INDEPENDENT AUDITOR S REPORT THU DUC TRADING AND IMPORT EXPORT JOINT STOCK COMPANY

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1 Audit and Consulting Co., Ltd. Member of Reanda International Head office: Pho Quang, ward 09, Phu Nhuan district, HCMC. Registered Office: 33 Phan Van Khoe street, ward 13, district 5, HCMC. Tel:+84 (8) ~97 Fax: +84 (8) [email protected] Website: Bring Knowledge to Clients INDEPENDENT AUDITOR S REPORT ON THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED 31 ST DECEMBER 2014 THU DUC TRADING AND IMPORT EXPORT JOINT STOCK COMPANY Audit and Consulting Co., Ltd. A member firm of Reanda International

2 THU DUC TRADING AND IMPORT EXPORT JOINT STOCK COMPANY CONTENTS Contents Page 1. Report of the Board of Management Independent Auditor s report Balance Sheet as of 31 st December Income statement for the fiscal year ended 31 st December Cash Flows Statement for the fiscal year ended 31 st December Notes to the Financial Statements for the fiscal year ended 31 st December

3 Report of the Board of Management REPORT OF THE BOARD OF MANAGEMENT The Board of Management of Thu Duc Trading and Import Export JSC (hereafter, referred to as the Company ) presents this report together with the audited financial statements of the Company for the fiscal year ended 31 st December General information of the Company Thu Duc Trading and Import Export JSC operates in accordance with the Business Registration Certificate No dated 27 th March 2000 and the Business Registration Certificate No , the sixteenth amendment dated 28 th November 2014 granted by the Department of Planning and Investment of Ho Chi Minh city. Charter capital : VND 124,000,000,000 (Vietnam Dong One Hundred Twenty Four Billion Only). The Company is listed on the Hanoi Stock Exchange (HNX) with the TMC stock code. 2. Registered office Address : No. 231 Vo Van Ngan street, Linh Chieu ward, Thu Duc district, Ho Chi Minh city. Tel. : +84 (8) Fax : +84 (8) Tax code : Information of branches - Petroleum station No.12 located at No. 44, National Road 1A, hamlet 8, Trung An ward, My Tho city, Tien Giang province, branch code ; dependent accounting; - Petroleum station No.11 located at street T 743, Binh Phuoc B hamlet, Binh Chuan ward, Thuan An town, Binh Duong province, branch code ; dependent accounting; - Petroleum station No.10 located at No. 10/A, Quarter 1A, hamlet 1, street T 747, Hoi Nghia ward, Tan Uyen town, Binh Duong province, branch code ; dependent accounting; - Petroleum station No.14 located at Quarter 9, Dong hamlet, Phuoc Tan ward, Bien Hoa city, Dong Nai province, branch code ; dependent accounting; - Shop of construction materials No.2 located at No. 7/145, National Road 13, Hiep Binh Phuoc ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Long Binh Petroleum station located at No. 90, Nguyen Xien street, Ben Do hamlet, Long Binh ward, district 9, Ho Chi Minh city, branch code ; dependent accounting; - Petroleum station No.6 located at No. 740A, National Road 52, Hiep Phu ward, district 9, Ho Chi Minh city, branch code ; dependent accounting; - Petroleum station No.3 located at No. 228, Vo Van Ngan street, Truong Tho ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Business shop of motorcycles located at No , Kha Van Can street, Linh Tay ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Tang Nhon Phu Petroleum station located at No. 392, Quarter 1, Le Van Viet street, Tang Nhon Phu A ward, district 9, Ho Chi Minh city, branch code ; dependent accounting; 2

4 Report of the Board of Management (cont.) - Petroleum station No.1 located at No. 744, Kha Van Can street, Quarter 5, Linh Dong ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Linh Xuan Petroleum station located at No. 507A, National Road 1A, Linh Xuan ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Petroleum station No.7 located at No. 77, To Ngoc Van street, Linh Tay ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Binh Tho Petroleum station located at No. 2, Dang Van Bi street, Quarter 4, Binh Tho ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Maintenance and service center of motorcycles located at No. 701, Kha Van Can street, Linh Tay ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Shop No.2 located at No. 507A, National Road 1A, Quarter 3, Linh Xuan ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Petroleum station No.19 located at No. 54/1, Huynh Tan Phat street, hamlet 6, Phu Xuan ward, Nha Be district, Ho Chi Minh city, branch code ; dependent accounting; - Shop of construction materials No.1 located at No. 1106, Kha Van Can street, Linh Chieu ward, Thu Duc district, Ho Chi Minh city, branch code ; dependent accounting; - Shop of construction materials No.740A located at No. 740A, National Road 52, Hiep Phu ward, district 9, Ho Chi Minh city, branch code ; dependent accounting. 3. Business activities - Agents of trading in petrol, oil, grease, viscous; - Trading in petroleum transportation; - Wholesale of automobiles and other motor vehicles; - Trading in motorcycles; - Trading in restaurant, wedding party, conferences; - Trading in electrical goods, consumables; - Iron, steel, construction materials; - Trading in real estate. 4. The Board of Management and the Board of Directors 4.1 The Board of Management The Board of Management of the Company as of date of this report include: Full name Position Mr. Nguyen Huu Thanh Mr. Ma Duc Tu Mr. Nguyen Cao Khai Mr. Duong Xuan Phat Mr. Hoang Dinh Son Chairman Vice Chairman Member Member Member 3

5 Report of the Board of Management (cont.) 4.2 Supervisory Board Supervisory Board of the Company as at the date of this report include: Full name Mr. Nguyen Anh Tuan Mr. Vo Tuan Hao Mrs. Nguyen Thi My Dung Position Head of board Member Member 4.3 The Board of Directors The Board of Directors of the Company as of date of this report includes: Full name Mr. Ma Duc Tu Mr. Nguyen Thanh Binh Mr. Pham Ngoc Minh Mr. Nguyen Cao Khai Mr. Vien Thien Khanh Position Director Deputy Director Deputy Director Deputy Director Chief Accountant 5. Business results The financial position and the business results for the fiscal year ended 31 st December 2014 of the Company are expressed in the financial statements attached to this report from page 08 to page Subsequent events In the opinion of the Board of Management, the Company s business results expressed in this report for the fiscal year ended 31 st December 2014 would not be seriously affected by any important items, transactions, or any extraordinary events happened to the date of this report, which need any adjustments to the figures or disclosures in the financial statements. 7. Auditors Audit and Consulting Co., Ltd. has performed the review on the Company s financial statements for the fiscal year ended 31 st December Audit and Consulting Co., Ltd. has expressed their willingness to be reappointed as the Company s independent auditor in future. 8. Confirmation of the Board of Management The Board of Directors of the Company is responsible for the preparation of the financial statements to give a true and fair view on the financial position, the business results and the cash flows of the Company for the fiscal year ended 31 st December In order to prepare these financial statements, the Board of Directors must: Select appropriate accounting policies and apply them consistently; Make judgments and estimates reasonably and prudently; 4

