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Annual General Shareholders Meeting

Annual General Shareholders Meeting. May 30 th , 2009. Agenda. Shareholders registration Report on the result of shareholders’ attendance Introduction and Adopting of Chairing Panel of the meeting Introduction and adopting of Secretary of the meeting

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Annual General Shareholders Meeting

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  1. Annual General Shareholders Meeting May 30th, 2009

  2. Agenda Shareholders registration Report on the result of shareholders’ attendance Introduction and Adopting of Chairing Panel of the meeting Introduction and adopting of Secretary of the meeting Introduction and adopting of Vote Checking Committee Introduction and adopting of the Voting Rule Present the Agenda & adopting of Agenda

  3. Agenda 8. Introduction and adopting of the Rule for Discussion Session Overview of Business Development in 2008 2008 Audited Financial Statements & Auditor’s report Report of Inspection Committee for 2008 Presenting the 2009 Business Targets & Plan Rationale for Revision of the Charter Proposals for Shareholders’ Approval

  4. Agenda Questions and answers – the company and Shareholders Proposal and voting on the Annual General Shareholder Meeting’s resolutions Announcing the Voting results Reading the Minutes of AGM Adopting the Minutes

  5. 2008, Year of Financial Crisis Over Heated Economy, Led to nose-dived of Vietnam securities markets Followed by Global Financial Crisis HOSE HaSTC

  6. 2008 Establishing Year • Overview of Business Development in 2008 • Accomplishments • Differences from AGM, 16-8-08 • 2008 Audited Financial Statements & Auditor’s report • Report of Inspection Committee for 2008 • Major Expenses & Efficiencies • Revenues Breakdown

  7. Accomplished from 2008 • Satisfactory audited results from premier international accounting firm • Timely “going live” with real times remote securities trading and cash management • Successfully launched sophisticated website www.tcsc.vn • Secured 4 supporting banks for brokerage business; VIB, Vietin, Bangkok Bank, VinaSiam • Modernized SOP, compliances and qualified staffs • Obtained leading strategic investor & business alliance; KT-Zmicoand Global Alliance Partner (GAP) 7 : Agenda #10, Overview of Business Development in 2008

  8. Differences from AGM, 16-8-08 • Business Plan Plan to invest in a mutual fund company • Move the plan to 2009 • Contract several securities agents all over Vietnam • Move to late 2009-2010 • Business Targets • Producing brokerage income of VND 178 million • Actual number is VND 62 million • NPAT was projected at VND -7,358 billion • Actual number is VND -33,729 billion 8 : Agenda #10, Overview of Business Development in 2008

  9. About Grant Thornton • Grant Thornton International Ltd. • Move the plan to 2009 Independent organization • The world’s leading accounting & consulting firm • Grant Thornton Vietnam • A member firm of Grant Thornton International Ltd • Provides full services with offices in Hanoi and HCMC • Retains over 120 employees • One of 28 audited firms approved by the SSC • 2008 : Audited fee $ 5,000 • 2009 : Estimated fee $10,000- $15,000 9 : Agenda #10, Overview of Business Development in 2008

  10. 2008 Audited by Grant Thornton Total Assets 330,253 Cash 236,451 Short term Investment 64,727 Provision for decline in value (39,864) Total Liabilities 3,983 Total Equities 326,270 Accumulated loss (33,730) Off Balance Sheet Items Customers’ securities 10,009 Collateral for REPO24,500 Balance Sheets VND in million 10 : Agenda #11, 2008 Audited Financial Statements & Auditor’s report

  11. 2008 Audited by Grant Thornton • Total revenues 38,199 • Revenues from brokerage fee 63 • Revenues from bank deposits 34,626 • Expenses -49,528 • Provision for investment loss -39,864 • Other operating expenses -9,664 • Administration expenses -22,400 • Earning before tax -33,730 • Net profit after tax -33,730 Income Statement VND in million 11 : Agenda #11, 2008 Audited Financial Statements & Auditor’s report

