thanh cong textile garment investment …. bctc...after 01 january 2015. circular 200 supersedes the...

THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY

(Incorporated in the Socialist Republic of Vietnam)

AUDITED SEPARATE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2015

March 2016


36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District

Ho Chi Minh City, S.R. Viet Nam

TABLE OF CONTENTS

CONTENTS PAGE(S)

STATEMENT OF THE BOARD OF DIRECTORS 1

INDEPENDENT AUDITORS’ REPORT 2

SEPARATE BALANCE SHEET 3 - 5

SEPARATE INCOME STATEMENT 6

SEPARATE CASH FLOW STATEMENT 7

NOTES TO THE SEPARATE FINANCIAL STATEMENTS 8 - 40


36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Separate Financial Statements

Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015

The notes set out on pages 8 to 40 are an integral part of these separate financial statements

3

SEPARATE BALANCE SHEET

As at 31 December 2015

FORM B 01-DN

Unit: VND

ASSETS Codes Notes 31/12/2015 31/12/2014

A. CURRENT ASSETS 100 1,185,530,999,909 976,609,750,273

I. Cash and cash equivalents 110 5 77,587,361,115 132,600,437,262

1. Cash 111 32,587,361,115 91,600,437,262

2. Cash equivalents 112 45,000,000,000 41,000,000,000

II. Short-term receivables 130 258,729,435,684 186,813,872,045

1. Short-term trade receivables 131 6 155,301,605,697 134,019,263,387

2. Short-term advances to suppliers 132 38,703,582,088 40,176,757,228

3. Short-term loan receivables 135 7 1,850,301,999 1,850,301,999

4. Other short-term receivables 136 8 67,289,871,434 17,445,801,397

5. Provision for short-term doubtful debts 137 (4,415,925,534) (6,678,251,966)

III. Inventories 140 9 757,675,890,043 623,301,474,910

1. Inventories 141 763,632,715,906 645,063,444,357

2. Provision for devaluation of inventories 149 (5,956,825,863) (21,761,969,447)

IV. Other short-term assets 150 91,538,313,067 33,893,966,056

1. Short-term prepayments 151 12,798,633,303 6,145,585,106

2. Value added tax deductibles 152 78,739,679,764 27,748,380,950




The notes set out on pages 8 to 40 are an integral part of these separate financial statements

4

SEPARATE BALANCE SHEET (Continued)

As at 31 December 2015

FORM B 01-DN

Unit: VND

ASSETS Codes Notes 31/12/2015 31/12/2014

B. NON-CURRENT ASSETS 200 1,091,297,529,227 1,044,814,832,207

I. Fixed assets 220 696,624,674,801 690,717,745,742

1. Tangible fixed assets 221 10 527,998,849,603 547,077,556,244

- Cost 222 1,256,751,606,135 1,260,686,211,189

- Accumulated depreciation 223 (728,752,756,532) (713,608,654,945)

2. Finance lease assets 224 11 96,422,894,301 68,858,326,771

- Cost 225 108,078,746,862 71,341,985,333


3. Intangible assets 227 12 72,202,930,897 74,781,862,727

- Cost 228 89,601,008,700 89,552,133,762

- Accumulated amortisation 229 (17,398,077,803) (14,770,271,035)

II. Investment property 230 13 116,309,421,416 118,479,226,677

- Cost 231 117,556,801,651 121,280,625,580


III. Long-term assets in progress 240 59,080,222,944 20,916,163,961

1. Construction in progress 242 14 59,080,222,944 20,916,163,961

IV. Long-term financial investments 250 15 148,994,307,401 142,494,386,803

1. Investments in subsidiaries 251 75,060,920,155 34,767,513,900

2. Investments in associates 252 113,046,152,000 113,046,152,000

3. Equity investments in other entities 253 5,352,050,000 5,352,050,000

4. Provision for impairment of long-term

financial investments

254 (44,464,814,754) (10,671,329,097)

V. Other long-term assets 260 70,288,902,665 72,207,309,024

1. Long-term prepayments 261 16 68,204,045,236 70,166,610,437

2. Deferred tax assets 262 17 2,084,857,429 2,040,698,587

TOTAL ASSETS (270=100+200) 270 2,276,828,529,136 2,021,424,582,480




NOTES TO THE SEPARATE FINANCIAL STATEMENTS FORM B 09-DN These notes are an integral part of and should be read in conjunction with the accompanying separate financial statements

8

1. GENERAL INFORMATION

Structure of ownership

Thanh Cong Textile Garment Investment Trading Joint Stock Company (the “Company”) was

incorporated in Vietnam as a joint stock company under Business Registration Certificate No.

4103004932 dated 23 June 2006 issued by the Department of Planning and Investment of Ho Chi

Minh City, as amended. According to 15th

amended Business Registration Certificate No.

0301446221 dated 17 November 2015 issued by the Department of Planning and Investment of Ho

Chi Minh City, the owners’ contributed capital is VND 491,999,510,000. The Company’s main

shareholder is E-land Asia Holdings Pte Ltd, incorporated in Singapore.

The number of the Company’s employees as at 31 December 2015 was 4,921 (31 December 2014:

4,577).

Principal activities

The principal activities of the Company are manufacture and garment trading, details are as follows:

Manufacture and trade cotton, fiber, garment products, footwear, machinery and equipment,

spare parts, raw materials, chemicals (excluding strong toxic chemicals), dye, packing for

garment and textile industry;

Trade cold equipment, air-conditioners, radios and televisions, building materials, and transport

vehicles;

Provide services of installation and repairs for machinery and equipment;

Trade road transport and merchandise transport;

Trade real estates, commercial centres;

Lease office buildings, factories, freight yard, machinery and equipment;

Act as a commercial brokerage;

Act as an agent for goods trading and goods consignment;

Invest, build, trade, assemble, repair, prepare overall estimates for civil/industrial construction

works, infrastructure of industrial parks and tourist area;

Short-term accommodation services;

Restaurant and foods services;

Retails of beverage in the specialised shops;

Retails of foods in the specialised shops;

Trade of real estate, land use rights owned or leased; and

Other retails.

Normal production and business cycle

The Company’s normal production and business cycle is carried out for a time period of 12 months or

less.

The Company’s structure

The Company has five subsidiaries:

Thanh Cong Medical Center Joint Stock Company

Thanh Quang Corporation

Thanh Cong - Vinh Long One Member Limited Company

TC Tower Company Limited

TC Eland One Member Limited Company

The Company has four associates:

Thanh Chi Corporation

Thanh Cong Securities Joint Stock Company

Thanh Phuc Investment Construction Corporation

Vung Tau Golf Tourism Joint Stock Company




NOTES TO THE SEPARATE FINANCIAL STATEMENTS (Continued) FORM B 09-DN These notes are an integral part of and should be read in conjunction with the accompanying separate financial statements

9

Disclosure of information comparability in the financial statements

As stated in Note 3, since 01 January 2015, the Company has adopted Circular No. 200/2014/TT-

BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 200”) guiding the

accounting regime for enterprises. This Circular is effective for the financial year beginning on or

after 01 January 2015. Circular 200 supersedes the regulations for accounting regime promulgated

under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and

Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance.

However, the adoption of Circular 200 does not have significant impact on the comparability of the

figures in the Company’s financial statements.

2. ACCOUNTING CONVENTION AND FINANCIAL YEAR

Accounting convention

The accompanying separate financial statements, expressed in Vietnam Dong (“VND”), are prepared

under the historical cost convention and in accordance with Vietnamese Accounting Standards,

accounting regime for enterprises and legal regulations relating to financial reporting.

The accompanying separate financial statements are not intended to present the financial position,

results of operations and cash flows in accordance with accounting principles and practices generally

accepted in countries and jurisdictions other than Vietnam.

The separate financial statements were prepared to present the separate financial position of the

Company as at 31 December 2015, and the related separate statements of income and cash flows for

the year then ended. Consequently, the Company did not consolidate the investments in subsidiaries

and associates in these single financial statements. The accounting policies applied to these

investments of the Company are described in details in Note 4 as below.

Financial year

The Company’s financial year begins on 01 January and ends on 31 December.

3. ADOPTION OF NEW ACCOUNTING GUIDANCE

New guidance on accounting regime for enterprises

On 22 December 2014, the Ministry of Finance issued Circular No. 200/2014/TT-BTC (“Circular

200”) guiding the accounting regime for enterprises. This Circular is effective for financial years

beginning on or after 01 January 2015. Circular 200 supersedes the regulations for accounting regime

promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of

Finance and Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of

Finance. The Board of Directors has adopted Circular 200 in the preparation and presentation of the

financial statements for the year ended 31 December 2015.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies, which have been adopted by the Company in the preparation of

these separate financial statements, are as follows:

Estimates

The preparation of separate financial statements in conformity with Vietnamese Accounting

Standards, accounting regime for enterprises and legal regulations relating to financial reporting

requires the Board of Directors to make estimates and assumptions that affect the reported amounts of

assets, liabilities and disclosures of contingent assets and liabilities at the date of the separate

financial statements and the reported amounts of revenues and expenses during the financial year.