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7 Công ty TNHH Kim toán và T vn Chun Vit ( ) Công ty Thành viên ca Reanda International a ch ng ký: 33 Phan Vn Khe, phng 13, qu n 5, HCM Vn phòng ti Tp.HCM: Ph Quang, phng 9, Q. Phú Nhu n, HCM Tel : +84 (8) ~97 Fax: +84 (8) [email protected] Website: No.: 2044/15/BCKT/AUD-VVALUES INDEPENDENT AUDITOR S REPORT To: THE BOARD OF MANAGEMENT AND THE BOARD OF DIRECTORS THU DUC TRADING AND IMPORT EXPORT JOINT STOCK COMPANY Report on the Financial Statements We have audited the accompanying financial statements for the fiscal year ended 31 st December 2014 of Thu Duc Trading and Import Export JSC (hereafter referred to as the Company ) which comprise the Balance Sheet as at 31 st December 2014, the Income Statement, the Cash Flows Statement and the Notes to the Financial Statements for the fiscal year ended 31 st December 2014 prepared on 04 th March 2015 (from page 08 to page 43) of the Company. The Board of Directors responsibility The Board of Directors of the Company is responsible for the preparation and fair presentation of these financial statements in accordance with the accounting standards, Vietnamese enterprises' accounting regime as well as other related regulations and for such internal control as the Board of Directors determines is necessary to enable the preparation and presentation of separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 6

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9 Balance Sheet As at 31st December 2014 BALANCE SHEET As at 31st December 2014 Currency: VND Code ASSETS Notes Ending balance Beginning balance A- CURRENT ASSETS AND SHORT TERM INVESTMENT 110 I. Cash and cash equivalent Cash Cash equivalent II. Short term financial investments Short-term investment Provision for short-term investments ( ) ( ) 130 III. Accounts receivable Trade receivables Advances to suppliers Other short-term receivables Provisions for doubtful receivables (*) - ( ) 140 IV. Inventories Inventories Provision for obsolete stock (*) V. Other current assets Short-term prepaid expenses VAT deductible Tax receivables Other current assets B- FIXED ASSETS AND LONG-TERM INVESTMENTS 210 I. Long-term receivables II. Fixed assets Tangible fixed assets Historical cost Accumulated depreciation ( ) ( ) Intangible fixed assets Historical cost Accumulated amortization ( ) ( ) Construction-in-progress III. Investment Properties Historical cost Accumulated depreciation ( ) ( ) 250 IV. Long-term financial investments Investment in subsidiaries Investment in joint ventures Other long-term investment Provisions for long-term investments (*) ( ) ( ) 260 V. Other long-term assets Long-term prepaid expenses Deferred corporate tax assets Other long-term assets TOTAL ASSETS These statements should be read in conjunction with the Notes to the Financial Statements 8

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13 Notes to the Financial Statements NOTES TO THE FINANCIAL STATEMENTS These notes form an integral part of and should be read in conjunction with the Financial Statements for the fiscal year ended 31 st December 2014 of Thu Duc Trading and Import Export JSC (hereafter, referred to as the Company ). 1. OPERATION FEATURES 1.1 Forms of ownership The Company is joint stock company. 1.2 Lines of business Trade, service, real estate. 1.3 Business activities - Agents of trading in petrol, oil, grease, viscous; - Trading in petroleum transportation; - Wholesale of automobiles and other motor vehicles; - Trading in motorcycles; - Trading in restaurant, wedding party, conferences; - Trading in electrical goods, consumables; - Iron, steel, construction materials; - Trading in real estate. 1.4 Employees, wage fund - As at 31 st December 2014, there are 198 employees who are working at the Company. - Total of wage fund in year: VND 23,180,954, ACCOUNTING PERIOD, AND REPORTING CURRENCY 2.1 The Company s fiscal year The fiscal year starts on 01 st January and ends on 31 st December of each calendar year. 2.2 Reporting currency and methods of foreign currency translation The standard currency unit used is Vietnam Dong (VND). 3. ADOPTED ACCOUNTING POLICIES 3.1 Applicable accounting regime The Company has applied the Accounting Laws, the Accounting Standards, the Vietnamese accounting regime in accordance with the Decision No. 15/2006/QD-BTC dated 20 th March 2006, the Circular No. 244/2009/TT-BTC dated 31 st December 2009 of Ministry of Finance and other related documents. These notes from an integral part of the Financial Statements 12

14 3.2 Statement on the compliance with the Vietnamese accounting system and standard We, the Board of Directors of Thu Duc Trading and Import Export JSC ensure to follow all the requirements of the prevailing Accounting Laws, the Vietnamese Accounting Regime and Standards in the accounting system and accounting report which are regulated by Government of Vietnam. 3.3 Registered accounting documentation system: General journal recording on computer. 4. APPLIED ACCOUNTING POLICIES 4.1 Principles for recognizing cash amounts and cash equivalents Cash includes cash on hand, cash in transit and cash in bank (non-term). Principles for determining cash equivalents: based on short-term stocks with settlement or maturity no more than 3 (three) months since the report date. Principles and methods for converting other currencies into reporting currency: based on the spot exchange rate at the arising date. At the ending of accounting period, the balances in foreign currency of cash on hand, cash in bank, cash in transit will be adjusted to the average inter-bank exchange rate. 4.2 Accounting policies for inventory Evaluation principle of inventory: are recognized at their historical costs. Method of inventory determination: petrol, oil, grease, viscous is recognized at the weighted average method; motorcycles are recognized at the specific identification method. Method of inventory recording: the perpetual method. Provision for devaluation of inventory: at the closed books date, the Company makes revaluation of inventory and provision based on their costs are higher than their net realizable values of inventory. 4.3 Recognizing and depreciation for fixed assets Evaluation principle: Fixed assets are determined by the historical costs less (-) accumulated depreciation. Historical costs of fixed assets include the purchase prices and other directly related costs to put the fixed assets into use. The improvement and renovation costs are included in the historical costs of fixed assets and the costs of repair and maintenance are posted into the Income Statement. When the assets are disposed or liquidated, their historical costs and accumulated depreciation are written off, then any profit (or loss) generated from the liquidation is included in the Income Statement. Applied depreciation method: Fixed assets are depreciated in line with straight-line method to gradually write off the historical costs of fixed assets over their estimated useful lives as stipulated in the Circular No. 45/2013/TT- BTC dated 25 th April 2013 of Ministry of Finance. The estimated useful lives of fixed assets: + Buildings and structures years + Machineries and equipments years + Vehicles years These notes form an integral part of the Financial Statements 13

15 + Management equipments and tools years + Computer software 03 years + Land-use right is amortized to the end of the expiry date which is stated on the certificate of land-use right. 4.4 Principles for recognizing financial investments Investments in subsidiaries, associated companies, and equally-controlled businesses are recorded at historical costs. The short-term securities investments, short-term investments, other long-term investments are recorded at historical costs. Classification of investments: - Holding more than 50% of the voting rights in the equity of the investee is recognized in investment in subsidiaries; - Holding from 20% to under 50% of the voting rights in the equity of the investee is recognized in investment in affiliated companies; - Holding under 20% of the voting rights in the equity of the investee is recognized in other longterm investment. 4.5 Principles for recognizing and capitalizing borrowing costs Borrowing costs is recognized production and operation cost in period at the arising date. Borrowing costs is capitalized when the Company gets reliable economic interest in the future for intended use assets and borrowing costs will be determined reliably. 4.6 Principles for recognizing prepaid expenses Prepaid expenses: expenses of tools, office equipments, factory which is allocated in income statement s expenses during year, and allocating times base on revenue from construction and basing on estimating times in use, which those assets bring about economic benefit. Method of allocating: in accordance with the straight line method. 4.7 Principles for recognizing wage fund The Company implement to calculate wage fund according to Decision No. 03/Q-HQT dated 27 th February 2015 of the Board of Management. 4.8 Principles for recognizing accrual expenses Accrual expenses are recognized when the Company has obligations which must be paid and can be reliably estimated. 4.9 Principles and method for recognizing provisions for payables Provisions for payables are recognized as the amount payable which can be reliably estimated as obligations to be paid as at the accounting period closing day. Method for recognizing: provisions for payables are set up (or reverting) according to differences between provisions for payables in current year and provisions for payables in previous year that haven't been spent as recorded in the accounts. These notes form an integral part of the Financial Statements 14

