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THANH CONG TEXTILE GARMENT INVESTMENT TRADING
JOINT STOCK COMPANY AND ITS SUBSIDIARIES
(Incorporated in the Socialist Republic of Vietnam)
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
March 2016
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
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
CONSOLIDATED BALANCE SHEET 3 - 5
CONSOLIDATED INCOME STATEMENT 6
CONSOLIDATED CASH FLOW STATEMENT 7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8 - 43
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated 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 43 are an integral part of these consolidated financial statements
3
CONSOLIDATED BALANCE SHEET
As at 31 December 2015
FORM B 01-DN/HN
Unit: VND
ASSETS Codes Notes 31/12/2015 31/12/2014
A. CURRENT ASSETS 100 1,171,380,263,282 994,563,475,461
I. Cash and cash equivalents 110 5 88,198,067,189 140,749,128,463
1. Cash 111 37,498,067,189 94,049,128,463
2. Cash equivalents 112 50,700,000,000 46,700,000,000
II. Short-term financial investments 120 4,500,000,000 4,500,000,000
1. Held-to-maturity investments 123 4,500,000,000 4,500,000,000
III. Short-term receivables 130 200,230,642,322 190,871,299,911
1. Short-term trade receivables 131 6 157,254,434,374 135,467,703,940
2. Short-term advances to suppliers 132 38,716,032,088 40,189,207,228
3. Short-term loan receivables 135 7 1,850,301,999 1,850,301,999
4. Other short-term receivables 136 8 6,825,799,395 17,594,937,732
5. Provision for short-term doubtful debts 137 (4,415,925,534) (4,232,019,466)
6. Deficits in assets awaiting solution 139 - 1,168,478
IV. Inventories 140 9 780,566,506,893 624,547,232,466
1. Inventories 141 786,523,332,756 646,309,201,913
2. Provision for devaluation of inventories 149 (5,956,825,863) (21,761,969,447)
V. Other short-term assets 150 97,885,046,878 33,895,814,621
1. Short-term prepayments 151 13,438,435,227 6,145,585,106
2. Value added tax deductibles 152 84,446,611,651 27,748,380,950
3. Taxes and other receivables from the State Budget 153 - 1,848,565
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated 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 43 are an integral part of these consolidated financial statements
4
CONSOLIDATED BALANCE SHEET (Continued)
As at 31 December 2015
FORM B 01-DN/HN
Unit: VND
ASSETS Codes Notes 31/12/2015 31/12/2014
B. NON-CURRENT ASSETS 200 1,337,877,302,674 1,065,554,933,518
I. Long-term receivables 210 35,000,000 35,000,000
1. Other long-term receivables 216 35,000,000 35,000,000
II. Fixed assets 220 870,879,438,397 718,871,207,195
1. Tangible fixed assets 221 10 678,830,080,393 553,158,855,198
- Cost 222 1,421,251,210,674 1,275,903,829,147
- Accumulated depreciation 223 (742,421,130,281) (722,744,973,949)
2. Finance lease assets 224 11 96,422,894,301 68,858,326,771
- Cost 225 108,078,746,862 71,341,985,333
- Accumulated depreciation 226 (11,655,852,561) (2,483,658,562)
3. Intangible assets 227 12 95,626,463,703 96,854,025,226
- Cost 228 113,227,155,700 111,740,833,762
- Accumulated amortisation 229 (17,600,691,997) (14,886,808,536)
III. Investment property 230 13 116,309,421,416 118,479,226,677
- Cost 231 117,556,801,651 121,280,625,580
- Accumulated depreciation 232 (1,247,380,235) (2,801,398,903)
IV. 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
V. Long-term financial investments 250 139,780,655,673 134,937,172,144
1. Investments in associates 252 15 136,537,892,373 132,084,972,844
2. Equity investments in other entities 253 16 5,352,050,000 5,352,050,000
3. Provision for impairment of long-term financial
investments
254 (2,109,286,700) (2,499,850,700)
VI. Other long-term assets 260 151,792,564,244 72,316,163,541
1. Long-term prepayments 261 17 149,707,706,815 70,275,464,954
2. Deferred tax assets 262 18 2,084,857,429 2,040,698,587
TOTAL ASSETS (270=100+200) 270 2,509,257,565,956 2,060,118,408,979
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated 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
Details of Thanh Cong Textile Garment Investment Trading Joint Stock Company's subsidiaries and
associates as at 31 December 2015 are as follows:
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
9
Subsidiaries
Name of
subsidiaries
Place of
incorporation
(or registered
place) and
operation
Proportion
of
ownership
(%)
Owners’ contributed
capital as at
31/12/2015
(VND)
Principal activities
Thanh Cong Medical
Center Joint Stock
Company (“Thanh
Cong Medical
Center”)
Tan Phu
District, Ho
Chi Minh City
70.94 21,700,000,000 Medical servicing and
trading drugs and
medical equipment
Thanh Quang
Corporation (“Thanh
Quang”)
Tan Phu
District, Ho
Chi Minh City
97.50 22,000,000,000 Infrastructures,
manufacturing and
trading fabric
Thanh Cong – Vinh
Long One Member
Company Limited
(Thanh Cong – Vinh
Long) (*)
Hoa Phu
Commune,
Long Ho
District, Vinh
Long Province
100 37,293,406,255 Productions, business,
exports, imports of
cottons, fiber, threads,
cloths, garments,
footwear and machines,
equipment, parts,
auxiliary and raw
materials, materials,
chemicals (except
poisonous chemicals),
dye-stuffs, packing
TC Tower Company
Limited (“TC
Tower”) (**)
Tan Phu
District, Ho
Chi Minh City
85.33 - Trading real estate
TC Eland One
Member Limited
Company (“TC
Eland”) (***)
District 1, Ho
Chi Minh City
100 3,000,000,000 Trading garment and
textile products
(*) 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
10
Associates
Name of associates
Place of
incorporation
(or registered
place) and
operation
Proportion
of
ownership
(%)
Owners’ contributed
capital as at
31/12/2015
(VND)
Principal activities
Thanh Chi
Corporation (“Thanh
Chi”)
Vung Tau City 47.43 43,890,000,000 Trading and exploiting
sand and stone
Thanh Cong
Securities Joint
Stock Company
(“TCSC”)
District 3, Ho
Chi Minh City
24.75 360,000,000,000 Brokerage, self -
trading securities,
securities guaranty and
securities investment
consultancy
Thanh Phuc
Investment
Construction
Corporation (“Thanh
Phuc”)
Tan Phu
District, Ho
Chi Minh City
23.79 7,000,000,000 Constructing and
managing projects