Although these accounting estimates are based on the Board of Directors’ best knowledge, actual

results may differ from those estimates.





10

Financial instruments

Initial recognition

Financial assets: At the date of initial recognition, financial assets are recognised at cost plus

transaction costs that are directly attributable to the acquisition of the financial assets. Financial assets

of the Company comprise cash and cash equivalents, trade and other receivables, investments in

stocks and deposits.

Financial liabilities: At the date of initial recognition financial liabilities are recognised at cost plus

transaction costs that are directly attributable to the issue of the financial liabilities. Financial

liabilities of the Company comprise obligations under finance leases, borrowings, trade and other

payables and accrued expenses.

Subsequent measurement after initial recognition

Currently, there are no requirements for the subsequent measurement of the financial instruments

after initial recognition.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid

investments that are readily convertible to known amounts of cash and which are subject to an

insignificant risk of changes in value.

Financial investments

Loan receivables

Loan receivables are measured at cost less provision for doubtful debts. Provision for doubtful debts

relating to loan receivables is made in accordance with prevailing accounting regulations.

Investments in subsidiaries, associates

Investment in subsidiaries

A subsidiary is an entity over which the Company has control. Control is achieved where the

Company has the power to govern the financial and operating policies of an investee enterprise so as

to obtain benefits from its activities.

Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a

subsidiary nor an interest in joint venture. Significant influence is the power to participate in the

financial and operating policy decisions of the investee but not control or joint control over those

policies.

Interests in subsidiaries and associates are initially recognised at cost. The Company’s share of the

net profit of the investee after acquisition is recognised in the separate income statement. Other

distributions received other than such profit share are deducted from the cost of the investments as

recoverable amounts.

Investments in subsidiaries and associates are carried in the separate balance sheet at cost less

provision for impairment of such investments (if any). Provisions for impairment of investments in

subsidiaries and associates are made in accordance with the prevailing accounting regulations.





11

Equity investments in other entities

Equity investments in other entities represent the Company’s investments in ordinary shares of the

entities over which the Company has no control, joint control, or significant influence.

Equity investments in other entities are carried at cost less provision for impairment. Provision for

impairment is made in accordance with the prevailing accounting regulations.

Receivables

Receivables represent the amounts recoverable from customers or other debtors and are stated at

book value less provision for doubtful debts.

Provision for doubtful debts is made for receivables that are overdue for six months or more, or when

the debtor is in dissolution, in bankruptcy, or is experiencing similar difficulties and so may be

unable to repay the debt.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials

and where applicable, direct labour costs and those overheads that have been incurred in bringing the

inventories to their present location and condition. Cost is calculated using the weighted average

method. Net realisable value represents the estimated selling price less all estimated costs to

completion and costs to be incurred in marketing, selling and distribution.

The evaluation of necessary provision for inventory obsolescence follows current prevailing

accounting regulations which allow provisions to be made for obsolete, damaged, or sub-standard

inventories and for those which have book value higher than net realisable value as at the balance

sheet date.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation. The cost of purchased tangible

fixed assets comprises its purchase price and any directly attributable costs of bringing the assets to

its working condition and location for its intended use. The costs of self-constructed or manufactured

assets are the actual construction or manufacturing cost plus installation and test running costs.

Tangible fixed assets are depreciated using the straight-line method over their estimated useful lives

as follows:

Years

Buildings and structures 10 - 50

Machinery and equipment 7 - 15

Motor vehicles 10

Office equipment 7 - 15

Others 7 - 22

Intangible assets and amortisation

Intangible assets represent land use rights, patents and software. Intangible assets are stated at cost

less accumulated amortisation and are amortised on the straight-line basis over their estimated useful

lives. Definite land use rights are carried at cost and amortised on the straight-line basis over the

duration of the right to use the land from 15-50 years. Indefinite land use rights are carried at cost and

not amortised. Patents and software are amortised on the straight-line basis over their estimate useful

lives from 4-10 years.





12

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the

risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognized as assets of the Company at their fair value at the

inception of the lease or, if lower, at the present value of the minimum lease payments. The

corresponding liability to the lessor is included in the separate balance sheet as a finance lease

obligation. Lease payments are apportioned between finance charges and reduction of the lease

obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged to separate profit or loss, unless they are directly attributable to

qualifying assets, in which case they are capitalized in accordance with the Company’s general policy

on borrowing costs.

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing

company are accounted for as operating leases. Rentals payable under operating leases are charged to

the separate income statement on a straight-line basis over the term of the relevant lease.

Assets held by the Company under finance leases are machinery which depreciated over the period of

10-15 years.

Construction in progress

Properties in the course of construction for production, rental or administrative purposes, or for other

purposes, are carried at cost. Cost includes costs that are necessary to form the assets in accordance

with the Company’s accounting policy. Depreciation of these assets, on the same basis as other

assets, commences when the assets are ready for their intended use.

Investment properties

Investment properties, which are composed of buildings and structures and land use rights held by

the Company to earn rentals or for capital appreciation. Investment properties held to earn rentals are

stated at cost less accumulated depreciation while investment properties held for capital appreciation

are stated at cost less impairment loss. The cost of purchased investment properties comprises its

purchase price and any directly attributable expenditures, such as professional fees for legal services,

property transfer taxes and other related transaction costs. The costs of self-constructed investment

properties are the finally accounted construction or directly attributable costs of the properties. No

depreciation is recorded for investment properties held for capital appreciation.

Buildings and structures are depreciated using the straight-line method over their estimated useful

lives of 50 years. Definite land use rights are amortised using the straight-line method over number

of years in accordance with the terms indicated in each land use right certificate. Land use rights

which are granted for an indefinite term are carried at cost and not amortised.

Long-term prepayments

Long-term prepayments comprise prepaid land rentals at Xuyen A Industrial Zone – Long An

Province, Nhi Xuan Industrial Zone – Hoc Mon District, Ho Chi Minh City and Trang Bang

Industrial Zone – Tay Ninh Province and other prepayments (allocated within 3 years). Prepaid land

rentals are charged to income statement using the straight-line method over the lease term from 45 to

58 years.

Payable provisions

Payable provisions are recognised when the Company has a present obligation as a result of a past

event, and it is probable that the Company will be required to settle that obligation. Provisions are

measured at the Board of Directors’ best estimate of the expenditure required to settle the obligation

as at the balance sheet date.





13

Revenue recognition

Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:

(a) the Company has transferred to the buyer the significant risks and rewards of ownership of the

goods;

(b) the Company retains neither continuing managerial involvement to the degree usually associated

with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably;

(d) it is probable that the economic benefits associated with the transaction will flow to the Company;

and

(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue of a transaction involving the rendering of services is recognised when the outcome of such

transactions can be measured reliably. Where a transaction involving the rendering of services is

attributable to several periods, revenue is recognised in each period by reference to the percentage of

completion of the transaction at the balance sheet date of that period. The outcome of a transaction

can be measured reliably when all four (4) following conditions are satisfied:

(a) the amount of revenue can be measured reliably;

(b) it is probable that the economic benefits associated with the transaction will flow to the Company;

(c) the percentage of completion of the transaction at the balance sheet date can be measured reliably;

and

(d) the costs incurred for the transaction and the costs to complete the transaction can be measured

reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the

applicable interest rate.

Dividend income from investments is recognised when the Company’s right to receive payment has

been established.

Foreign currencies

The Company applies the method of recording foreign exchange differences in accordance with

Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates”.

Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the

transaction date. The balances of monetary items denominated in foreign currencies as at the balance

sheet date are retranslated at the exchange rates on the same date. Exchange differences arising from

the translation of these accounts are recognised in the separate income statement. Unrealised

exchange gains as at the balance sheet date are not treated as part of distributable profit to

shareholders.

Borrowing costs

Borrowing costs are recognised in the income statement in the year when incurred unless they are

capitalised in accordance with Vietnamese Accounting Standard No.16 “Borrowing costs”.

Accordingly, borrowing costs directly attributable to the acquisition, construction or production of

qualifying assets, which are assets that necessarily take a substantial period of time to get ready for

their intended use or sale, are added to the cost of those assets, until such time as the assets are

substantially ready for their intended use or sale. Investment income earned on the temporary

investment of specific borrowings pending their expenditure on qualifying assets is deducted from the

cost of those assets. For specific borrowings for the purpose of construction of fixed assets and

investment properties, borrowing costs are capitalised even when the construction period is under 12

months.





