for SUCCESS

Transcription

for SUCCESS

OF BUILDING THE
FOUNDATION
for
SUCCESS
1993 - 2013
ANNUAL REPORT 2013
CONTENTS
Vision - Missions
04
KDC - 20 YEARS
06
Company history - milestones
20 years - social responsibilities
Testimonials 20 years
MANAGEMENT'S REPORT
General information
Corporate action 2013
Key financial highlights
Share ownership
List of subsidiaries and related parties
Chairman's message
CEO's message
Board meetings and resolutions
Board of Directors and Board of Management
Board of Management
Supervisory Board
Change in key personnel - management
- transaction of related parties
Management discussion
Human resources
Corporate social responsibility
Food safety and environmental responsibility
CONSOLIDATED FINANCIAL STATEMENTS
General information
Report of the management
Independent auditors’ report
Consolidated balance sheet
Consolidated income statement
Consolidated cash flow statement
Notes to the consolidated financial statements
08
14
16
18
20
21
22
26
28
30
34
38
41
44
46
48
50
60
62
64
66
68
70
71
72
74
75
77
2011
94
19
95
19
97
19
96
19
2012
2008
2009
2010
05
20
06
20
03
20
h
nt
ompany
ai
na
ble
c
co
re
3
201
2000
07
20
1999
e
1993
04
20
1998
th i
Streng
t
C
us
r
e
a
ds
t
es a
healthy an
rg
oa
ls
d
uil
fb
20 years o
ou
d
n
reach beyo
n
wi
Allo
for
us t
o
g
ss
the
cce
u
foun
s
r
dation fo
in
g
2002
2001
VISION
FLAVOR YOUR LIFE
Kinh Do creates life’s flavor through wholesome,
healthy, nutritious and convenient foods.
MISSIONS
Our CONSUMER MISSION
Is to identify and produce affordable staple and packaged foods,
snacks, bakery products, beverages and juices, confectionaries
and condiments, instant foods, processed meats and health
supplements that are appealing. Our products are pioneering
market-leading, hygienic, healthy, satisfying and conveniently
available to all consumers.
Our SHAREHOLDER MISSION
Is to maximize investment returns over the long-term and to
manage risks in order to give certainty and confidence that
investments in our business can achieve our shareholder’s goals.
Our PARTNER MISSION
Is to create sustainable value for supply chain partners through
the creation of innovative food products, which address consumer
demand trends and satisfy or exceed consumer expectations; and
provide equitable returns for all.
Our STAFF MISSION
Is to nurture and develop the skills and abilities of our people to
meet the professional demands of their work and satisfy their
personal needs. The aim is to create a dynamic, creative, innovative
and dependable community within the company.
Our COMMUNITY MISSION
Is to contribute to the communities in which we operate through
sponsorship programs.
ANNUAL REPORT 2013
4 5
2002
2001
2000
1999
19
94
19
95
19
96
19
97
1998
1993
-2
3
201
2
201
1
0
9
8
200
200
201
201
7
200
6
200
5
200
4
200
3
200
rs
a
ye
0
01
01
KDC
STRENGTH in
the CORE...
COMPANY HISTORY - MILESTONES
Kinh Do has always had its own
trade marks demonstrating our
creativity, leadership and our
emphasis on Vietnamese brands in
our journey beyond Vietnam.
1993
•Established
Kinh Do Company
with only 70
employees.
1995 - 1996
•Constructed
a 60.000 m2
factory in Thu
Duc District.
2000
•Constructed
North Kinh Do
factory in Hung
Yen with total
area of 28,000 m2
and total
investment of
VND 30 billion.
2001
•North Kinh
Do Factory
officially went
into operations
serving the
North Vietnam
market.
2003
•Acquired Wall’s
ice cream factory
from Unilever and
established KI
DO Corporation.
Developed Merino
and Celano brands.
2004
•Established Kinh
Do Binh Duong
Corporation.
•North Kinh Do is
officially listed on
the stock exchange
with ticker NKD.
2005
•Kinh Do
Corporation is
officially listed on
the stock exchange
with ticker KDC.
•Kinh Do invested
into Tribeco
Company.
2006
•Constructed Kinh Do
Binh Duong factory
in VSIP industrial
zone with total area
of 13 ha and total
investment of VND
660 billion.
2007
•Kinh Do formed a
strategic partnership
with Eximbank.
•Kinh Do cooperated
•Kinh Do invested
with Cadbury Group.
•Kinh Do received
•Kinh Do formed a
strategic partnership
with Nutifood.
into Vinabico
company.
Labor Medal III.
ANNUAL REPORT 2013
8 9
2008
•Kinh Do Binh
Duong factory
official went into
operations.
•Kinh Do is voted
as one of the top
Vietnamese brands.
•Kinh Do is voted to
be a National Brand
organized by MOIT.
2010
2011
•North Kinh Do
•Signed a strategic
(NKD) and KI DO
partnership
Corporation were
with Ezaki Glico
merged into Kinh
Company (Japan).
Do Corporation
(KDC).
•Kinh Do is voted
to be a National
Brand the second
time organized by
MOIT.
2012
2013
•Completed the
•Kinh Do
merge of Vinabico
celebrated the
into KDC.
company's 20th
anniversary.
•For the third
consecutive time, •Kinh Do received
Kinh Do is voted
Labor Medal II.
to be a National
Brand organized
by MOIT.
COMPANY HISTORY - MILESTONES
Throughout our 20 years journey serving consumers, Kinh Do not
only brings flavor to life with our nutritious, convenient and unique
products, but also carry all the sweet happy moments of family
reunion, and intimate gathering during every holiday, moment
and fills it with happiness for our consumers. From just offering
simple snack products, Kinh Do has continuously innovated to bring
hundreds of products to serve the market, many of which are now
market-leading products. We continue to look forward to bringing
nutritious products following the "Food & Flavor" strategy and to
become a familiar choice for everyday consumers.
1993
KINH DO
founded
Launched
snack products
1994
1996
Launched
cookie products
1997
Launched
bun products
Launched
moon cakes
1998
Launched
cracker products
1999
1998
1997
2000
Launched
chocolate candy
Launched candy
2005
Launched
cake products
Launched
Wel Grow milk
Launched
Pocky products
2011
2012
2013
2007
2012
Launched
Wel Yo yogurt
KINH DO 20th
Anniversary
Launched rice
cracker products
ANNUAL REPORT 2013
12 13
SOCIAL
RESPONSIBILITIES
During the past twenty years of extraordinary
achievements, Kinh Do’s successes have always
been associated with meaningful stories of social
responsibility brand.
The “TASTE OF HAPPINESS”
FOR CONSUMERS
FOR EMPLOYEES
During our 20 year journey with a
mission to bring the "taste of happiness"
to consumers, Kinh Do has continuously
seeked to secure stable raw materials,
invest in modern technology, and strictly
maintain professional management
systems, as well as high hygiene and
food safety standards. We have always
kept in mind that any manufactured
products that does not meet our high
quality of standards will not be sold
to the consumers. Kinh Do always
innovates and researches new products
that are nutritious and unique to satisfy
the changing demand of customers.
Investment in developing the talents
of our employees has been one of the
keystones to the success of Kinh Do’s
during the past 20 years. Going beyond
providing salaries, bonuses and ensuring
working safety for our employees, Kinh
Do’s management team also organizes
continuous training programs, and
implements welfare policies to ensure
the well being of employees both
professionally and personally.
CORPORATION AND DEVELOPMENT
THE COMMUNITY
WITH OUR PARTNERS
In our strategic development, investors
and partners have always been important
links in our supply chain. We believe
in the strategy to forming long-term
sustainable and efficient partnerships to
grow together. These partnerships have
been the pride of Kinh Do during past
for years. They are important sources
of strength for us in the next stage of
development.
Kinh Do brings the "taste of happiness"
to the community through sharing and
contributions. For years, Kinh Do has been
the main sponsor for many major cultural,
and sports events throughout the country.
In addition, we also actively participate in
sponsoring students and social programs
such as building social housing, sponsoring
eye surgeries, or heart surgeries for poor
patients. Accompanying many social
organizations, Kinh Do also brought joy to
thousands of children and less fortunate
people across the country during festivities
and Tet holidays.
DEVELOPING BUSINESS WITH SOCIAL RESPONSIBILITY IS A PART OF KINH
DO’S CULTURE WHICH ARE NURTURED THROUGH OUR BRANDS OVER
THE PAST 20 YEARS.
ANNUAL REPORT 2013
14 15
TESTIMONIALS
Kinh Do is one of the few companies that
is very passionate with the community. For
sponsoring of Poor Patients Association,
Kinh Do spent a lot of enthusiasm
financing many association's activities
during the past 17 years. We appreciate
the companionship of the company not
only through sponsor contributions, but
also in the devotion, and passion of the
leaders and staff of the company. We
believe that as the company grows, Kinh
Do’s culture of sharing responsibility with
the community will also continue to
develop bringing further contribution to
the community.
Mr. Tran Thanh Long
Chairman of Hochiminh Sponsoring for
Poor Patients Association
Mr. Nguyen Van Duong
Age 55
Ton That Thuyet, District 4
Mrs. Vo Thi Ngoc Lien
Age 50 - Tran Ke Xuong, Ward 7,
Phu Nhuan District
I started to be impressed with
Kinh Do since its acquisition
of Wall’s ice cream factory
from Unilever. This is evidence
that Vietnamese companies
have sufficient strength and
confidence to integrate with
the global market. I think that
during the past 20 years Kinh
Do has achieved a lot of success.
However, the path ahead for
the company still has many
difficulties and challenges. I hope
this brand will always prevail to
reaffirm Vietnamese pride on the
world stage.
When there is a holiday or a
demand for confectionery
products, Kinh Do always has
been my #1 choice because I
believe in the credibility, quality
and the taste suitability of Kinh
Do's products. 20 years passed
like a flash and Kinh Do has
grown strongly proving my
choice for the family was right.
I hope this brand will continue
to grow and develop better
products for consumers.
Through the compassion "Bring back
the light to poor blind patients" program
of the Sponsoring for Poor Patients
Association and Kinh Do Corporation,
my eyesight was recovered. Being
able to see again, I also recovered my
motivation to rise again in life. I rejoiced
and honored to represent over 400,000
cataract patients to express our most
sincere gratitude to the Association and
Kinh Do. We wish your company success
so that the sharing and caring for the
community that your company has
continuously done our the past 20 years
can be shared even further to those less
fortunated.
Ms. Huynh Thi Thanh Nhan
District 12
(retired teacher)
Ms Do Thi Hong Loan
Age 25 - Nguyen Huu Tien,
Tan Phu District
Since I was a child, I have seen my
mother buy Kinh Do products
for our family. As I grew up, I
also prioritized the products
of this brand. Although it is a
Vietnam confectionary brand,
I found that the design, and
quality of products and food
hygiene issues were always well
maintained by the company. I
also know that the company's
products are also exported to
many countries around the world
such as America, Japan, South
Korea, etc. This is an outstanding
achievement and a pride of
Vietnamese brands.
With Kinh Do’s 20 years of experience in
the food industry, we as partners have
always believed in the direction and
growth of the company in the future. The
strength of brand, and market position
in categories as well as Kinh Do’s diverse
product portfolio are major advantages
that helped us confidently make long
term investments into the market. Hoang
Tan Distributor had the opportunity to
cooperate with Kinh Do for over 18 years
and we recognize the rapid, drastic and
long-term oriented changes that were
made by Kinh Do’s management. These
changes will help to further reinforce the
confidence of distributors in developing
alongside the company during the next
20 - year journey.
Mr. Pham Van Hoang
Hoang Tan Distributor
Mr. Nguyen Quoc Binh
Professional Investor
I invested in many stocks in VN30
group of companies, including
KDC. Having closely followed the
development of the company,
I noticed that with each
passing year Kinh Do not only
reached the targets announced
with shareholders but the
management team always
boosted investor confidence by
setting a transparent strategic
direction. I wish the company
to continue to grow and create
more value for shareholders in
the future.
After 20 years of rapid development,
we believe that Kinh Do will continue
to be a leading company in Vietnam
confectionary market.
Our company has a long history of
cooperating and collaborating with Kinh
Do. We appreciate Kinh Do’s philosophy
of growing together with partners in
the value chain of the company. Kinh
Do has always set very strict standards
for inputs and has closely collaborated
with us to manage the quality of
products throughout supply chain
from inputs received from suppliers to
transportation to Kinh Do’s warehouse
and finally to products deliver to
customers. We also manages jointly with
Kinh Do the price fluctuations of inputs.
After 20 years of development, as the
scale of Kinh Do Corporation increase, so
is our cooperation with Kinh Do. We are
delighted with such development and
wish the relationship between the two
parties will continue to grow further.
Mr. Doan Ngoc Thai
Thai Duong Distributor
Mr. Phan Thong Cuong
General Director Binh Dong Flour Company
Supplier
We have many years of experience in
the consumer staple industry but we
were most impressed when partnering
with Kinh Do Corporation. The respect
towards distributors and the company’s
close guidance, and support in resolving
our problems make us feel secure to
collaborate with the company. It can be
said that the cooperation with Kinh Do
is not just a business or career, but also a
pride, and long-term commitment.
Ms. Truong Thi Lan Phuong
Finance Manager, KDC
Having been with the company
and attending many activities
for over 10 years, I found Kinh
Do changing every year. The
company organized many
activities to help facilitate
teamwork and collaboration
among employees as well as
demonstrate their own talents.
I hope that our company will
develop further and continue
to strengthen the bond of its
employees so that whenever
Kinh Do is mentioned, people will
not only think about the quality
of our product but also think
of a friendly and professional
working environment.
Ms. Vu Thi Thu Vui
Cakes Line – BKD
Ms. Nguyen Thi Kim Nga
KI DO production
I have been with Kinh Do for
more than 15 years: Since the
day the company was just a
small establishment until it has
become a major corperation.
I am lucky to be able to
work in such a professional
environment. Following the
development of Kinh Do, I have
also undergone major changes
becoming more prosperous
and having better relationships. I
believe the whole of Kinh Do will
always unite and work together
to have more successes in the
next development stage.
I still remember the feeling
when Kinh Do acquired the
ice cream factory from a multinational corporation in 2003. I
wondered how my lives, salaries
and other related issues would
turn out. But we were really
relieved as Kinh Do has done
far more than our expectations.
I truly feel honored and assured
as a member of the Kinh Do
family. And if I was granted one
wish, I would wish Kinh Do and
KI DO to grow steadily beyond
Vietnam.
ANNUAL REPORT 2013
16 17
HEALTHY &
SUSTAINABLE COMPANY
Man
ag
em
e
...creates a
rt
o
p
e
R
s
'
t
n
01
02
GENERAL INFORMATION
KINH DO CORPORATION
8/F, Empress Tower, 138-142 Hai Ba Trung Street, Da Kao Ward,
District 1, Ho Chi Minh City, Vietnam.
Tel: +84 (8) 38270838 Fax: +84 (8) 38270839
Email: info@kinhdo.vn
Website: www.kinhdo.vn
Exchange Listed: Ho Chi Minh Stock Exchange (HSX)
Symbol: KDC
Chartered Capital: VND 1,676,282,700,000
TIONS
LO C A L
IND
I
72,339,538
ALS
FORE
DU
IGN
I
VI
NS
U
TIT
58,565,196
Shares
Shares
43.54 %
35.25 %
166,136,014
Shares
2,966,807
32,264,473
1.79 %
19.42 %
T IT
LS
I
S
UA
D
I
V
Shares
LO C A L
IN
Shares
UTI
ONS
FOREIG
NI
ND
CORPORATE ACTIONS 2013
30/01/2013
ESOP SHARE ISSUANCE
Issued 1,320,000 bonus shares for Board of Management and
issued 5,281,000 discounted shares for Board of Directors,
Supervisory Board, and employees.
27/02/2013
2012 DIVIDEND PART 1
VND 165 billion paid to existing investors
at the rate of 10%.
27/06/2013
VINABICO SHARE SWAP
1,105,645 KDC shares issued to swap
with Vinabico shares.
14/08/2013
2012 DIVIDEND PART 2
VND166 billion paid to existing investors
at the rate of 10%.
ANNUAL REPORT 2013
20 21
KEY FINANCIAL
HIGHLIGHTS
VALUE FOR SHAREHOLDERS
VND
Dividends
Earnings Per Share
GR
OU
P
SA
LE
GR
OPE
OS
RO
RAT
ING
VND
billion
KDC ACHIEVED
S
SP
10.1
331
3,051
%
Return on Equity
VND
4,561
+ 6.4% compare to 2012
VND
1,976
+ 5.7% compare to 2012
FIT
PRO
FIT
BILLION
BILLION
623
VND
BILLION
PROFIT BEFO
RE TAX
FLOWS
OPERATING CASH
619
VND
BILLION
707
VND
BILLION
+ 22.1% compare to 2012
+ 26.3% compare to 2012
+ 53.3% compare to 2012
Gross Profit Margin 43.3%
Operating Profit Margin 13.7%
2013: COMPLETED RESTRUCTURING
OF THE GROUP PLATFORM
This year marked the completion of the corporate
restructuring. We continue to seek improvements
in operations and aim to continue with ongoing
efficiency improvements. Leveraging on the strong
platform, we will seek opportunities to enhance our
growth internally and externally.