Vung Tau Golf
Tourism Joint Stock
Company (“Golf
Vung Tau”)
Ba Ria, Vung
Tau City
30.00 29,000,000,000 Providing tourism and
entertainment services
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 and Circular No. 202/2014/TT-BTC issued by the Ministry of
Finance on 22 December 2014 (“Circular 202”) guiding the preparation and presentation of
consolidated financial statements. 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. Circular 202 supersedes section XIII in Circular No. 161/2007/TT-BTC dated 31 December
2007 of the Ministry of Finance guiding the preparation and presentation of consolidated financial
statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial
Statements and Accounting for Investments in Subsidiaries”. However, the adoption of such circulars
does not have significant impact on the comparability of the figures in the Company’s consolidated
financial statements.
2. ACCOUNTING CONVENTION AND FINANCIAL YEAR
Accounting convention
The accompanying consolidated 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 consolidated 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.
Financial year
The Group’s financial year begins on 01 January and ends on 31 December.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
11
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 and Circular No. 202/2014/TT-BTC (Circular
202) guiding the preparation and presentation of consolidated financial statements. These circulars
are 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. Circular 202 will supersede section XIII in
Circular No. 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance guiding the
preparation and presentation of consolidated financial statements in accordance with Vietnamese
Accounting Standard No. 25 “Consolidated Financial Statements and Accounting for Investments in
Subsidiaries”. The Board of Directors has adopted Circular 200 in the preparation and presentation of
the consolidated financial statements for the year ended 31 December 2015. Thereof, certain
reclassifications have been made to the prior period’s figures in accordance with the guidance of
Circular 200 to enhance their comparability with the current period’s presentation; details have been
presented in Note 44 – Comparative figures.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies, which have been adopted by the Group in the preparation of these
consolidated financial statements, are as follows:
Estimates
The preparation of consolidated 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 consolidated
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.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
enterprises controlled by the Company (its subsidiaries) up to the end of each financial year. Control
is achieved where the Company has the power to govern the financial and operating policies of an
investee enterprises so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
income statement from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used in line with those used by the Company.
All inter-company transactions and balances between group’s enterprises are eliminated on
consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from
the Company’s equity therein. Non-controlling interests consist of the amount of those interests at the
date of the original business combination (presented in Note 28) and the non-controlling’s share of
changes in equity since the date of the combination. Losses in subsidiaries are respectively attributed
to the non-controlling interests even if this results in the non-controlling interests having a deficit
balance.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
12
Business combinations
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their
fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired is credited to profit and loss in the period
of acquisition.
The non-controlling interests are initially measured at the non-controlling shareholders’ proportion of
the net fair value of the assets, liabilities and contingent liabilities recognised.
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.
The results and assets and liabilities of associates are incorporated in these financial statements using
the equity method of accounting. Interests in associates are carried in the balance sheet at cost as
adjusted by post-acquisition changes in the Company’s share of the net assets of the associate. Losses
of an associate in excess of the Company's interest in that associate (which includes any long-term
interests that, in substance, form part of the Company's net investment in the associate) are not
recognised.
Where a group entity transacts with an associate of the Group, unrealised profits and losses are
eliminated to the extent of the Company’s interest in the relevant associate.
Goodwill
Goodwill represents the excess of the cost of acquisition over the Company’s interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities of an associate or jointly controlled
entity at the date of acquisition.
Goodwill arising on the acquisition of associates and jointly controlled entities is included in the
carrying amount of the associates and jointly controlled entities. On disposal of an associate or jointly controlled entity, the attributable amount of unamortised
goodwill is included in the determination of the profit or loss on disposal.
Negative goodwill
Negative goodwill represents the excess of the Company’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of a subsidiary, associate or jointly controlled
entity at the date of acquisition over the cost of acquisition. Negative goodwill is immediately
recognised in the consolidated income statement at the acquisition date.
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 Group comprise cash and cash equivalents, trade and other receivables, investments in stocks
and deposits.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
13
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 Group 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.