16 4.10 Principles for recognizing owners equity Principles for recognizing owner s invested equity, surplus of share capital and others: Owner s invested equity: owner s actual capital; Surplus of share capital: differences between issued actual value and the nominal value of stocks in joint stock companies when they issue stocks and re-issue treasury stocks; Principles for recognizing undistributed earnings: undistributed earnings after tax on Balance Sheet is profit (profit or loss) from the company s operation after (-) corporation income tax (CIT) and adjusts due to applying retroactive effect of the change accounting policy and adjusting, material mistakes retroactive of the previous year; Appropriation principles for funds from after-tax profits: in accordance with the Company s Charter Revenues and expenses Revenues from sale of goods are recognized when: - Most of risk and benefits associated with the goods ownership are transferred to customers; and completion of work can be determined; - There are no rights to manage or to control the goods; - Revenues can be determined reliably; - Getting or will get reliable economic benefits from providing service; - Expenses related to providing and completing service can be determined. Revenues from rendering of services are recognized when: - Revenue is determined rather reliably; - Be able to gain economic benefits from the transactions; - Determining work completely as at Balance Sheet date; - Determining expenses related to rendering of services. Financial income is recognized when: - Able to gain economic benefits from the transactions; - Revenue can be determined reliably. Expenses are recognized in line with the principle of matching between sales and expenditure to complete service Principles and method for recognizing financial expense Financial expense is recognized in the Income Statements which arise in the period, should not be offset with financial income Principles and method for recognizing current Corporate income tax and deferred Corporate income tax expense Current corporate income tax expense is recognized based on taxable income and corporate income tax and tax rate in current year. Deferred corporate income tax expense is recognized based on temporary differences in deductibles, temporary differences in taxable and corporate income tax rate. Current corporate income tax and deferred corporate income tax expense should not be offset. These notes form an integral part of the Financial Statements 15

17 4.14 Taxes and Statutory obligations The Company has obligation to pay tax for Government of Vietnam: Value added tax (VAT): in accordance with deduction method. Corporate income tax (CIT): - CIT rate of 22% (twenty two percent). Other taxes will be paid according to prevailing regulations Classification of financial assets In accordance with Circular No. 210/2009/TT-BTC dated 06 th November 2009 of Ministry of Finance on guiding the application of international accounting standards on presentation of financial statements and disclosures of financial instruments: The Company classifies financial assets into the following categories: financial assets at fair value through Income Statement, held-to-maturity investments, loans and receivables, available-for-sale financial assets. The classification of financial assets depends on the nature and purpose of financial assets and is designated as such on initial recognition. Financial assets at fair value through Income Statement A financial asset is classified as at fair value through Income Statement if it is classified as held for trading or is designated through Income Statement as such on initial recognition. A financial asset is classified as held for trading if: Be bought or created primarily for the purpose of reselling in a short time; The company intends to hold for short-term profit-making purpose; Derivative financial instruments (except for derivative financial instruments is defined as a financial guarantee contract or an effective instrument to prevent risks). Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and have fixed maturities that the Company has the positive intent and ability to hold debt securities to maturity. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of financial assets at fair value through Income Statement, held-tomaturity investments or loans and receivables. Initial book value of financial assets Financial assets are recognized at the acquisition date and stopped for recognizing at the date of sale. At the time of initial recognition, financial assets are determined by the bought / issued cost and plus other expenses which is directly related to the purchase and distribution of financial assets. These notes form an integral part of the Financial Statements 16

18 Financial liabilities and equity instrument Financial instruments are classified as financial liabilities or equity instruments at the time of initial recognition in accordance with the nature and definition of financial liabilities and equity instruments. Financial liabilities The Company classifies financial liabilities into the following categories: financial liabilities at fair value through Income Statement, financial liabilities are determined in accordance with the allocating value. The classification of financial liabilities depends on the nature and purpose of financial liabilities and is designated as such on initial recognition. Financial liabilities at fair value through Income Statement A financial liability is classified as at fair value through Income Statement if it is classified as held for trading or is designated through Income Statement as such on initial recognition. A financial liability is classified as held for trading if be bought or created primarily for the purpose of reselling in a short time; Financial liabilities are determined in accordance with the allocating value Financial liabilities are determined in accordance with the allocating value that are determined by the value of initial recognition of financial liabilities after deducting repayments of principal, adding or deducting the cumulative allocations in accordance with the actual interest rate method of the differences between initial recognition and maturity value, and less the deductions (directly or through by provision account) due to decreasing value or could not withdraw. Actual interest rate method is the method of calculating allocation value of one or group financial liabilities and allocating profit income or interest expense during the year which are related. Actual interest is the discount rate of estimated cash flow which will be paid or gotten in the future during the expected lifetime of financial instruments or less than, if required, can use the net current book value of financial liabilities. Initial book value of financial liabilities At the time of initial recognition, financial liabilities are determined by the issued cost and plus other expenses which is directly related to the issuing of financial liabilities.. Equity instruments Equity instruments are the contracts which demonstrate the residual benefits of the Company's assets after deducting all obligations. Compound financial instruments Compound financial instruments are issued by the Company are classified as liability components and equity component in accordance with the agreed content in contract and defination of financial liabilities and equity instruments. These notes form an integral part of the Financial Statements 17

19 The equity is defined as the residual value of financial instruments after deducting the fair value of liabilities. The value of derivative instruments (such as sale-chose-rights contract) accompanying compound financial instruments which are not belong to equity (such as the chose-rights of changing equity capital) are presented in liabilities. Total book value of liabilities and equity are recognized initially at fair value of financial instruments. Offsetting of financial instruments Financial liabilities and assets are offset and net value which will be presented on balance sheet if, and only if, the Company has: a legal right to implement the offset of recognized values; and intend to offset on a net basis, or obtains assets and pays liabilities at the same time. 5. ADDITIONAL INFORMATION FOR ITEMS SHOWN IN THE BALANCE SHEET (Currency: VND) 5.1. Cash and equivalent cash Code Items Ending balance Beginning balance Cash on hand 214,109,713 1,834,638, Cash in banks 9,909,602,721 15,269,833, Cash in transit 62,784,000 - Total 10,186,496,434 17,104,471, Short-term financial investments Code Items Ending balance Beginning balance Short-term investment 11,481,666,342 12,826,954, Provision for short-term investments (6,264,324,104) (5,933,887,206) Total 5,217,342,238 6,893,066,983 These notes form an integral part of the Financial Statements 18