  12. 2008 Audited by Grant Thornton Asset structure Current assets/Total Assets 92.42% Capital structure Total liabilities /Total Resources 1.21% Liquidity Total Assets/Total Liabilities 82.91 Times Current Assets/Current Liabilities 76.63 Times Cash/Current Liabilities 65.61 Times Profitability Loss/Shareholders Equities (10.34) % Book Value/Share in VND 9,063 12 : Agenda #11, 2008 Audited Financial Statements & Auditor’s report

  13. 2008 Report of Inspection Committee Summary • Not all targets of 2008 had been met • Inefficient expenses as compared to financial results • Revenues mainly derived from bank deposits

  14. 2008 Report of Inspection Committee Explanation • Depositing money with banks was the decision of the Management, considered as operating performances • Limited options to generate any revenues • Investments in securities would lead to greater financial difficulties • TCSC was newly established, not ready for brokerage & investment banking businesses

  15. 2008 Report of Inspection Committee Explanation TCSC Business Policy • Not investing in any transactions which yielded lower than bank deposit rates • Capex was mainly invested for long term stability & strong growth when market turned around • Building proper infrastructures for the Modernization of Vietnam securities market • improving “qualities” of staffs & IT

  16. 2009, Year of Difficulties The worst is over The question is how long will it take for recovery? GDP From 1990

  17. 2009, Year of Difficulties The worst seems to be over The question is how each company dealt with the crisis? HOSE HaSTC

  18. 3-Years Business Orientation • 2008 Constructed proper infrastructure for future growth • 2009 Listed on HaSTC UpCom • 2010 Listed on HaSTC, required 1 year profit • 2011 Listed on HOSE, required 2 years consecutive profits 18: Agenda #13, Presenting the 2009 Business Targets & Plan

  19. Plans for 2009 • Transforming to be a public company • Granted with new business license, Underwriting • Applying to list on HaSTC UpCom • Relocation of Head Office & Opening a branch in District 1, HCMC 19 : Agenda #13, Presenting the 2009 Business Targets & Plan

  20. Operating Targets for 2009 • Getting ready for Margin Trading • Modernization of Securities Trading (new laws & regulations of the SSC, HOSE & HaSTC) • IT & communication • SOP & Compliances • Staffs training 20: Agenda #13, Presenting the 2009 Business Targets & Plan

  21. Operating Targets for 2009 • Establishing high recognition for • Securities Business • Investment Banking Business • Cooperation with regulators for new products • Leading gateway for investments in Vietnam • Top 10 ranking among comparable benchmarks 21: Agenda #13, Presenting the 2009 Business Targets & Plan

  22. Financial Targets for 2009 To Achieve by Year-end • >2.5% Market share of total brokerage value • Producing > VND 100 billion in revenues and NPAT > VND 49 billion • ROE >12% p.a. on par value basis 22: Agenda #13, Presenting the 2009 Business Targets & Plan

  23. 2009 Brokerage Market Share 23: Agenda #13, Presenting the 2009 Business Targets & Plan

  24. 2009 Budget Key Assumptions • 5 months actual numbers, Jan-May • Foreign brokerage volume begins in late July • Margin Trading activities begin in Q4 • Prime rate is 7% per annum • Relocation of Head Office and opening a branch in District 1 are completed in Q4 • Issue new shares to KT-Zmico in Q4 24: Agenda #13, Presenting the 2009 Business Targets & Plan

  25. 2009 Financial Forecast with MT without MT Total Assets 985,329 801,181 Cash 709,526 694,128 Short term Investment 45,000 45,000 Provision for decline in value (450) (450) Total Liabilities 347,815 175,986 Total Equities 637,514 625,195 Gains on investments 33,010 20,692 Balance Sheets VND in million 25: Agenda #13, Presenting the 2009 Business Targets & Plan

  26. 2009 Financial Forecast with MT without MT Income Statements VND in million • Total revenues 143.293 128,949 • Revenues from brokerage fee34,533 21,033 • Revenues from bank deposits 18,865 21,397 • Expenses 76,551 74,526 • Provision for investment loss 10,954 10,954 • Other operating expenses 5,199 3,172 • Administration expenses 60,399 60,399 • Earning before tax 66,740 54,421 • Net profit after tax 58,487 49,248 26: Agenda #13, Presenting the 2009 Business Targets & Plan