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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
14
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.
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 recognised as assets of the Group 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 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 consolidated profit or loss, unless they are directly attributable to qualifying assets, in
which case they are capitalised in accordance with the Group’s general policy on borrowing costs.
Leases where substantially all the rewards and risks of ownership of assets remain with the leasing
Group are accounted for as operating leases. Rentals payable under operating leases are charged to
the consolidated income statement on a straight-line basis over the term of the relevant lease.
Assets held by the Group 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 Group’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
Group 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
15
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, Trang Bang Industrial
Zone - Tay Ninh Province and Hoa Phu Industrial Zone - Vinh Long Province, and other
prepayments (allocated within 3 years). Prepaid land rentals are charged to consolidated income
statement using the straight-line method over the lease term from 45 to 58 years.
Payable provisions
Payable provisions are recognized when the Group has a present obligation as a result of a past event,
and it is probable that the Group 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.
Revenue recognition
Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:
(a) the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
(b) the Group 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 Group;
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 Group;
(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 Group’s right to receive payment has been
established.
Foreign currencies
The Group 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 consolidated income statement. Unrealised
exchange gains as at the balance sheet date are not treated as part of distributable profit to
shareholders.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
16
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.
Severance allowance payable
The severance allowance for employees is accrued at the end of each reporting period for all
employees having worked at the Group 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 consolidated the 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 consolidated 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 consolidated 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
recognized 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 Group 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
17
Appropriation of funds and dividend distribution
Dividend distribution to the Company and its subsidiaries’ shareholders is recognized as a liability in
the Company and its subsidiaries’ financial statements in the year in which the dividends are
approved by the Company and its subsidiaries’ 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 and its subsidiaries’ Charter and Vietnamese regulatory requirements.
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 919,707,232 461,814,575
Demand deposits 36,578,359,957 93,587,313,888
Cash equivalents 50,700,000,000 46,700,000,000
88,198,067,189 140,749,128,463
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% - 6% per annum).
6. SHORT-TERM TRADE RECEIVABLES
31/12/2015 31/12/2014
VND VND
a. Short-term trade receivables
- Sanmar corporation 11,109,032,280 22,694,998,290
- Others 70,757,471,207 79,789,166,359
b. Receivables from related parties 75,387,930,887 32,983,539,291
(Note 42)
157,254,434,374 135,467,703,940
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 Group’s accounting policy.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
18
8. OTHER SHORT-TERM RECEIVABLES
31/12/2015 31/12/2014
VND VND
Receivable from employees 4,596,847,944 3,778,463,748
Deposits and mortgages 333,650,000 401,180,000
Receivable for dividends 1,040,950,000 2,602,375,000
Other receivables 854,351,451 10,812,918,984
6,825,799,395 17,594,937,732
9. INVENTORIES
Cost Provision Cost Provision
VND VND VND VND
Goods in transit 78,146,323,784 - 66,541,684,138 -
Raw materials 220,513,131,791 - 200,233,929,068 -
Tools and supplies 3,105,675,871 - 7,723,197 -
Work in progress 188,247,179,291 - 126,716,300,483 -
Finished goods 271,456,261,043 5,956,825,863 245,498,821,239 21,761,969,447
Merchandise 5,011,570,589 - 2,909,398,049 -
Goods on consignment 20,043,190,387 - 4,401,345,739 -
786,523,332,756 5,956,825,863 646,309,201,913 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
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN
These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
19
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 271,494,293,433 853,923,401,703 17,750,168,126 13,911,652,015 118,824,313,870 1,275,903,829,147
- Additions 59,367,000 4,878,795,221 4,557,962,400 1,149,336,779 2,507,227,727 13,152,689,127 - Transfer from construction in
progress
113,059,114,476 51,106,098,437 1,190,800,944 454,558,497 2,913,896,332 168,724,468,686
- Transferred from investment
property
3,723,823,929 - - - - 3,723,823,929
- Disposals - (30,561,311,241) (382,710,416) (3,759,348,792) (4,778,565,435) (39,481,935,884)
- Other decreases - (771,664,331) - - - (771,664,331)
As at 31/12/2015 388,336,598,838 878,575,319,789 23,116,221,054 11,756,198,499 119,466,872,494 1,421,251,210,674
ACCUMULATED DEPRECIATION
As at 01/01/2015 100,495,700,061 515,522,955,589 9,630,464,088 9,692,262,390 87,403,591,821 722,744,973,949
- Charge for the year 7,005,671,838 40,905,372,742 1,806,126,607 885,854,605 6,527,938,193 57,130,963,985
- Transferred from investment
property
1,744,315,204 - - - - 1,744,315,204
- Disposals - (30,339,350,570) (390,907,103) (3,759,348,792) (4,639,416,201) (39,129,022,666)
- Other decreases - (70,100,191) - - - (70,100,191)
As at 31/12/2015 109,245,687,103 526,018,877,570 11,045,683,592 6,818,768,203 89,292,113,813 742,421,130,281
NET BOOK VALUE As at 31/12/2015 279,090,911,735 352,556,442,219 12,070,537,462 4,937,430,296 30,174,758,681 678,830,080,393
As at 31/12/2014 170,998,593,372 338,400,446,114 8,119,704,038 4,219,389,625 31,420,722,049 553,158,855,198
As noted further in Note 23 and 25, the Group has pledged its buildings and machinery, equipment, which has a carrying value of approximately VND 306.6
billion as at 31 December 2015 (31 December 2014: VND 264.7 billion), to secure banking facilities granted to the Group.