20 5.2.1 Short-term investment No. Stocks Ending balance Beginning balance Causes of increase/ Number of Value Number of Value decrease 1 Cuchi Commercial and Industrial Developing Investment Joint Stock Company (Cidico) 2 Ca Mau Commercial Joint Stock Company 3 Materials Petroleum Joint Stock Company (Comeco) 4 Ha Tien 1 Cement Joint Stock Company 5 Pomina Steel Joint Stock Company 6 Refrigeration Electrical Engineering Corporation (Ree) 7 Saigon Fuel Joint Stock Company 8 SMC Trading Investment Joint Stock Company 9 Thanh Cong Textile and Garment Joint Stock Company 10 Thu Duc Housing Development Corporation 11 Nha Be Steel Joint Stock Company 12 Vinh Long Cereal and Food Corporation 13 Bien Hoa Steel Joint Stock Company 27, ,653,894 77, ,315,254 Selling during period 70,000 1,158,803,816 70,000 1,158,803,816 21, ,538,344 20, ,801,036 Purchasing during period , ,000,000 Selling during period 186,000 5,191,965, ,000 5,303,610,407 Selling during period ,693 Selling during period - - 1,100 19,638,600 Selling during period 80,000 1,639,691,867 80,000 1,639,691, ,398 Selling during period , ,750,372 Selling during period 57,500 1,185,000,000 57,500 1,185,000, , ,346, , ,377,196 Selling during period 35, ,666,550 35, ,666,550 Total 11,481,666,342 12,826,954,189 These notes form an integral part of the Financial Statements 19

21 5.2.2 Provision for short-term investments Details are as follows: Ending balance (*) Beginning balance Ca Mau Commercial Joint Stock Company 101,803, ,803,816 Ha Tien 1 Cement Joint Stock Company - 450,000,000 Pomina Steel Joint Stock Company 3,629,565,240 2,890,620,407 SMC Trading Investment Joint Stock Company 783,691, ,691,867 Thanh Cong Textile and Garment JSC - 105,998 Thu Duc Housing Development Corporation - 52,150,372 Nha Be Steel Joint Stock Company 949,250,000 1,035,500,000 Vinh Long Cereal and Food Corporation 11,346,631 31,348,196 Bien Hoa Steel Joint Stock Company 788,666, ,666,550 Total 6,264,324,104 5,933,887,206 (*) Details of ending balance are as follows: Details are as follows: Book value Market value Ending balance (1) (2) (1)-(2) Ca Mau Commercial JSC 1,158,803,816 1,057,000, ,803,816 Pomina Steel JSC 5,191,965,240 1,562,400,000 3,629,565,240 SMC Trading Investment JSC 1,639,691, ,000, ,691,867 Nha Be Steel Joint Stock Company 1,185,000, ,750, ,250,000 Vinh Long Cereal & Food Corporation 611,346, ,000,000 11,346,631 Bien Hoa Steel JSC 886,666,550 98,000, ,666,550 Total 6,264,324,104 Market value is the closing price as at 31 st December These notes form an integral part of the Financial Statements 20

22 5.3. Trade receivables No. Customers Ending balance Beginning balance 1. Third parties 6,716,565,848 8,693,812, Related parties (refer to Notes No. 7.1) 10,174,399,833 2,333,533,793 Total 16,890,965,681 11,027,346, Advances to suppliers STT Suppliers Ending balance Beginning balance 1. Third parties 6,774,242, ,819, Related parties - - Total 6,774,242, ,819, Other short-term receivables Details are as follows: Ending balance Beginning balance - TMC Petroleum Co., Ltd. (distributed profit) 2,463,921, ,484,719 - Ba Muoi Thang Tu Co., Ltd. (distributed profit) 507,271, ,257,693 - Song Duc Trading Service Co., Ltd. (distributed profit) 251,147, ,553,142 - Others 369,722, ,702,505 Total 3,592,063,723 1,564,998, Inventories Code Items Ending balance Beginning balance Materials and supplies 565,168, ,638, Tools Merchandises 27,838,722,758 57,373,169, Provision for obsolete stock - - Realizable net value of inventories 28,403,891,498 57,794,808, Merchandises This item is petrol, oil and kinds of motorcycles. These notes form an integral part of the Financial Statements 21

23 5.7. Other current assets No. Items Ending balance Beginning balance Advances 22,000,000 75,000, Short-term mortgage and deposits 164,000, ,100,000 Total 186,000, ,100, Tangible fixed assets Items Buildings and structures Machineries and equipments Vehicles Management equipments and tools Total I. Historical cost 1. Beginning balance 47,515,450,089 16,074,947,728 9,825,137, ,373,203 73,706,908, Increase 5,588,551, ,649, ,909,091 6,211,109, Decrease - 278,706, ,869,523 40,356, ,931, Ending balance 53,104,001,530 16,309,890,554 9,433,267, ,926,294 79,207,086,221 II. Depreciation 1. Beginning balance 19,330,359,211 7,980,645,827 5,835,005, ,373,203 33,437,383, Increase 3,539,944,597 1,923,115,062 1,073,742,135 18,151,512 6,554,953, Decrease - 252,162, ,869,523 40,356, ,388, Ending balance 22,870,303,808 9,651,597,981 6,516,878, ,168,715 39,307,948,655 III. Net book value 1. Beginning balance 28,185,090,878 8,094,301,901 3,990,131,827-40,269,524, Ending balance 30,233,697,722 6,658,292,573 2,916,389,692 90,757,579 39,899,137,566 In which: - Historical cost of tangible fixed assets completely depreciated which still be used is VND 14,963,860, The residual value of tangible fixed assets have been mortgaged to secure the loans is VND 8,183,648,645. These notes form an integral part of the Financial Statements 22

24 5.9. Intangible fixed assets Items Long-term land-use right Land-use right with a term Accounting software Total I. Historical cost 1. Beginning balance 17,453,845,036 34,687,565, ,200,000 52,262,610, Increase - 8,093,126, ,420,000 8,270,546, Decrease 880,720, ,720, Ending balance 16,573,125,036 42,780,692, ,620,000 59,652,437,203 II. Amortization 1. Beginning balance - 3,904,802, ,200,000 4,026,002, Increase - 1,219,614,370 19,713,332 1,239,327, Decrease Ending balance - 5,124,417, ,913,332 5,265,330,645 III. Net book value 1. Beginning balance 17,453,845,036 30,782,763,008-48,236,608, Ending balance 16,573,125,036 37,656,274, ,706,668 54,387,106,558 In which: - Historical cost of intangible fixed assets completely amortized which still be used is VND 121,200, The residual value of intangible fixed assets have been mortgaged to secure the loans is VND 16,434,256, Construction-in-progress Details are as follows: Ending balance Beginning balance - Condominium 27, street No.9, Thu Duc district (1) 1,624,353,483 1,624,353,483 - Repairing No.746 Kha Van Can street 2,503,092, ,000,000 - Others 234,929,636 12,523,923,003 Total 4,362,375,796 14,448,276,486 (1) Those constructions are in the stage of designing, surveying and they have not yet been constructed and supplemented construction costs. These notes form an integral part of the Financial Statements 23