  27. 2009 Financial Forecast Revenue Breakdown with MT in Q4 without MT • Fee income 35.96% 29.49% • Brokerage 24.10% 16.31% • Advisory/Underwriting/Consulting 11.86% 13.18% • Gain on Investments 46.21% 51.35% • Other income 17.83% 19.16% • Bank deposits 13.17% 16.59% (Legal Reserve, Business Insurance, Daily Excess Cash) • Margin (MT)/Repo/Others 4.66% 2.56% Total income VND in billion 143 >> 130 27: Agenda #13, Presenting the 2009 Business Targets & Plan

  28. 2009 Financial Forecast Capital Expenditure Breakdown • Operating Expenses 16.153 • Provision for investment loss 14.31% • Administration Expenses 60.399 • HR 20.28% • Outsourcing (Professional Fee) 9.94% • Training & Travelling 7.78% • Office rental & Utilities(3 offices) 12.68% • PR & Marketing 10.61% Total number of staffs 61 Total Expenses 76.552 100% 28: Agenda #13, Presenting the 2009 Business Targets & Plan

  29. 2009 Financial Forecast • Asset structure with MT without MT • Current assets/Total Assets 96.87% 96.15% • Capital structure • Total liabilities /Total Resources 35.30% 21.97% • Liquidity • Total Assets/Total Liabilities 2.83 times 4.55 times • Current Assets/Current Liabilities 2.74 times 4.38 times • Cash/Current Liabilities 2.04 times 3.94 times • Profitability • Profit/Shareholders Equities (ROE) 15.47% 13.09% • Book Value/Share 11,133 10,918

  30. 2009 Strategies & Plans • Joint venture with KT-Zmico to produce Researches & Thanh Cong Index • Joint marketing with GAP for foreign investors & advisory businesses • Joint develop with GAP for new services & products >>> Materialize in 2H, 2009 • Emphasize on creating value to customers, wealth & analytical skills • Emphasize on direct visibilities to target groups 30: Agenda #13, Presenting the 2009 Business Targets & Plan

  31. 2009 Strategies & Plans • Additional capital will primarily be injected by KT-Zmico in late Q4 • Use of Proceeds: • Funding margin trading business from 2009>>> • Investment in proprietary trading • Investment in a mutual fund company • Investment in distress assets from other securities companies and/or mutual funds • Acquiring other ailing securities company(s) >>> Materialize in Q4, 2009 31: Agenda #13, Presenting the 2009 Business Targets & Plan

  32. Amending the Charter Public Company Foreign Major Shareholders Soon to be listed on HaSTC UpCom

  33. Rationales • To comply with • public company acts • international standards • To prepare to list on HaSTC UpCom and/or any other eligible stock markets 33: Agenda #14, Rationale for Revision of the Charter

  34. Changes • Article 2 ; Item 4: Change the legal representative of the company from the Chairman of Board of Directors to the General Director • Article 3: Term of operation of the company in accordance with the operating license • Article 4 ; Item 1: Scope of business activities of the company in accordance with the operation license • Article 7 ; Item 1: Scope of business activities of the company in accordance with the operating license 34: Agenda #14, Rationale for Revision of the Charter

  35. Changes • Article 9; Item 3 & 4: Limitations on the Members of the Board of Directors and General Director to work for other companies in accordance with the applicable laws • Article 16: Limitations on share transfers of the Founding Shareholders within 3 years from the date of the establishment of the company in accordance with the applicable laws 35: Agenda #14, Rationale for Revision of the Charter

  36. Changes • Article 19: Provisions of shareholders’ rights and obligations in accordance with the laws • Article 26 ; Items 6 and 7: Setting of minimum quorum for Shareholders Meeting and percentage of voting to pass Shareholders Resolutions • Article 27 ; Items 24: Specify types of transactions to require approvals from the Board of Directors • Article 33 ; Items 1,2&3: Specify types of related transactions (between the Company and (1) the Managers of the company or (2) the more than 35% Shareholders) to require approvals from the Board of Directors 36: Agenda #14, Rationale for Revision of the Charter