EFFICIENT USE OF CAPITAL
UR
SET T NOVER
AS
0.77x
RN ON ASSETS
TU
RE
7.7%
CONSERVATIVE USE OF DEBT
Debt Equity Ratio
0.31x
STRONG CASH RESERVE FOR GROWTH
External Gearing
Ratio
0.12x
Current Ratio
2.54x
Quick Ratio
ANNUAL REPORT 2013
2.30x
22 23
KEY FINANCIAL
HIGHLIGHTS (continued)
REVENUE
Unit: Billion VND
5,000
4,247
4,286
2011
2012
4.561
4,000
3,202
3,000
1,663
2,000
1,000
2009
2010
2013
M&A PERIOD
1,976
VND
BILLION
GROSS PROFIT IN 2013
ASSET EFFICIENCY OVER THE YEARS
Gross Profit (Billion VND)
and Gross Profit Margin (%)
2.500
2.000
44%
43%
44
42
1.000
39%
40
39%
500
38
2009
2010
2011
2012
36
2013
Earnings per Share (VND)
331
350
46
44%
1.500
_
Dividend (Billion VND)
311
300
3,500
250
2,800
200
2,100
150
134
122
144
1,400
100
50
_
2,774
2,082
_
2010
2011
2012
2013
Business Cycle (Days)
10.1%
2,313
10%
9.1%
7.9%
8%
7.2%
700
2009
12%
3,051
2010
2011
Adjusted EPS
2012
6%
2013
Adjusted ROE
Asset Efficiency (x)
90
0.90
60
65
60
0.60
49
_
2009 2010 2011
Business Cycle
Inventory Days
33
Debt Ratios (x)
0.80
2.5
0.20
_
2.0
0.31
0.21
0.36
0.26
0.14
0.12
2009
Debt/Equity
2010
2011
2012
0.31
0.12
2013
External Gearing (times)
6.3%
1.5
2.5
1.8
1.4
1.7
1.2
2.3
5,000
2009
2010
2011
2012
1.5
0.5
1,000
_
_
2010
2011
ROA (%)
4,561 2,584
3,000
2,000
Current Ratio
0.0%
2013
4,000
1.0
2009
8.0%
Performance Breakdown
(Billion VND)
2.3
1.5 1.4
7.7%
4.0%
Average Asset Turnover
3.0
0.51
0.40
_
Liquidity Ratios (x)
0.72
0.60
12.0%
5.1%
0.30
2012 2013
Collection Days
Payable Days
16.0%
0.76x 0.77x
10.8% 0.64x
0.39x
43
30
13.9% 0.78x
2012
2013
Quick Ratio
40
997
395
Net
Sales
COGS
Net
Selling G&A
Financial Exp
Exp
Income
ANNUAL REPORT 2013
619
Profit
Before
Tax
24 25
SHARE OWNERSHIP
BOARD OF DIRECTORS
SHARE OWNERSHIP %
Tran Kim Thanh
0.08%
Tran Le Nguyen
8.42%
Wang Ching Hua
0.52%
Vuong Buu Linh
0.05%
Vuong Ngoc Xiem
3.48%
Tran Quoc Nguyen
0.34%
Nguyen Van Thuan
0.01%
Nguyên Gia Huy Chuong
0.00%
Nguyen Duc Tri
0.00%
BOARD OF MANAGEMENT
SHARE OWNERSHIP %
Tran Le Nguyen
8.42%
Vuong Buu Linh
0.05%
Vuong Ngoc Xiem
3.48%
Wang Ching Hua
0.52%
Nguyen Xuan Luan
0.07%
Mai Xuan Tram
0.04%
Bui Thanh Tung
0.04%
Tran Quoc Nguyen
0.34%
Tran Quoc Viet
0.02%
Tran Tien Hoang
0.09%
Kelly Yin Hon Wong
0.02%
Ma Thanh Danh
0.00%
SUPERVISORY BOARD
SHARE OWNERSHIP %
Le Cao Thuan
0.00%
Vo Long Nguyen
0.00%
Luong My Duyen
0.00%
34.64%
THROUGH DIRECT AND
INDIRECT OWNERSHIP OF
BOARD OF DIRECTORS AND
BOARD OF MANAGEMENT.
ANNUAL REPORT 2013
26 27
LIST OF SUBSIDIARIES
AND RELATED PARTIES
99.8
%
PERCENTAGE
OWNERSHIP
KINH DO BINH DUONG CORPORATION
Address: Singapore Industrial Park, Thuan An
District, Binh Duong Province, Vietnam.
Operating scope: Process agricultural products
and foods; produce confectionery, purified water,
and fruit juice; and sell and purchase agricultural
products and foods, industrial products, and fabric.
KI DO CORPORATION
Address: Cu Chi Northwest Industrial Park, Cay
Sop Village, Tan An Hoi Ward, Cu Chi District, Ho
Chi Minh City, Vietnam.
Operating scope: Produce and trade all kinds
of food and drink products such as ice, ice
cream, milk and other dairy products.
VINABICO CONFECTIONERY JOIN
STOCK COMPANY
Address: 436 No Trang Long Street, Ward 13,
Binh Thanh District, Ho Chi Minh City, Vietnam.
Operating scope: Produce and sell confectionery and purified water.
100
100
PERCENTAGE
OWNERSHIP
PERCENTAGE
OWNERSHIP
%
%
NORTH KINH DO FOOD JOINT STOCK
COMPANY
Address: Ban Yen Nhan Town, My Hao District,
Hung Yen Province, Vietnam.
Operating scope: Produce and process food stuffs,
including various ranges of high-grade cookies,
to trade food and food stuffs, various type of
beverages and liquors as well as
cigarettes produced in Vietnam,
and to lease a factory.
100
%
PERCENTAGE
OWNERSHIP
TAN AN PHUOC COMPANY LIMITED
LAVENUE INVESTMENT CORPORATION
Address: 6/134 National Road No. 13, Hiep
Binh Phuoc Ward, Thu Duc District, Ho Chi
Minh City.
Address: 7th floor, Sun Wah Tower, 115 Nguyen
Hue, Ben Nghe Ward, District 1, Ho Chi Minh
City, Vietnam.
Operating scope: Operate in real estate
industry.
Operating scope: Operate in real estate
industry.
49
50
PERCENTAGE
OWNERSHIP
PERCENTAGE
OWNERSHIP
%
%
ANNUAL REPORT 2013
28 29
NET PROFIT
BEFORE TAX
619
BILLION
CHAIRMAN'S MESSAGE
Dear Stakeholders,
2013 was an extraordinary year and marked
the 20th anniversary of Kinh Do Group. This
is a momentous and poignant milestone for
the Group and for me personally as one of the
founders of the Group.
We first established the company at the
beginning of the 1990’s when Vietnam and
the confectionery industry was a very different
place. Founded at a very early stage of the
market, our company has been able to grow
consistently along side the many changes of the
market. For the past 20 years, the overall food
industry has witnessed vast changes in a variety
of aspects. KDC has become a market leader
across major confectionary categories and is
one of the most recognized Vietnamese brands
in the country.
On this occasion we are pleased to report that we
have delivered our best results in our company’s
history with revenues reaching VND 4,561bn
and net profit before tax at VND 619bn while also
completing stage 4 of the restructuring process
“Profitable Growth”. More importantly we gave
a commitment two years ago to increase our
return on equity and we have achieved the
first milestone with an ROE for 2013 at 10.1%.
In addition, we continued to improve the
efficiency of our consolidated platform. We have
established a nationwide distribution network
and a broad product portfolio with many
products being market leaders and loved by
consumers. These achievements are significant
given the challenging economic conditions and
under which we achieved all this and also the
added complexity of a corporate transformation
of such scale. This entire undertaking was
not merely a sum of parts consolidation of
companies but also an undertaking in which
we transformed and unified our company under
a two part strategy: 1) to unite the company
under one consolidated platform and 2) to
elevate the product strategy to a broader Food
& Flavor offering.
Looking back at our heritage these past 20
years, we were able to build our company’s
competitive advantage and make use of
opportunities amidst increasingly competitive
environment. Not only was able to build
an extensive distribution networks and a
portfolio of well-known brands, KDC was
able to build up many brands to become the
leader in their respective categories with sales
of over VND 1,000 billion such as Solite, AFC,
Cosy, Kinh Do mooncakes, Merino and Celano
ice cream.
REVENUE
4,561
BILLION
LOOKING BACK AT OUR HERITAGE THESE PAST 20 YEARS, WE WERE ABLE
TO BUILD OUR COMPANY’S COMPETITIVE ADVANTAGE AND MAKE USE OF
OPPORTUNITIES AMIDST INCREASINGLY COMPETITIVE ENVIRONMENT. WE HAVE
BUILT A SUFFICIENTLY ROBUST PLATFORM TO BE ABLE TO ENDURE DESPITE ANY
EXTERNAL PRESSURES. THIS PLATFORM WILL CONTINUE TO GROW IN LINE WITH
THE OVERALL MARKET AND CONTINUE TO PROVIDE A STEADY RETURN ON CAPITAL.
ANNUAL REPORT 2013
30 31
With regards to corporate governance, KDC
has built a foundation for sustainable growth
through a professional management system
and an experienced management team. KDC
was able to build a operational system of many
SBUs all under the management of an Executive
Management Committee (EMC) which helped
to increase the efficiency of the subs overall.
Another important basis of our success has
been the investment in IT systems to improve
our commercial activities and management
capability. The modernization of our operations
and incorporation of new technology have
vastly improved our management capability
decision making mechanism which resulted in
better company performance overall.
During our journey, KDC also led the M&A market
with various cooperation, partnership and
investment deals to broaden the product portfolio
which built the Group to the scale of today.
I believe that post the challenging restructure
process that we underwent for the past years
our company has been able to build a strong
foundation for growth that will help us succeed
in the future amidst an increasingly competitive
and integrated environment.
Vietnam is now becoming increasingly
integrated into the global supply chain with
the WTO and AFTA becoming effective in 2018
whereby removing many trade barriers. In
addition, Vietnam will also participate in the TPP
and become a part of a larger free trade zone
through multilateral free trade agreements.
Amidst such globalization trends, KDC will
continue to strengthen our competitive core
and maintain the market leading position
while actively seeking new partnership and
cooperation opportunities to accelerate growth
and diversify our product portfolio to serve
consumers.
Though we have achieved many successes in the
past, KDC will continue to seek ways to improve
our operational systems, strengthen our scale
and competitive advantages beyond current
levels to create a platform for future growth. The
goal is to be ready for future acquisitions in the
coming years which will accelerate our growth
opportunities.
During our years of development and through
our many cooperations and partnerships,
KDC has always prepared extensively in
order to swiftly capitalize on any investment
FOR THE NEXT 10 YEARS JOURNEY, KDC WILL CONTINUE TO
PURSUE DEALS WITH REMARKABLE SCALE TO ENTER INTO
NEW CATEGORIES AND INCREASINGLY COOPERATE WITH
NEW PARTNERS TO GROW BEYOND VIETNAM SEEKING
MORE ACHIEVEMENTS AND WRITING NEW HISTORY FOR
THE COMPANY.
opportunities that arose. KDC will also continue
to seek new partnerships that can create
disruptive changes to the market and strengthen
our business capabilities. Core business
however remains our key focus following the
Food & Flavor strategy with us actively seeking
investment opportunities in companies that fit
with our preset criteria, as well as cooperation
and partnership with global companies to bring
the Kinh Do brand abroad.
shareholders, the community, and our supply
chain partners. We succesfully completed our
restructuring process and are now ready to seize
new opportunities within and even beyond
Vietnam. For the next 10 years journey, KDC will
continue to pursue deals with remarkable scale
to enter into new categories and increasingly
cooperate with new partners to grow beyond
Vietnam seeking more achievements and
writing new history for the company.
Over the past 20 years, we have strived to grow
KDC and have successfully become one of the
leading brands in the food industry. From a
small factory in 1993, we have become a major
food corporation in Vietnam with an average
growth rate of over 30% per year during
the first 10 years. During the next 10 years,
we have made many bold and remarkable
initiatives including the acquisition of Wall’s
ice cream factory from Unilever, the listing of
our shares on the stock exchange, and many
acquisitions, partnerships, and cooperations
with both domestic and overseas companies.
Throughout those years, we consecutively
achieved our business targets, and grew the
company steadily creating enormous values for
I would like to thank our many stakeholders,
shareholders, investors, employees, partners,
suppliers, distributors for their business,
support, patience, commitment throughout our
journey and we truly could not have made it this
far without you. These will be the strength and
the source of confident for us during our next 10
years of development.
Finally, I would like to wish you all great health
and success in the upcoming year.
TRAN KIM THANH
Chairman
Kinh Do Group
ANNUAL REPORT 2013
32 33
WITH THE COMPLETION OF STAGE 4 OF THE RESTRUCTURING
PROCESS IN 2013, I BELIEVE THAT WE HAVE ACHIEVED WHAT WE
SET OUT TO DO IN 2010, WHICH WAS TO CREATE A SCALABLE AND
UNIFIED PLATFORM FOR FUTURE GROWTH THAT WOULD BE ABLE
TO RAISE OUR PRODUCT DEVELOPMENT STRATEGY TO THE NEXT
LEVEL, THE FOOD & FLAVOR STRATEGY.
CEO'S MESSAGE
Dear Valued Shareholders,
We have witnessed a majority of the economic
headwinds dissipate both in Vietnam and
globally, but the overall market continued to
be constrained by microeconomic issues that
limited growth in 2013. We again managed our
business with focus on the core food business
using all our strengths and experience to find
and exploit market opportunities. In 2013, KDC
also completed stage 4 of the restructuring
process: Profitable Growth. The result of such
change was a record profit for 2013, despite
slower consumption KDC.
We have persevered to pursue our restructuring
process during the past 5 years through 4 stages
of change: Preparation (2009 – 2010) – Building
Foundation (2011) – Profit through Efficiency
(2012) and Profitable Growth (2013). During
2010 and 2011 we were focused on internal
changes and also process alignments. We spent
the greater part of two years syncing up the
different companies and the operations. By
2012 we entered phase 3 of our transformation
in which we targeted on profitability and specific
changes which leveraged process realignments
to better quality profits (Profitability by
Efficiencies) including major changes in the sales
process, brand management, working capital
management and rationalization of products.
With the completion of stage 4 of the
restructuring process in 2013, I believe that we
have achieved what we set out to do in 2010,
which was to create a scalable and unified
platform for future growth that would be able
to raise our product development strategy to
the next level, the Food & Flavor strategy. The
KDC platform will continue to see incremental
improvements with marginal efficiency gains
over the long term. Growth over the last two
years was constrained by the overall market
conditions and slower consumption but with a
market- focused strategy KDC was able to grow
both revenue and profit.
Last year, the product portfolio restructuring
process focused on core SKUs and continued to
focus on generating further efficiencies, which
contributed to the improved profitability of KDC.
In addition, the company further diversified
its product ranged through the launching of
many new type of products including: whole
grain AFC, Kinh Do fresh bread, and other
new products serving the delights and gifting
segments during Mid Autumn and Lunar New
Year holidays.
Reviewing our product strategy, for 2013 we
entered into the beginning phases of the Food
& Flavor strategy which is defined as meal
compliments and replacements. The goal was
to improve choices for consumers through new
types of products and at the same time improve
the value proposition for consumers through
better quality products and innovations to
extend choices. The product strategy is a
much longer-term strategy and while we
began the process in 2013, it is nowhere near
done, especially with the adverse market
conditions we faced in 2012 and 2013. With
market conditions constraining the distribution
channel, we focused more closely than ever on
profitability by leveraging our existing portfolio
and deliberately delaying the launch of new
products under the Food & Flavor strategy.
We recognized the fierce competition of new
categories, which we intended to participate in
and thus wanted to prepare ourselves
GROSS PROFIT
1,976
BILLION
ANNUAL REPORT 2013
34 35
extensively in order to have a steady footing
upon entry. For the past year, we have focused
on improving profitability using our core
existing products and achieved record results.
The extraordinary performance of KDC in
the past year is the most sound evidence of
the committment of our management team
in delivering results amidst a challenging
environment. In particular, the company
achieved VND 4,562 billion in net revenue in
2013 despite difficult market conditions and
slower consumer demand. The company’s
profitability also improved with profit before
tax reaching VND 612 billion, increasing 24.9%
compared to 2012. These achievements have
shown the positive effects of the restructuring
process of our company undertaken during the
past few years. Furthermore, the management
team’s committment and dedication have
improved profitability over the last four years
since the change began. These factors together
have formed a strong foundation to continue
generating value for shareholders in the future.
We have also institutionalized our group
management process, which now includes
a well-rounded Executive Management
Committee that’s directly responsible for many
key functions and driving the strategy of the
company. This committe will now able to
make the day-to-day decisions in a timely and
effective manner to maximize opportunities.
By assigning responsibilities directly to the
Executive Management Committee – EMC,
we are now able to manage the increasing
complexity and scale of the organization.
As we look beyond the completion of the
final phase of our transition, we believe we
have established a strong enough foundation
operationally and strategically to carry
us forward. This platform allows us to be
focused and flexible enough to capitalize on
the potential opportunities while managing
unforeseen risks. Currently, KDC is moving to
the next stage of development with revenue
target of VND 5,150 billion and profit before
tax of VND 660 billion for the year of 2014.
For the next part of this journey, we will leverage
the scale and strength of our platform built over
20 years as well as embark on a continuous
improvement process to ensure that we will
not ever be complacent. We will strive to
improve our operations and find incremental
improvements throughout our processes. This
will be translated into improved profitability
and steady growth in financial returns for our
stakeholders and supply chain partners.
With the advantage of scale and exisiting
strength which KDC has built over the years,
I believe that KDC is now a company ready to
pursue new partnerships and cooperation in
both Vietnam and overseas. We are ready to
build our success in new potential categories,
creating value for shareholders in 2014 and
beyond.
On behalf of our management team, I want
to thank our shareholders, investors, partners
for your support and valued contribution to
Kinh Do’s successes over the past 20 years.
I wish that our cooperation will continue to
be strengthened so that our company can
continue to deliver value to our shareholders
and partners.
TRAN LE NGUYEN
CEO
Kinh Do Group
WITH THE ADVANTAGE OF SCALE AND EXISITING STRENGTH WHICH KDC
HAS BUILT OVER THE YEARS, I BELIEVE THAT KDC IS NOW A COMPANY READY
TO PURSUE NEW PARTNERSHIPS AND COOPERATION IN BOTH VIETNAM
AND OVERSEAS. WE ARE READY TO BUILD OUR SUCCESS IN NEW POTENTIAL
CATEGORIES, CREATING VALUE FOR SHAREHOLDERS IN 2014 AND BEYOND.
ANNUAL REPORT 2013
36 37
BOARD MEETINGS
AND RESOLUTIONS
BOARD OF DIRECTORS MEETING CONTENTS
10/01/2013 Meeting: Approved the merger of Vinabico
23/01/2013 Meeting: Approve the first dividend payment of 2012
10/04/2013 Meeting: Approve all issues that will be present to shareholders during the AGM.
23/04/2013 Meeting: Approved first quarter financial statements of 2013
26/04/2013 Meeting: Approved company charter for 2013
08/07/2013 Meeting: Selected auditor for 2013
01/08/2013 Meeting: Approve the second dividend payment of 2012
20/10/2013 Meeting: Reviewed company performance of the first nine months of 2013, review MidAutumn season performance, approved financial statements of 3Q2013.
04/11/2013 Meeting: Issued resolution to ask for shareholders’ approvals to conduct a private
issuance to strategic shareholder
No
MEMBER
POSITION
MEETING
ATTENDED
%
1
Tran Kim Thanh
Chairman
9/9
100%
2
Tran Le Nguyen
Vice Chairman
9/9
100%
3
Wang Ching Hua
Member
9/9
100%
4
Vuong Buu Linh
Member
9/9
100%
5
Nguyen Gia Huy Chuong
Member
9/9
100%
6
Vuong Ngoc Xiem
Member
9/9
100%
7
Tran Quoc Nguyen
Member
9/9
100%
8
Nguyen Van Thuan
Member
9/9
100%
9
Nguyen Duc Tri
Member
9/9
100%
10
Le Cao Thuan
Head of SB
9/9
100%
11
Vo Long Nguyen
Member of SB
9/9
100%
12
Luong My Duyen
Member of SB
9/9
100%
NOTES
RESOLUTION OF BOARD OF DIRECTORS
No
RESOLUTION NO.