14

Severance allowance payable

The severance allowance for employees is accrued at the end of each reporting period for all

employees having worked at the Company for full 12 months and above. Working time serving as the

basis for calculating severance allowance shall be the total actual working time subtracting the time

when the employees have made unemployment insurance contributions as prescribed by law, and the

working time when severance allowance has been paid to the employees. The allowance made for

each year of service equals to a half of an average monthly salary under the Vietnamese Labour

Code, Social Insurance Code and relevant guiding documents. The average monthly salary used for

calculation of severance allowance shall be adjusted to be the average of the 6 consecutive months

nearest to the date of the financial statements at the end of each reporting period. The increase or

decrease in the accrued amount shall be recorded in the separate income statement.

Tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit

as reported in the separate income statement because it excludes items of income or expense that are

taxable or deductible in other years and it further excludes items that are never taxable or deductible.

Deferred tax is recognised on significant differences between carrying amounts of assets and

liabilities in the separate financial statements and the corresponding tax bases used in the

computation of taxable profit and is accounted for using balance sheet liability method. Deferred tax

liabilities are generally recognised for all temporary differences and deferred tax assets are

recognised to the extent that it is probable that taxable profit will be available against which

deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is

settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates

to items charged or credited directly to equity, in which case the deferred tax is also dealt with in

equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current

tax assets against current tax liabilities and when they relate to income taxes levied by the same

taxation authority and the Company intends to settle its current tax assets and liabilities on a net

basis.

The determination of the current tax payable and deferred tax is based on the current interpretation of

tax regulations. However, these regulations are subject to periodic variation and their ultimate

determination depends on the results of the tax authorities’ examinations.

Other taxes are paid in accordance with the prevailing tax laws in Vietnam.

Appropriation of funds and dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s

separate financial statements in the year in which the dividends are approved by the Company’s

shareholders.

Net profit after tax is available for appropriation to shareholders after approval by the shareholders at

the Annual General Shareholders’ Meeting, and after making appropriation to funds in accordance

with the Company's Charter and Vietnamese regulatory requirements.





15

Treasury shares

Treasury shares are shares issued and bought-back by the Company, but they are not cancelled and

shall be re-issued in the period which complies with law on securities. Treasury shares are hold by

the Company will have no dividend, no right for election or join to share assets when the Company is

dissolved. When distributing dividend for shares, treasury shares hold by the Company shall be

considered as not yet sold.

Value of treasury shares is reflected as prices actually bought-back including buying-back prices and

expenses directly related to buying-back of shares, such as expenses of transaction, information.

5. CASH AND CASH EQUIVALENTS

31/12/2015 31/12/2014

VND VND

Cash on hand 848,014,040 410,586,845

Demand deposits 31,739,347,075 91,189,850,417

Cash equivalents 45,000,000,000 41,000,000,000

77,587,361,115 132,600,437,262

Cash equivalents represent short-term bank deposits with an original maturity of three months. These

deposits earn average interest rate of 5.3% per annum (2014: 1% to 5.5% per annum).

6. SHORT-TERM TRADE RECEIVABLES

31/12/2015 31/12/2014

VND VND

a. Short-term trade receivables

- Eland World Limited 47,517,326,523 22,961,175,289

- ELand Asia Holding Pte.Ltd - Hong Kong Branch 21,935,155,050 -

- Others 85,849,124,124 111,058,088,098

155,301,605,697 134,019,263,387

b. Receivables from related parties

(Note 38)

75,387,930,887 33,053,168,523

75,387,930,887 33,053,168,523

7. SHORT-TERM LOAN RECEIVABLES

Short-term loan receivables represent a loan to third party in 2006. The investment has been fully

provided provision as at 31 December 2015 in according to the Company’s accounting policy.

8. OTHER SHORT-TERM RECEIVABLES

31/12/2015 31/12/2014

VND VND

Advances to employees 4,494,679,969 3,682,749,364

Deposits and mortgages 333,650,000 401,180,000

Receivable for dividends 1,040,950,000 2,602,375,000

Thanh Cong - Vinh Long One Member Company

Limited (*)

60,661,079,302 -

Other receivables 759,512,163 10,759,497,033

67,289,871,434 17,445,801,397





16

(*) Other short-term receivables from Thanh Cong - Vinh Long One Member Company Limited

(“Thanh Cong – Vinh Long”) represent the amount that the Company paid on behalf of Thanh Cong -

Vinh Long relating to the cost for construction of Thanh Cong - Vinh Long’s factory, land rental and

other incurred expenses.

9. INVENTORIES

Cost Provision Cost Provision

VND VND VND VND

Goods in transit 78,146,323,784 - 66,541,684,138 -

Raw materials 219,437,439,276 - 199,589,780,336 -

Tools and supplies 1,875,354,931 - 7,723,197 -

Work in progress 179,277,826,958 - 126,716,300,483 -

Finished goods 262,342,901,666 5,956,825,863 245,498,821,239 21,761,969,447

Merchandise 2,509,678,904 - 2,307,789,225 -

Goods on consignment 20,043,190,387 - 4,401,345,739 -

763,632,715,906 5,956,825,863 645,063,444,357 21,761,969,447

31/12/2015 31/12/2014

Movement of provision for devaluation of inventories during the year as follow:

2015 2014

VND VND

As at 01 January 21,761,969,447 13,304,597,502

Provision for the year - 14,264,840,890

Reversal in the year (15,805,143,584) (5,807,468,945)

As at 31 December 5,956,825,863 21,761,969,447




NOTES TO THE SEPARATE FINANCIAL STATEMENTS (Continued) FORM B 09-DN

These notes are an integral part of and should be read in conjunction with the accompanying separate financial statements

17

10. INCREASES, DECREASES IN TANGIBLE FIXED ASSETS

Buildings Machinery Motor Office

and structures and equipment vehicles equipment Others Total

VND VND VND VND VND VND

COST

As at 01/01/2015 267,713,225,233 847,158,071,855 16,558,166,196 10,432,434,035 118,824,313,870 1,260,686,211,189

- Additions - 3,003,021,371 4,557,962,400 1,059,435,779 2,507,227,727 11,127,647,277 - Transferred from construction in

progress

- 45,868,458,473 - 454,558,497 739,013,332 47,062,030,302

- Transferred from investment property 3,723,823,929 - - - - 3,723,823,929

- Capital contribution to Thanh Cong -

Vinh Long One Member Co., Ltd.

- (25,382,789,228) - - - (25,382,789,228)

- Disposals - (30,561,311,241) (1,366,091,866) (3,759,348,792) (4,778,565,435) (40,465,317,334)

As at 31/12/2015 271,437,049,162 840,085,451,230 19,750,036,730 8,187,079,519 117,291,989,494 1,256,751,606,135

ACCUMULATED DEPRECIATION

As at 01/01/2015 99,439,026,808 510,999,388,831 8,927,446,425 6,839,201,060 87,403,591,821 713,608,654,945

- Charge for the year 5,501,454,892 38,972,489,416 1,612,274,034 665,833,663 6,342,107,460 53,094,159,465

- Transferred from investment

properties

1,744,315,204 - - - - 1,744,315,204

- Disposals - (30,339,350,570) (956,257,519) (3,759,348,792) (4,639,416,201) (39,694,373,082)

As at 31/12/2015 106,684,796,904 519,632,527,677 9,583,462,940 3,745,685,931 89,106,283,080 728,752,756,532

NET BOOK VALUE

As at 31/12/2015 164,752,252,258 320,452,923,553 10,166,573,790 4,441,393,588 28,185,706,414 527,998,849,603

As at 31/12/2014 168,274,198,425 336,158,683,024 7,630,719,771 3,593,232,975 31,420,722,049 547,077,556,244

As noted further in Note 21 and 23, the Company has pledged its buildings and machinery, equipment, which has a carrying value of approximately VND 275

billion as at 31 December 2015 (31 December 2014: VND 264.7 billion), to secure banking facilities granted to the Company.

The cost of the Company’s tangible fixed assets includes VND 354 billion which have been fully depreciated but which are still in use (31 December 2014: VND

380 billion).