25 5.11. Investment properties Items Land-use right with a term Buildings and structures Total I. Historical cost 1. Beginning balance 10,877,849,339 33,668,996,700 44,546,846, Increase Decrease 10,877,849,339 1,060,335,214 11,938,184, Ending balance II. Depreciation - 32,608,661,486 32,608,661, Beginning balance 978,578,427 4,948,232,567 5,926,810, Increase 46,680,490 1,368,752,392 1,415,432, Decrease 1,025,258, ,692,208 1,521,951, Ending balance III. Net book value - 5,820,292,751 5,820,292, Beginning balance 9,899,270,912 28,720,764,133 38,620,035, Ending balance - 26,788,368,735 26,788,368,735 In which: - Historical cost of investment properties completely depreciated which still be used is VND 976,409, The residual value of investment properties have been mortgaged to secure the loans is VND Long-term financial investments Code Items Ending balance Beginning balance Investment in subsidiaries 68,490,722, Other long-term investment 24,341,227, Provisions for long-term investments (4,032,736,744) ( ) Total ,867,189, Investment in subsidiaries Details are as follows: Ending balance Beginning balance - Song Duc Trading Service Co., Ltd. (occupied 100% 38,100,000,000 38,100,000,000 of capital) (1) (*) - Ba Muoi Thang Tu Co., Ltd. (occupied 100% of 15,000,000,000 15,000,000,000 capital) (2) - TMC Petroleum Co., Ltd. (occupied 100% of 10,000,000,000 10,000,000,000 capital) (3) (*) - Bao Duy Trung Trading Petroleum Co., Ltd. (occupied 100% of capital) (4) (*) 2,960,722,600 2,960,722,600 - Thanh Thanh Dat Restaurant Weddings Conferences 2,430,000,000 2,430,000,000 Co., Ltd. (occupied 83.33% of capital) (5) Total 68,490,722,600 68,490,722,600 These notes form an integral part of the Financial Statements 24

26 (1) Being operated in accordance with the Business Registration Certificate No dated 22 nd December 2008 and the fourth amendment dated 08 th February Registered charter capital is VND 36,000,000,000 (charter capital has been contributed fully). (2) Being operated in accordance with the Business Registration Certificate No dated 12 th April Registered charter capital is VND 15,000,000,000 (charter capital has been contributed fully). (3) Being operated in accordance with the Business Registration Certificate No dated 09 th February Registered charter capital is VND 10,000,000,000 (charter capital has been contributed fully). (4) Being operated in accordance with the Business Registration Certificate No dated 30 th May Registered charter capital is VND 5,000,000,000 (charter capital has not been contributed fully, the capital contributed of investor is VND 3,545,194,600; the differences between the investment value and the investor's contributed capital with the amount of VND ( ) is the negative goodwill). (5) Being operated in accordance with the Business Registration Certificate No dated 20 th May Registered charter capital is VND 3,000,000,000 (charter capital has been contributed fully). (*) According to the Resolution No. 32/NQ-HQT dated 05 th November 2014 of the Board of Management, the Board of Management decided the plan of 2015, the dissolved organizational structure of Song Duc Trading Service Co., Ltd., Bao Duy Trung Trading Petroleum Co., Ltd., TMC Petroleum Co., Ltd. After dissolution, those companies will continue to operate in the form of branches of Thu Duc Trading and Import Export JSC Other long-term investment Details are as follows: Ending balance Beginning balance - Long-term investment (1) 23,529,601,450 23,529,601,450 - Other long-term investment (2) 811,626, ,952,065 Total 24,341,227,995 24,378,553,515 These notes form an integral part of the Financial Statements 25

27 (1) Details are as follows: No. 1 2 Stocks Hau Giang Materials Joint Stock Company Real Estate 9 Joint Stock Company Number of Ending balance Value Beginning balance Number of Value 743,750 4,905,000, ,750 4,905,000, ,000 3,990,000, ,000 3,990,000,000 3 Viet Thang Textile Corporation 67, ,500,000 67, ,500, Dong A Textile Joint Stock Company Vinh Long Import Export Joint Stock Company 50,00 897,500,000 50,00 897,500,000 64, ,000,000 64, ,000, Southern Commercial Joint Stock Bank Phong Phu Home Textile Joint Stock Company Phong Phu Fabric Joint Stock Company Bien Hoa Steel Joint Stock Company PETEC Trading & Investment Corporation Vietnam Steel Joint Stock Company PV OIL Saigon Joint Stock Company Joint Stock Commercial Bank for Investment and Development of Vietnam 58,220 1,975,220,000 58,220 1,975,220,000 30, ,000,000 30, ,000,000 30, ,000,000 30, ,000,000 4, ,833,450 4, ,833, ,351 4,186,371, ,351 4,186,371, ,000 2,020,000, ,000 2,020,000, ,000 3,500,000, ,000 3,500,000,000 4,442 82,177,000 4,442 82,177,000 Total 23,529,601,450 23,529,601,450 (2) Details are as follows: Ending balance Beginning balance - Business cooperation with Ho Chi Minh city Union of commercial Cooperative (SaiGon Co.op) (*) 721,626, ,952,065 - Contributing capital to Ba Thang Hai Trading Service Co., Ltd. (contribution rate of 20%) 90,000,000 90,000,000 Total 811,626, ,952,065 (1) Business cooperation in accordance with Business cooperation contract No. 32/HHTKD dated 08 th February 2002 singed with Ho Chi Minh city Union of commercial Cooperative; Duration of operation: 30 years; These notes form an integral part of the Financial Statements 26

28 Form of business cooperation: jointly controlled joint-venture assets (do not establish a new legal entity); The Company's contributed asset is the right to lease land and construction site at No. 191, Quang Trung street, Hiep Phu ward, district 9, Ho Chi Minh city; Ending balance of period which is presented at Long-term investment item with amount of VND 721,626,545 is the residual value of fixed assets on the Company's land and is contributed to operate this joint-venture activities; Ho Chi Minh city Union of commercial Cooperative has full right to manage this business activities; Division ratio of result: the Company is received the fixed monthly benefit before corporate income tax (the received benefit for the year 2014 is VND 2,221,229,997 (included VAT 10%)) Provisions for long-term investments Details are as follows: Ending balance Beginning balance Thanh Thanh Dat Restaurant Weddings Conferences Co., Ltd. 537,053, ,638,129 Bien Hoa Steel Joint Stock Company 98,583,450 78,458,450 PETEC Trading & Investment Corporation 3,397,100,041 - Total 4,032,736,744 1,002,096, Short-term loans and liabilities Code Items Ending balance Beginning balance Bank loan 24,908,430,000 39,000,000, Individual loan 10,229,484,014 13,616,881,759 Total 35,137,914,014 52,616,881, Bank loan Details are as follows: Ending balance Beginning balance - Vietnam Joint Stock Commercial Bank for Industry & Trade (VietinBank) Dong Saigon branch (1) 10,000,000,000 5,000,000,000 - Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) Dong Saigon 10,000,000,000 - branch (2) - Viet Capital Joint Stock Bank Saigon branch (3) 4,908,430, HSBC Bank (Vietnam) Ltd. - 10,000,000,000 - Vietnam Joint Stock Commercial Bank for Industry & Trade Branch No.14-14,000,000,000 - Military Commercial Joint Stock Bank - 10,000,000,000 Total 24,908,430,000 39,000,000,000 These notes form an integral part of the Financial Statements 27

29 (1) (2) (3) This item is the loan according to Credit Contract No. 06/2014-HTDHM/NHT946-TIMEXCO dated 17 th June 2014; Loan limit: VND 80,000,000,000 (this limit included the loan balance of Credit Contract No A/HTDHM dated 18 th June 2013); Purpose: supplementing working capital; Duration: be stated on the debentures but not exceeding 02 months for the petroleum field and 03 months for other products; Interest rate: be stated on the debentures. The residual value of tangible fixed assets have been mortgaged to secure the loans of this contract is VND 8,183,648,645. This item is the loan according to Loan Contract No. 01/2011/ dated 27 th April 2011, Appendix Contract No. 01/2011/ PL4 dated 24 th June 2013; Loan limit: VND 30,000,000,000; Purpose: supplementing working capital; Duration: be stated on each debentures; Interest rate: be stated on each debentures. The residual value of tangible fixed assets have been mortgaged to secure the loans of this contract is VND 9,185,878,928. This item is the loan according to Credit Contract No. 97/96/00314/02.HTDHM on August 2014; Loan limit: VND 20,000,000,000; Purpose: supplementing working capital; Duration: be stated on each debentures; Interest rate: be stated on each debentures. The residual value of tangible fixed assets have been mortgaged to secure the loans of this contract is VND 7,248,378, Individual loan This item is the loan of the Company's employees, in the form of unsecured loans Trade payables No. Suppliers Ending balance Beginning balance 1. Third paries 6,644,525,832 4,706,783, Related parties (refer to Notes No. 7.1) 23,729,024,236 49,797,340,378 Total 30,373,550,068 54,504,123,912 These notes form an integral part of the Financial Statements 28