DATE
CONTENTS
1
01/2013/NQ-HĐQT
18/01/2013
Approved merger of Vinabico
2
02/2013/NQ-HĐQT
23/01/2013
Approved the first dividend payment of 2012
3
03/2013/NQ-HĐQT
08/07/2013
Selected auditor for 2013
4
04/2013/NQ-HĐQT
01/08/2013
Approved the second dividend payment of 2012
5
05/2013/NQ-HĐQT
04/11/2013
Issued resolution to ask for shareholders’ approvals
on issuing new shares for stategic investors
BOARD OF DIRECTORS’ ACTIVITIES WITH BOARD OF MANAGEMENT:
Supervised of the Board of Management conducted on a quarterly basis through quarterly meetings.
As six (6) members of Board of Director are in Board of Management, the Board of Directors were able to fully appreciate
and comprehend the business issues faced by the Management and therefore was able to efficiently supervise the
activities of the Board of Management.
BOARD OF DIRECTOR’S COMMITTEES ACTIVITIES
Until 4Q2013, Kinh Do Corporation has not formed any committee.
ANNUAL REPORT 2013
38 39
BOARD OF DIRECTORS
AND BOARD OF MANAGEMENT
Mr. TRAN KIM THANH
The founder of Kinh Do Corporation,
Chairman of the Board of Directors
of Kinh Do Group
A entrepreneur with a lifetime of experience in
management and business, he is a combination
of boldness in driving the company and caution
in managing risk. Under his leadership, Kinh
Do has grown from a small family business to
become Vietnam’s number one confectionary
company. His strengths are his acute business
senses, thorough risk analysis, and quick decision
making mechanism. These abilities have
help him to many successes in the M&A field
especially acquisition of Wall’s ice cream factory
from Unilever.
Mr. Thanh’s leadership strategy for Kinh Do
Corporation is to create the best company,
consisting of the best people built around the
best processes. Dedicated to many activities
and all milestones of Kinh Do, he is the source of
inspiration and the guiding light for the company
staffs. He is currently Chairman of the Board for
Kinh Do Corporation and sits on various boards
of other large Vietnamese corporations; helping
to contribute to the growth and development
of the country. He is a Member of the Central
Committee of the Vietnam Homeland Front.
He has received several awards and accolades
from both the central and local Government of
Vietnam for his significant contributions to the
socio-economic developments of the country.
Mr. Thanh is the founder of Kinh Do Corporation.
Mr. TRAN LE NGUYEN
Co-founder Kinh Do Corporation,
Vice Chairman of the Board of Directors
& CEO of Kinh Do Group
An experienced entrepreneur with a track record
of building large and profitable businesses over
the last few decades, Mr. Nguyen has been
instrumental in the development of Kinh Do
Corporation to become one of the biggest food
corporation in Vietnam. Under his management,
Kinh Do has emerged as one of the most wellknown brands in Vietnam in addition to a broad
portfolio of market dominating products that
are the best in their categories. Mr. Nguyen
successfully initiated and engineered the
acquisition of the Kido’s ice cream factory and
spear-headed the development of the market for
ice cream and built the business as it is today. In
addition, He is also very successful in other M&A
deals. He wishes for the long lasting of Kinh Do
brands.
Mr. Nguyen serves concurrently as both the ViceChairman of the Board and as the CEO of Kinh Do
Corporation. He is an active member of the board
of directors for the Vietnam Chamber Commerce
and Industry (VCCI) and participates on the board
of several prominent companies in Vietnam.
ANNUAL REPORT 2013
40 41
BOARD OF DIRECTORS
AND BOARD OF MANAGEMENT
Mrs. VUONG BUU LINH
Member of the Board of Directors
& Vice President Kinh Do Corporation
Mrs. VUONG NGOC XIEM
Ms. Linh co-founded Kinh Do Corporation
and has been active in the development
and growth of the company since. She
is experienced in business and supply
chain management; contributing greatly
to the development of both for Kinh Do
Corporation and all its subsidiaries. Under
her guidance, Kinh Do implemented the
ERP system by SAP, effectively increasing
the company’s capability in making
timely and accurate decisions with the
right information.
Ms. Xiem co-founded Kinh Do
Corporation and has been actively
participating in the management of the
company since. She has many years
of experience in managing operations
and particularly in retailing & exporting.
With her experience and hands-on
approach, she has been a key part of the
management team since the founding
of the company and also contributed
largely to the growth of the company.
Currently, Mrs. Linh is both a member
of the Board of Directors and a Vice
President.
Ms. Xiem is currently a member of the
Board of Directors and a Vice President at
Kinh Do Corporation.
Mr. WANG CHING HUA
Mr. Wang has over 20 years of experience
in the food manufacturing and processing
industry, and was one of the original
founders that helped to set up Kinh Do
Corporation’s manufacturing operations.
He has since been instrumental in
helping to develop and scale Kinh Do
Corporation’s manufacturing footprint in
Vietnam.
He is a member of the Board of Directors
and a Vice President.
Mr. TRAN QUOC NGUYEN
Mr. NGUYEN VAN THUAN
Member of the Board of Directors Member of
& General Director of KI DO
the Board of Directors
Mr. NGUYEN GIA HUY CHUONG
Member of
Mr. NGUYEN DUC TRI
Member of
Mr. Chuong joined the Board
of Directors of Kinh Do in 2013.
He holds a Master of Law at Law
University of Bristol (UK), specializing
in International Commercial Law.
Mr. Tri was voted into the
Board of Directors of Kinh Do
since 2013. He holds a PhD
in Business Management at
Nanyang Technological University
– Singapore.
Corporation
Mr. Nguyen has over 17 years of
experience managing various
member companies within Kinh Do
Corporation. He has held several
key senior management positions
including General Manager, Board
Member and Vice President at both
the group and subsidiary level.
He is currently the General Manager
of the KI DO Corporation, a member
of the Board of Directors at Kinh
Do and Vice President of Kinh Do
Corporation.
Mr. Thuan is a Member of the
Board of Directors of Kinh Do. He
has a Doctorate in economics, and
is currently the Dean of Finance
– Banking Department at Ho Chi
Minh City Open University. He has
over 30 years’ of experience as a
lecturer in the field of banking and
finance.
Besides his academic works at Ho
Chi Minh Open University, he is also
a financial consultant and advisor
for many companies and foreign
organizations operating in Vietnam.
He is currently an advisor at Luat Viet
and a General Director/Managing He has been working for a sugar
Partner at Phuoc & Co.
company
under
Agricultural
Ministry and teaches at Trident
University (California, US), Faculty
of Economics – Risho University
(Tokyo, Japan), Ho Chi Minh
Economic University, and other
joint programs in Vietnam.
ANNUAL REPORT 2013
42 43
BOARD OF MANAGEMENT
Mr. NGUYEN XUAN LUAN
Vice President
of Systems Kinh Do Corporation
Mr. Luan has been with Kinh Do
Corporation since 1996. He has since
held top positions throughout the group
including, Chairman of the Board of
Directors, CEO, and Deputy CEO at Kinh
Do's various subsidiaries and investments.
Currently, Mr. Luan is in charge of building
Business Operations Systems and
Decision Making Systems at Kinh Do as
well as managing one of the Strategic
Business Units.
Mr. TRAN QUOC VIET
Vice President of Kinh Do Corporation
& General Director of
North Kinh Do
Mr. KELLY WONG
Kinh Do Corporation CFO
Mr. Viet has over 17 years of experience
in managing companies in the FMCG
industry and has been with Kinh Do
Corporation since 2004 As the General
Director of North Kinh Do, he has led the
group’s norther operations to achieve
remarkable growth over the during last 9
years.
Mr. Wong joined Kinh Do in 2011 and
is responsible for managing the group
finance and accounting functions.
Mr. Wong has worked and lived in Vietnam
for almost 10 years in various financial
institutions.
He is also a member of the Executive
Committee of Vietnam Marketing
Association (VMA), Vietnam Food Safety
Association (VINAFOSA) and an expert
in analyzing and consulting business
strategy. Mr. Viet is Doctor of Business
Administration.
Mr. Wong holds a Bachelor of Commerce
from the University of British Columbia
in Vancouver, Canada and a Diploma in
Asia Pacific Management from the McRae
Institute of Management at Capilano
University.
Mr. BUI THANH TUNG
Director
of Kinh Do Corporation
Mr. Tung has been with Kinh Do
Corporation since 1993. He has
over 10 years of experience in
manufacturing management and
with in-depth knowledge on the
Strategic Business Unit operating
model.
He is currently a SBU Director
and Head of the Labor Union for
Kinh Do Corporation. He holds
a degree from the University of
Economics with a specialization
in Business Administration and
Higher Leadership Skill Certificate
from UCLA Anderson (Los Angeles,
USA).
Mr. MAI XUAN TRAM
Mr. TRAN TIEN HOANG
Director of Kinh Do Corporation Director
& General Director
of VINABICO
Mr. MA THANH DANH
Mr. Tram was among the first
of the management team to
help lay the foundation of the
current distribution system used
throughout the group.
Mr. Danh served on Kinh Do
Corporation’s Board of Directors
between 2010 and 2013. Mr. Danh
joined Kinh Do’s management
team in 2013 and looks after the
Internal Control department of the
group.
Mr. Hoang joined Kinh Do
Corporation in 1997 and has
over 17 years of experience in
procurement management in the
FMCG industry. He was appointed
to Director of Supply Chain at Kinh
He has been with Kinh Do since Do Corporation in 2011.
2000 and has developed a deep
understanding of the company, He currently leads the company’s
its competitive environment and COST TEAM and plays a significant
the Vietnamese market through role in developing the order
hands-on practical experience. management strategy for the
He holds an MBA from California entire group. He holds a Bachelor
Miramar University in the United of Economics from the University
States.
of Economics and Higher
Leadership Skill Certificate from
UCLA Anderson (Los Angeles,
USA).
Director
Mr. Danh holds a Bachelor’s
of Science (BSC) in electrical
engineering, Degree in Business
Administration from the University
of Economics and a Masters of
Business Administration with a
focus in International Business
Strategy and Brand Management
from Belgium. He has over ten
years of experience in financial
management, business strategy
and
brand
management
consultancy and advisory in
mergers and acquisitions.
ANNUAL REPORT 2013
44 45
SUPERVISORY BOARD
Mr. LE CAO THUAN
Head of the
Supervisory Board
Mr. VO LONG NGUYEN
Mrs. LUONG MY DUYEN
Member of the
Supervisory Board
Member of the
Supervisory Board
Mr. Thuan was one of the first pioneers
who helped to successfully establish
North Kinh Do Company and played
an important role in building the
operations to what it is today. Mr.
Thuan graduated with an MBA and
as the valedictorian at Benedictine
University in the USA, he also holds
a Bachelor of Accounting and Audit
from the University of Economics
and a Bachelor of Computer and
Mathematics
Applications
from
Polytechnic University.
Mr. Nguyen holds a Bachelor of
Economics with a specialization in
Business Administration. He is a certified
Fund Manager with a certificate issued
by the State Securities Commission of
Vietnam.
Ms. Duyen has been working for Kinh
Do Corporation since 1993 and has
held several key positions, including
Accountant, Deputy Manager of the
Accounting Department at Kinh Do
and Chief Accountant Kinh Do.
He has extensive experience in finance
and investment, focusing primarily on
the Vietnamese capital markets.
Since 2006 Mrs. Duyen has been the
Chief Accountant at Kinh Do Real
Estate Joint Stock Company. She holds
a degree in Finance and Accounting
and has spent her career at Kinh Do.
He is currently the Finance Director
of North Kinh Do and Head of
the Supervisory Board at Kinh Do
Corporation.
ANNUAL REPORT 2013
46 47
CHANGE IN KEY PERSONNEL
No.
DATE
CONTENTS
1
15/03/2013 Resignation from the Board of Directors - Mr Co Gia Tho and Mr. Ma Thanh Danh
2
12/04/2013
Appointment to the Board of Directors – Mr. Nguyen Duc Tri
and Mr. Nguyen Gia Huy Chuong
3
10/05/2013
Resignation of Mr. Foo Woh Seng - Vice President
4
25/09/2013
Resignation of Mr. Le Anh Quan - Vice President
5
05/12/2013
Appointment of Mr. Ma Thanh Danh - Director
6
24/12/2013
Resignation of Mr. Nguyen Khac Huy - COO
MANAGEMENT
No. NAME
RELATIONSHIP
1. BKD
Subsidiary
2. Bui Thanh Tung
Vice President
3. Le Cao Thuan
SHARES OWNED AT BEGINNING
SHARES OWNED AT ENDING
ACTIONS
Amount
%
Amount
%
13,043,112
8.15%
-
0.00%
Bonus + Sell
135,000
0.00%
73,000
0.04%
Sell
Head of
Supervisory
Board
2,865
0.00%
2,865
0.00%
Bonus + Sell
4. Le Cao Tu
Relative of
Le Cao Thuan
3,505
0.00%
505
0.00%
Sell
5. Luong My Duyen
Member of
Supervisory Board
5,509
0.00%
6,009
0.00%
Sell + Bonus
6. Mai Xuan Tram
Vice President
135,006
0.08%
72,506
0.04%
Sell
7. Nguyen Thi Oanh
Chief Accountant
55,010
0.03%
50,000
0.03%
Sell
8. Tran Le Nguyen
General Director
13,498,668
8.44%
13,858,748
8.35%
Buy
9. Tran Quoc Viet
Vice President
125,273
0.07%
50,273
0.03%
Sell
10. Tran Thi Thanh Thuy
Relative of
Tran Tien Hoang
2,006
0.00%
6
0.00%
Sell
11. Vinabico
Subsidiary
15,960
0.01%
0
0.00%
Sell
12. Vuong Buu Dinh
Relative of
Ma Thanh Danh
208,876
0.13%
205,936
0.13%
Sell + Buy +
Bonus
13. Vuong Buu Ngoc
Relative of
Vuong Buu Linh
308,557
0.19%
303,557
0.19%
Sell
14. Vuong Ngan Hao
Relative of
Vuong Ngoc Xiem
3,500
0.00%
Sell + Bonus
15. Vuong Thu Binh
Relative of
Vuong Buu Linh
75,000
0.00%
12,500
0.00%
Sell
16. Vuong Thu Le
Relative of
Vuong Ngoc Xiem
2,047
0.00%
9,007
0.00%
Sell + Bonus
400
TRANSACTION OF RELATED PARTIES
SHARES OWNED
AT BEGINNING
SHARES OWNED
AT ENDING
RELATIONSHIP
WITH
MANAGEMENT
Amount
%
Amount
Ma Thanh Danh
195,936
0.12%
182,996
0.11%
Buy & Sell
2. Tran Thi Thanh Thuy Tran Tien Hoang
2,006
0.00%
6
0.00%
Sell
308,557
0.19%
309,557
0.19%
Buy & Sell
No. NAME
1. Vuong Buu Dinh
ACTIONS
%
3. Vuong Buu Ngoc
Vuong Buu Linh
4. Vuong Ngan Hao
Vuong Ngoc Xiem
2,400
0.00%
5,602
0.00%
Buy & Sell
5. Vuong Thu Le
Vuong Ngoc Xiem
2,047
0.00%
9,007
0.01%
Buy & Sell
6. Vuong Thu Binh
Vuong Ngoc Xiem
-
-
12,500
0.01%
Buy & Sell
ANNUAL REPORT 2013
48 49
MANAGEMENT
DISCUSSION
GROUP SALES 2013
4,561
VND
+6.4%
VERSUS 2012
BILLION
GROUP SALES 2013
INTRODUCTION
Economic stability returned to Vietnam in 2013. Overall
the GDP of Vietnam in 2013 reached a growth rate of
5.4% and inflation averaged an estimated 6% for the
year. Foreign exchange rates were also relatively stable
with a good reserve of USD being built up by the country.
Despite the stability there were still no clear signs of a
recovery. The risk heading into 2014 continues to be
that economic recovery and activity remains sluggish
but with a slight increase in inflation which is expected
to lead the economic cycle rather than lag it. With that
we may end up in a situation where inflation is being
driven up faster than an economic recovery.
The root of this problem is still primarily the nonperforming loans and as a result risks appetites in
the Vietnamese banking system. There is a clear
polarization of risk appetite which is skewed towards
large manufacturing companies, and away from small
and medium enterprises (SME’s). This is product of
the system not wishing to add on higher risk loans of
small companies and focusing on large manufacturing
corporates. This while supportive of sustainable
corporate growth and production output, is not
supportive of demand and consumption. Inadvertently,
we have fallen into a stasis between stability and
recovery but without a clear catalyst for demand and
therefore economic recovery.
The impact on our business is that while we enjoy low
rates and preferential treatment by the banks. Our
distributors and retailers are still unable to access capital
at a reasonable rate, creating a deleveraging of risk
downstream. As a result, demand remains at relatively
moderate with little incentive or capital to increase
their inventory levels. Distributors are therefore focused
on selling core products which can to some extent
guarantee success versus taking risk on new products.
Within our own portfolio we have noticed that the
winning strategy has been to continue to focus on our
core product offering and not deviate too far from that.
WE EFFECTIVELY IMPROVED THE QUALITY OF THE PROFITABILITY WITH
A SYSTEMATIC AND ROUTINE APPROACH TO ASSESSING RISK VERSUS
REWARD. THIS PROCESS IS NOW INGRAINED INTO OUR MANAGEMENT
CULTURE AND AS A RESULT, WE ARE WORKING BOTH HARDER AND
SMARTER TO GET THE RESULTS WE NEED.
160,000
4,286
2012
4,561
4,247
3,202
30,000
2011
POINTS OF SALE
2013
2010
2009
1,663
FREEZERS
GROUP SALES
(VND BILLION)
331
311
GROUP RESULTS 2013
2013
2012
2011
134 122
2010
Overall revenue growth of 6.4% versus 2012 was constrained primarily by
external factors that affected the market and was due to the lack of capital and
risk appetite through the distribution channel. As we mentioned, production
output was encouraged but demand was discouraged due to the disparity in
the markets. Therefore consumer demand while stable was not recovering.
This changed in the latter part of the year as demand began to accelerate and
should flow through to 2014.
144
2009
Against this economic backdrop we have completed Stage 4: Profitable
Growth of our transformative change process. Profitable growth is defined
as the improvement in the quality of our earnings with a strong focus on
asset efficiency and profit growth. It’s essentially the decision to balance
each investment against a growth in revenue and corresponding profit. This
stage has been fairly successful in the sense that we were able to balance
growth with profitability in 2013 and reached a record year for profitability.
We effectively improved the quality of the profitability with a systematic
and routine approach to assessing risk versus reward. This process is now
ingrained into our management culture and as a result, we are working both
harder and smarter to get the results we need.