18

11. INCREASES, DECREASES IN FINANCE LEASE ASSETS

Machinery,

equipment

VND

COST

As at 01/01/2015 71,341,985,333

Transfer from construction in progress 36,736,761,529

As at 31/12/2015 108,078,746,862


As at 01/01/2015 2,483,658,562

Charge for the year 9,172,193,999

As at 31/12/2015 11,655,852,561

NET BOOK VALUE

As at 31/12/2015 96,422,894,301

As at 31/12/2014 68,858,326,771

12. INCREASES, DECREASES IN INTANGIBLE ASSETS

Land use rights Patents Software Total

VND VND VND VND

COST

As at 01/01/2015 74,334,416,604 3,942,895,847 11,274,821,311 89,552,133,762

Transferred from

construction in progress - - 48,874,938 48,874,938

As at 31/12/2015 74,334,416,604 3,942,895,847 11,323,696,249 89,601,008,700

ACCUMULATED AMORTISATION

As at 01/01/2015 9,334,369,070 2,558,012,227 2,877,889,738 14,770,271,035

Charge for the year 617,618,178 671,121,970 1,339,066,620 2,627,806,768

As at 31/12/2015 9,951,987,248 3,229,134,197 4,216,956,358 17,398,077,803

NET BOOK VALUE

As at 31/12/2015 64,382,429,356 713,761,650 7,106,739,891 72,202,930,897

As at 31/12/2014 65,000,047,534 1,384,883,620 8,396,931,573 74,781,862,727

As noted further in Note 21 and 23, the Company has pledged land use rights with a carrying value of

approximately VND 9.4 billion as at 31 December 2015 (31 December 2014: VND 9.7 billion) to

secure banking facilities granted to the Company.





19

13. INCREASES, DECREASES IN INVESTMENT PROPERTY

Buildings for lease Land use rights Total

VND VND VND

COST

As at 01/01/2015 11,620,896,678 109,659,728,902 121,280,625,580

Transfer to tangible fixed assets (3,723,823,929) - (3,723,823,929)

As at 31/12/2015 7,897,072,749 109,659,728,902 117,556,801,651


As at 01/01/2015 2,801,398,903 - 2,801,398,903

Charge for the year 190,296,536 - 190,296,536

Transfer to tangible fixed assets (1,744,315,204) - (1,744,315,204)

As at 31/12/2015 1,247,380,235 - 1,247,380,235

NET BOOK VALUE

As at 31/12/2015 6,649,692,514 109,659,728,902 116,309,421,416

As at 31/12/2014 8,819,497,775 109,659,728,902 118,479,226,677

As noted further in Note 21 and 23, the Company has pledged investment property with a carrying

value of approximately VND 6.6 billion as at 31 December 2015 (31 December 2014: VND 110

billion) to secure banking facilities granted to the Company.

As at 31 December 2015, the Company’s Board of Directors has not determined fair value of the

investment property due to the intention of holding for a long-term and there is no basis for

determination.

14. CONSTRUCTION IN PROGRESS

2015 2014

VND VND

As at 1 January 20,916,163,961 11,633,469,068

Additions 141,989,429,121 87,933,559,412

Transfer to tangible fixed assets (47,062,030,302) (6,213,902,270)

Transfer to finance lease assets (36,736,761,529) (71,341,985,333)

Transfer to intangible assets (48,874,938) -

Other transfers (19,977,703,369) (1,094,976,916)

As at 31 December 59,080,222,944 20,916,163,961

The total interest expense which had been capitalised into the cost of construction in progress during

the year was VND 1,535,197,469 (2014: VND 1,285,030,254).

As at the balance sheet date, constructions in progress comprise the following major projects:

31/12/2015 31/12/2014

VND VND

Thanh Cong Tower 1 23,881,110,714 12,400,477,320

Purchase of machineries, equipment 34,721,203,139 6,858,859,091

Others 477,909,091 1,656,827,550

59,080,222,944 20,916,163,961





20

15. LONG-TERM FINANCIAL INVESTMENTS

31/12/2015 31/12/2014

31/12/2015 31/12/2014 VND VND

Investments in subsidiaries 75,060,920,155 34,767,513,900

Thanh Cong Medical Center JSC 70.94% 70.94% 14,055,000,000 14,055,000,000

Thanh Quang Corporation (*) 97.50% 97.50% 20,712,513,900 20,712,513,900

Thanh Cong - Vinh Long One Member

Company Limited (**)

100% 100% 37,293,406,255 -

TC Tower Company Limited (***) 85.33% 85.33% - -

TC Eland One Member Company

Limited (****)

100% 100% 3,000,000,000 -

Investments in associates 113,046,152,000 113,046,152,000

Thanh Chi Corporation 47.43% 47.43% 20,709,040,000 20,709,040,000

Thanh Phuc Investment Construction

Corporation

23.79% 23.79% 1,665,000,000 1,665,000,000

Vung Tau Goft Tourism JSC 30% 30% 8,700,000,000 8,700,000,000

Thanh Cong Securities JSC 24.75% 24.75% 81,972,112,000 81,972,112,000

Other long-term investments 5,352,050,000 5,352,050,000

Viet Thang Textile Joint Stock Company 125,000,000 125,000,000

Thang Loi Textile and Garment Company 1,576,000,000 1,576,000,000

Hue Textile Garment Company 318,000,000 318,000,000

SY Vina Joint Stock Company 883,450,000 883,450,000

Vietcombank 2,449,600,000 2,449,600,000

193,459,122,155 153,165,715,900

Provision for long-term investments (44,464,814,754) (10,671,329,097)

Net long-term investments 148,994,307,401 142,494,386,803

Proportion of ownership

interest and voting power

(*) Thanh Quang Corporation (“Thanh Quang”) was established on 25 May 2007 in accordance with

Business Registration Certificate No. 5003000203 issued by the Department of Planning and

Investment of Long An Province. As at the date of this report, Thanh Quang has not started its

business activities.

(**) Thanh Cong - Vinh Long One Member Company Limited (“Thanh Cong - Vinh Long”) was

established in Vietnam under Business Registration Certificate No. 1500998966 dated 06 May 2014

issued by the Department of Planning and Investment of Vinh Long Province. The subsidiary’s

registered capital is VND 129,000,000,000. As at the date of this report, Thanh Cong Textile

Garment Investment Trading Joint Stock Company has contributed an assets, machinery and

equipment to Thanh Cong - Vinh Long with an amount of VND 37, 293,406,255.

(***) TC Tower Company Limited (“TC Tower”) was established in Vietnam under Investment

Certificate No. 411022000794 dated 31 October 2014 issued by People's Committee of Ho Chi Minh

City. The subsidiary’s registered capital is VND 159,150,000,000. As at the date of this report, Thanh

Cong Textile Garment Investment Trading Joint Stock Company has not contributed capital to TC

Tower yet.

(****) TC Eland One Member Company Limited (“TC Eland”) was established in Vietnam under

Enterprise Registration Certificate No. 0313392612 dated 28 August 2015 issued by Development

and Planning Investment Department of Ho Chi Minh City. The subsidiary’s registered capital is

VND 6,450,000,000. As at the date of this report, Thanh Cong Textile Garment Investment Trading

Joint Stock Company has contributed to TC Eland with an amount of VND 3,000,000,000.





21

Movement of provision for long-term investment during the year as follow:

2015 2014

VND VND

As at 01 January 10,671,329,097 11,497,152,110

Provision for the year 37,245,181,635 449,887,495

Reversal in the year (3,451,695,978) (1,275,710,508)

As at 31 December 44,464,814,754 10,671,329,097

16. LONG-TERM PREPAYMENTS

2015 2014

VND VND

As at 01 January 70,166,610,437 77,418,823,053

Additions during the year 2,027,831,436 -

Allocated to expenses during the year (3,990,396,637) (7,252,212,616)

As at 31 December 68,204,045,236 70,166,610,437

Details of long-term prepayments are as follow:

31/12/2015 31/12/2014

VND VND

Land rental expenses 67,497,483,242 68,548,112,642

Others 706,561,994 1,618,497,795

68,204,045,236 70,166,610,437

17. DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets

31/12/2015 31/12/2014

VND VND

- Corporate income tax rates used for determination

of value of deferred tax assets 7.5% 7.5%

- Deferred tax assets related to provisions

and accrued expenses 2,080,338,584 2,051,131,447

- Deferred tax assets related to foreign

exchange difference 27,710,633 955,596

- Amount offset against deferred tax liabilities (23,191,788) (11,388,456)

Deferred tax assets 2,084,857,429 2,040,698,587

Deferred tax liabilities

31/12/2015 31/12/2014

VND VND

- Corporate income tax rates used for determination

of value of deferred tax liabilities 7.5% 7.5%

- Deferred tax liabilities arising from accrued

interest income 23,191,788 11,388,456

- Amount offset against deferred tax assets (23,191,788) (11,388,456)