30 5.15. Advances from customers No. Customers Ending balance Beginning balance 1. Third paries 409,249,468 11,165,707, Related parties (refer to Notes No. 7.1) 5,497,567,282 3,508,503,683 Total 5,906,816,750 14,674,211, Taxes and Statutory obligations Details are as follows: Ending balance Beginning balance - Value added tax (VAT) of domestic goods 5,614, Corporate income tax (CIT) 654,301, ,706,001 - Personal income tax (PIT) 117,947,930 8,810,860 - Others 820,036,200 - Total 1,597,900, ,516, Other short-term payables Code Items Ending balance Beginning balance Trade union fees - 12,579, Social, Health, Unemployment Insurance - 19,205, Short-term mortgage and deposits 2,449,238,121 1,676,421, Other payables 2,374,094,897 1,329,514,465 Total 4,823,333,018 3,037,720, Short-term mortgage and deposits This item is the deposit for rent the infrastructure on land Other payables Details are as follows: Ending balance Beginning balance - Ba Muoi Thang Tu Co., Ltd. (1) 1,500,000, Song Duc Trading Service Co., Ltd. (1) 490,000, ,000,000 - Payable profit from venture activities 281,510, ,501,265 - Other payables 102,584, ,013,200 Total 2,374,094,897 1,329,514,465 (1) This item is the payables to subsidiaries on supporting business capital to the Company. These notes form an integral part of the Financial Statements 29

31 5.18. Other long-term payables Details are as follows: Ending balance Beginning balance - Ba Muoi Thang Tu Co., Ltd. (1) 10,000,000,000 10,000,000,000 - Mr. Doan Vinh Nam (2) 700,000, Mrs. Nguyen Thi Nghiep (3) 71,349,486 71,349,486 Total 10,771,349,486 10,071,349,486 (1) This item is the long-term deposit to rent the infrastructure on land. (2) This item is the joint venture capital according to the Contract No. 262/HKT dated 22 nd October 2014, on capital venture to operate Tang Nhon Phu petroleum station in form of jointly controlled joint-venture assets. Profit after CIT from operation is divided as follows 50% of Thu Duc Trading and Import Export JSC and 50% of Mr. Doan Vinh Nam. (3) This item is the joint venture capital according to the Contract No. 17/H-CT dated 10 th July 2000, on capital venture to operate Long Binh petroleum station in form of jointly controlled joint-venture assets. Profit after CIT from operation is divided as follows 71.5% of Thu Duc Trading and Import Export JSC and 28.5% of Mrs. Nguyen Thi Nghiep Unearned revenue This item is the deposit to rent the infrastructure on land which is paid advance for many years The movement of the owner s capital Details are referred to the Appendix No. 01. (*) Details of owner s equity ITEMS Ending balance Beginning balance Common equity Proportion Common equity Proportion - State equity - 0% - 0% - Others 124,000,000, % 124,000,000, % Total 124,000,000, % 124,000,000, % (*) Stocks Ending balance Beginning balance - Number of stocks being registered to issue 12,400,000 12,400,000 - Number of stocks already issued and 12,400,000 12,400,000 contributed capital fully + Common stocks 12,400,000 12,400,000 - Number of buy-back stocks Common stocks Number of outstanding stocks 12,400,000 12,400,000 + Common stocks 12,400,000 12,400,000 - Nominal value of outstanding stocks (VND/stock) 10,000 10,000 These notes form an integral part of the Financial Statements 30

32 5.21. Goods held under trust or for processing This item is the sold petrol, oil but customers have not yet received and being held under trust in the Company' warehouse. 6. ADDITIONAL INFORMATION FOR ITEMS SHOWN IN THE INCOME STATEMENTS (Currency: VND) 6.1. Revenues from sale of goods and rendering of services Details are as follows: Current year Previous year - Selling petrol, oil 1,139,634,125,126 1,164,955,579,805 - Selling motorcycles 112,465,316, ,493,953,562 - Selling construction materials 51,298,903,377 30,702,176,361 - Renting the infrastructure on land 11,519,939,024 15,098,606,616 Total 1,314,918,284,302 1,320,250,316, Cost of goods sold Details are as follows: Current year Previous year - Selling petrol, oil 1,104,920,887,517 1,134,025,098,845 - Selling motorcycles 103,297,707, ,733,935,711 - Selling construction materials 49,868,605,564 30,626,503,673 - Renting the infrastructure on land 3,032,601,709 4,844,993,402 Total 1,261,119,802,043 1,271,230,531, Income from financial activities Details are as follows: Current year Previous year - Interest on bank deposits and loans 63,294, ,014,120 - Divided dividends and profits (*) 13,061,263,530 9,155,215,097 - Others 2,376,392,747 2,010,823,706 Total 15,500,951,275 11,266,052,923 (*) In which, dividends received in year from subsidiaries are as follows: - TMC Petroleum Co., Ltd. 7,716,584,309 - Ba Muoi Thang Tu Co., Ltd. 2,498,496,839 - Song Duc Trading Service Co., Ltd. 1,102,936,832 Total 13,061,263,530 These notes form an integral part of the Financial Statements 31

33 6.4. Expenses from financial activities Details are as follows: Current year Previous year - Loan interest 2,072,169,792 6,177,417,165 - Loss due to liquidation of short-term and long-term investments - Provisions for short-term and long-term investments - Reversal of provisions for short-term and long-term investments 346,291,157 1,193,680,716 4,041,685, ,065,629 (680,597,978) (785,135,391) - Others 72,975, ,136,807 Total 5,852,523,432 8,113,164, Selling expenses Details are as follows: Current year Previous year - Wage and salary 17,172,514,662 13,899,157,812 - Tools, equipments 3,214,174,772 3,698,492,571 - Depreciation of fixed assets 5,821,676,236 6,013,661,498 - Outsourcing expenses 6,036,740,677 3,085,267,415 - Others 648,509, ,603,073 Total 32,893,616,078 27,181,182, General & administration expenses Details are as follows: Current year Previous year - Wage and salary 9,904,429,057 4,194,327,695 - Office equipments 900,569, ,118,225 - Depreciation of fixed assets 640,360,672 55,515,980 - Taxes, fees, charges 3,090,535,889 1,110,173,089 - Outsourcing expenses 4,535,225,923 3,891,305,286 - Others 686,191, ,384,550 Total 19,757,312,143 10,922,824, Other income Details are as follows: Current year Previous year - Liquidation sale of fixed assets 21,462,251,819 1,455,454,545 - Others 4,027,528,002 1,280,756,155 Total 25,489,779,821 2,736,210,700 These notes form an integral part of the Financial Statements 32