  37. Vote for Shareholders Resolution • To approve the Company’s amended & supplemented Charter

  38. Proposals to Shareholders For Your Kind Considerations

  39. Proposal #1 • 2008 Dividend pay out policy • Total revenues VND 38,198,198,000 • Total NPAT VND (-33,729,892,000) • Since there was no profit in 2008, the Board of Directors submits to the General Shareholders Meetings for its consent and voting for the approval of non-payment of dividends for 2008 39: Agenda #15, Proposals for Shareholders’ Approval

  40. Proposal #2 • 2008 Remuneration for Members of The Inspection Committee • Number of working days for the job of the Inspection Committee 2 days / month x 16 months = 32 working days • Daily compensation for 1 working day: VND 650,000 • Total compensation for the Inspection Committee for 2008 is: 3 persons x 32 working days x VND 650,000 / working days = VND 62,400,000 40: Agenda #15, Proposals for Shareholders’ Approval

  41. Proposal #3 • Approving the company development orientation for 2009 • To Achieve by Year-end: • Market share: >2.5% market share of total brokerage value • Producing > VND 100 billion in revenues and NPAT > VND 49 billion in profits • ROE >12% p.a. on par value basis • Becoming the leading gateway for investment into Vietnam • Top 10 ranking among comparables benchmarks 41: Agenda #15, Proposals for Shareholders’ Approval

  42. Proposal #4 • Selection of 2009 financial auditing firm BoD proposes to authorise to the General Director to select one of the four (4) Auditing Firms below. • Ernst & Young Auditing Firm (Vietnam) • Grant Thornton Auditing Firm (Vietnam) • KPMG Auditing Firm (Vietnam) • PriceWaterHouse Coopers Auditing Firm (Vietnam) 42: Agenda #15, Proposals for Shareholders’ Approval

  43. Proposal #5 • Remuneration of member of Board of Director for 2008, 2009 and Inspection committee 2009 • Remuneration for 2008: since the company faced many difficulties in 2008, members of BoD voluntarily waive their rights to remuneration. • Remuneration for 2009: BoD will also vonluntarily waive their rights to remuneration if the company does not make profit. In case, the company is profitable, BoD shall consider their remuneration for 2009 and shall submit to General Shareholders Meeting 2010 for consideration. • Remuneration for The Inspection Committee shall consider and propose to the General Shareholders Meeting in 2010. 43: Agenda #15, Proposals for Shareholders’ Approval

  44. Proposal #6 • 2009 Dividend Payout Policy • Propose to pay out 100% of NPAT, net of allocation to necessary funds Net profit after tax (NPAT) 49,248,536,039 Provision for necessary funds Less Charter capital supplement reserves 2,462,426,802 5% Financial reserves 2,462,426,802 5% Benefit funds 2,462,426,802 5% 44: Agenda #15, Proposals for Shareholders’ Approval

  45. Proposal #6 • 2009 Dividend Payout Policy in VND Total Dividend payout 41,861,255,633 Dividend per share 1,163 Dividend yields on par 11.63% 45: Agenda #15, Proposals for Shareholders’ Approval

  46. Proposal # 7 • Resignation of the current members of the Board of Directors and Inspection Committee • Ms. Le Thi Kieu Phuong – Members of BoD • Mr. Mai Van Sau – Head of the Inspection Committee • Mr. Phan Nhu Bich – Member of the Inspection Committee 46: Agenda #15, Proposals for Shareholders’ Approval

  47. Proposal #8 • Election of additional directors • Nominated candidates • Mr. EkamolKiriwat • Mr. Chaipatr Srivisarvacha • Mr. Pinit Puapan • Mrs. Duangrat Watanapongchat • Mrs. Kittivalai Charoensombut-Amorn 47: Agenda #15, Proposals for Shareholders’ Approval

  48. Proposal # 9 • Election of new members of Inspection Committee • Mr. James Michael Kelso • Ms. Nguyen Thi Thuy Nguyen 48: Agenda #15, Proposals for Shareholders’ Approval

  49. Discussion

  50. Voting Shareholders Resolutions

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