Deferred tax liabilities - -





22

18. SHORT-TERM TRADE PAYABLES

Amount

Amount able

to be paid off Amount

Amount able

to be paid off

VND VND VND VND

a. Short-term trade payables

- Eland International Fashion (Shanghai) Co., Ltd 31,397,592,759 31,397,592,759 8,139,709,455 8,139,709,455

- Other suppliers 185,607,377,836 185,607,377,836 119,549,777,653 119,549,777,653

217,004,970,595 217,004,970,595 127,689,487,108 127,689,487,108

b. Trade payables to related parties 51,962,910,329 51,962,910,329 12,863,786,739 12,863,786,739

(Note 38)

51,962,910,329 51,962,910,329 12,863,786,739 12,863,786,739

31/12/2015 31/12/2014

19. TAXES AND AMOUNTS PAYABLE TO THE STATE BUDGET

01/01/2015

Payable during

the year

Paid during

the year 31/12/2015

VND VND VND VND

Corporate income tax 2.685.189.298 12.938.675.711 (14.436.838.118) 1.187.026.891

Personal income tax 667.282.503 11.958.973.578 (11.502.781.612) 1.123.474.469

Value added tax - 32.948.692.723 (32.948.692.723) -

Other taxes - 12.981.302.714 (12.981.302.714) -

3.352.471.801 70.827.644.726 (71.869.615.167) 2.310.501.360

20. OTHER CURRENT PAYABLES

31/12/2015 31/12/2014

VND VND

Union fee 1,440,639,835 1,058,912,264

Dividends payable 118,884,570 29,566,537,650

Others 7,425,381,079 1,368,652,561

8,984,905,484 31,994,102,475






23

21. SHORT-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASES

Amount

Amount able to be

paid off Increases Decreases Amount

Amount able to be

paid off


Short-term loans 714,266,533,052 714,266,533,052 2,151,173,845,625 2,012,774,991,755 575,867,679,182 575,867,679,182

- Bank SinoPac – Ho Chi Minh City Branch 63,355,713,726 63,355,713,726 171,801,579,232 127,562,041,507 19,116,176,001 19,116,176,001

- Vietcombank – Ho Chi Minh City Branch 252,142,228,752 252,142,228,752 709,886,501,144 699,771,088,482 242,026,816,090 242,026,816,090

- Standard Charterd Bank - - 136,130,703,956 162,393,771,699 26,263,067,743 26,263,067,743

- BIDV - Hoc Mon Branch 172,937,554,275 172,937,554,275 395,059,854,389 304,232,553,368 82,110,253,254 82,110,253,254

- HSBC Bank (Vietnam) Ltd 69,144,086,302 69,144,086,302 289,695,463,524 279,398,601,859 58,847,224,637 58,847,224,637

- Vietinbank - Ho Chi Minh City Branch 121,285,603,229 121,285,603,229 379,614,691,714 391,176,829,059 132,847,740,574 132,847,740,574

- Vietnam International Bank - FDI Branch 35,401,346,768 35,401,346,768 68,985,051,666 48,240,105,781 14,656,400,883 14,656,400,883

Current portion 62,094,154,467 62,094,154,467 84,058,590,103 92,999,597,352 71,035,161,716 71,035,161,716

- Current portion of long-term loans 32,198,576,119 32,198,576,119 47,353,122,838 67,438,098,719 52,283,552,000 52,283,552,000

- Current portion of long-term obligations under finance

leases

29,895,578,348 29,895,578,348 36,705,467,265 25,561,498,633 18,751,609,716 18,751,609,716

776,360,687,519 776,360,687,519 2,235,232,435,728 2,105,774,589,107 646,902,840,898 646,902,840,898

31/12/2015 In the year 31/12/2014





24

The Company has short-term credit facilities from local banks to finance its working capital

requirements, details are as follow:

Lenders Credit limit Credit term Secured by

Bank SinoPac - Ho Chi Minh City

Branch

USD 3,000,000 1 year Inventories

Vietcombank-

Ho Chi Minh City Branch

VND 450,000,000,000 1 years Fixed assets

- Standard Chartered Bank USD 10,000,000 5 years Letter of Credit from E-

land World Ltd

BIDV - Hoc Mon Branch VND 280,000,000,000 1 year Inventories

HSBC Bank (Vietnam) Ltd USD 5,000,000 1 year Inventories

Vietinbank - Ho Chi Minh City

Branch

VND 200,000,000,000 1 year Inventories

Vietnam International Bank - FDI

Branch

VND 50,000,000,000 1 year Inventories

22. OTHER LONG-TERM PAYABLES

Other long-term payables mainly represent the amount payable to State Treasury for the increase in

value of a number of land lots which were granted to the Company or leased when it was equitized in

2004. In accordance with the asset revaluation report dated 28 September 2005, among other land

lots, there were 5 land lots with the total areas of 36,716 sqm were revalued. The amount will be paid

once the Company completes the transfer of title of the land use rights to the Company’s name.





25

23. LONG-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASES

Amount

Amount able to be

paid off Increases Decreases Amount

Amount able to be

paid off


Long-term loans 182,643,968,828 182,643,968,828 36,211,334,902 46,190,308,917 192,622,942,843 192,622,942,843

- Vietcombank - Ho Chi Minh City Branch 9,757,916,000 9,757,916,000 725,012,000 6,015,216,000 15,048,120,000 15,048,120,000

- E-Land Asia Holdings Pte Ltd 157,640,000,000 157,640,000,000 8,120,000,000 - 149,520,000,000 149,520,000,000

- Bank for Investment and Development of

Vietnam - Hoc Mon Branch

10,153,649,592 10,153,649,592 18,526,188,408 8,372,538,816 - -

- Vietnam Development Bank - Ho Chi Minh

City Branch

- - - 672,342,843 672,342,843 672,342,843

- Shinhan Bank Vietnam Limited - - 464,640,000 27,847,120,000 27,382,480,000 27,382,480,000

- ANZ Bank (Vietnam) Limited - Ho Chi Minh

City Branch

5,092,403,236 5,092,403,236 8,375,494,494 3,283,091,258 - -

Long-term obligations under finance leases 24,623,564,374 24,623,564,374 31,132,462,826 35,712,194,118 29,203,295,666 29,203,295,666

- Vietcombank Leasing Co., Ltd. 24,623,564,374 24,623,564,374 31,132,462,826 35,712,194,118 29,203,295,666 29,203,295,666

207,267,533,202 207,267,533,202 67,343,797,728 81,902,503,035 221,826,238,509 221,826,238,509

31/12/2015 In the year 31/12/2014





26

The long-term loans are from local banks and shareholders obtained by the Company, details are as

follows:

Lenders Contract No. Credit limits Credit term

E-land Asia Holdings Pte Ltd 04/2010 USD 1,000,000 3 years

E-land Asia Holdings Pte Ltd 01/2011 USD 6,000,000 3 years

Vietcombank -


0016/DTDA/13CD VND 23,830,000,000 5 years

Vietcombank -


0026/DTDA/13CD USD 927,359 5 years

Vietnam Development Bank -


46/HDTD TW VND 22,000,000,000 12 years

Shinhan Bank Vietnam Limited 130-000-167516 VND 165,200,000,000 3 years

02/2015/93435/HDTD JPY 104,500,000 3 years

30/2014/93435/HDTD VND 15,976,000,000 3 years

849580-2 USD 115,948 3 years

8523772 USD 82,600 3 years

8560689 USD 65,100 3 years

869471-6 USD 108,500 3 years

72.13.10/CTTC USD 615,200 3 years

72.13.11/CTTC USD 324,960 3 years

72.14.06/CTTC USD 386,400 3 years

72.14.07/CTTC USD 555,555 3 years

72.14.08/CTTC USD 535,200 3 years

72.14.09/CTTC USD 216,321.6 3 years

72.14.15/CTTC USD 232,800 3 years

72.14.16/CTTC USD 394,400 3 years

72.15.01/CTTC USD 81,600 3 years

72.15.02/CTTC USD 213,921.6 3 years

72.15.03/CTTC USD 525,000 3 years

Bank for Investment and

Development of Vietnam - Hoc

Mon Branch

ANZ Bank (Vietnam) Limited -


Vietcombank Leasing Co., Ltd

These loans are secured by fixed assets financed by the loans.

Long-term loans are repayable as follows:

31/12/2015 31/12/2014

VND VND

On demand or within one year 32,198,576,119 52,283,552,000

In the second year 17,327,433,278 33,847,654,843

In the third to fifth year inclusive 165,316,535,550 158,775,288,000

214,842,544,947 244,906,494,843

Less: Amount due for settlement within 12 months

(shown under current liabilities) 32,198,576,119 52,283,552,000

Amount due for settlement after 12 months 182,643,968,828 192,622,942,843

Long-term obligations under finance leases represent machinery finance leases from Vietcombank

Leasing Co., Ltd.