SIGNIFICANT CASH RETURN FOR
SHAREHOLDERS
(VND BILLION)
ANNUAL REPORT 2013
50 51
MANAGEMENT
DISCUSSION (continued)
GROUP RESULTS 2013 (continued)
Input prices were relatively stable for all major cost
categories, including raw materials which allowed for
fairly stable gross profits margins of 43.3% vs 43.6%
in 2012. Last year as we entered the inflection point
between stability and recovery we saw very marginal
pressure on input prices. We expect pressure to increase
slightly in 2014 as we enter into a new economic cycle
both in Vietnam and globally which will see input prices
inch up due to return of demand. Barring any major
natural disaster events globally the rise should be
manageable, but nonetheless we expect some increase
of raw material prices in the coming year.
Sales and marketing costs saw an increase of 4% versus
2012, primarily due to the one-time costs associated
with the 20th anniversary. These costs were not purely
celebratory, but were primarily used to leverage the
realignment around the Kinh Do brand across our daily
products and increase exposure between product
brands. These costs were offset somewhat by the
rationalization in spending at the product brand levels
which saw some reductions due to brand restructuring
and cross promotions conducted in conjunction with
the 20th anniversary.
Financing costs declined significantly last year as
average borrowing costs declined from 8% to 6% versus
2012; contributing to a net financing income of VND
39bn in 2013. We continue to expect the rates to be at
these levels but risk is to the upside as we begin to see
inflation creep into the system and demand improving
across the country. We are net cash positive so we are
well positioned to manage this risk.
As a result operating profit margins improved from 11.9%
to 13.7%, reflecting the efforts of the last two years to
improve the quality of the earnings. We will continue to
focus on improving efficiencies using the current base as
a platform to seek incremental changes. We would expect
some marginal improvements in operating margins but
at a rate of improvement much lower than the last few
years where the platform changes were transformative.
The challenge of the current environment persists where
capital remains constrained at the distribution and retail
level. Consumer sentiment continues to be stable but at
low levels. There is yet to be a strong catalyst for inducing
demand in the Vietnamese market so the coming year
will continue to be challenging.
Economic stability has been achieved but a recovery is
only now just starting to gain momentum. Hopefully this
will provide some momentum in improving demand but
the added risk for us is that as this begins to happen,
inflationary pressures will be more prevalent than in
previous cycles due to the long period of stable pricing
we experienced in 2013. In spite of these risks, there are
clear opportunities in Vietnam this year and we are well
positioned given the changes we have undertaken in the
organization in the last two years to capitalize on them.
At the same time we are also cognizant of the risks and
managing the potential downside.
AS A RESULT OPERATING PROFIT MARGINS IMPROVED
FROM 11.9% TO 13.7%, REFLECTING THE EFFORTS OF
THE LAST TWO YEARS TO IMPROVE THE QUALITY OF
THE EARNINGS.
623
VND
Billion
OPERATING PROFIT
ASSETS
7,7%
Cash balance continues to be strong and we continue to build up a reserve
in order to take advantage of potential opportunities in the Vietnamese
and regional markets. As the overall economic conditions improve, we
are seeing some interesting opportunities that were previously too risky
or where price expectations were too far apart to be able to rationalize.
RETURN ON ASSETS
In addition to cash, key improvements have been achieved in working
capital management with the business cycle reducing from 43 to 33 days.
This was achieved due to improvements on inventory reductions and also
efficiency improvements in communication and stock level monitoring in
the supply chain through the new Distributor Management System. This
has resulted in unlocking additional free cash flows of VND 72bn. We do
not believe that there will be significant improvements in this area in the
coming years, but our goal is to maintain this consistency in efficiencies
even against seasonality through good planning and coordination.
Fixed asset levels remained fairly constant for the year as the previous year
saw little new capital expansion. We continue to be in a digestion period
for some of the new production lines that were delivered in early 2013
and finally setup towards the end of the 4Q2013. We will see products
come off these lines in 2014 which will help to improve the quality of the
products and range of products from these lines. Plans for expanding
capacity remain limited at this point as we look to leverage existing
capacity to higher profitability before making further investments into
new machinery. Overall return on assets increased from 6.3% to 7.7%
due to higher profitability and stable levels of assets; improving both
efficiencies and returns.
LIABILITIES
External debt levels declined in 2013 by VND 13bn. We deliberately
restructured the short-term debt to more stable longer-term debt in
early 2013 in response to market conditions in 2011/2012. We started this
initiative in the beginning of 2013 to create stability in our funding base
as a hedge against volatile liquidity conditions in the Vietnamese money
markets. While we don’t believe these conditions will return, we believe
that the additional comfort of long-term commitments versus short-term
revolving funding is worth the slight premium we are paying especially
as rates begin to rise. We continue to maintain some short-term debt to
finance working capital for seasonality and relationship reasons. The debt
levels are managed within very strict limits and maintain debt to equity
ratios of well below our goals of 0.50x and external gearing levels below
0.20x throughout the year.
707
VND
BILLION
OPERATING CASH FLOW
Debt Ratio
0.80
0.72
0.60
0.51
0.40
0.20
_
0.36
0.31
0.21
0.14
0.12
2009
2010
Debt/Equity
0.31
0.26
2011
2012
0.12
2013
External Gearing (times)
Asset Efficiency/Assets
0.90
0.60
13.9% 0.78x
10.8% 0.64x
5.1%
0.30
16.0%
12.0%
0.39x
_
0.76x 0.77x
7.7%
6.3%
8.0%
4.0%
2009
2010
2011
Average Asset Turnover
2012
2013
0.0%
ROA (%)
ANNUAL REPORT 2013
52 53
MANAGEMENT
THE ORGANIZATION CONTINUES TO BE MANAGED BASED ON STRATEGIC BUSINESS
UNITS WITH SHARED SERVICES IN KEY AREAS. ONE SIGNIFICANT CHANGE THAT HAS
BEEN UNDERTAKEN IS TO ESTABLISH AN EXECUTIVE MANAGEMENT COMMITTEE FOR
THE OPERATIONS WHICH TAKES RESPONSIBILITIES FOR THE KEY FUNCTIONAL AND
STRATEGIC AREAS OF THE COMPANY. BY ALLOCATING AREAS OF RESPONSIBILITY AND
CREATING AN EXECUTIVE MANAGEMENT COMMITTEE ON OPERATIONS, WE HAVE BEEN
ABLE TO DEAL WITH MANAGING THE FAST GROWING COMPLEXITY AND SCOPE OF THE
ENTIRE ORGANIZATION.
MANAGEMENT/POLICY CHANGES
The organization continues to be managed based
on Strategic Business Units with shared services
in key areas. One significant change that has
been undertaken is to establish an Executive
Management Committee for the operations which
takes responsibilities for the key functional and
strategic areas of the company. By allocating
areas of responsibility and creating an Executive
Management Committee on operations, we have
been able to deal with managing the fast growing
complexity and scope of the entire organization.
BRAND RESTRUCTURINNG
The change in brand infrastructure has been
completed 2013 and we have successfully linked the
product brands with the corporate Kinh Do brand
as part of the 20th anniversary campaign with the
message: “20 years Taste of Happiness”. The result
now is a clear communication of positioning based
on the brand including:
Kinh Do represents "Celebration" group.
Cosy, AFC, Solite, Slide, Korento represents
"Delight" group.
Kinh Do represents "Packaged meals" group.
Celano, Merino, Wel Yo, Wel Cream represents
"Dairy" group.
A significant change made during the past year was
the restructuring of the Marketing function with
the product brands are not put under the direct
management of SBU Director. Such change will help
to improve the coordination between category
development strategy and market activities. We
also established a Media department in order to
increase the media spending efficiency of brands.
Furthermore, brands’ Activation activities were
also consolidated as part of the cross branding
exercise and increase spending efficiency overall.
During 2013, retail audit, brand health check data
provided by CMI department also helped us get
market insight to organize appropriate campaign
for each brand. We continue to diversify our
product portfolio through launching new products
including AFC whole grains, Kinh Do fresh bread,
and other new gifting products such as green, and
mochi mooncakes serving Mid-Autumn or other
new type for Lunar New Year festival.
In the past year, brand restructuring process also
include scaling up existing key product brands
such as Cosy, or Kinh Do fresh bread. Cosy brand
now has become both a daily brand, and Lunar
New Year brand. Cosy product portfolio after the
restructure was able to penetrate the market very
well. Kinh Do media campaign during Mid-Autumn
and Lunar New Year festival also made remarkable
imprints in the consumer minds. In the last year,
Cosy, and other products serving Mid-Autumn and
Lunar New Year made significant contribution to the
company results. Overall, the brand restructuring
not only invigorated the product image but also
financially this change will also have an impact
on the advertising and promotions costs. While
there will not be a sharp decline, they will be more
effective and impactful which are in line with our
goals pertaining to transformative change and will
result in improved profitability.
Finally the integrated platform transformation
has completed as of the end of 2013 and will be
able to sustain and support future growth. The
management team has endeavored to firmly
establish this platform over the last four years with
thousands of hours going into streamlining and
aligning processes and procedures that link up the
entire organization. Going forward we will look to
leverage this hard work into accelerated revenue
and profit growth through organic or inorganic
opportunities.
Delights
Dairy
Packaged Meals
Celebration
ANNUAL REPORT 2013
54 55
MANAGEMENT
WE MANAGE THIS RISK WITH VERY STRICT CONTROLS,
INCLUDING FIXED TENOR AND FIXED RATE CONTRACTS
TO MITIGATE SHORT-TERM FLUCTUATIONS IN ORDER TO
PROVIDE PREDICTABILITY ON OUR INPUT COSTS. WE ALSO
WORK COOPERATIVELY WITH OUR SUPPLIERS TO PROVIDE
A CLEAR TRANSPARENT VIEW ON OUR DEMAND SCHEDULE
SO THAT THE RISK OF RAW MATERIAL PRICE RISKS CAN BE
MANAGED BY THEM.
RISK FACTORS
Raw material price risk continues to be our primary risk factor that has the largest
potential impact on our business. This exposure includes soft commodities such
as wheat, sugar, edible oils and milk. We continue to be very prudent in our
approach to monitoring and managing these risks, but markets continue to be
volatile and exposed to global supply and demand factors.
We manage this risk with very strict controls, including
fixed tenor and fixed rate contracts to mitigate shortterm fluctuations in order to provide predictability
on our input costs. We also work cooperatively with
our suppliers to provide a clear transparent view on
our demand schedule so that the risk of raw material
price risks can be managed by them.
Foreign exchange rate risk continues to be a
primary concern especially given that a large part
of our inputs are imported directly by ourselves
or our suppliers. We hedge this risk by sourcing
as much as we can locally to offset the foreign
exchange rate risk, but as Vietnam still imports a
large part of their capital inputs we are indirectly
exposed. We do however have a reasonably strong
export business that creates a natural hedge, and
for those risks that are indirect, we work closely
with our suppliers to manage the risk by using
fixed tenor and fixed rate contracts.
ANNUAL REPORT 2013
56 57
MANAGEMENT
AS PART OF OUR NEW STRATEGY TO INVEST IN THE FUTURE, WE WILL BE
SEEKING IN MORE DETAIL OPPORTUNITIES THAT FIT. OVERALL WE ARE
LOOKING TO CONTINUE TO ENGAGE OUR FOOD & FLAVOR STRATEGY BY
LEVERAGING OUR PLATFORM.
FUTURE DEVELOPMENT PLAN
Future developments will include a strong
focus on deploying the incremental
efficiency improvements around the existing
business which we believe is still possible.
These incremental improvements will be
a philosophical approach to continuously
improving what we do and how we do it in order
to meet the dynamic changes of the operating
environment. In addition, our product strategy
from previous years which included improving
the breadth and quality of our offering will
continue to endure. This will include future
capex to improve, quality, efficiency and range
of products. Capex in 2014 will be small as we
continue to be in the digestion period for the
previous lines purchased late 2012, but we may
see some purchases in 2015 and beyond.
As part of our new strategy to invest in the
future, we will be seeking in more detail
opportunities that fit. Overall we are looking to
continue to engage our Food & Flavor strategy
by leveraging our platform, but we are widening
our scope of exploration to including interesting
opportunities that will add immediate and/or
future value to our business.
2014
FINANCIAL TARGETS
5,150
VND
BILLION
REVENUE 2014
660
VND
BILLION
PROFIT BEFORE TAX
ANNUAL REPORT 2013
58 59
HUMAN
RESOURCES
THROUGH PROFESSIONAL HUMAN RESOURCES MANAGEMENT,
AND COMPETITIVE REMUNERATION POLICIES, KINH DO HAS
BUILT UP A POOL OF TALENTED EMPLOYEES THAT SHARE THE
LONG-TERM VISION OF SUCCESS WITH KINH DO.
HUMAN RESOURCE POLICIES
Over the last 20 years, human resources has become
one of the most important asset of Kinh Do. We are
a diversified group of people with a broad range of
experiences, joined together with a common goal.
Through professional human resources management,
and competitive remuneration policies, Kinh Do has built
up a pool of talented employees that share the long-term
vision of success with Kinh Do. This team will be one of the
primary success factors of Kinh Do in the future.
Our human resources management and
development policies are founded upon the
philosophy: “If a country’s most precious resources
are the people, then an organization’s most precious
resources are the right people”. To develop the
human resources needed for future growth, Kinh
Do has continued to source, nurture and develop
both internal and external talents to transform them
collectively into one of the most competitive teams
in the market, becoming an invaluable resources for
the company. This is accomplished through:
Satisfying human resource needs of the
company based on long-term strategic
development objectives.
Maximizing human resource potential to
achieve optimal efficiency for the company.
Investing in training and developing talents.
Enhancing employee to employee relationships
and building successful teams.
KINH DO HAS BUILT UP A POOL
OF TALENTED EMPLOYEES
At Kinh Do, we commit to nurture and develop
the skills and abilities of our people to meet the
professional demands of their work and satisfy their
personal needs. We value the capabilities, attitudes,
and commitments of our professional staffs. Kinh
Do’s continuous growth helps to ensure that our
compensation and bonus packages always remains
attractive to attract the right talent. To attract the
best talents is to become the best company will
always be our philosophy.
ANNUAL REPORT 2013
60 61
CORPORATE
SOCIAL RESPONSIBILITY
AFTER TWENTY YEARS OF DEVELOPMENT, THE KINH
DO BRAND HAS BECOME A BRAND THAT IS CLOSELY
ASSOCIATED WITH QUALITY AND SOCIAL VALUE.
After twenty years of development, the Kinh Do
brand has become a brand that is closely associated
with quality and social value. Leveraging this, Kinh
Do has continuously tried to respond to the support
and appreciation by our consumers through our
contribution to the community by actively supporting
social programs. "The taste of happiness" that Kinh Do
brings to consumers through our products not only
include products but also social activities that are well
regarded by the community.
Over the years, Kinh Do’s image has been associated
with various activities for students such as scholarships
programs and competitions. Factory tours for students
1,500
Coordinate with
Sponsoring
Association for Poor
Patients to fund the
health insurance
cards
400,000
eye surgery
th
and the "Management Trainee" program which Kinh Do is currently
deploying create an ideal condition for young people to learn and
experience valuable practical lessons.
Accompanying the National Fatherland Front, Sponsoring Association
for Poor Patients, Red Cross and other social organizations, Kinh Do
has brought joy to thousands of unfortunate children, and poor
households across the country during many occasions and Tet
through countless visits, and meaningful gifts. Some illustrations of
our companies during the past year includes:
Coordinate with Sponsoring Association for Poor Patients to fund
the 400,000th eye surgery for patients with difficult circumstances.
Coordinate with Sponsoring Association for Poor Patients to
award nearly 1,500 health insurance cards for the poor in HCM
City.
Spent VND 1.8 billion to provide Tet sponsoring for the poor
including: bus tickets for youth workers; coordinated with the
HCMC Fatherland Front Committee to visit and present gifts to
unfortunate children and families to celebrate 2013 Tet Festival.
Awarded 8,000 gifts with value of VND 750 million for poor
children to celebrate 2013 Mid-Autumn Festival.
Donated VND 2.5 billion to many social organizations including
Children's Fund of Vietnam, the Fatherland Front Committee of
Ho Chi Minh City, HCMC Sponsoring Association for Poor Patients
during the 20th anniversary of Kinh Do Corporation.
Kinh Do's social programs and activities have helped to create a
strong corporate image as well as increase consumers support to
our brands.
ANNUAL REPORT 2013
62 63
FOOD SAFETY AND
ENVIRONMENTAL RESPONSIBILITY
AS A FOOD COMPANY, KINH DO
STRICTLY ADHERES TO HIGH FOOD
QUALITY, SAFETY AND HYGIENE.
WE ARE ALSO WELL AWARE AND
COMMITTED TO ENVIRONMENTAL
RESPONSIBILITIES THROUGHOUT ALL
THE MANUFACTURING LOCATIONS
OF KINH DO (INCLUDING FACTORIES
AT KINH DO BINH DUONG, NORTH
KINH DO, AND KI DO). OUR FOCUS IS
BASED ON:
Green, clean, and environmentally friendly production
processes.
High quality management systems to ensure
consistency and quality.
Strict control of waste treatment, modern processing
equipment to minimize externalities.
GREEN, CLEAN, AND
ENVIRONMENTALLY FRIENDLY PRODUCTION
We focus on quality assurance, food safety and hygiene in
every product we make. In addition, we implement strict
production standards with a green and environmentally
friendly mindset throughout our company’s development.
We strive to bring nutritional and healthy products
to consumer and minimize adverse impacts on the
environment. Throughout our manufacturing processes,
Kinh Do always chooses and sources material of the
highest quality, and clear origin that are carefully selected
from reputable suppliers. Furthermore, we specifically
focus on the research and development of new innovative
products and continuously aim to meet consumers tast
profiles by providing high quality products that are
delicious, healthy, and nutritious.
WITH A MODERN FACTORY, ALL
PRODUCTS OF KINH DO ARE
PRODUCED TO MEET THE WORLD’S
HIGHEST STANDARDS FOR QUALITY
AND FOOD SAFETY.
Clean, green, and
environmental
friendly production
processes
Professional
quality control
systems
HIGH QUALITY MANAGEMENT SYSTEM
Kinh Do’s factories possess modern production facilities
with world's most advanced technology from Europe
(Italy, Netherlands, Denmark). The factories also apply
many international quality management production
processes including:
Quality Management System according to
ISO 9001:2008 standards certified and reviewed by
Bureau Veritas Certification.
Food Hygiene and Safety Management System
ISO 22.000:2005 certified and reviewed by SGS.
Production hazard control system - HACCP.
Environmental Management System ISO 14001:2004.
Occupational Health Safety Administration System
OHSAS 18001:2007.
Good Manufacturing Practice (GMP).
Quality Management Systems TQM (Total Quality
Management).
Implementation of 5S and TPM programs (Total
Productive Maintenance).
With a modern factory, all products of Kinh Do are
produced to meet the world’s highest standards for quality
and food safety.
