (expected before Dec. 05, 2008) ENGAGED PROJECT THIS MONTH

3 Cathay Life Insurance Ltd. (Vietnam) 30 May II.FUND SPLITING (Company fund device into Shareholder fund & Policyowner fund as MOF regulation) oCompleted “Funds Segmentation” which includes the: Overview & regulation requirement Proposal method for splitting Responsible of related department Implementation plan oPlanning Dept has approved the method, but still waiting from Parent Company for approved oAccounting Dept will send the Letter of register the method Cathay applying to MOF (expected by Dec.05 th, 2008) ENGAGED PROJECT THIS MONTH

4 Cathay Life Insurance Ltd. (Vietnam) 30 May III.OUR ACTION FOR NEW LAW OF PIT (from Jan 01, 2009) oOpened the meeting with Related Department (HR, Agency):  Human Resource & Agency plan to: Work with IT about the Salary system Collect registration of employee’s dependents Issue memo to staff & agent Register Tax code for staffs & submit forms to Tax oAccounting Dept will help to support to calculate the tax rate & tax confirmation letters oThese process are expected to finish by Dec 25, 2008 ENGAGED PROJECT THIS MONTH

5 Cathay Life Insurance Ltd. (Vietnam) 30 May IV.COMPARISON OF NEW & CURRENT PIT LAW oThe table below is to show the main differences: Items Current rulesNew law 1. Tax rate applying for non-resident25%20% 2. Tax rate for employee (Local & Expat. use the same new tax rate) New tax rate 3. Deductions for taxpayer (himself & his dependents) not apply - Taxpayer: 4mil./mth - Each dependent: 1.6 mil/month 4. Housing allowance 15% of income - The actual house rental 5. Tax apply for agent 5% - Has tax code: 10% - No tax code: 20% ENGAGED PROJECT THIS MONTH

6 Cathay Life Insurance Ltd. (Vietnam) 30 May IV.COMPARISON OF NEW & CURRENT PIT LAW oGive an example: the below sample show how much different the tax amount individual has to pay ENGAGED PROJECT THIS MONTH SalaryHouseDependents Rate (usd/vnd) Mr.A 6,060 3,0302 persons16,500 Mr.B 4,850 2,1801 person Ms.C 3,030 1,5151 person Mr.D 1,820 1,090no one

7 Cathay Life Insurance Ltd. (Vietnam) 30 May IV.COMPARISON OF NEW & CURRENT PIT LAW oHow much different of the tax amount payable Tax paye r Current regulationNew regulation Difference (in vnd million) Income (vnd.million) Taxable income (vnd mil.) Tax Amoun t (vnd mil.) Income (vnd.million) Deducti on (taxpay er &depe ndents) Taxabl e incom e (vnd mil.) Tax Amoun t (vnd mil.) Salary Housi ng (15%)Salary Housi ng (actu al) 1 mth 1 year Mr.A Mr.B Ms.C Mr.D

8 Cathay Life Insurance Ltd. (Vietnam) 30 May IV.COMPARISON OF NEW & CURRENT PIT LAW oConclusion: from the above example, we can see: The new tax law make the taxpayer pay a higher tax amount The reason mainly is due to Housing Allowance oOur action: we will may consider Reduce the house rental fee Two people can live in one apartment Transfer the amount on the contract from Gross (the net income of Expats are not changed but higher expense for the Company) ENGAGED PROJECT THIS MONTH

9 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT THIS MONTH I.GETTING APPROVAL OF PAYMENT GUIDELINE at Customer Service counter Summarize the main point :  Payment amount : Maximum cash payment VND 20 million per one time of payment  Documents for payment: 1)Payment application form: This is signed by customer who is entitled for payment

10 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT THIS MONTH 2) Authorization letter: Customer can authorize any person to collect money on his or her behalf. If the payment amount is over VND 2,000,000, the authorization letter have to be verified by local government as current law regulations. For case payment amount equal or lower than VND 2,000,000, direct sale managers and brand managers can verify the authorization

11 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT THIS MONTH 3) Original ID card of receiver: the receiver can submit The original ID card The passport, driving license, or other legally valuable documents attached photo are acceptable. 4) Payment voucher: Payment voucher is printed from the system. CSC have to check enough support documents for any payment CSC process payment to appropriate person with correct amount. This voucher has to be signed by CS staff and receiver.

12 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT THIS MONTH II. MONTHLY FORECAST EXPENSE form apply to HR, GA, IT, Marketing and training division since November 2008 Forecast how much money we use enough in month Investment can use the remain amount to invest III. OPEN BANK ACCOUNT AT IVB for Deposit of Premium collector To widen the Premium collection system And for the convenience of our policy owner

13 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT NEXT MONTH I.PREPARATION FOR AUDITING For the year end auditing, we need to: Contact with auditors to arrange the schedule working Prepare the documents & data, answer the questionnaire II. PREPARATION FOR CLOSING ALL THE EXPENSES OF THE YEAR To work with related departments for providing all the invoice of expense of the year 2008 Consider if some expenses in 2009 can issue invoice in 2008

14 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT NEXT MONTH III.IMPROVEMENT THE ACCOUNTING SYSTEM Working with IT Dept to revise/improve some accounting bookings & reports IV. SUPPORTING HUMAN RESOURCE IN COMPLETING PROCEDURE FOR REGISTER NEW PIT Formula & calculate the tax amount Submit register form to Tax Dept. Others related to Taxable income of employees

15 Cathay Life Insurance Ltd. (Vietnam) 30 May ENGAGED PROJECT NEXT MONTH I.SURVEY AND DUE WITH BANKS FOR TRANSFER PAYMENT OF PREMIUM OF CUSTOMERS To make a list of bank and find out the best banks II. ARRANGE FOR PHYSICAL CASH COUNT AT YEAR END FOR AUDITOR Cash on hand at HCM & HN office and Cash in banks III.MAKING GUIDELINE FOR CASH MANAGEMENT AT HN OFFICE

16 Cathay Life Insurance Ltd. (Vietnam) 30 May THANK YOU