27

Details of obligations under finance lease are as follows:

31/12/2015 31/12/2014 31/12/2015 31/12/2014

VND VND VND VND

Amounts payable under finance leases: 56,733,241,527 51,767,456,611 54,519,142,722 47,954,905,382

Within one year 30,457,407,872 21,080,595,994 29,895,578,348 18,751,609,716

In the second to fifth year inclusive 26,275,833,655 30,686,860,617 24,623,564,374 29,203,295,666

Less: Future finance charges 2,214,098,805 3,812,551,229 - -

Present value of lease obligations 54,519,142,722 47,954,905,382 54,519,142,722 47,954,905,382

Less: Amount due for settlement within 12

months (shown under current liabilities) 29,895,578,348 18,751,609,716

Amount due for settlement after 12 months 24,623,564,374 29,203,295,666

Minimum lease payments

Present value of minimum lease

payments

24. LONG-TERM PROVISIONS

Long-term provisions represent for the severance allowance accrued in accordance with the

Company’s policies.

25. OWNERS’ EQUITY

The list of main shareholders who are holding 5% of share or more and other shareholders have been

fixed as at 19 February 2016 and 22 December 2014 Ho Chi Minh Stock Exchange (“HOSE”) as

follows:

Shares % VND Shares % VND

E-Land Asia Holdings Pte Ltd 21,270,799 43.23 212,707,990,000 21,270,799 43.23 212,707,990,000

Vinatex (*) 9 - 90,000 9 - 90,000

Others 27,828,693 56.57 278,286,930,000 27,828,693 56.57 278,286,930,000

Treasury shares 100,450 0.20 1,004,500,000 100,450 0.20 1,004,500,000

49,199,951 100 491,999,510,000 49,199,951 100 491,999,510,000

As at 19/02/2016 As at 22/12/2014

(*) Vinatex is the State shareholder.

Shares

31/12/2015 31/12/2014

Number of shares issued to public 49,199,951 49,199,951

Number of treasury shares 100,450 100,450

Number of outstanding shares in circulation 49,099,501 49,099,501

The Company has one class of ordinary share which carry no right to receive any fixed dividend with

the par value of VND 10,000/share. The shareholders of ordinary shares are entitles to receive

dividends as declared from time to time and are entitled to have one vote per share at the Company’s

shareholders meetings.






28

Movement in owners’ equity:

Owners'

contributed capital Share premium Treasury shares

Investment and

Development fund

Financial

reserve fund Other funds Retained earnings Total

VND VND VND VND VND VND VND VND

As at 01/01/2014 491,999,510,000 22,720,075,000 (5,939,990,000) 2,110,908,440 40,080,890,995 15,086,185,164 140,532,742,910 706,590,322,509

Profit for the year - - - - - - 167,191,096,711 167,191,096,711

Fund appropriation - - - 12,351,817,949 12,351,817,949 12,351,817,949 (55,583,180,770) (18,527,726,923)

Dividend declared - - - - - - (78,559,201,600) (78,559,201,600)

As at 31/12/2014 491,999,510,000 22,720,075,000 (5,939,990,000) 14,462,726,389 52,432,708,944 27,438,003,113 173,581,457,251 776,694,490,697

Apply new accounting

policy - - - 52,432,708,944 (52,432,708,944) - - -

As at 01/01/2015 491,999,510,000 22,720,075,000 (5,939,990,000) 66,895,435,333 - 27,438,003,113 173,581,457,251 776,694,490,697

Profit for the year - - - - - - 153,715,486,742 153,715,486,742

Fund appropriation - - - 50,520,123,926 - - (92,620,227,197) (42,100,103,271)

Dividend for year 2014

declared

- - - - - - (29,459,700,600) (29,459,700,600)

As at 31/12/2015 491,999,510,000 22,720,075,000 (5,939,990,000) 117,415,559,259 - 27,438,003,113 205,217,016,196 858,850,173,568

According to Circular No. 200/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014, the Company has transferred balance as at 31 December

2014 of Financial reserve fund to Investment and Development fund.

According to the 2015 Annual General Shareholders’ Meeting minute No. 01/2015/BB-DHCD dated on 04 April 2015, the Company’s shareholders approved the

plan of appropriation for the Investment and Development fund and Bonus and Welfare fund at the ratio of 30% and 25% of consolidated profit after tax of the

year 2014, respectively.

According to General Shareholders’ Resolution No. 01/2015/NQ-DHCD dated 04 April 2015, the Company’s shareholders approved to pay dividend of the year

2014 at the ratio of 12% of share’s par value.





29

26. OFF BALANCE SHEET ITEM

Foreign currencies:

31/12/2015 31/12/2014

- United States Dollar ("USD") 1,360,416 3,938,287

- Japanese Yen ("JPY") 99,339 100,791

- Euro ("EUR") 221 232

27. SEGMENT REPORTING

The Company selected geographical segments as reportable segment because the risk and economic

benefits of the Company differ in each geographical segment.

The business segment report includes items directly attributable to a segment as well as for segments

on reasonable basis. Unallocated items include financial income, financial expenses, selling

expenses, general and administration expenses, profit from other activities, and corporate income tax.

The income statement of business segment report during the year is as follows:

Geographical segments

As stated the segment information about geographical segments, segment revenue depends on

geographic location of clients in Vietnam (“Domestic”) or in countries other than Vietnam

(“Export”). The Company does not prepare the segment report for items on the balance sheet due to

insufficient basis for separation.

2015 2014

VND VND

Domestic

Revenue 251,869,161,742 246,537,568,728

Cost of goods sold 211,705,572,002 210,609,285,153

Gross profit 40,163,589,740 35,928,283,575

Export

Revenue 2,513,220,922,223 2,295,448,201,720

Cost of goods sold 2,112,457,393,463 1,960,929,149,112

Gross profit 400,763,528,760 334,519,052,608

Business segments

The separate financial statements have not presented business segments because the Company’s all

operations are focused on manufacturing, trading of garment and textile products.





30

28. NET REVENUE FROM GOODS SOLD AND SERVICES RENDERED

2015 2014

VND VND

Sales of merchandise and services

Garment and textile products 2,680,714,527,201 2,476,915,765,002

Processing fees 79,560,031,576 65,580,887,121

Others 7,650,951,554 8,508,465,578

2,767,925,510,331 2,551,005,117,701

In which:

Revenue from related parties (Note 38) 952,727,776,046 540,500,935,146

Deductions

Sales returns and discounts (2,835,426,366) (9,019,347,253)

2,765,090,083,965 2,541,985,770,448

29. COST OF GOODS SOLD AND SERVICES RENDERED

2015 2014

VND VND

Raw materials 1,433,074,719,263 1,449,451,651,813

Labour costs 434,843,837,526 326,768,641,384

Depreciation and amortisation 58,902,787,959 50,472,223,851

Overheads 390,351,379,674 326,423,091,203

Others 6,990,241,043 18,422,826,014

2,324,162,965,465 2,171,538,434,265

30. PRODUCTION COST BY NATURE

2015 2014

VND VND

Raw materials 1,336,715,312,906 1,407,975,615,966

Labour cost 474,251,915,388 420,871,664,708

Depreciation and amortisation 65,084,456,768 57,249,519,082

Out-sourced services 564,144,192,483 400,634,440,435

Others 111,906,045,151 91,177,780,087

2,552,101,922,696 2,377,909,020,278

31. FINANCIAL INCOME

2015 2014

VND VND

Bank and loan interest 2,118,375,242 1,748,171,595

Dividend income 1,217,200,000 176,250,000

Foreign exchange gain 21,297,063,926 10,971,483,541

24,632,639,168 12,895,905,136





31

32. FINANCIAL EXPENSES

2015 2014

VND VND

Interest expense 21,462,767,793 26,965,351,933

Made/(reversal) provision for financial investments 33,793,485,657 (825,823,013)

Foreign exchange loss 59,878,606,157 19,863,652,506

Others - 6,440,000

115,134,859,607 46,009,621,426

33. OTHER INCOME

2015 2014

VND VND

Proceeds from disposals of fixed assets 3,915,806,724 2,205,744,329

Proceeds from sales of material, supplies 871,016,239 4,202,576

Others 1,741,453,914 6,140,276,950

6,528,276,877 8,350,223,855

34. OTHER EXPENSES

2015 2014

VND VND

Expense for sales of material, supplies 879,738,687 506,250

Others 866,051,409 1,663,667,753

1,745,790,096 1,664,174,003

35. CORPORATE INCOME TAX EXPENSES

2015 2014

VND VND

Current corporate income tax expenses

- Corporate income tax based on taxable profit in the

current year

12,531,409,667 14,134,918,112

407,266,044 (596,159,254)