Strict policies on waste
treatment and disposal
with all facilities upgraded
to meet international
standards
STRICT CONTROL OF WASTE TREATMENT,
MODERN PROCESSING EQUIPMENT
Kinh Do recognizes and ensures that our company
adopts and uses appropriate treatments for all forms of
waste arising from our production. Kinh Do factories are
equipped with environmental friendly waste treatment
facilities and we continually strive to improve our
production lines and apply new energy-saving application
to minimize impacts to the environment. Our factories
also apply many practical production programs including:
implementation of cleaner production process, energy
audits, trainings for incidents that potentially impact the
environmental, environmental testing, and compliance
with government legislation on environmental protection.
All factories comply with legal regulations on waste
treatment and we strive to build an environmentally
friendly working environment.
KINH DO RECOGNIZES AND ENSURES THAT OUR COMPANY ADOPTS AND
USES APPROPRIATE TREATMENTS FOR ALL FORMS OF WASTE ARISING FROM
OUR PRODUCTION. TRAININGS FOR INCIDENTS THAT POTENTIALLY IMPACT
THE ENVIRONMENTAL, ENVIRONMENTAL TESTING, AND COMPLIANCE WITH
GOVERNMENT LEGISLATION ON ENVIRONMENTAL PROTECTION. .
ANNUAL REPORT 2013
64 65
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GENERAL INFORMATION
COMPANY
Kinh Do Corporation (“the Company”) is a shareholding company incorporated under the Law on Enterprise of Vietnam
pursuant to the Business Registration Certificate (“BRC”) No. 4103001184 issued by the Ho Chi Minh City Department of
Planning and Investment on 6 September 2002 and the following amended BRC:
Amended BRC:
Date:
No. 4103001184
The first amendment
The second amendment
The third amendment
The fourth amendment
The fifth amendment
The sixth amendment
The seventh amendment
The eighth amendment
The ninth amendment
The tenth amendment
26 November 2002
22 September 2003
11 December 2003
3 August 2004
7 October 2004
11 May 2005
18 May 2006
6 July 2006
6 November 2007
10 October 2008
No. 0302705302
The eleventh amendment
The twelfth amendment
The thirteenth amendment
The fourteenth amendment
The fifteenth amendment
The sixteenth amendment
The seventeenth amendment
The eighteenth amendment
21 January 2010
1 November 2010
26 March 2011
2 March 2012
23 November 2012
21 March 2013
2 April 2013
18 November 2013
The Company’s shares were listed on the Ho Chi Minh Stock Exchange in accordance with the License No. 39/UBCK-GPNY issued by the State Securities Commission on 18 November 2005.
The principal activities of the Company are to process agricultural products and foods; produce confectionery, purified
water, and fruit juice; and sell and purchase agricultural products and foods, industrial products, and fabric.
The registered head office of the Company is located at 138 - 142 Hai Ba Trung, Da Kao Ward, District 1, Ho Chi Minh
City, Vietnam.
BOARD OF DIRECTORS
Members of the Board of Directors during the year and at the date of this report are:
Mr Tran Kim Thanh
Mr Tran Le Nguyen
Mr Wang Ching Hua
Ms Vuong Buu Linh
Ms Vuong Ngoc Xiem
Mr Tran Quoc Nguyen
Mr Nguyen Van Thuan
Mr Nguyen Gia Huy Chuong
Mr Nguyen Duc Tri
Mr Co Gia Tho
Mr Ma Thanh Danh
Chairman
Vice Chairman
Member
Member
Member
Member
Member
Member
Member
Member
Member
appointed on 12 April 2013
appointed on 12 April 2013
resigned on 12 April 2013
resigned on 12 April 2013
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Mr Le Cao Thuan
Ms Luong My Duyen
Mr Vo Long Nguyen
Head of the Board of Supervision
Member
Member
MANAGEMENT
Members of the management during the year and at the date of this report are:
Mr Tran Le Nguyen
General Director
Ms Vuong Buu Linh
Deputy General Director
Ms Vuong Ngoc Xiem
Mr Wang Ching Hua
Mr Nguyen Xuan Luan
Mr Mai Xuan Tram
Mr Bui Thanh Tung
Mr Tran Quoc Nguyen
Mr Tran Quoc Viet
Mr Tran Tien Hoang
Mr Kelly Yin Hon Wong
Mr Ma Thanh Danh
appointed on 5 December 2013
Mr Foo Woh Seng
resigned on 10 May 2013
Mr Le Anh Quan
resigned on 25 September 2013
Mr Nguyen Khac Huy
resigned on 24 December 2013
LEGAL REPRESENTATIVE
The legal representative of the Company during the year and at the date of this report is Mr Tran Kim Thanh.
AUDITORS
The auditor of the Company is Ernst & Young Vietnam Limited.
ANNUAL REPORT 2013
68 69
REPORT OF MANAGEMENT
Management of Kinh Do Corporation (“the Company”) is pleased to present its report and the consolidated financial
statements of the Company and its subsidiaries (“the Group”) for the year ended 31 December 2013.
MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the consolidated financial statements of each financial year which give a true and fair
view of the consolidated state of affairs of the Group and of the Group’s consolidated results and consolidated cash
flows for the year. In preparing those consolidated financial statements, management is required to:
»» select suitable accounting policies and then apply them consistently;
»» make judgements and estimates that are reasonable and prudent;
»» state whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the consolidated financial statements; and
»» prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that
the Group will continue its business.
Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure that the accounting records comply
with the registered accounting system. It is also responsible for safeguarding the assets of the Group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial statements.
STATEMENT BY MANAGEMENT
Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true
and fair view of the consolidated financial position of the Group as at 31 December 2013 and of the consolidated results
of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting
Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of consolidated financial statements.
For and on behalf of management:
Tran Le Nguyen
General Director
26 March 2014
INDEPENDENT AUDITORS’ REPORT
To:
Reference: 60752643/16352013
The Shareholders of Kinh Do Corporation
We have audited the accompanying consolidated financial statements of Kinh Do Corporation and its subsidiaries
(collectively referred to as “the Group”) as prepared on 26 March 2014 and set out on pages 72 to 121 which comprise
the consolidated balance sheet as at 31 December 2013, the consolidated income statement and the consolidated cash
flow statement for the year then ended and the notes thereto.
Management's Responsibility
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory
requirements relevant to preparation and presentation of consolidated financial statements, and for such internal
control as management determines is necessary to enable the preparation and presentation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted
our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the
risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated
financial position of the Group as at 31 December 2013, and of the consolidated results of its operations and its
consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese
Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of consolidated
financial statements.
Ernst & Young Vietnam Limited
Duong Le Anthony
Audit Practicing Registration Certificate
No. 2223-2013-004-1
Hang Nhat Quang
Auditor
Audit Practicing Registration Certificate
No. 1772-2013-004-1
Ho Chi Minh City, Vietnam
26 March 2014
A member firm of Ernst & Young Global Limited
ANNUAL REPORT 2013
70 71
CONSOLIDATED BALANCE SHEET
B01-DN/HN
as at 31 December 2013
VND
Code ASSETS
Notes
100 A. CURRENT ASSETS
110 I. Cash and cash equivalents
5
111 1. Cash
112 2. Cash equivalents
Ending balance
Beginning balance
3,208,951,948,303
2,289,382,509,434
1,958,064,548,124
829,459,259,294
287,064,548,124
215,149,047,387
1,671,000,000,000
614,310,211,907
39,479,723,350
237,482,984,125
121 1. Short-term investments
48,576,276,394
274,454,915,888
129 2. Provision for short-term investments
(9,096,553,044)
(36,971,931,763)
859,893,313,934
882,114,197,701
188,931,745,641
180,529,903,420
70,757,652,186
196,058,013,223
603,491,045,600
507,157,423,689
120 II. Short-term investments
130 III. Current accounts receivable
13.2
6
131 1. Trade receivables
132 2. Advances to suppliers
135 3. Other receivables
139 4. Provision for doubtful debts
(3,287,129,493)
(1,631,142,631)
303,697,604,128
316,605,949,009
141 1. Inventories
317,614,040,657
323,945,751,898
149 2. Provision for obsolete inventories
(13,916,436,529)
(7,339,802,889)
150 V. Other current assets
47,816,758,767
23,720,119,305
151 1. Short-term prepaid expenses
14,434,824,512
17,310,449,270
152 2. Value-added tax deductible
5,679,645,734
73,411,292
17,515,321,638
-
140 IV. Inventories
154 3. Tax and other receivables from the State
7
8
158 4. Other current assets
200 B. NON-CURRENT ASSETS
218 I. Other long-term receivables
220 II. Fixed assets
221 1. Tangible fixed assets
6,336,258,743
3,225,321,952,576
-
299,618,517
1,371,191,674,104
1,451,929,592,575
919,281,789,101
941,976,539,062
222
Cost
1,755,145,801,018
1,689,567,812,006
223
Accumulated depreciation
(835,864,011,917)
(747,591,272,944)
326,200,228,842
412,023,311,045
227 2. Intangible fixed assets
228
Cost
229
Accumulated amortization
9
10,186,966,883
3,169,293,630,695
10
429,548,357,289
492,810,355,420
(103,348,128,447)
(80,787,044,375)
230 3. Construction in progress
11
125,709,656,161
97,929,742,468
240 III. Investment property
12
21,444,908,571
24,018,297,599
241 1. Cost
242 2. Accumulated depreciation
250 IV. Long-term investments
252 1. Investments in associates and jointly controlled entity
13.1
258 2. Other long-term investments
13.3
262 2. Deferred tax assets
269 VI. Goodwill
1,272,100,000,000
1,271,100,000,000
1,257,100,000,000
1,256,100,000,000
15,000,000,000
15,000,000,000
128,053,492,580
14
124,374,000,279
79,707,784,012
28.3
40,647,012,600
47,795,925,568
13,213,869,120
549,783,000
268 3. Deferred tax assets
270 TOTAL ASSETS
34,524,970,816
(10,506,673,217)
178,234,881,999
260 V. Other long-term assets
261 1. Long-term prepaid expenses
34,524,970,816
(13,080,062,245)
4
326,322,166,021
349,920,951,305
6,378,245,578,998
5,514,704,462,010
Code RESOURCES
Notes
Ending balance
Beginning balance
300
A. LIABILITIES
1,495,030,377,728
1,469,330,630,943
310
I. Current liabilities
1,265,590,486,146
1,353,059,965,053
311
1. Short-term loans and debts
15
400,939,212,302
529,559,033,303
312
2. Trade payables
16
283,772,381,108
274,618,256,546
313
3. Advances from customers
17
34,950,728,208
37,628,753,830
314
4. Statutory obligations
18
81,827,122,663
102,723,109,885
315
5. Payables to employees
58,642,156,537
48,828,794,770
316
6. Accrued expenses
19
230,109,039,925
194,023,168,467
319
7. Other payables
20
122,357,506,054
121,494,113,721
323
8. Bonus and welfare fund
52,992,339,349
44,184,734,531
330
II. Non-current liabilities
229,439,891,582
116,270,665,890
333
1. Other long-term liabilities
60,554,121,882
63,637,569,390
334
2. Long-term loans and debts
21
168,885,769,700
52,633,096,500
400
B. OWNERS’ EQUITY
22
4,881,643,588,931
4,010,273,661,046
410
I. Capital
4,881,643,588,931
4,010,273,661,046
411
1. Issued share capital
1,676,282,700,000
1,599,216,250,000
412
2. Share premium
2,344,308,719,177
2,189,781,329,788
414
3. Treasury shares
(152,626,203,900)
(655,246,276,814)
417
4. Investment and development fund
25,370,280,515
25,370,280,515
418
5. Financial reserve fund
25,792,635,752
25,792,635,752
419
6. Other funds belonging to owners’ equity
15,909,752,661
15,909,752,661
420
7. Undistributed earnings
946,605,704,726
809,449,689,144
439
C. MINORITY INTERESTS
1,571,612,339
35,100,170,021
440
TOTAL LIABILITIES AND OWNERS’ EQUITY
6,378,245,578,998
5,514,704,462,010
Ending balance
Beginning balance
1,389,939
2,041,170
110
102
OFF BALANCE SHEET ITEM
ITEM
Foreign currencies:
- United States dollar (US$)
- Euro (EUR)
Tran Minh Nguyet
Preparer
26 March 2014
Nguyen Thi Oanh
Chief Accountant
Tran Le Nguyen
General Director
ANNUAL REPORT 2013
72 73
CONSOLIDATED INCOME STATEMENT
B02-DN/HN
for the year ended 31 December 2013
VND
Code ITEMS
Notes
Current year
Previous year
01
1. Revenue from sale of goods and rendering of services
23.1
4,674,796,415,910
4,311,914,226,281
02
2. Deductions
23.1
(114,198,130,572)
(26,116,782,870)
10
3. Net revenue
23.1
4,560,598,285,338
4,285,797,443,411
11
4. Cost of goods sold and services rendered
24
(2,584,484,709,244)
(2,416,751,839,765)
20
5. Gross profit
1,976,113,576,094
1,869,045,603,646
21
6. Finance income
23.2
113,135,293,907
133,281,778,819
22
7. Finance expenses
25
(73,516,940,227)
(190,339,813,268)
23
In which: Interest expense
(43,391,810,398)
(94,369,615,032)
24
8. Selling expenses
(996,843,091,578)
(958,733,196,493)
25
9. General and administration expenses
(395,953,432,450)
(343,004,410,348)
30
10. Operating profit
622,935,405,746
510,249,962,356
31
11. Other income
26
30,372,643,049
20,132,906,361
32
12. Other expenses
26
(34,690,086,601)
(40,454,914,532)
40
13. Other loss
26
(4,317,443,552)
(20,322,008,171)
50
14. Profit before tax
618,617,962,194
489,927,954,185
51
15. Current income tax expense
28.2
(118,676,164,588)
(131,641,468,329)
52
16. Deferred income tax expense
28.3
(7,148,912,968)
(856,794,455)
60
17. Net profit after tax
492,792,884,638
357,429,691,401
(1,076,667,504)
3,485,288,065
493,869,552,142
353,944,403,336
3,051
2,318
Attributable to:
61
17.1 Minority interests
62
17.2 The Company’s shareholders
80
18. Basic and diluted earnings per share
Tran Minh Nguyet
Preparer
26 March 2014
Nguyen Thi Oanh
Chief Accountant
22.4
Tran Le Nguyen
General Director
CONSOLIDATED CASH FLOW STATEMENT
B03-DN/HN
VND
Code ITEMS
Notes
Current year
Previous year
618,617,962,194
489,927,954,185
230,052,975,960
215,148,557,479
(7,383,394,361)
11,013,981,270
2,258,288,851
(2,781,973,065)
(103,152,864,326)
(51,459,916,808)
43,391,810,398
94,369,615,032
783,784,778,716
756,218,218,093
I. CASH FLOWS FROM OPERATING ACTIVITIES
01
Profit before tax
Adjustments for:
4. 9,
10,12
02
Depreciation and amortization
03
Provisions
04
Unrealised foreign exchange losses (gains)
05
Profits from investing activities
06
Interest expense
08
Operating profit before changes in
working capital
09
Decrease in receivables
70,706,973,679
64,968,349,554
10
Decrease in inventories
6,331,711,241
75,709,579,408
11
Increase (decrease) in payables
51,056,516,330
(94,402,339,724)
12
Decrease in prepaid expenses
21,822,216,240
24,994,132,139
13
Interest paid
(44,439,725,376)
(96,483,378,327)
14
Corporate income tax paid
(181,490,308,355)
(77,403,326,392)
15
Other cash inflows from operating activities
6,232,230,468
6,453,122,221
16
Other cash outflows from operating activities
(39,495,349,366)
(9,706,163,034)
20
Net cash flows from operating activities
674,509,043,577
650,348,193,938
(179,465,405,244)
(222,818,458,228)
7,167,957,959
7,788,090,788
(2,410,500,000,000)
(2,773,200,000,000)
2,592,419,036,288
2,851,929,343,712
25
28.2
II. CASH FLOWS FROM INVESTING ACTIVITIES
21
Purchase and construction of fixed assets
22
Proceeds from disposals of fixed assets
23
Loans to other entities
24
Collections from borrowers
25
Payments for investments in other entities
(1,000,000,000)
(258,883,483,745)
26
Proceeds from sale of investments in other entities
32,504,017,702
111,288,125,542
27
Dividends and interest received
48,790,143,022
30,504,845,950
30
Net cash flows from (used in) investing activities
89,915,749,727
(253,391,535,981)
ANNUAL REPORT 2013
74 75
CONSOLIDATED CASH FLOW STATEMENT (continued)
B03-DN/HN
VND
Code ITEMS
Notes
Current year
Previous year
696,877,189,600
693,153,676,333
Capital contribution from minority interest
-
200,000,000
32
Capital redemption
-
(501,376,498,414)
33
Borrowings received
1,603,649,310,611
2,102,838,534,453
34
Borrowings repaid
(1,618,068,675,638)
(2,517,380,411,634)
36
Dividends paid to equity holder of the parent
(317,070,140,579)
(311,706,777,813)
(1,188,717,337)
(3,546,360,564)
364,198,966,657
(537,817,837,639)
1,128,623,759,961
(140,861,179,682)
829,459,259,294
967,330,130,617
(18,471,131)
2,990,308,359
1,958,064,548,124
829,459,259,294
III. CASH FLOWS FROM FINANCING ACTIVITIES
31
Issuance of shares
Dividends paid to minority interest
40
50
60
Net cash flows from (used in)
financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning
of year
61
Impact of exchange rate fluctuation
70
Cash and cash equivalents at
end of year
Tran Minh Nguyet
Preparer
26 March 2014
5
5
Nguyen Thi Oanh
Chief Accountant
Tran Le Nguyen
General Director
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
B09-DN/HN
as at and for the year ended 31 December 2013
1.
CORPORATE INFORMATION
The Group consists of Kinh Do Corporation (“KDC” or “the Company”) and its subsidiaries, associates and a jointly
controlled entity as follows:
Company
KDC is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business
Registration Certificate (“BRC”) No. 4103001184 issued by the Ho Chi Minh City Department of Planning and
Investment on 6 September 2002 and the following amended BRC:
Amended BRC:
No. 4103001184
The first amendment
The second amendment
The third amendment
The fourth amendment
The fifth amendment
The sixth amendment
The seventh amendment
The eighth amendment
The ninth amendment
The tenth amendment
No. 0302705302
The eleventh amendment
The twelfth amendment
The thirteenth amendment
The fourteenth amendment
The fifteenth amendment
The sixteenth amendment
The seventeenth amendment
The eighteenth amendment
Date:
26 November 2002
22 September 2003
11 December 2003
3 August 2004
7 October 2004
11 May 2005
18 May 2006
6 July 2006
6 November 2007
10 October 2008
21 January 2010
1 November 2010
26 March 2011
2 March 2012
23 November 2012
21 March 2013
2 April 2013
18 November 2013
The Company’s shares were listed on the Ho Chi Minh Stock Exchange in accordance with the License No. 39/
UBCK-GPNY issued by the State Securities Commission on 18 November 2005.