34 6.8. Other expenses Details are as follows: Current year Previous year - Expenses related to liquidation of fixed assets 11,590,787,719 1,333,911,785 - Others 1,344,149 18,200,280 Total 11,592,131,868 1,352,112, Current Corporate income tax (CIT) expenses Assignment Items activities of real estate Pre-tax accounting profit Adjustments make to increase taxed income Adjustments make to decrease taxed income (1) (2) (3) Other business activities Total 9,665,280,283 18,397,057,142 24,693,629, ,519,087, (13,061,263,530) - Received dividends and profits - - (13,061,263,530) Total taxable income (4) = (1) + (2) - (3) 9,665,280,283 4,486,173,412 14,151,453,695 Tax rate (5) 22% 22% Current Corporate income tax expenses (6) = (4) x (5) 2,126,361, ,958,813 3,113,320, Gain on stock Gain on stock Current year Previous year - Accounting profit after Corporate income tax 21,580,309,359 13,741,105,071 - Increase and decrease adjustments of accounting profit to determine profit or loss is allocated for shareholders holding common stock: (187,614,295) (723,243,809) + Increase adjustments Decrease adjustments (*) (397,583,218) (723,243,809) - Profit or loss is allocated for shareholders holding common stock 21,182,726,141 13,017,861,262 - Average outstanding common stock during period 12,400,000 12,400,000 - Gain on stock (VND/stock) 1,708 1,050 (*) Decrease adjustments are profit after corporate income tax which must pay to joint-venture parties of joint-venture activities in form of jointly controlled joint-venture assets. These notes form an integral part of the Financial Statements 33

35 6.11. Expenses from operating activities by nature Details are as follows: Current year Previous year - Raw materials 4,114,744,351 3,724,003,258 - Wage and salary 27,076,943,719 18,680,715,029 - Depreciation of fixed assets 6,462,046,908 5,664,065,607 - Outsourcing expenses 13,662,492,489 8,974,543,374 - Others 1,334,700,754 1,060,679,926 Total 52,650,928,221 38,104,007, OTHER INFORMATION 7.1 Transactions were done with related parties No. Objects Relationship Transactions during period 1 Ba Muoi Thang Tu Co., Ltd. 2 Thanh Thanh Dat Restaurant Weddings Conferences Co., Ltd. Subsidiary of Thu Duc Trading and Import Export JSC Subsidiary of Thu Duc Trading and Import Export JSC - The Company recorded revenues from sale of goods and rendering of services: VND 1,939,714,518; - The Company recorded financial income from divided profit: VND 2,498,496,839; - Balance of other receivables: VND 507,271,811; - Balance of other payables: VND 11,500,000, The Company recorded revenues from sale of goods and rendering of services: VND 826,636, TMC Petroleum Co., Ltd. Subsidiary of Thu Duc Trading and Import Export JSC - The Company recorded revenues from sale of goods and rendering of services: VND 92,739,017,334; - The Company recorded value of purchasing goods and services: VND 65,569,850,606; - The Company recorded financial income from divided profit: VND 7,716,584,309; - Balance of trade receivables: VND 10,174,399,833; - Balance of trade payables: VND 13,032,179,812; - Balance of other receivables: VND 2,463,921,731. These notes form an integral part of the Financial Statements 34

36 4 Song Duc Trading Service Co., Ltd. 5 Bao Duy Trung Trading Petroleum Co., Ltd. 6 Petro Vietnam Oil Corporation PV Oil Saigon Joint Stock Company (PVOIL) 7 PETEC Trading & Investment Corporation 8 Saigon Petro Co., Ltd. (SG PETRO) Subsidiary of Thu Duc Trading and Import Export JSC Subsidiary of Thu Duc Trading and Import Export JSC PVOIL contributed capital to Thu Duc Trading and Import Export JSC (occupied 33.99% of the contributed capital of Thu Duc Trading and Import Export JSC) PETEC contributed capital to Thu Duc Trading and Import Export JSC (occupied 16.86% of the contributed capital of Thu Duc Trading and Import Export JSC) SG PETRO contributed capital to Thu Duc Trading and Import Export JSC (occupied 14.90% of the contributed capital of Thu Duc Trading and Import Export JSC) - The Company recorded revenues from sale of goods and rendering of services: VND 82,286,296,720; - The Company recorded value of purchasing goods and services: VND 0; - The Company recorded financial income from loans: VND 79,166,666; - The Company recorded financial income from divided profit: VND 1,102,936,832; - Balance of advances from customers: VND 5,497,567,282; - Balance of other receivables: VND 251,147,379; - Balance of other payables: VND 490,000, The Company recorded payment on behalf: VND 6,298, Balance of other payables: VND 12,299, The Company recorded value of purchasing goods and services: VND 1,015,356,144,794; - The Company recorded financial income from divided dividends: VND 122,500,000; - Balance of trade payables: VND 10,553,708, Do not arise. - Do not arise. These notes form an integral part of the Financial Statements 35

37 9 Ba Thang Hai Co., Ltd. Thu Duc Trading and Import Export JSC contributed capital to Ba Thang Hai Co., Ltd. (occupied 20% of the contributed capital of Ba Thang Hai Co., Ltd.) 10 Business cooperation with Ho Chi Minh city Union of commercial Cooperative (Saigon Co.op) 11 Real Estate 9 Joint Stock Company 12 SMC Trading Investment Joint Stock Company Saigon Co.op cooperated with Thu Duc Trading and Import Export JSC in form of jointly controlled jointventure assets Thu Duc Trading and Import Export JSC owns 360,000 shares of Real Estate 9 Thu Duc Trading and Import Export JSC owns 80,000 shares of SMC - The Company recorded revenues from sale of goods and rendering of services: VND 320,547,993; - The Company recorded financial income from divided dividends: VND 14,400, The Company recorded revenues from sale of goods and rendering of services: VND 42,419,671; - The Company recorded financial income from joint-venture activities: VND 2,019,299,997; - Balance of trade receivables: VND 0. - The Company recorded financial income from divided dividends: VND 54,000,000; - Balance of trade payables: VND 143,136, The Company recorded value of purchasing goods and services: VND 7,119,608,900; - The Company recorded financial income from divided dividends: VND 60,000,000; - Balance of trade payables: VND Income of the Company s key members In 2014: Wages Bonus Others Total - Mr. Ma Duc Tu 582,163,000 12,800, ,888, ,851,500 - Mr. Nguyen Cao Khai 58,992,000 5,000,000 1,448,000 65,440,000 - Mr. Pham Ngoc Minh 457,835,000 6,995,000 34,412, ,242,000 - Mr. Nguyen Thanh Binh 447,448,000 6,995,000 29,230, ,673,000 - Mr. Vien Thien Khanh 272,057,000 2,650,000 19,739, ,446,500 Total 1,818,495,000 34,440, ,718,000 2,047,653,000 In 2013: Wages Bonus Others Total - Mr. Ma Duc Tu 468,377,000 3,051,000 12,354, ,782,000 - Mr. Pham Ngoc Minh 342,227,000 6,028,000 14,036, ,291,000 - Mr. Nguyen Thanh Binh 357,639,800 3,109,000 8,580, ,329,060 - Mr. Vien Thien Khanh 228,831,000 1,595,000 21,723, ,149,000 Total 1,397,074,800 13,783,000 56,693,260 1,467,551,060 These notes form an integral part of the Financial Statements 36