Total current corporate income tax expenses 12,938,675,711 13,538,758,858

- Adjustments for corporate income tax expenses in

previous years to the current year





32

Detail of corporate income tax based on taxable profit in the current year is as follow:

2015 2014

VND VND

Profit before tax 166,610,003,611 180,431,930,941

Adjust for 475,458,615 8,033,643,895

- Increase taxable income 8,751,275,148 12,764,590,681

- Decrease taxable income (8,275,816,533) (4,730,946,786)

Assesable income 167,085,462,226 188,465,574,836

Of which:

+ Income from activities which entitled incentive tax

rate

167,085,462,226 188,465,574,836

+ Income from office rental service - -

+ Other income - -

Applicable tax rate

+ For income from activities which entitled 15% 15%

+ For income from office rental service 20% 20%

+ For other income 22% 22%

Corporate income tax 25,062,819,334 28,269,836,225

Tax reduction (12,531,409,667) (14,134,918,113)

Corporate income tax based on taxable profit in

the current year 12,531,409,667 14,134,918,112

2015 2014

VND VND

Deferred corporate income tax

- Deductible temporary differences 44,158,842 297,924,628 Total deferred corporate income tax 44,158,842 297,924,628

The Company is obliged to pay corporate income tax (“CIT”) at the rate of 15% in 12 years from

2006 to 2017 for its principal activities manufactured in an industrial park. The Company is entitled

CIT exemption for 3 years from the first profit making year and the 50% reduction for the following

subsequent 7 years. This is under the Article No.36, Decree No.187/2004/ND-CP dated 16 November

2004, Decree No.164/2003/ND-BTC dated 22 December 2003, Circular No.128/2003/TT-BTC dated

22 December 2003 and Circular No.88/2004/TT-BTC dated 01 September 2004. The year 2006 was

the first year the Company had taxable profit. The year 2009 was the first year the Company entitled

to the 50% CIT reduction.

For the activity relating to office rental service in an industrial park, the Company is obliged to pay

CIT at the rate of 20% in 10 years from 2006 to 2015. The Company is entitled CIT exemption for 2

years from the first profit making year and the 50% reduction for the following subsequent 6 years

basing on the Circular No.88/2004/TT-BTC dated 01 September 2004 issued by Ministry of Finance

to modify, supplement Circular No.128/2003/TT-BTC dated 22 December 2003. The year 2006 was

the first year the Company had taxable profit. The year 2008 was the first year the Company entitled

to the 50% CIT reduction. This year 2015, the Company applies the rate of 20% for the taxable

income from this activity.

For the other activities, the Company is obliged to pay CIT at the rate of 22%.





33

36. OPERATING LEASE COMMITMENTS

2015 2014

VND VND

Minimum lease payments under operating leases

recognised in income statement for the year 9,192,192,144 5,990,350,376

At the balance sheet date, the Company had outstanding commitments under non-cancelable

operating leases, which fall due as follows:

31/12/2015 31/12/2014

VND VND

Within one year 6,525,437,584 8,290,121,879

In the second to fifth years inclusive 25,258,950,336 30,586,787,517

After five years 25,099,717,815 66,209,576,760

56,884,105,735 105,086,486,156

Operating lease payments represent total rentals payable by the Company for land leases at Tan Phu

District - Ho Chi Minh City and management fee at Tan Binh Industrial Zone – Ho Chi Minh City

and Trang Bang Industrial Zone – Tay Ninh Province.

The contract terms and rental charges are determined per each specific contract.

37. FINANCIAL INSTRUMENTS

Capital risk management

The Company manages its capital to ensure that the Company will be able to continue as a going

concern while maximising the return to shareholders through the optimisation of the debt and equity

balance.

The capital structure of the Company consists of net debt (borrowings as disclosed in Note 21 and 23,

offset by cash and cash equivalents) and equity attributable to shareholders (comprising contributed

capital, share premium, treasury shares, funds and retained earnings).

Gearing ratio

The gearing ratio of the Company as at the balance sheet date was as follows:

31/12/2015 31/12/2014

VND VND

Borrowings 983,628,220,721 868,729,079,407

Less: Cash and cash equivalents 77,587,361,115 132,600,437,262

Net debt 906,040,859,606 736,128,642,145

Equity 858,850,173,568 776,694,490,697

Net debt to equity ratio 1.05 0.95

Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteria for

recognition, the bases of measurement, and the bases for recognition of income and expenses) for

each class of financial assets and financial liabilities are disclosed in Note 4.





34

Categories of financial instruments

31/12/2015 31/12/2014

VND VND

Financial assets

Cash and cash equivalents 77,587,361,115 132,600,437,262

Trade and other receivables 215,197,523,627 142,553,185,453

Investments 2,767,600,000 2,767,600,000

Deposits 333,650,000 401,180,000

295,886,134,742 278,322,402,715

Financial liabilities

Obligations under finance leases 54,519,142,722 47,954,905,382

Borrowings 929,109,077,999 820,774,174,025

Trade and other payables 225,989,876,079 159,683,589,583

Accrued expenses 11,189,478,181 10,766,268,840

1,220,807,574,981 1,039,178,937,830

Carrying amounts

The Company has not assessed fair value of its financial assets and liabilities as at the balance sheet

date since there are no comprehensive guidance under Circular 210/2009/TT-BTC issued by the

Ministry of Finance on 06 November 2009 (“Circular 210”) and other relevant prevailing regulations

to determine fair value of these financial assets and liabilities. While Circular 210 refers to the

application of International Financial Reporting Standards (“IFRS”) on presentation and disclosures

of financial instruments, it did not adopt the equivalent guidance for the recognition and measurement

of financial instruments, including application of fair value, in accordance with IFRS.

Financial risk management objectives

The Company has set up risk management system to identify and assess the risks exposed by the

Company and designed control policies and procedures to manage those risks at an acceptable level.

Risk management system is reviewed on a regular basis to reflect changes in market conditions and

the Company’s operations.

Financial risks include market risk (including foreign currency risk, interest rate risk, share price risk

and commodity price risk), credit risk and liquidity risk.

Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency

exchange rates, interest rates and prices. The Company does not hedge these risk exposures due to the

lack of active market for the trading activities of financial instruments.

Foreign currency risk management

The Company undertakes certain transactions denominated in foreign currencies; consequently,

exposures to exchange rate fluctuations arise. The carrying amounts of the Company’s foreign

currency denominated monetary assets and monetary liabilities at the end of the year are as follows:

31/12/2015 31/12/2014 31/12/2015 31/12/2014

VND VND VND VND

United States Dollar (USD) 180,370,962,437 217,620,592,371 1,031,735,997,041 902,918,377,056

Euro (EUR) 5,400,842 6,006,132 3,492,919,125 240,861,065

Japanese Yen (JPY) 18,421,424 17,931,727 11,636,780,000 -

South Korean Won (KRW) - - 282,188,079 -

180,394,784,703 217,644,530,230 1,047,147,884,245 903,159,238,121

Asset Liabilities





35

Foreign currency sensitivity analysis

The Company is mainly exposed to United States Dollar and Euro.

The following table details the Company's sensitivity to a 5% increase and decrease in Vietnam Dong

against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign

currency risk internally to key management personnel and represents management's assessment of the

reasonably possible change in foreign exchange rates. The sensitivity analysis includes only

outstanding foreign currency denominated monetary items and adjusts their translation at the period

end for a 5% change in foreign currency rates. For a 5% increase/decrease in the following foreign

currencies against Vietnam Dong, the profit before tax for the year would decrease/increase by the

same amount as follow:

2015 2014

VND VND

USD (42,568,251,730) (34,264,889,234)

EUR (174,375,914) (11,742,747)

(42,742,627,644) (34,276,631,981)

Applying the same analysis to Japanese Yen and South Korean Won, the increase/decrease in

Japanese Yen and South Korean Won would not have material effect to the profit before tax of the

Company during the year.

Interest rate risk management

The Company has significant interest rate risks arising from interest bearing loans which are

arranged. The risk is managed by the Company by maintaining an appropriate level of borrowings

and analyzing market competition to enjoy favorable interest rates from appropriate lenders.

Interest rate sensitivity

The loan’s sensitivity to interest rate changes which may arise at an appropriate level. Assuming all

other variables were held constant, if interest rates applicable to floating interest bearing loans had

been 200 basis points higher/lower, the Company’s profit before tax for the year ended 31 December

2015 would have decreased/increased by VND 18,582,181,560 (2014: VND 16,415,483,481).