The cost of the Group’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).
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
20
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
ACCUMULATED DEPRECIATION
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 96,334,416,604 3,942,895,847 11,463,521,311 111,740,833,762
Transferred from construction
in progress - - 1,486,321,938 1,486,321,938
As at 31/12/2015 96,334,416,604 3,942,895,847 12,949,843,249 113,227,155,700
ACCUMULATED AMORTISATION
As at 01/01/2015 9,334,369,070 2,558,012,227 2,994,427,239 14,886,808,536
Charge for the year 617,618,178 671,121,970 1,425,143,313 2,713,883,461
As at 31/12/2015 9,951,987,248 3,229,134,197 4,419,570,552 17,600,691,997
NET BOOK VALUE
As at 31/12/2015 86,382,429,356 713,761,650 8,530,272,697 95,626,463,703
As at 31/12/2014 87,000,047,534 1,384,883,620 8,469,094,072 96,854,025,226
As noted further in Note 23 and 25, the Group 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 Group.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
21
13. 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 asset (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
ACCUMULATED DEPRECIATION
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 asset (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 23 and 25, the Group 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 Group.
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 01 January 20,916,163,961 11,633,469,068
Additions 265,089,314,505 87,933,559,412
Transfer to tangible fixed assets (168,724,468,686) (6,213,902,270)
Transfer to finance lease assets (36,736,761,529) (71,341,985,333)
Transfer to intangible assets (1,486,321,938) -
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, construction in progress comprises 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
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
22
15. INVESTMENTS IN ASSOCIATES
31/12/2015 31/12/2014
VND VND
Cost of investment in associates 113,046,152,000 113,046,152,000
Share of post-acquisition profits,
net of dividends received 23,491,740,373 19,038,820,844
136,537,892,373 132,084,972,844
Goodwill 6,384,523,879 6,384,523,879
Company’s share of associates’ net assets 130,153,368,494 125,700,448,965
Total assets 559,974,752,218 518,236,356,363
Total liabilities 110,045,056,599 82,750,449,284
Net assets 449,929,695,619 435,485,907,079
Company’s share of associates’ net assets 130,153,368,494 125,700,448,965
2015 2015
VND VND
Net profit 18,260,840,761 10,690,654,731 Company’s share of associates’ net profit 5,493,869,529 3,002,304,007
16. EQUITY INVESTMENTS IN OTHER ENTITIES
31/12/2015 31/12/2014
VND VND
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 Garment and Textile Company 318,000,000 318,000,000
SY Vina Joint Stock Company 883,450,000 883,450,000
Bank for Foreign Trade of Vietnam Joint Stock
Company 2,449,600,000 2,449,600,000
5,352,050,000 5,352,050,000
Provision for impairment of long-term financial
investments
(2,109,286,700) (2,499,850,700)
Net equity investments in other entities 3,242,763,300 2,852,199,300
17. LONG-TERM PREPAYMENTS
2015 2014
VND VND
As at 01 January 70,275,464,954 77,604,523,018
Additions during the year 87,608,838,721 118,243,000
Allocated to expenses during the year (8,176,596,860) (7,447,301,064)
As at 31 December 149,707,706,815 70,275,464,954
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
23
Details of long-term prepayments are as follows:
31/12/2015 31/12/2014
VND VND
Land rental expenses 135,266,756,512 68,548,112,642
Others 14,440,950,303 1,727,352,312
149,707,706,815 70,275,464,954
18. 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 - -
19. 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
- Eland World Limited 11,922,392,020 11,922,392,020 4,128,022,920 4,128,022,920
- Other suppliers 168,388,229,483 168,388,229,483 116,541,211,772 116,541,211,772
211,708,214,262 211,708,214,262 128,808,944,147 128,808,944,147
b. Trade payables to related parties
(Note 42) 43,749,653,990 43,749,653,990 12,474,026,739 12,474,026,739
43,749,653,990 43,749,653,990 12,474,026,739 12,474,026,739
31/12/2015 31/12/2014
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
24
20. 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 2,777,360,029 13,262,950,643 (14,585,976,680) 1,454,333,992
Personal income tax 782,876,173 13,199,736,854 (12,723,856,494) 1,258,756,533
Value added tax - 34,422,631,686 (34,419,036,492) 3,595,194
Other taxes - 12,988,302,714 (12,988,302,714) -
3,560,236,202 73,873,621,897 (74,717,172,380) 2,716,685,719
21. SHORT-TERM ACCRUED EXPENSES
31/12/2015 31/12/2014
VND VND
Accrual for loan interest 6,793,211,074 5,245,466,502
Accrual for land rental (*) 20,576,577,272 -
Others 4,595,125,132 5,520,802,338
31,964,913,478 10,766,268,840
(*) Accrual for land rental represents the unpaid amount relating to land rental in Hoa Phu Industrial
Park - Vinh Long Province.