38 7.3 Financial instruments Financial assets and financial liabilities Financial asset Ending balance Book value Beginning balance Ending balance Fair value Beginning balance Cash and cash equivalent 10,186,496,434 17,104,471,750 10,186,496,434 17,104,471,750 Financial investment 5,217,342,238 6,893,066,983 5,375,500,000 6,627,691,800 Trade receivables 16,890,965,681 10,448,386,585 16,890,965,681 10,448,386,585 Other receivables 3,592,063,723 1,564,998,059 3,592,063,723 1,564,998,059 Total 35,886,868,076 36,010,923,377 36,045,025,838 35,745,548,194 Financial liabilities Ending balance Book value Beginning balance Ending balance Fair value Beginning balance Loans and liabilities 35,137,914,014 52,616,881,759 35,137,914,014 52,616,881,759 Trade payables 30,373,550,068 54,504,123,912 30,373,550,068 54,504,123,912 Other payables 14,894,682,504 13,109,070,283 14,894,682,504 13,109,070,283 Total 80,406,146, ,230,075,954 80,406,146, ,230,075,954 Fair value of financial assets and financial liabilities are stated at the value of financial instruments which can be converted in a current transaction between the parties that have fully understand and wish to have transaction. The Company use the following method and assumption to estimate fair value: Fair value of cash on hand, short-term cash in banks, trade receivables, trade payables and other short-term liabilities equivalent to book value of these items due to they have short-term. Fair value of receivables and loans with fixed or changed interest rate are evaluated based on information such as interest rate, risks, ability to repay and risk-nature related to liabilities. Base on this evaluation, the Company estimates provision for the unable item to withdraw Purpose and policy of financial risk management Elements of financial risk The Company subject to the following risk when using financial instruments: Market risk Credit risk Liquidity risk The Board of Directors is general responsible for setting and supervising the principles of financial risk management. The Board of Directors set up the policies in order to detect and analyze the risks, set up risk control measures and appropriate risk limits, risk supervision and the implementation of risk limits. Risk management system and policy are reviewed periodically to reflect changes of market condition and the Company's operation. These notes form an integral part of the Financial Statements 37

39 Market risk Market risk is the risk which fair value or future cash flows of financial instruments will fluctuates according to changes of market prices. Market risk includes three types: foreign currency risk, interest rate risk and other price risk (price of goods). The below assessments related to the Company's financial position as at 31 st December 2013 on the basis of value of net liabilities. The changing level of interest rates, stock prices, prices of goods used for sensitivity analysis is based on the assumption assess the possible occur within the next one year with the observed conditions of the market at the present time. Interest rate risk Interest rate risk is the risk which fair value or future cash flows of financial instruments will fluctuates according to changes of market interest. The Company's interest rate risk is mainly related to short-term deposits. The Company manages interest rate risk by analyzing the market condition to get the best interest rates and still be within the limit of risk management. The Board of Directors evaluate the effects of interest rate fluctuation to the Company's profit after tax and owner s equity is not significant Credit risk Credit risk is the risk which a party to the contract has not been able to perform obligations lead to the financial losses for the Company. The Company has credit risks from business operations (mainly to trade receivables) and financial activities (cash in banks, loans and other financial instruments). Trade receivables To manage trade receivables, the Company's the Board of Management has issued the sale regulation with strict regulations on subjects, sale norms, debt limit and debt duration specifically. And the Board of Management organizes the monthly meetings to review the compliance with this sale regulation. Besides, accountants regularly monitor trade receivables to urge withdrawal. Based on this, risk related to trade receivables is low. Cash in banks Most of the Company's cash in banks are deposited in the large banks with prestige in Vietnam. The Company realized concentration level of credit risk for cash in banks is low Liquidity risk Liquidity risk is the risk that the Company have difficulties when implementing financial obligations due to lack of money. The Board of Directors are highest responsible for liquidity risk management. The Company's liquidity risk mainly arises from he financial assets and financial liabilities have differences of maturity time. The Company manages liquidity risk by maintaining cash and cash equivalents in accordance with loans with the level of satisfying operations that the Board of Directors accepted in order to reduce effect of fluctuations in cash flows. These notes form an integral part of the Financial Statements 38

40 The payment time of financial liabilities based on the expected payments in accordance with contract which has not be discounted yet as follows: Ending balance Less than 1 year Over 1 year to 5 years Total Loans and liabilities 35,137,914,014-35,137,914,014 Trade payables 30,373,550,068-30,373,550,068 Other payables 4,823,333,018 10,071,349,486 14,894,682,504 Total 70,334,797,100 10,071,349,486 80,406,146,586 Beginning balance Loans and liabilities 52,616,881,759-52,616,881,759 Trade payables 54,504,123,912-54,504,123,912 Other payables 3,037,720,797 10,071,349,486 13,109,070,283 Total 110,158,726,468 10,071,349, ,230,075,954 The Company thinks that the risk concentration level for the repayment is low. The Company has ability to pay due debts from cash flow of business operations and proceeds from the maturity financial assets. 7.4 Segment Reporting Segment reporting is mainly business field due to the Company's business activities is organized and managed according to the nature of products and services Business field The Company's business field is mainly as follows: - Revenues from sale of petrol and oil; - Revenues from sale of construction materials; - Revenues from sale of motorcycles; - For rent the infrastructure on land and others. Business result information of the Company's business field is as follows: These notes form an integral part of the Financial Statements 39

41 In 2014 Items Revenues from sale of goods and rendering of services Cost of goods sold Gross profit from sale of goods and rendering of services Gross rate profit Petrol and oil Construction materials Motorcycles Infrastructure for rent Total 1,139,634,125,126 51,298,903, ,465,316,775 11,519,939,024 1,314,918,284,302 1,104,920,887,517 49,868,605, ,297,707,253 3,032,601,709 1,261,119,802,043 34,713,237,609 1,430,297,813 9,167,609,522 8,487,337,315 63,463,762, % 2.79% 8.15% 73.67% 4.09% In 2013 Items Revenues from sale of goods and rendering of services Cost of goods sold Gross profit from sale of goods and rendering of services Gross rate profit Petrol and oil Construction materials Motorcycles Infrastructure for rent Total 1,164,955,579,805 30,702,176, ,493,953,562 15,098,606,616 1,320,250,316,344 1,134,025,098,845 30,626,503, ,733,935,711 4,844,993,402 1,271,230,531,631 30,930,480,960 75,672,688 7,760,017,851 10,253,613,214 49,019,784, % 0.25% 7.09% 67.91% 3.71% Geography Whole activities of the Company take place only in the territory of Vietnam. 7.6 Subsequent events In the opinion of the Board of Management, the Company s business results expressed in this report for the fiscal year ended 31 st December 2014 would not be seriously affected by any important items, transactions, or any extraordinary events happened to the date of this report, which need any adjustments to the figures or disclosures in the financial statements. These notes form an integral part of the Financial Statements 40

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43 For the fiscal year ended 31st December 2014 APPENDIX NO. 01: THE MOVEMENT OF THE OWNER S CAPITAL Items Owners invested equity Surplus of share capital Development and investment funds Financial reserve funds Undistributed earnings Total A Beginning balance in previous year Increase in previous year Profit increase Supplement from profit Decrease in previous year Appropriation of Development and investment funds - Appropriation of Financial reserve funds Appropriation of Bonus and welfare funds Dividing the remaining dividends Wages and bonus of the Board of Management and the Supervisory Board - Profit-sharing for joint ventures (*) Other decrease Ending balance in previous year, Beginning balance in current year Increase in current year Profit increase Supplement from profit Decrease in current year Appropriation of Development and investment funds - Appropriation of Financial reserve funds Appropriation of Bonus and welfare funds These notes from an integral part of the Financial Statements 42

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