Share price risk management

Shares held by the Company are affected by market risks arising from the uncertainty about future

prices of such shares. The Company manages this risk exposure by setting up investment limits. The

Company’s Board of Management also assesses and approves decisions on share investments such as

operating industry, investees, etc. The Company assesses the share price risk to be immaterial.

The Company is also exposed to equity price risks arising from investments in subsidiaries and

associates. The Company’s Board of Management assesses and approves decisions on investments in

subsidiaries and associates such as operating industry, investees, etc. Investments in subsidiaries and

associates are held for long-term strategic investments rather than trading purposes. The Company

does not have intention to trade these investments in the foreseeable future.

Commodity price risk management

The Company purchases materials, commodities from local and foreign suppliers for business

purpose. Therefore, the Company is exposed to the risk of changes in selling prices of materials,

commodities.





36

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in

financial loss to the Company. The Company has a credit policy in place and the exposure to credit

risk is monitored on an ongoing basis. The Company does not have any significant credit risk

exposure to any counterparty because receivables consist of a large number of customers, spread

across diverse industries and geographical areas.

Liquidity risk management

The purpose of liquidity risk management is to ensure the availability of funds to meet present and

future financial obligations. Liquidity is also managed by ensuring that the excess of maturing

liabilities over maturing assets in any period is kept to manageable levels relative to the amount of

funds that the Company believes can generate within that period. The Company policy is to regularly

monitor current and expected liquidity requirements to ensure that the Company maintains sufficient

reserves of cash, borrowings and adequate committed funding from its shareholders to meet its

liquidity requirements in the short and longer term.

The following table details the Company’s remaining contractual maturity for its non-derivative

financial assets and financial liabilities with agreed repayment periods. The tables have been drawn

up based on the undiscounted cash flows of financial assets and undiscounted cash flows of financial

liabilities based on the earliest date on which the Company can be required to pay. The inclusion of

information on non-derivative financial assets is necessary in order to understand the Company’s

liquidity risk management as the liquidity is managed on a net asset and liability basis.

31/12/2015 Less than 1 year Over 1 year Total

VND VND VND

Cash and cash equivalents 77,587,361,115 - 77,587,361,115

Trade and other receivables 215,197,523,627 - 215,197,523,627

Investments - 2,767,600,000 2,767,600,000

Deposits 333,650,000 - 333,650,000

293,118,534,742 2,767,600,000 295,886,134,742

Obligations under finance leases 29,895,578,348 24,623,564,374 54,519,142,722

Borrowings 746,465,109,171 182,643,968,828 929,109,077,999

Trade and other payables 225,989,876,079 - 225,989,876,079

Accrued expenses 11,189,478,181 - 11,189,478,181

1,013,540,041,779 207,267,533,202 1,220,807,574,981

Net liquidity gap (720,421,507,037) (204,499,933,202) (924,921,440,239)





37

31/12/2014 Less than 1 year Over 1 year Total

VND VND VND

Cash and cash equivalents 132,600,437,262 - 132,600,437,262

Trade and other receivables 142,553,185,453 - 142,553,185,453

Investments - 2,767,600,000 2,767,600,000

Deposits 401,180,000 - 401,180,000

275,554,802,715 2,767,600,000 278,322,402,715

Obligations under finance leases 18,751,609,716 29,203,295,666 47,954,905,382

Borrowings 628,151,231,182 192,622,942,843 820,774,174,025

Trade and other payables 159,683,589,583 - 159,683,589,583

Accrued expenses 10,766,268,840 - 10,766,268,840

817,352,699,321 221,826,238,509 1,039,178,937,830

Net liquidity gap (541,797,896,606) (219,058,638,509) (760,856,535,115)

Regardless of the existing net liquidity gap, the Board of Directors believes that the Company will be

able to generate sufficient funds to meet its financial obligations as and when they fall due from

internally generated cash flows and maintains minimum credit lines available. Undrawn facilities are

disclosed in Note 21 and 23.

38. RELATED PARTY TRANSACTIONS AND BALANCES

List of related parties:

Name Relationship

Eland Asia Holdings Pte Ltd Main shareholder

Thanh Cong Medical Center JSC Subsidiary

Thanh Cong - Vinh Long One Member Limited Company Subsidiary

TC Eland One Member Company Limited Subsidiary

Thanh Chi Corporation Associate

Eland World Limited Company in Eland Group

Eland International Fashion (Shanghai) Co., Ltd Company in Eland Group

Eland Fashion (Shanghai) Co., Ltd Company in Eland Group

Eland Fashion Hong Kong Limited - Taiwan Branch Company in Eland Group

Eland Asia Holding Pte.Ltd - Hong Kong Brach Company in Eland Group

Eland Fashion Hong Kong Limited Company in Eland Group

Eland Retail Limited Company in Eland Group

Eland Viet Nam Co., Ltd Company in Eland Group

S.Y VINA Joint Stock Company Company in Eland Group

Savimex Corporation Company in Eland Group

Wish Trading (Shanghai) Co., Ltd Company in Eland Group

Wish Fashion (Shanghai) Co., Ltd Company in Eland Group





38

During the year, the Company entered into the following significant transactions with its related

parties:

2015 2014

VND VND

Sales

Eland World Limited 547,723,166,173 359,734,670,923

Eland International Fashion (Shanghai) Co., Ltd 173,302,392,515 96,895,048,070

Eland Fashion (Shanghai) Co., Ltd 75,533,795,546 45,183,950,494

Wish Fashion (Shanghai) Co., Ltd 19,806,415,435 17,439,652,676

Eland Fashion Hong Kong Limited 20,574,309,122 11,455,511,377

Eland Retail Limited 779,483,161 6,944,618,574

Eland Vietnam Co., Ltd. 647,005,234 1,675,931,266

ELand Asia Holding Pte.Ltd - Hong Kong Branch 110,819,984,998 -

Eland Fashion Hong Kong Limited - Taiwan Branch 389,940,189 -

S.Y VINA Joint Stock Company 10,031,040 -

TC Eland One Member Company Limited 2,009,513,137 -

Thanh Cong - Vinh Long One Member Limited Company 530,585,104 -

Thanh Cong Medical Center JSC 601,154,392 1,171,551,766 952,727,776,046 540,500,935,146

Purchases



Eland Vietnam Co., Ltd. 2,327,152,594 72,391,200

Wish Trading (Shanghai) Co., Ltd 1,370,300,852 829,488,538


Savimex Corporation 3,357,174,624 1,960,211,261

TC Eland One Member Company Limited 129,636,419 -

Thanh Cong - Vinh Long One Member Limited Company 9,629,709,233 -

Thanh Cong Medical Center JSC 256,462,789 653,050,000

Loan interest

E-land Asia Holdings Pte Ltd 1,535,197,469 1,285,030,254

Dividends declared to


Dividends declared by

Thanh Chi Corporation 1,040,950,000 -

Capital contribution

TC Eland One Member Company Limited 3,000,000,000 -


Remuneration paid to the Company’s Board of Directors during the year was as follows:

2015 2014

VND VND

Salaries and benefits in kind 9,369,335,041 10,138,038,249





39

Significant related party balances as at the balance sheet date were as follows:

31/12/2015 31/12/2014

VND VND

Short-term trade receivables

Eland Fashion (Shanghai) Co., Ltd 1,543,419,990 3,165,231,813

Eland Fashion Hong Kong Limited 1,130,604,900 2,385,261,588



Eland Retail Limited - 1,823,045,028

Eland Vietnam Co., Ltd. - 100,936,635

Wish Fashion (Shanghai) Co., Ltd - 834,265,850

ELand Asia Holding Pte.Ltd - Hong Kong Branch 21,935,155,050 -

Eland Fashion Hong Kong Limited - Taiwan Branch 175,475,935 -

Thanh Cong Medical Center JSC - 69,629,232 75,387,930,887 33,053,168,523

Other short-term receivables


Thanh Chi Corporation 1,040,950,000 2,602,375,000

Short-term trade payables



Wish Trading (Shanghai) Co., Ltd 107,343,157 -


Savimex Corporation 298,310,408 206,294,364


Thanh Cong Medical Center JSC - 389,760,000 51,962,910,329 12,863,786,739

Loan payable


Loan interest payable


39. SUPPLEMENTAL NON-CASH DISCLOSURES ARE STATED ON SEPARATE CASH

FLOW STATEMENT

Dividends paid during the year excluded an amount of VND 118,884,570, representing dividends

declared that have not yet been paid (2014: VND 29,566,537,650). Consequently, changes in

accounts payable have been adjusted by the same amount.

thanh cong textile garment investment …. bctc...after 01 january 2015. circular 200 supersedes the...

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