22. OTHER CURRENT PAYABLES
31/12/2015 31/12/2014
VND VND
Union fee 1,607,458,475 1,074,125,964
Dividends payable 118,884,570 29,566,537,650
Others 7,606,076,747 1,394,843,017
9,332,419,792 32,035,506,631
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
25
23. SHORT-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASES
Amount
Amount able to be
paid off Increases Decreases Amount
Amount able to be
paid off
VND VND VND VND VND VND
Short-term borrowings 755,770,001,160 755,770,001,160 2,202,133,891,121 2,022,231,569,143 575,867,679,182 575,867,679,182
- 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 293,645,696,860 293,645,696,860 760,846,546,640 709,227,665,870 242,026,816,090 242,026,816,090
- 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
29,895,578,348 29,895,578,348 36,705,467,265 25,561,498,633 18,751,609,716 18,751,609,716
817,864,155,627 817,864,155,627 2,286,192,481,224 2,115,231,166,495 646,902,840,898 646,902,840,898
31/12/2015 In the year 31/12/2014
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY AND
ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
26
The Group 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
24. OTHER LONG-TERM PAYABLES
Other long-term payables 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
27
25. LONG-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASES
Amount
Amount able to be
paid off Increases Decreases Amount
Amount able to be
paid off
VND VND VND VND VND VND
Long-term loans 315,580,188,828 315,580,188,828 169,147,554,902 46,190,308,917 192,622,942,843 192,622,942,843
- Vietcombank - Ho Chi Minh City Branch 142,694,136,000 142,694,136,000 133,661,232,000 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
340,203,753,202 340,203,753,202 200,280,017,728 81,902,503,035 221,826,238,509 221,826,238,509
31/12/2015 In the year 31/12/2014
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
28
The long-term loans are from local banks and shareholders obtained by the Group, 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 -
Ho Chi Minh City Branch
0016/DTDA/13CD VND 23,830,000,000 5 years
Vietcombank -
Ho Chi Minh City Branch
0026/DTDA/13CD USD 927,359 5 years
Vietcombank -
Ho Chi Minh City Branch
0008/DTDA/15CD VND 140,202,000,000 6 years
Vietnam Development Bank - Ho
Chi Minh City Branch
46/HĐTD 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 - Ho
Chi Minh City Branch
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 33,944,460,778 33,847,654,843
In the third to fifth year inclusive 265,018,700,550 158,775,288,000
After five years 16,617,027,500 -
347,778,764,947 244,906,494,843
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 315,580,188,828 192,622,942,843
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
29
Long-term obligations under finance leases represent machinery finance leases from Vietcombank
Leasing Co., Ltd.
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 21,012,358,580
In the second to fifth year inclusive 26,275,833,655 30,686,860,617 24,623,564,374 26,942,546,802
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
26. LONG-TERM PROVISIONS
Long-term provisions represent for the severance allowance accrued in accordance with the Group’s
policies.
27. OWNERS’ EQUITY
The list of main shareholders of the Company who are holding 5% of number of share or more and
other shareholders have been fixed as at 19 February 2016 and 22 December 2014 by 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 19/2/2016 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN
These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
30
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
Balance 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 15,086,185,164 169,801,475,131 735,859,054,730
Profit for the year - - - - - - 168,400,413,084 168,400,413,084
Funds appropriation - - - 12,351,817,949 12,351,817,949 12,351,817,949 (55,583,180,770) (18,527,726,923)
Dividends declared - - - - - - (78,559,201,600) (78,559,201,600)
Balance 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 27,438,003,113 204,059,505,845 807,172,539,291
Apply new accounting
policy
- - - 52,432,708,944 (52,432,708,944) - - -
Balance as at 01/01/2015 491,999,510,000 22,720,075,000 (5,939,990,000) 66,895,435,333 - 27,438,003,113 204,059,505,845 807,172,539,291
Profit for the year - - - - - - 153,530,498,145 153,530,498,145
Funds appropriation - - - 50,520,123,926 - - (92,620,227,197) (42,100,103,271)
Dividends for year 2014
declared
- - - - - - (29,459,700,600) (29,459,700,600)
Balance as at 31/12/2015 491,999,510,000 22,720,075,000 (5,939,990,000) 117,415,559,259 - 27,438,003,113 235,510,076,193 889,143,233,565
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 funds 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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
31
28. NON-CONTROLLING INTERESTS
Non-controlling interest rate is calculated as follows:
Thanh Cong
Medical Center Thanh Quang
Thanh Cong -
Vinh Long TC Eland
VND VND VND VND
Charter capital of subsidiaries 21,700,000,000 22,000,000,000 37,293,406,255 3,000,000,000
In which:
Contributed capital from the Company 15,395,000,000 21,450,000,000 37,293,406,255 3,000,000,000
Contributed capital from minority interests 6,305,000,000 550,000,000 - -
Non-controlling interests rate 29.06% 2.50% - -
Non-controlling interests base on net assets as at 31 December 2015:
Thanh Cong
Medical Center Thanh Quang
Thanh Cong -
Vinh Long TC Eland Total
VND VND VND VND VND
Total assets 22,333,905,140 22,000,000,000 262,727,230,870 3,455,888,179 310,517,024,189
Total liabilities 1,686,626,535 - 262,679,006,250 95,600,516 264,461,233,301
Total net assets 20,647,278,605 22,000,000,000 48,224,620 3,360,287,663 46,055,790,888
In which:
Owners' contributed capital 21,700,000,000 22,000,000,000 37,293,406,255 3,000,000,000 83,993,406,255
Share premium (1,340,000,000) - - - (1,340,000,000)
Retained earning/(accumulated
losses)