The principal activities of the Company are to process agricultural products and foods; produce confectionery,
purified water, and fruit juice; and sell and purchase agricultural products and foods, industrial products,
and fabric.
The registered head office of the Company is located at 138 - 142 Hai Ba Trung, Da Kao Ward, District 1, Ho Chi Minh
City, Vietnam.
The number of the Group’s employees as at 31 December 2013 was 7,069 (31 December 2012: 5,889).
ANNUAL REPORT 2013
76 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
B09-DN/HN
Subsidiaries
Kinh Do Binh Duong Corporation (“KDBD”)
KDC holds a 99.8% equity interest in KDBD which is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the BRC No. 4603000129 issued by the Department of Planning and Investment
of Binh Duong Province on 13 October 2004 and the subsequent amended BRC.
The principal activities of KDBD are to process agricultural products and foods; produce confectionery, purified
water, and fruit juice; and sell and purchase agricultural products and foods, industrial products, and fabric.
The registered head office and factory of KDBD are located at VSIP, Vietnam – Singapore Industrial Park, Thuan
An District, Binh Duong Province, Vietnam.
1.
CORPORATE INFORMATION (continued)
Subsidiaries (continued)
Vinabico Corporation (“Vinabico”)
KDC holds a 100% equity interest in Vinabico which is a shareholding company incorporated under the Law on
Enterprise of Vietnam pursuant to the BRC No. 4103001904 issued by the Ho Chi Minh City Department of Planning and Investment on 3 November 2003 and the subsequent amended BRC.
The principal activities of Vinabico are to produce and sell confectionery and purified water.
The registered head office and factory of Vinabico are located at 436 No Trang Long Street, Ward 13, Binh Thanh
District, Ho Chi Minh City, Vietnam.
Kido Company Limited (“KIDO”)
KDC holds a 100% equity interest in KIDO, was formerly a shareholding company, is currently a one member limited liability company incorporated under the Law on Enterprise of Vietnam pursuant to the BRC No. 4103001557
issued by the Ho Chi Minh City Department of Planning and Investment on 14 April 2003 and the subsequent
amended BRC.
The principal activities of KIDO are to produce and trade all kinds of food and drink products such as ice, ice
cream, milk and other dairy products.
The registered head office and factory of KIDO are located at Cu Chi Northwest Industrial Park, Cay Sop Village,
Tan An Hoi Ward, Cu Chi District, Ho Chi Minh City, Vietnam.
North Kinh Do One Member Company Limited (“NKD”)
KDC holds a 100% equity interest in NKD, was formerly a shareholding company, is currently a one member limited liability company incorporated under the Law on Enterprise of Vietnam pursuant to the Decision No.139/QDUB dated 19 August 1999 issued by the People’s Committee of Hung Yen Province and the BRC No. 0503000001
and No. 0900178525 issued by the Department of Planning and Investment of Hung Yen Province on 28 January
2000 and 25 January 2011, respectively.
The principal activities of NKD are to produce and process food stuffs, including various ranges of high-grade
cookies, to trade food and food stuffs, various types of beverages and liquors as well as cigarettes produced in
Vietnam, and to lease a factory.
The registered head office is located at Ban Yen Nhan Town, My Hao District, Hung Yen Province, Vietnam and
one branch at 200 Thai Ha Street, Dong Da District, Hanoi City, Vietnam.
Associates
Tan An Phuoc Company Limited (“TAP”)
KDC holds a 49% equity interest in TAP which is a limited liability company with two and more members incorporated under the Law on Enterprise of Vietnam pursuant to the BRC No. 0309403269 issued by the Ho Chi Minh
City Department of Planning and Investment on 24 September 2009.
The principal activity of TAP is to operate in the real estate industry.
The registered office of TAP is located at 6/134 National Road No. 13, Hiep Binh Phuoc Ward, Thu Duc District, Ho
Chi Minh City, Vietnam.
Thanh Thai Real Estate Corporation (“TTR”)
KDC holds a 30% equity interest in TTR which is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the BRC No. 0310442801 issued by the Ho Chi Minh City Department of Planning and
Investment on 10 November 2010.
The principal activity of TTR is to operate in the real estate industry.
The registered office of TTR is located at 332 To Hien Thanh, Ward 14, District 10, Ho Chi Minh City, Vietnam.
Jointly controlled entity
Lavenue Investment Corporation (“Lavenue”)
KDC holds a 50% equity interest in Lavenue which is a shareholding company incorporated under the Law on
Enterprise of Vietnam pursuant to the BRC No. 0310306044 issued by the Ho Chi Minh City Department of Planning and Investment on 10 September 2010.
The principal activity of Lavenue is to operate in the real estate industry.
The registered office of Lavenue is located at 3th Floor, May Flower Tower, 12 Le Thanh Ton, District 1, Ho Chi
Minh City, Vietnam.
ANNUAL REPORT 2013
78 79
2.
BASIS OF PREPARATION
2.1
Accounting standards and system
B09-DN/HN
The consolidated financial statements of the Group, expressed in Vietnam dong (“VND”), are prepared in
accordance with Vietnamese Enterprise Accounting System and Vietnamese Accounting Standards issued by
the Ministry of Finance as per the:
»» Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of Four
Vietnamese Accounting Standards (Series 1);
»» Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese
Accounting Standards (Series 2);
»» Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese
Accounting Standards (Series 3);
»» Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese
Accounting Standards (Series 4); and
»» Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of Four
Vietnamese Accounting Standards (Series 5).
Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash
flow statement and related notes, including their utilisation are not designed for those who are not informed
about Vietnam’s accounting principles, procedures and practices and furthermore are not intended to present
the consolidated financial position and consolidated results of operations and consolidated cash flows in
accordance with accounting principles and practices generally accepted in countries other than Vietnam.
2.2
Applied accounting documentation system
The Group’s applied accounting documentation system is the General Journal system.
2.3
Fiscal year
The Group’s fiscal year applicable for the preparation of its consolidated financial statements starts on 1
January and ends on 31 December.
2.4
Accounting currency
The consolidated financial statements are prepared in VND which is also the Group’s accounting currency.
2.5
Basis of consolidation
The Group’s consolidated financial statements comprise the financial statements of KDC (“the parent company”)
and the financial statements of its subsidiaries for the year ended 31 December 2013.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
control, and continues to be consolidated until the date that such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting year as the parent company,
using consistent accounting policies.
All intra-company balances, income and expenses and unrealised gains or losses result from intra-company
transactions are eliminated in full.
Minority interests represent the portion of profit or loss and net assets that is not held by the Group’s shareholders
and are presented separately in the consolidated income statement and consolidated balance sheet. Acquisitions
of minority interests are accounted for using the parent entity extension method, whereby, the difference
between the consideration and the book value of the share of the net assets acquired is recognised in goodwill.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1
Change in accounting policies and disclosures
The accounting policies adopted by the Group in preparation of the consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual consolidated financial statements for
the year ended 31 December 2012.
3.2
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks, cash in transit and short-term, highly liquid
investments with an original maturity of less than three months that are readily convertible into known amounts
of cash and that are subject to an insignificant risk of change in value.
3.3Inventories
Inventories are stated at the lower of cost incurred in bringing each product to its present location and condition,
and net realisable value.
Net realisable value represents the estimated selling price in the ordinary course of business less the estimated
costs to complete and the estimated costs necessary to make the sale.
The perpetual method is used to record inventories, which are valued as follows:
Raw materials, consumables and goods
for resale.
Finished goods and work in process.
- actual cost on a weighted average basis.
- cost of direct materials and labour plus attributable overhead
based on the normal level of activities.
ANNUAL REPORT 2013
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3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.3
Inventories (continued)
B09-DN/HN
Inventories (continued)
An inventory provision is created for the estimated loss arising due to the impairment (through diminution,
damage, obsolescence, etc.) of raw materials, finished goods, and other inventories owned by the Group, based
on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the
provision balance are recorded into the cost of goods sold account in the consolidated income statement.
3.4Receivables
Receivables are presented in the consolidated financial statements at the carrying amounts due from customers
and other debtors, after provision for doubtful debts.
The provision for doubtful debts represents amounts of outstanding receivables at the balance sheet date which
are doubtful of being recovered. Increases and decreases to the provision balance are recorded as general and
administration expense in the consolidated income statement.
3.5
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation.
The cost of a tangible fixed asset comprises its purchase price and any directly attributable costs of bringing the
tangible fixed asset to working condition for its intended use.
Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and
expenditures for maintenance and repairs are charged to the consolidated income statement as incurred.
When tangible fixed assets are sold or retired, their cost and accumulated depreciation are removed from the
consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated
income statement.
3.6
Leased assets
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement
at inception date and requires an assessment of whether the fulfilment of the arrangement is dependent on the
use of a specific asset and the arrangement conveys a right to use the asset.
A lease is classified as a finance lease whenever the terms of the lease transfer substantially all the risks and
rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.
Where the Group is the lessee
Rentals under operating leases are charged to the consolidated income statement on a straight-line basis over
the term of the lease.
Where the Group is the lessor
Assets subject to operating leases are included as the Group’s fixed assets in the consolidated balance sheet.
Initial direct costs incurred in negotiating an operating lease are recognised in the consolidated income
statement as incurred.
Lease income is recognised in the consolidated income statement on a straight-line basis over the lease term.
3.7
Intangible fixed assets
Intangible fixed assets are stated at cost less accumulated amortization.
The cost of an intangible fixed asset comprises its purchase price and any directly attributable costs of preparing
the intangible fixed asset for its intended use.
Expenditures for additions, improvements are added to the carrying amount of the assets and other expenditures
are charged to the consolidated income statement as incurred.
When intangible fixed assets are sold or retired, their costs and accumulated amortization are removed from
the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated
income statement.
Land use rights
Land use rights are recorded as intangible assets representing the value of the right to use the lands acquired by
the Group. The useful lives of land use rights are assessed as either finite or indefinite. Accordingly, land use right
with finite lives representing the land lease are amortised over the term of lease while the land use right with
indefinite useful lives are not amortised.
The advance payment for land rental, of which the land lease contracts have effectiveness prior to 2003 and
Land use right certificate being issued, are recorded as intangible asset according to Circular No. 45/2013/TT-BTC
issued by the Ministry of Finance on 25 August 2013 guiding the management, use and depreciation of fixed
assets (“Circular 45”).
3.8
Depreciation of tangible fixed assets and amortization of intangible fixed assets are calculated on a straight-line
basis over the estimated useful life of each asset as follows:
Buildings and structures
10 years
Machinery and equipment
5 - 10 years
Means of transportation
6 - 10 years
Office equipment
Land use right
Brand name
Computer software
Land lease advantage
Customer relationships
Others
3 - 5 years
46 years
10 - 20 years
3 years
20 - 55 years
16 years
8 years
The useful life of the fixed assets and depreciation and amortization rates are reviewed periodically to ensure
that the method and the period of the depreciation and amortization are consistent with the expected pattern
of economic benefits that will be derived from the use of the fixed assets.
ANNUAL REPORT 2013
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3.
3.9
Investment properties
B09-DN/HN
Investment properties are stated at cost including transaction costs less accumulated depreciation.
Subsequent expenditure relating to an investment property that has already been recognized is added to the
net book value of the investment property when it is probable that future economic benefits, in excess of the
originally assessed standard of performance of the existing investment property, will flow to the Group.
Depreciation of investment properties are calculated on a straight-line basis over the estimated useful life of
each asset as follows:
Plant
13.5 years
Investment properties are derecognised when either they have been disposed of or when the investment
properties are permanently withdrawn from use and no future economic benefit is expected from its disposal.
The difference between the net disposal proceeds and the carrying amount of the assets is recognised in the
consolidated income statement in the period of retirement or disposal.
Transfers are made to investment properties when, and only when, there is a change in use, evidenced by
ending of owner-occupation, commencement of an operating lease to another party or ending of construction
or development. Transfers are made from investment properties when, and only when, there is change in use,
evidenced by commencement of owner-occupation or commencement of development with a view to sale.
The transfer from investment property to owner-occupied property or inventories does not change the cost or
the carrying value of the property for subsequent accounting at the date of change in use.
3.10 Construction in progress
Construction in progress represents tangible fixed assets under construction and is stated at cost. This includes
costs of construction of plant, installation of equipment and other direct costs. Construction in progress is not
depreciated until such time as the relevant assets are completed and put into operation.
3.11 Borrowing costs
Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of
funds and are recorded as expense during the year in which they are incurred.
3.12 Prepaid expenses
Prepaid expenses are reported as short-term prepaid expenses or long-term prepaid expenses on the
consolidated balance sheet and amortised over the period for which the amounts are paid or the period in
which economic benefits are generated in relation to these expenses.
Starting from 10 June 2013, according to Circular 45, the prepaid rental related to land lease contract with
effectiveness after 2003 is not qualified for recognition as intangible fixed asset. Accordingly, the unamortised
balances of prepaid rental made in accordance with lease contract with effectiveness after 2013 are reclassified
from intangible assets to long-term prepaid expenses for allocation to the income statement over the remaining
lease term.
3.13 Business combination and goodwill
Business combinations are accounted for using the purchase method. The cost of an acquisition is measured
as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date
of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at fair values at the date of
business combination.
Goodwill is initially measured at cost being the excess of the cost of the business combination over the Group’s
share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of
acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the consolidated income statement.
After initial recognition, goodwill is measured at cost less accumulated amortization. Amortization of goodwill
is calculated on a straight-line basis over ten (10) years during which the source embodying economic benefits
are recovered by the Group.
3.14 Investment in associates
The Group’s investment in its associates is accounted for using the equity method of accounting. An associate is
an entity in which the Group has significant influence and which is neither a subsidiary nor a joint venture. The
Group generally deems they have significant influence if they have over 20% of the voting rights.
Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post acquisition
changes in the Group’s share of net assets of the associates. Goodwill arising on acquisition of the associate is
included in the carrying amount of the investment and is amortized over a 10-year period. The consolidated
income statement reflects the share of the post-acquisition results of operation of the associate.
The share of post-acquisition profit (loss) of the associates is presented on the face of the consolidated income
statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. Dividend or profit
sharing received or receivable from associates reduce the carrying amount of the investment.
The financial statements of the associates are prepared for the same reporting year and use the same accounting
policies as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those
of the Group.
ANNUAL REPORT 2013
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3.
B09-DN/HN
3.15 Investment in joint venture
The Group’s investment in jointly controlled entity is accounted for using the equity method of accounting.
Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post joint
venture changes in the Group’s share of net assets of the jointly controlled entity. The consolidated income
statement reflects the share of the post-acquisition results of operation of the jointly controlled entity.
The share of profit (loss) of the jointly controlled entity is presented on face of the consolidated income
statement and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. Dividend or profit
sharing received or receivable from jointly controlled entities reduces the carrying amount of the investment.
The financial statements of the jointly controlled entities are prepared for the same reporting year and use the
same accounting policies as the Group. Where necessary, adjustments are made to bring the accounting policies
in line with those of the Group.
3.16 Investments in securities and other investments
Investments in securities and other investments are stated at their acquisition costs. Provision is made for any
diminution in value of the marketable investments at the balance sheet date representing the excess of the
acquisition cost over the market value at that date in accordance with the guidance under Circular No. 228/2009/
TT-BTC issued by the Ministry of Finance on 7 December 2009. Increases and decreases to the provision balance
are recorded as finance expense in the consolidated income statement.
3.17 Payables and accruals
Payables and accruals are recognised for amounts to be paid in the future for goods and services received,
whether or not billed to the Group.
3.18 Accrual for severance pay
The severance pay to employees is accrued at the end of each reporting period for all employees who have
more than 12 months in service up to 31 December 2008 at the rate of one-half of the average monthly salary
for each year of service up to 31 December 2008 in accordance with the Labour Code, the Law on Social
Insurance and related implementing guidance. Commencing 1 January 2009, the average monthly salary used
in this calculation will be revised at the end of each reporting period following the average monthly salary of
the 6-month period up to the balance sheet date. Any changes to the accrued amount will be taken to the
consolidated income statement.
This accrued severance pay is used to settle the termination allowance to be paid to employee upon
termination of their labour contract following Article 48 of the Labour Code.
3.19 Foreign currency transactions
The Group follows the guidance under Vietnamese Accounting Standard No. 10 - Effects of Changes in Foreign
Exchange Rates and Circular No. 179/2012/TT-BTC providing guidance on recognition, measurement, treatment
for foreign exchange differences issued by the Ministry of Finance on 24 October 2012 in relation to foreign
currency transactions as applied consistently in prior year.
Transactions in currencies other than the Group’s reporting currency of VND are recorded at the exchange
rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denominated
in foreign currencies are translated at buying exchange rate announced by the commercial bank where the
Group maintains bank accounts ruling at the balance sheet date. All realised and unrealised foreign exchange
differences are taken to the consolidated income statement.
3.20 Treasury shares
Treasury shares, which represent the reacquired shares of the Company, are deducted from equity at acquisition
cost. No gain or loss is recognised in the consolidated income statement upon purchase, sale, re-issue or
cancellation of the Group’s own equity instruments.
3.21 Earnings per share
Basic earnings per share is computed by dividing net profit for the year attributable to ordinary shareholders,
before appropriation for bonus and welfare fund by the weighted average number of ordinary shares outstanding
during the year, where applicable.
Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary
equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary
shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
3.22 Segment information
A segment is a component determined separately by the Group which is engaged in providing products or
related services (business segment) or providing products or services in a particular economic environment
(geographical segment), that is subject to risks and returns that are different from those of other segments.
3.23 Appropriation of net profit
Net profit after tax is available for appropriation to shareholders after approval in the shareholders’ meeting,
and after making appropriation to reserve funds in accordance with the Company’s charter and Vietnamese
regulatory requirements.
The Group maintains the following reserve funds which are appropriated from the Group’s net profit as proposed
by the Board of Directors and subject to approval by shareholders at the Annual General Meeting:
Financial reserve fund
This fund is set aside to protect the Group's normal operations from business risks or losses, or to prepare for
unforeseen losses or damages for objective reasons and force majeure, such as fire, economic and financial
turmoil of the country or elsewhere.
ANNUAL REPORT 2013
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3.
B09-DN/HN
3.23 Appropriation of net profit (continued)
Investment and development fund
This fund is set aside for use in the Company’s expansion of its operation or in-depth investments.
Bonus and welfare fund
This fund is set aside for the purpose of pecuniary rewarding and encouragement, common benefits and
improvement of the employees’ benefits.
Dividends
Final dividends proposed by the Group’s Board of Directors are classified as a separate allocation of undistributed
earnings within the equity section of the consolidated balance sheet, until they have been approved by the
Group’s shareholders at the Annual General Meeting. When these dividends have been approved by the
shareholders and declared, they are recognised as a liability in the consolidated balance sheet.
3.24 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable, excluding trade discount, rebate and sales return. The following specific recognition criteria must
also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer, usually upon the delivery of the goods.
Rendering of services
Revenue is recognised when service is rendered.
Interest
Revenue is recognised as the interest accrues (taking into account the effective yield on the asset) unless
collectability is in doubt.
Dividends
Income is recognised when the Group’s entitlement as an investor to receive the dividend is established.
3.25Taxation
Current income tax
Current income tax assets and liabilities for the current and prior years are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted by the balance sheet date.
Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to set
off current tax assets against current tax liabilities and when the Group intends to settle its current tax assets and
liabilities on a net basis.
Deferred income tax
Deferred income tax is provided using the balance sheet liability method on temporary differences at the
balance sheet date between the tax base of assets and liabilities and their carrying amount for financial reporting
purpose.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
»» Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which
at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and
»» In respect of taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures where timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and
unused tax losses, to the extent that it is probable that taxable profits will be available against which deductible
temporary differences, carried forward unused tax credit and unused tax losses can be utilised, except:
»» Where the deferred tax asset in respect of deductible temporary difference which arises from the initial
recognition of an asset or liability which at the time of the related transaction, affects neither the accounting
profit nor taxable profit or loss; and
»» In respect of deductible temporary differences associated with investments in subsidiaries and associates,
and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profits will be available against which
the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised. Previously unrecognised deferred income tax assets are re-assessed at
each balance sheet date and are recognised to the extent that it has become probable that future taxable profit
will allow the deferred tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted at the
balance sheet date
Deferred tax is charged or credited to the consolidated income statement, except when it relates to items
recognised directly to equity, in which case the deferred tax is also dealt with in the equity account.
Deferred tax assets and liabilities are offset when there is a legally enforceable right for the Group to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority on either the same taxable entity or when the Group intends to either settle current tax liabilities and
assets on a net basis or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
ANNUAL REPORT 2013
88 89
3.
B09-DN/HN
3.26 Financial instruments
Initial recognition and presentation
Financial assets
On 6 November 2009, the Ministry of Finance issued Circular No. 210/2009/TT-BTC providing guidance for the
adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of
financial instruments (“Circular 210”) with effectiveness from financial years beginning on or after 1 January 2011.
Financial assets within the scope of Circular 210 are classified, for disclosures in the notes to the consolidated
financial statements, as financial assets at fair value through profit or loss, held-to-maturity investments, loans
and receivables or available-for-sale financial assets as appropriate. The Group determines the classification of its
financial assets at initial recognition.
All financial assets are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial assets include cash and short-term deposits, trade and other receivables, loan receivables
and short-term and long-term investments.
Financial liabilities
Financial liabilities within the scope of Circular 210 are classified, for disclosures in the notes to the consolidated
financial statements, as financial liabilities at fair value through profit or loss or financial liabilities measured
at amortised cost as appropriate. The Group determines the classification of its financial liabilities at initial
recognition.
All financial liabilities are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables and loans.
Subsequent re-measurement
No subsequent re-measurement of financial instruments is currently required.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance
sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
4.
BUSINESS COMBINATION AND GOODWILL
4.1
Business combination
In accordance with the 2013 Annual General Meeting Resolution dated 12 April 2013, the Company’s shareholders
approved a plan for the merger of Vinabico Corporation (“Vinabico”) into the Company through the issuance of
the Company’s new shares at a ratio of 1:2.2 (2.2 existing shares of Vinabico will be in exchange for 1 new share
of the Company).
On 28 June 2013, the Company completed the issuance of 1,105,645 new shares at par value of VND 10,000 per
share in exchange for the shares of Vinabico.
The fair value of the net assets owned by Vinabico at the date of acquisition was subsequently assessed by the
Group’s management. The management’s assessment showed that there were not any identifiable intangible
assets recognised on the acquisition and the fair value of the net assets approximate their provisional amounts
recognised in the Group’s consolidated financial statements for the six-month period ended 30 June 2013. The
fair values of the identifiable assets and liabilities of Vinabico as at the acquisition date were as follows:
Fair value recognized
on acquisition
VND
Assets
Property, plant and equipment
7,388,107,304
Trade receivables
5,235,691,428
Inventories
2,801,038,999
2,829,719,234
Investments
41,174,484,744
Other current assets
3,823,496,136
Intangible assets
7,462,892,695
Other long-term assets
10,688,039,534
81,403,470,074
Liabilities
Account payables
Other liabilities
1,364,916,322
15,994,860,175
17,359,776,497
Total net assets
64,043,693,577
Total net assets acquired, 48.8%
31,252,450,241
Goodwill arising on acquisition
Consideration, shares issued at fair value
21,044,558,259
52,297,008,500
The total cost of the business combination amounted to VND 52,297,008,500 comprising the issuance of
1,105,645 ordinary shares at fair value which was determined by the published price of the Company’s share at
the acquisition date, which was VND 47,300 per share.
ANNUAL REPORT 2013
90 91
4.
B09-DN/HN
BUSINESS COMBINATION AND GOODWILL (continued)
4.2Goodwill
Goodwill is amortised on a straight line basis over ten years from acquisition date. The amortisation charges of
goodwill during the year and the accumulated amortisation as at balance sheet date are as follows:
Amount
VND
Cost
Beginning balance
433,015,187,595
Increase due to business combination
21,044,558,259
Ending balance
454,059,745,854
Accumulated amortisation
Beginning balance
83,094,236,290
Amortisation for the year
44,643,343,543
Ending balance
127,737,579,833
Net carrying amount
5.
Beginning balance
349,920,951,305
Ending balance
326,322,166,021
CASH AND CASH EQUIVALENTS
Ending balance
VND
Beginning balance
VND
Cash on hand
1,902,172,564
1,459,782,477
Cash in banks
282,810,221,399
211,785,272,910
Cash in transit
2,352,154,161
1,903,992,000
1,671,000,000,000
614,310,211,907
1,958,064,548,124
829,459,259,294
Cash equivalents
TOTAL
Cash equivalents represent bank term deposits at the commercial banks with the original maturity of less than
three months and earn interest at the applicable deposit rates.
6.
CURRENT ACCOUNTS RECEIVABLE
Trade receivables
Ending balance
VND
Beginning balance
VND
188,931,745,641
180,529,903,420
26,479,518,640
51,543,851,651
162,452,227,001
128,986,051,769
70,757,652,186
196,058,013,223
In which:
Due from related parties (Note 29)
Due from third parties
Advances to suppliers
Ending balance
VND
Beginning balance
VND
Due from a related party (Note 29)
13,950,621,542
27,929,026,963
Due from third parties
56,807,030,644
168,128,986,260
603,491,045,600
507,157,423,689
Due from related parties (Note 29)
402,054,592,874
344,901,764,350
Receivables from the sale of investments
156,776,770,363
156,776,698,020
Interest receivable
3,023,356,389
-
Other receivables
41,636,325,974
5,478,961,319
(3,287,129,493)
(1,631,142,631)
859,893,313,934
882,114,197,701
Ending balance
VND
Beginning balance
VND
Raw materials
182,115,956,240
184,979,783,982
Finished goods
66,529,353,608
91,901,676,725
Tools and supplies
37,506,961,237
28,842,914,533
Merchandise goods
11,119,095,817
2,586,365,048
In which:
Other receivables
In which:
Provision for doubtful debts
NET
7.
INVENTORIES
Goods on consignment
8,479,275,211
2,067,862,904
Goods in transit
8,398,681,676
10,239,873,840
Work in process
3,464,716,868
3,327,274,866
317,614,040,657
323,945,751,898
(13,916,436,529)
(7,339,802,889)
303,697,604,128
316,605,949,009
TOTAL
Provision for obsolete inventories
NET
Details of movement of provision for obsolete inventories:
Current year
VND
Previous year
VND
7,339,802,889
1,623,240,670
Provision created during the year
13,916,436,529
7,339,802,889
Utilization and reversal of provision during the year
(7,339,802,889)
(1,623,240,670)
13,916,436,529
7,339,802,889
Ending balance
VND
Beginning balance
VND
16,764,949,919
-
Others
750,371,719
-
TOTAL
17,515,321,638
-
At beginning of year
At end of year
8.
TAX AND OTHER RECEIVABLE FROM THE STATE
Corporate income tax overpaid (Note 28.2)
ANNUAL REPORT 2013
92 93
9.
B09-DN/HN
TANGIBLE FIXED ASSETS
Buildings and structures
VND
Machinery and equipment
VND
391,412,863,319
19,125,229,299
1,091,707,291,181
97,107,882,563
3,284,300,106
15,840,929,193
658,129,003
41,523,433,494
55,584,449,069
(51,132,382,033)
658,129,003
411,196,221,621
(6,911,712,487)
(44,220,669,546)
1,137,682,791,711
17,095,052,818
127,627,080,550
92,033,184,946
23,854,875,057
159,046,871
547,364,507,782
103,323,780,397
(44,038,036,253)
159,046,871
116,047,106,874
(6,213,249,023)
(37,824,787,230)
606,650,251,926
299,379,678,373
295,149,114,747
544,342,783,399
531,032,539,785
Cost
Beginning balance
Increases
In which:
Newly purchased
Transferred from construction in progress
Decreases
In which:
Sold, disposed
Reclassifications
Ending balance
In which:
Fully depreciated
Beginning balance
Depreciation for the year
Decreases
In which:
Sold, disposed
Reclassifications
Ending balance
Net carrying amount
Beginning balance
Ending balance
The machinery and equipment of the Group with a carrying amount of VND 237,031,514,595 were placed as
collateral for the Group’s short-term and long-term loans from the banks. Details of such loans are presented in
Notes 15 and 21.
10.
INTANGIBLE FIXED ASSETS
Brand name
VND
Land use right
VND
Computer software
VND
Beginning balance
16,591,966,348
64,772,106,766
76,563,143,961
Increases - Newly purchased
Reclassifications
Ending balance
In which:
Fully amortized
Accumulated amortization
Beginning balance
Amortization for the year
Reclassifications
Ending balance
Net carrying amount
Beginning balance
Ending balance
16,591,966,348
349,200,000
(63,843,027,996)
1,278,278,770
231,829,865
76,794,973,826
-
671,220,840
2,439,995,855
3,318,393,116
1,659,196,789
4,977,589,905
7,794,602,688
2,171,338,917
(8,897,288,093)
1,068,653,512
27,841,536,558
7,836,150,379
(181,844,115)
35,495,842,822
13,273,573,232
11,614,376,443
56,977,504,078
209,625,258
48,721,607,403
41,299,131,004
Cost
Means of transportation
VND
Office equipment
VND
Total
VND
133,612,141,888
9,091,441,847
72,835,515,618
17,791,219,005
1,689,567,812,006
143,115,772,714
5,444,180,072
3,647,261,775
(12,468,158,678)
16,011,438,330
1,779,780,675
(14,595,371,994)
66,263,352,002
76,852,420,712
(77,537,783,702)
(11,574,041,642)
(894,117,036)
130,235,425,057
(957,639,120)
(13,637,732,874)
76,031,362,629
(19,443,393,249)
(58,094,390,453)
1,755,145,801,018
17,916,613,827
38,187,804,964
200,826,552,159
56,182,891,435
15,539,934,597
(7,269,225,133)
52,010,688,781
8,060,770,390
(11,358,406,953)
747,591,272,944
150,779,360,441
(62,506,621,468)
(6,526,484,762)
(742,740,371)
64,453,600,899
(938,075,859)
(10,420,331,094)
48,713,052,218
(13,677,809,644)
(48,828,811,824)
835,864,011,917
77,429,250,453
65,781,824,158
20,824,826,837
27,318,310,411
941,976,539,062
919,281,789,101
Land lease advantage
VND
Customer relationships
VND
Others
VND
Total
VND
55,268,061,157
277,615,077,188
2,000,000,000
492,810,355,420
55,268,061,157
277,615,077,188
2,000,000,000
581,029,865
(63,843,027,996)
429,548,357,289
-
-
-
3,111,216,695
5,130,627,365
2,789,254,539
7,919,881,904
34,701,884,648
17,350,942,324
52,052,826,972
2,000,000,000
250,000,000
(416,666,668)
1,833,333,332
80,787,044,375
32,056,882,948
(9,495,798,876)
103,348,128,447
50,137,433,792
47,348,179,253
242,913,192,540
225,562,250,216
166,666,668
412,023,311,045
326,200,228,842
ANNUAL REPORT 2013
94 95
11.
CONSTRUCTION IN PROGRESS
Ending balance
VND
Beginning balance
VND
120,770,769,156
83,046,025,998
2,437,080,393
3,581,574,577
-
5,510,118,012
Others
2,501,806,612
5,792,023,881
TOTAL
125,709,656,161
97,929,742,468
Installation of machinery
Software development
Construction of new plants
12.
B09-DN/HN
INVESTMENT PROPERTY
Plant
VND
Cost
Beginning and ending balances
34,524,970,816
Beginning balance
10,506,673,217
Depreciation for the year
2,573,389,028
Ending balance
13,080,062,245
Net carrying amount
Beginning balance
24,018,297,599
Ending balance
21,444,908,571
Investment property represents the plant which was leased out to North Tribeco Joint Stock Company for 15
years starting from 25 May 2007. The cost of this investment property is depreciated over 13.5 years commencing
from 17 November 2008. The fair value of the investment property had not yet been formally assessed and
determined as at 31 December 2013. However, it is management’s assessment that this property’s market values
are much higher than its carrying value as at the balance sheet date.
13.INVESTMENTS
13.1 Investments in associates and jointly controlled entity
Name of associates
and jointly controlled entity
Carrying value
Interest
%
Ending balance
VND
Interest
%
Beginning balance
VND
Lavenue Investment Corporation (“Lavenue”)
50.00
1,050,000,000,000
50.00
1,050,000,000,000
Tan An Phuoc Company Limited (“TAP”)
49.00
205,300,000,000
49.00
204,300,000,000
Thanh Thai Real Estate Corporation (“TTR”)
30.00
1,800,000,000
30.00
1,800,000,000
TOTAL
1,257,100,000,000
1,256,100,000,000
13.2 Short-term investments
Ending balance
Number of
Amount
shares
VND
Marketable securities, net
Short-term securities
of which:
Listed shares
Asia Commercial Joint Stock Bank
Refrigeration Electrical Engineering
Corporation (“REE”)
Other securities
Thien Long Group Corporation
Prudential Balanced Fund
Unlisted shares
Saigon Beer - Alcohol - Beverage
Corporation
Vien Dong Assurance Corporation
Provision for diminution in value of securities
Other short-term investments, net
Other short-term investments
In which:
Short-term investments in bonds
Corporate bond of REE
Short-term investments
Loans to related parties
of which:
Hung Vuong Corporation (*)
Kinh Do Investment Co., Ltd.
Dat Thang Company
Vimec Trading Investment Corporation
Other short-term investment
Provision for other short-term investments
Net value of short-term investments
Beginning balance
Number of
Amount
shares
VND
95,691
3,681,723,350
4,778,276,394
1,991,386
24,265,947,837
48,737,879,600
27,412
1,021,814,918
27,412
1,021,814,918
18,144
252,000,000
91,044
1,458,264,693
135
-
4,461,476
-
90,129
455,281
1,040,000
3,516,100,478
15,885,188,911
10,860,118,000
50,000
3,500,000,000
50,000
3,500,000,000
-
(1,096,553,044)
35,798,000,000
43,798,000,000
237,520
12,496,392,600
(24,471,931,763)
213,217,036,288
225,717,036,288
1,000
1,000
98,000,000
98,000,000
43,700,000,000
1,000
1,000
98,000,000
98,000,000
225,619,036,288
35,700,000,000
8,000,000,000
(8,000,000,000)
39,479,723,350
35,700,000,000
156,919,036,288
15,000,000,000
10,000,000,000
8,000,000,000
(12,500,000,000)
237,482,984,125
(*) At the date of these consolidated financial statements, Hung Vuong Corporation repaid to the Group an
amount of VND 35,700,000,000.
ANNUAL REPORT 2013
96 97
13.
B09-DN/HN
INVESTMENTS (continued)
13.3 Other long-term investments
Ending balance
Viet Capital Healthcare fund
14.
15.
Beginning balance
Number of fund
certificates
Amount
VND
Number of fund
certificates
Amount
VND
150
15,000,000,000
150
15,000,000,000
LONG-TERM PREPAID EXPENSES
Ending balance
VND
Beginning balance
VND
Land rental
71,275,053,740
16,709,161,152
Tools and consumables
47,416,744,169
56,921,307,813
Maintenance expenses
3,579,907,327
2,158,899,606
Others
2,102,295,043
3,918,415,441
TOTAL
124,374,000,279
79,707,784,012
Ending balance
VND
Beginning balance
VND
Short-term loans
255,722,512,286
529,559,033,303
Current portion of long-term loans (Note 21)
145,216,700,016
-
400,939,212,302
529,559,033,303
SHORT-TERM LOANS AND DEBTS
TOTAL
The Group has obtained short-term loans from banks for the purpose of financing its working capital requirements
with balances due at year-end as set out in the table below:
Name of bank
Ending balance
VND
Term
Interest
rate
Description of collateral
% p.a.
Vietinbank
99,618,277,545
180 days from
drawdown date
6.5
Unsecured
Vietcombank – Hai Duong Branch
(“VCB”)
74,972,459,945
5 months from
drawdown date
6.4
Machinery and
equipment valued at
VND 4,891,677,858
Hongkong and Shanghai Bank
Corporation (“HSBC”)
35,566,234,311
90 days from
drawdown date
5.8 - 6.5 Unsecured
Military Joint Stock Commercial
Bank ("MB")
30,542,930,599
5 months from
drawdown date
Land use right and
7.5 - 8.5 assets at Tay Bac Cu Chi
Industrial Zone
Vietnam International bank (“VIB”)
8,811,646,869
6 months from
drawdown date
4,772,159,277
Standard Chartered Bank ("SCB")
1,438,803,740
7
Unsecured
6 months from
drawdown date
8
The Group's receivables
and inventory with
minimum value equal
to outstanding loan
balance at all time
120 days from
drawdown date
6
Machinery and
equipment valued at
VND 27,856,590,036
255,722,512,286
ANNUAL REPORT 2013
98 99
16.