287,278,605 - (37,245,181,635) 360,287,663 (36,597,615,367)
Non-controlling interests 5,999,079,163 550,000,000 - - 6,549,079,163
In which:
Owners' contributed capital 6,305,000,000 550,000,000 - - 6,855,000,000
Share premium (389,404,000) - - - (389,404,000)
Retained earnings 83,483,163 - - - 83,483,163
Non-controlling interests based on business result for the year ended 31 December 2015:
Thanh Cong
Medical Center Thanh Quang
Thanh Cong -
Vinh Long TC Eland Total
VND VND VND VND VND
Profit/(loss) after tax of subsidiaries 717,745,543 - (37,245,181,635) 360,287,663 (36,167,148,429)
Profit after tax of
non-controlling interest
208,576,854 - - - 208,576,854
Changes of non-controlling interests during the year as follows:
Owner’s
contributed
capital Share premium
Accumulated
losses Total
VND VND VND VND
Balance as at 01/01/2015 7,055,000,000 (389,404,000) (325,093,691) 6,340,502,309
Profit during the year - - 208,576,854 208,576,854
Balance as at 31/12/2015 7,055,000,000 (389,404,000) (116,516,837) 6,549,079,163
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
32
29. OFF BALANCE SHEET ITEM
Foreign currencies:
31/12/2015 31/12/2014
- United State Dollar (USD) 1,360,416 3,938,287
- Japanese Yen ("JPY") 99,339 100,791
- Euro ("EUR") 221 232
30. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
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:
2015 2014
VND VND
Garment and textile
Revenue 2,755,954,819,482 2,533,477,304,870
Cost of goods sold 2,343,359,998,545 2,172,087,419,203
Gross profit 412,594,820,937 361,389,885,667
Healthcare services
Revenue 28,890,853,838 30,596,219,851
Cost of goods sold 21,905,601,829 22,961,780,609
Gross profit 6,985,252,009 7,634,439,242
Others
Revenue 7,049,797,162 7,336,913,812
Cost of goods sold 206,748,717 104,065,062
Gross profit 6,843,048,445 7,232,848,750
Geographical segments
Geographical segments report depends on geographic location of customers in Vietnam (“Domestic”)
or in countries other than Vietnam ("Export"). The Group does not prepare the segment report for
items on the balance sheet due to insufficient basis for separation.
2015 2014
VND VND
Domestic
Revenue 278,674,548,259 275,962,236,813
Cost of goods sold 253,014,955,628 234,224,115,762
Gross profit 25,659,592,631 41,738,121,051
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
The consolidated financial statements do not present segments asset due to such information does not
available to the Board of Directors.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
33
31. NET REVENUE FROM GOODS SOLD AND SERVICES RENDERED
2015 2014
VND VND
Sales of merchandise and services
Garment and textile products 2,678,348,158,423 2,476,915,765,002
Processing fees 79,560,031,576 65,580,887,121
Others 36,822,706,849 37,933,133,663
2,794,730,896,848 2,580,429,785,786
In which:
Revenue from related parties (Note 42) 949,586,523,413 539,341,128,107
Deductions
Sales returns and discounts (2,835,426,366) (9,019,347,253)
2,791,895,470,482 2,571,410,438,533
32. COST OF GOODS SOLD AND SERVICES RENDERED
2015 2014
VND VND
Raw materials 1,445,023,026,180 1,460,932,890,078
Labour costs 462,098,414,744 338,754,427,141
Depreciation and amortisation 60,189,240,713 50,472,223,851
Overheads 391,171,426,411 326,570,897,790
Others 6,990,241,043 18,422,826,014
2,365,472,349,091 2,195,153,264,874
33. PRODUCTION COST BY NATURE
2015 2014
VND VND
Materials 1,348,850,566,683 1,419,456,854,231
Labor cost 516,950,709,383 435,247,141,750
Depreciation and amortisation 69,207,337,981 58,540,985,043
Out-sourced services 570,692,675,065 400,338,983,935
Others 121,921,028,316 95,150,622,639
2,627,622,317,428 2,408,734,587,598
34. FINANCIAL INCOME
2015 2014
VND VND
Bank and loan interest 2,656,896,347 2,267,325,286
Dividend income 176,250,000 176,250,000
Foreign exchange gain 21,297,642,926 10,971,483,541
24,130,789,273 13,415,058,827
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
34
35. FINANCIAL EXPENSES
2015 2014
VND VND
Interest expense 27,382,928,849 26,965,351,933
Reversal provision for financial
investments
(390,564,000) (165,989,700)
Foreign exchange loss 59,890,806,957 19,863,652,506
Others - 6,440,000
86,883,171,806 46,669,454,739
36. 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 883,449,875 4,202,576
Others 1,853,295,801 6,279,064,337
6,652,552,400 8,489,011,242
37. OTHER EXPENSES
2015 2014
VND VND
Expense for sales of material, supplies 879,738,687 506,250
Others 896,803,201 1,992,245,222
1,776,541,888 1,992,751,472
38. CORPORATE INCOME TAX EXPENSES
2015 2014
VND VND
Current corporate income tax expenses
- Corporate income tax based on taxable profit in
the current year
12,842,606,621 14,227,088,843
420,344,022 (587,191,060)
Total current corporate income tax expenses 13,262,950,643 13,639,897,783
- Adjustments for corporate income tax expenses in
previous years to the current year
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
35
The corporate income tax expense based on taxable profit in the current year was computed as
follows:
2015 2014
VND VND
Profit before tax 166,957,866,800 181,702,866,009
Adjust for 1,583,068,814 7,181,666,695
- Increase taxable income 9,858,885,347 11,912,613,481
- Decrease taxable income (8,275,816,533) (4,730,946,786)
Assesable income 168,540,935,614 188,884,532,704
Of which:
+ Income from activities which entitled incentive
tax rate 167,085,462,226 188,465,574,836
+ Income from office rental service - -
+ Income from TC Eland 450,359,579 -
+ Other income 1,005,113,809 418,957,868
Applicable tax rate
+ For income from activities which entitled
incentive tax rate 15% 15%
+ For income from office rental service 20% 20%
+ For income from TC Eland 20% 0%
+ For other income 22% 22%
Corporate income tax 25,374,016,288 28,362,006,956
Tax reduction (12,531,409,667) (14,134,918,113)
Corporate income tax based on taxable profit 12,842,606,621 14,227,088,843
in the current year
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 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%.
TC Eland is obligated to pay corporate income tax at the rate of 20% and the Company's remaining
subsidiaries are obliged to pay corporate income tax at the rate of 22%.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
36
39. BASIC EARNINGS PER SHARE
The calculation of the basic earnings per share attributable to the ordinary equity holders of the
Company is based on the data as below and the certain reclassification has been made to the prior
year’s figures in accordance with the guidance of Circular 200 to enhance their comparability with
the current year’s presentation:
2015 2014
VND VND
Profit for the year attributable to equity holders
of the Company
153,530,498,145 168,400,413,084
Less: appropriation of bonus and welfare fund 46,059,149,444 42,100,103,271
Earnings for the purposes of basic earnings
per share
107,471,348,701 126,300,309,813
Weighted average number of ordinary shares for the
purposes of basic earnings per share
49,099,501 49,099,501
Earnings per share 2,189 2,572
40. 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 Group 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 Group 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.
41. FINANCIAL INSTRUMENTS
Capital risk management
The Group manages its capital to ensure that the Group will be able to continue as a going concern
while maximizing the return to shareholders through the optimization of the debt and equity balance.
The capital structure of the Group consists of net debt (borrowings as disclosed in Note 23 and 25,
offset by cash and cash equivalents), and equity attributable to shareholders (comprising owners’
contributed capital, share premium, treasury shares, funds and retained earnings).
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
37
Gearing ratio
The gearing ratio of the Group as at the balance sheet date was as follows: 31/12/2015 31/12/2014
VND VND
Borrowings 1,158,067,908,829 868,729,079,407
Less: Cash and cash equivalents (88,198,067,189) (140,749,128,463)
Net debt 1,069,869,841,640 727,979,950,944
Equity 895,692,312,728 813,513,041,600
Net debt to equity ratio 1.19 0.89
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.
Categories of financial instruments
31/12/2015 31/12/2014
VND VND
Financial assets
Cash and cash equivalents 88,198,067,189 140,749,128,463
Trade and other receivables 156,584,112,290 146,502,448,935
Investments 2,767,600,000 2,767,600,000
Deposits 368,650,000 436,180,000
247,918,429,479 290,455,357,398
Financial liabilities
Obligations under finance leases 54,519,142,722 47,954,905,382
Borrowings 1,103,548,766,107 820,774,174,025
Trade and other payables 221,040,634,054 160,844,450,778
Accrued expenses 31,964,913,478 10,766,268,840
1,411,073,456,361 1,040,339,799,025
Carrying amounts
The Group has not assessed fair value of its financial assets and liabilities as at the balance 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 Group has set up risk management system to identify and assess the risks exposed by the Group
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
Group’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.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
38
Market risk
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies; consequently,
exposures to exchange rate fluctuations arise.
The carrying amounts of the Group’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
Foreign currency sensitivity analysis
The Group is mainly exposed to United States Dollar, Euro and Japanese Yen.
The following table details the Group'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 Board of Directors’ 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 year 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 follows:
2015 2014
VND VND
United States Dollar (USD) (42,568,251,730) (34,264,889,234)
Euro (EUR) (174,375,914) (11,742,747)
Japanese Yen (JPY) (580,917,929) 896,586
(43,323,545,573) (34,275,735,395)
Applying the same analysis to South Korean Won, the increase/decrease in South Korean Won would
not have material effect to the profit before tax of the Group during the year.
Interest rate risk management
The Group has significant interest rate risks arising from interest bearing loans which are arranged.
The risk is managed by the Group by maintaining an appropriate level of borrowings and analyzing
market competition to enjoy favorable interest rates from appropriate lenders.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
39
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 22,070,975,322 (2014: VND 16,415,483,481).
Share price risk management
Shares held by the Group are affected by market risks arising from the uncertainty about future prices
of such shares. The Group manages this risk exposure by setting up investment limits. The
Company’s Board of Directors also assesses and approves decisions on share investments such as
operating industry, investees, etc. The Group assesses the share price risk to be immaterial.
The Group is also exposed to equity price risks arising from investments in subsidiaries and
associates. The Company’s Board of Directors 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 Group does
not have intention to trade these investments in the foreseeable future.
Commodity price risk management
The Group purchases materials, commodities from local and foreign suppliers for business purpose.
Therefore, the Group is exposed to the risk of changes in selling prices of materials, commodities.
Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in
financial loss to the Group. The Group has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis. The Group 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 Group believes can generate within that period. The Group policy is to regularly
monitor current and expected liquidity requirements to ensure that the Group 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 Group’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 Group can be required to pay. The
inclusion of information on non-derivative financial assets is necessary in order to understand the
Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
40
31/12/2015 Less than 1 year Over 1 year Total
VND VND VND
Cash and cash equivalents 88,198,067,189 - 88,198,067,189
Trade and other receivables 156,584,112,290 - 156,584,112,290
Investments - 2,767,600,000 2,767,600,000
Deposits 333,650,000 35,000,000 368,650,000
245,115,829,479 2,802,600,000 247,918,429,479
Obligations under finance leases 29,895,578,348 24,623,564,374 54,519,142,722
Borrowings 787,968,577,279 315,580,188,828 1,103,548,766,107
Trade and other payables 221,040,634,054 - 221,040,634,054
Accrued expense 31,964,913,478 - 31,964,913,478
1,070,869,703,159 340,203,753,202 1,411,073,456,361
Net liquidity gap (825,753,873,680) (337,401,153,202) (1,163,155,026,882)
31/12/2014 Less than 1 year Over 1 year Total
VND VND VND
Cash and cash equivalents 140,749,128,463 - 140,749,128,463
Trade and other receivables 146,502,448,935 - 146,502,448,935
Investments - 2,767,600,000 2,767,600,000
Deposits 401,180,000 35,000,000 436,180,000
287,652,757,398 2,802,600,000 290,455,357,398
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 160,844,450,778 - 160,844,450,778
Accrued expense 10,766,268,840 - 10,766,268,840
818,513,560,516 221,826,238,509 1,040,339,799,025
Net liquidity gap (530,860,803,118) (219,023,638,509) (749,884,441,627)
Regardless of the existing net liquidity gap, the Board of Directors believes that the Group 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 the minimum credit lines available. Undrawn facilities
are disclosed in Note 23 and 25.
42. RELATED PARTY TRANSACTIONS AND BALANCES
List of related parties:
Name Relationship
Eland Asia Holdings Pte Ltd Main shareholder
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
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
41
During the year, the Group 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
Eland Asia Holding Pte.Ltd - Hong Kong Branch 110,819,984,998 -
Eland Fashion Hong Kong Ltd - Taiwan Branch 389,940,189 -
Wish Fashion (Shanghai) Co., Ltd 19,806,415,435 17,439,652,676
S.Y VINA Joint Stock Company 10,031,040 11,744,727
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
949,586,523,413 539,341,128,107
Purchases
Eland World Limited 45,539,875,591 37,634,227,008
Eland International Fashion (Shanghai) Co., Ltd 141,438,650,163 58,131,329,874
Eland Vietnam Co., Ltd. 2,327,152,594 72,391,200
S.Y VINA Joint Stock Company 114,111,270 -
Savimex Corporation 3,357,174,624 1,960,211,261
Wish Trading (Shanghai) Co., Ltd 1,370,300,852 829,488,538
Loan interest
E-land Asia Holdings Pte Ltd 1,535,197,469 1,285,030,254
Dividends declared to
E-land Asia Holdings Pte Ltd 25,524,958,800 21,270,799,000
Remuneration paid to the 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
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 Ltd 1,130,604,900 2,385,261,588
Eland World Limited 47,517,326,523 22,961,175,289
Eland International Fashion (Shanghai) Co., Ltd 3,085,948,489 1,713,623,088
Eland Asia Holding Pte.Ltd - Hong Kong Branch 21,935,155,050 -
Eland Fashion Hong Kong Ltd - Taiwan Branch 175,475,935 -
Eland Retail Limited - 1,823,045,028
Eland Vietnam Co., Ltd. - 100,936,635
Wish Fashion (Shanghai) Co., Ltd - 834,265,850
75,387,930,887 32,983,539,291
THANH CONG TEXTILE GARMENT INVESTMENT TRADING JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
36 Tay Thanh Street, Tay Thanh Ward, Tan Phu District Consolidated Financial Statements
Ho Chi Minh City, S.R. Viet Nam For the year ended 31 December 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements
42
31/12/2015 31/12/2014
VND VND
Other receivables
Thanh Chi Corporation 1,040,950,000 2,602,375,000
Short-term trade payables
Eland International Fashion (Shanghai) Co., Ltd 31,397,592,759 8,139,709,455
Eland World Limited 11,922,392,020 4,128,022,920
Wish Trading (Shanghai) Co.Ltd 107,343,157 -
S.Y VINA Joint Stock Company 24,015,646 -
Savimex Corporation 298,310,408 206,294,364
43,749,653,990 12,474,026,739
Loan payable
E-land Asia Holdings Pte Ltd 157,640,000,000 149,520,000,000
Loan interest payable
E-land Asia Holdings Pte Ltd 6,212,814,898 4,677,617,429
43. SUPPLEMENTAL NON-CASH DISCLOSURES ARE STATED ON CONSOLIDATED
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.