TRADE PAYABLES
Ending balance
VND
Beginning balance
VND
265,262,235,541
257,155,299,694
18,510,145,567
17,462,956,852
283,772,381,108
274,618,256,546
Ending balance
VND
Beginning balance
VND
34,845,875,955
37,523,901,577
104,852,253
104,852,253
34,950,728,208
37,628,753,830
Ending balance
VND
Beginning balance
VND
Corporate income tax (Note 28.2)
60,627,851,285
79,116,759,336
Value-added tax payable
17,662,993,337
17,798,220,570
Personal income tax
2,704,945,678
4,233,648,849
Import/export duties
-
480,358,799
831,332,363
1,094,122,331
81,827,122,663
102,723,109,885
Ending balance
VND
Beginning balance
VND
Marketing expenses
93,547,309,568
69,694,923,489
13th month salary and bonus
45,985,328,998
33,534,434,998
Tax on changing of purpose for use of land
34,594,000,000
34,594,000,000
Sales commission
20,871,418,585
26,425,323,237
Transportation fees
14,350,962,827
13,560,403,738
License fees
5,752,005,440
3,274,139,000
Utilities
5,458,486,312
3,278,987,013
Interest expense
1,931,764,928
2,979,679,906
Others
7,617,763,267
6,681,277,086
TOTAL
230,109,039,925
194,023,168,467
Due to third parties
Due to related parties (Note 29)
TOTAL
17.
ADVANCE FROM CUSTOMERS
Due to a related party (Note 29)
TOTAL
18.
STATUTORY OBLIGATIONS
Other taxes
TOTAL
19.
B09-DN/HN
ACCRUED EXPENSES
20.
OTHER PAYABLES
Ending balance
VND
Beginning balance
VND
100,000,000,000
100,000,000,000
Unearned revenue
2,947,932,000
2,947,932,000
Deposits received
2,767,218,796
2,987,218,796
Dividends payable
2,435,013,268
1,364,047,360
Social, health and unemployment insurance
1,526,414,089
1,811,992,728
Trade union fees
1,017,711,076
2,466,048,047
Others
11,663,216,825
9,916,874,790
TOTAL
122,357,506,054
121,494,113,721
100,614,628,800
102,334,622,604
21,742,877,254
19,159,491,117
Ending balance
VND
Beginning balance
VND
314,102,469,716
52,633,096,500
145,216,700,016
-
168,885,769,700
52,633,096,500
Capital holding on behalf
In which:
Due to related parties (Note 29)
21.
LONG-TERM LOANS AND DEBTS
Long-term loans from banks
Less:
Current portion of long-term loans (Note 15)
NON-CURRENT PORTION
Details of long-term loans from banks are as follows:
Name of banks
SCB - In USD
Ending balance
VND
172,112,727,234
In which: current portion
76,494,545,532
SCB - In VND
40,909,090,910
18,181,818,180
United Overseas Bank ("UOB") In USD
TOTAL
101,080,651,572
50,540,336,304
Term
Interest
rate Description of collateral
% p.a.
3 years from first
drawdown date on 7
March 2013
3.8
Machinery and
equipment of two
subsidiaries valued at
VND 125,257,984,370
1,076 days from first
drawdown date on 27
March 2013
6.9
As above
36 months from the
first withdrawal date on
8 November 2012
5
The new soft-cakes
production line
amounting to
VND 79,025,262,331
314,102,469,716
In which:
Current portion
145,216,700,016
Non-current portion
168,885,769,700
ANNUAL REPORT 2013 100
101
22.
B09-DN/HN
OWNERS’ EQUITY
22.1 Increase and decrease in owners’ equity
Issued share capital
Share premium
Treasury shares
1,195,178,810,000
1,950,665,093,455
(153,869,778,400)
Issuance of new shares
140,000,000,000
503,153,676,333
-
Issuance of bonus shares
264,037,440,000
(264,037,440,000)
-
Acquisition of treasury shares
-
-
(501,376,498,414)
Foreign exchange differences
-
-
-
Net profit for the year
-
-
-
Dividends declared
-
-
-
Transferred to funds
-
-
-
Board of Directors’ allowance
-
-
-
1,599,216,250,000
2,189,781,329,788
(655,246,276,814)
1,599,216,250,000
2,189,781,329,788
(655,246,276,814)
Issuance of new shares to employees
66,010,000,000
31,686,000,000
-
Issuance of new shares for business
combination
11,056,450,000
40,630,558,500
-
Issuance of treasury shares
-
82,210,830,889
502,620,072,914
Net profit for the year
-
-
-
Dividends declared
-
-
-
Transferred to funds
-
-
-
Board of Directors’ allowance
-
-
-
1,676,282,700,000
2,344,308,719,177
(152,626,203,900)
Previous year
Beginning balance
Ending balance
Current year
Beginning balance
Ending balance
In accordance with the 2013 Annual General Meeting Resolution dated 12 April 2013, the Company’s shareholders
approved a plan for the merger of Vinabico into the Group through the issuance of the Company’s new shares at
a ratio of 1:2.2 (2.2 existing shares of Vinabico will be in exchange for 1 new share of the Company).
On 28 June 2013, the distribution of new shares for the purpose of exchanging the shares of Vinabico was
completed and the Company is in process of completion of the Report of Distribution Result to submit to the
State Security Committee.
As at the balance sheet date, the Company is in process of obtaining the Amended Business Registration
Certificate regarding the increase in share capital arising from the new issuances of share for the said mergers
from relevant authorities.
VND
Foreign
exchange
differences
Investment and
development fund
Financial
reserve fund
Other funds
belonging to
owners’ equity
Undistributed
earnings
Total
(891,411,434)
25,370,280,515
25,792,635,752
15,909,752,661
779,434,568,252
3,837,589,950,801
-
-
-
-
-
643,153,676,333
-
-
-
-
-
-
-
-
-
-
-
(501,376,498,414)
891,411,434
-
-
-
-
891,411,434
-
-
-
-
353,944,403,336
353,944,403,336
-
-
-
-
(311,455,718,925)
(311,455,718,925)
-
-
-
-
(6,728,181,334)
(6,728,181,334)
-
-
-
-
(5,745,382,185)
(5,745,382,185)
-
25,370,280,515
25,792,635,752
15,909,752,661
809,449,689,144
4,010,273,661,046
-
25,370,280,515
25,792,635,752
15,909,752,661
809,449,689,144
4,010,273,661,046
-
-
-
-
-
97,696,000,000
-
-
-
-
-
51,687,008,500
-
-
-
-
-
584,830,903,803
-
-
-
-
493,869,552,142
493,869,552,142
-
-
-
-
(318,141,106,487)
(318,141,106,487)
-
-
-
-
(31,543,480,073)
(31,543,480,073)
-
-
-
-
(7,028,950,000)
(7,028,950,000)
-
25,370,280,515
25,792,635,752
15,909,752,661
946,605,704,726
4,881,643,588,931
103
22.
B09-DN/HN
OWNERS’ EQUITY (continued)
22.2 Capital transactions with owners and distribution of dividends
Current year
VND
Previous year
VND
1,599,216,250,000
1,195,178,810,000
77,066,450,000
404,037,440,000
1,676,282,700,000
1,599,216,250,000
318,141,106,487
311,455,718,925
Ending balance
Shares
Beginning balance
Shares
Ordinary shares authorised to be issued
167,628,270
159,921,625
Ordinary shares issued and fully paid
167,628,270
159,921,625
Treasury shares held by the Group
(1,492,335)
(14,535,368)
In which: held by the Company
(1,492,256)
(1,492,256)
166,135,935
145,386,257
Current year
VND
Previous year
VND
493,869,552,142
353,944,403,336
161,876,676
152,692,848
3,051
2,318
Issued share capital
Beginning balance
Increase
Ending balance
Dividends
Dividends declared
22.3Shares
Ordinary outstanding shares
22.4 Earnings per share
Net profit attributable to the Company’s shareholders (VND)
Weighted average number of ordinary shares
Basic earnings per share (VND)
(Par value: VND 10,000 per share)
The weighted average number of ordinary shares has taken into account the treasury shares and bonus shares
made by the Company up to the date of these consolidated financial statements. Accordingly, the opening
weighted average number of ordinary shares has been adjusted retrospectively.
There are no potential dilutive ordinary shares as at the balance sheet date.
23.REVENUE
23.1 Revenue from sale of goods and rendering of services
Current year
VND
Previous year
VND
4,674,796,415,910
4,311,914,226,281
4,593,939,105,675
4,261,773,089,546
78,697,252,611
48,768,953,487
2,160,057,624
1,372,183,248
(114,198,130,572)
(26,116,782,870)
Sales returns
(52,633,490,262)
(15,862,928,415)
Sales discounts
(61,564,640,310)
(10,253,854,455)
4,560,598,285,338
4,285,797,443,411
Current year
VND
Previous year
VND
108,281,743,978
122,931,646,545
Realised foreign exchange gains
2,630,600,578
5,746,638,478
Gains from disposal of investment
1,569,220,394
418,433,704
653,728,957
1,088,283,677
Unrealised foreign exchange gains
-
2,781,973,065
Gains from securities investments
-
314,803,350
113,135,293,907
133,281,778,819
Current year
VND
Previous year
VND
2,489,214,834,327
2,362,933,789,580
44,467,415,735
31,428,101,387
6,576,633,640
5,716,562,219
Cost of services rendered
2,573,389,028
2,573,389,029
41,652,436,514
14,099,997,550
2,584,484,709,244
2,416,751,839,765
Gross revenue
Of which:
Sale of finished goods
Sale of merchandise goods
Rendering of services
Less:
Of which:
NET REVENUE
23.2 Finance income
Interest income
Dividends income
TOTAL
24.
COST OF GOODS SOLD AND SERVICES RENDERED
Cost of finished goods sold
Cost of merchandise sold
Other
TOTAL
105
25.
FINANCE EXPENSES
Current year
VND
Previous year
VND
Interest expense
43,391,810,398
94,369,615,032
Finance consulting fees
34,328,987,760
-
Realised foreign exchange loss
3,139,219,009
9,017,219,090
Unrealised foreign exchange loss
2,258,288,851
-
Discounts for early payment
1,300,075,820
2,138,505,535
765,514,385
75,227,233,816
(15,616,014,863)
6,127,874,987
Others
3,949,058,867
3,459,364,808
TOTAL
73,516,940,227
190,339,813,268
Current year
VND
Previous year
VND
30,372,643,049
20,132,906,361
12,340,588,017
8,950,392,665
Loss on disposal of investments
(Reversal of provision) provision for investment diminution
26.
OTHER INCOME AND EXPENSES
Other income
Sale of scrap materials
Proceeds on disposal of fixed assets
7,167,957,959
7,788,090,788
10,864,097,073
3,394,422,908
(34,690,086,601)
(40,454,914,532)
Disposal of scrap materials
(6,707,431,121)
(6,313,758,422)
Expenses on disposal of fixed assets
(5,765,583,605)
(5,854,107,440)
Expenses relating to Hiep Binh Phuoc Project
(4,407,114,395)
Penalty
(4,243,636,059)
(13,102,514,941)
Expenses from writing off receivables
-
(9,598,048,875)
Expenses from the depreciation of fixed assets not used in normal
business activities
-
(1,568,797,253)
Others
(13,566,321,421)
(4,017,687,601)
NET
(4,317,443,552)
(20,322,008,171)
Current year
VND
Previous year
VND
44,467,415,735
31,428,101,387
1,986,466,175,919
2,038,113,660,539
Labor costs
665,734,246,822
589,804,207,979
Depreciation and amortization (Notes 4, 9, 10 and 12)
230,052,975,960
213,579,760,226
Expenses from external services
581,591,958,146
438,501,829,445
Other expenses
477,497,756,620
441,229,532,421
3,985,810,529,202
3,752,657,091,997
Others
Other expenses
27.
B09-DN/HN
PRODUCTION AND OPERATING COSTS
Cost of merchandise goods
Raw materials
TOTAL
28.
CORPORATE INCOME TAX
The Company and its subsidiaries, except for KDBD, have the obligation to pay corporate income tax (“CIT”) at
the rate of 25% of taxable profits.
KDBD has the obligation to pay the CIT at the rate of 15% of taxable profits for twelve (12) years from
commencement of its operations, and 25% for the years thereafter. KDBD is entitled to an exemption from CIT
for three (3) years commencing from the first year of earning profits (year 2008) and a 50% reduction from CIT
for the following seven (7) years.
The tax returns filed by the Company and its subsidiaries are subject to examination by the tax authorities.
Because the application of tax laws and regulations to many types of transactions is susceptible to varying
interpretations, amounts reported in the consolidated financial statements could change at a later date upon
final determination by the tax authorities.
28.1 CIT expense
Current CIT expense
Deferred CIT expense
TOTAL
Current year
VND
Previous year
VND
(118,676,164,588)
(131,641,468,329)
(7,148,912,968)
(856,794,455)
(125,825,077,556)
(132,498,262,784)
28.2 Current CIT
The current CIT payable is based on taxable profit for the year. Taxable profit differs from 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 not taxable or deductible. The Group’s liability for current CIT
is calculated using tax rates that have been enacted by the balance sheet date.
107
28.
B09-DN/HN
CORPORATE INCOME TAX (continued)
28.2 Current CIT (continued)
The reconciliation between the taxable profit and accounting profit as reported in the consolidated income
statement is presented below:
Accounting profit before tax
Adjustments:
Permanent differences
Profit from reissuing treasury shares held by subsidiaries
Advertising expenses in excess of 10% cap
Payments not related to taxable income
Amortization of goodwill
Amortization of revalued intangible assets
Penalty
Rental income at subsidiary level
Depreciation of fixed assets exceeded
Loss arising from disposal of investment
Income not subject to CIT
Provision for investment diminution, not deducted in prior years
Other adjustments
Temporary differences
Provision for other short-term investment
Accrued expenses
Allocation of prepaid expenses exceeded
Unrealized foreign exchange differences
Unrealised profits
Provision for investment diminution at subsidiary level
Severance allowance
Provision for loans to related parties
Estimated current taxable income
Estimated current CIT
CIT exemption
Adjustment for CIT from re-issue of treasury shares by subsidiaries
recognised directly to share premium
Estimated CIT expense
(Over-accrual) under-accrued CIT in previous years
CIT expense
CIT payable at beginning of year
Adjustment for CIT from re-issue of treasury shares by subsidiaries
CIT paid during the year
CIT payable at end of year
In which:
CIT payable (Note 18)
CIT overpaid (Note 8)
Current year
VND
Previous year
VND
618,617,962,194
489,927,954,185
109,771,116,686
82,496,490,142
50,610,068,519
44,643,343,543
21,708,646,991
1,342,902,318
787,874,376
1,413,682,130
(653,728,957)
(12,256,671,256)
1,118,141,906
179,773,366,015
42,133,667,060
43,591,115,630
21,638,639,385
13,132,414,941
1,575,748,752
1,253,219,666
(40,005,209,054)
(1,088,283,677)
3,540,436,016
8,000,000,000
5,613,303,193
5,099,602,203
4,165,600,000
2,927,966,169
725,046,329
605,174,500
417,312,314
(12,500,000,000)
934,653,833,300
191,816,622,453
(31,956,622,487)
1,660,036,536
(48,801,956,047)
(3,009,124,805)
4,863,283,977
(605,174,500)
3,892,508,779
12,500,000,000
725,972,642,859
152,938,697,307
(22,490,550,974)
(27,560,285,797)
-
132,299,714,169
(13,623,549,581)
118,676,164,588
79,116,759,336
27,560,285,797
(181,490,308,355)
43,862,901,366
130,448,146,333
1,193,321,996
131,641,468,329
24,878,617,399
(77,403,326,392)
79,116,759,336
60,627,851,285
(16,764,949,919)
79,116,759,336
-
28.3 Deferred CIT
The Group recognized deferred CIT as at the balance sheet date as follows:
Consolidated balance sheet
Ending balance Beginning balance
VND
VND
Accrued expenses
Consolidated income statement
Current year
Previous year
VND
VND
25,203,852,708
31,835,959,199
(6,632,106,491)
(9,875,899,116)
Severance allowance
9,089,061,831
10,036,783,622
(947,721,791)
2,823,216,382
Unrealised profits
2,656,344,922
2,837,312,193
(180,967,271)
3,549,868,152
1,760,000,000
-
1,760,000,000
-
916,432,000
-
916,432,000
-
778,982,791
432,579,421
346,403,370
400,085,414
Depreciation
250,317,725
312,799,927
(62,482,202)
(94,556,493)
-
3,125,000,000
(3,125,000,000)
3,125,000,000
-
(45,388,088)
45,388,088
(45,388,088)
(7,979,377)
(739,120,706)
731,141,329
(739,120,706)
40,647,012,600
47,795,925,568
(7,148,912,968)
(856,794,455)
Provision for other short-term
investment
Allocation of prepaid expenses
exceeded
Provision for loans to related
parties
Provision for investment
diminution at subsidiary level
Unrealized foreign exchange
differences
TOTAL
29. TRANSACTIONS WITH RELATED PARTIES
Related parties transactions include all transactions undertaken with other companies to which the Group is
related, either through the investor/investee relationship or because they share a common investor and thus
are considered to be a part of the same corporate group.
Significant transactions with related parties during the year were as follows:
Related party
Relationship
Related party
Transaction
Amount
VND
Loan collection
2,566,919,036,288
Short term loans
(2,410,000,000,000)
Loan interest receivable
License fees
Kinh Do Saigon Bakery Joint
Stock Corporation
Related party
Sale of raw and packaging
materials, tools and supplies
Tong Yuan Co., Ltd.
Related party
Purchase of packaging
Hung Vuong Corporation
Related party
Loan interest receivable
51,692,598,524
(12,707,643,598)
43,318,136,309
2,421,763,149
(78,355,524,132)
5,429,375,000
109
29.
B09-DN/HN
TRANSACTIONS WITH RELATED PARTIES (continued)
Remuneration to members of the Board of Directors, management and the Board of Supervision during the
year was as follows:
Current year
Previous year
VND
VND
Board of Directors
Allowance and bonus
7,016,950,000
5,649,382,185
25,407,190,000
16,230,000,000
174,000,000
96,000,000
32,598,140,000
21,975,382,185
Management
Salaries and bonus
Board of Supervision
Allowance and bonus
TOTAL
Amounts due from and due to related parties at the balance sheet date, other than the investments disclosed
in Note 13, were as follows:
Receivable (payable)
Related party
Relationship Transaction
VND
Trade receivables
Kinh Do Saigon Bakery Joint Stock
Corporation
Related party
Sale of finished goods,
materials, tools and supplies
Kinh Do Land Corporation
Related party
23,171,121
Kinh Do Investment Co., Ltd
Related party
4,297,915
26,452,049,604
26,479,518,640
Other receivables
Kinh Do Investment Co., Ltd (*)
Related party
Loan Interest
Payment on behalf
371,071,397,753
25,219,543,505
Hung Vuong Corporation (*)
Related party
Loan interest
Tan An Phuoc Co., Ltd
Associate
Payment on behalf
303,421,616
Kinh Do Saigon Bakery Joint Stock
Corporation
Related party
Payment on behalf
30,855,000
5,429,375,000
402,054,592,874
Advance to supplier
Related party
Advance to license fees
13,950,621,542
(*) At the date of these consolidated financial statements, Kinh Do Investment Co., Ltd. and Hung Vuong
Corporation repaid to the Company an amount totalling VND 401,720,316,258.
Amounts due from and due to related parties at the balance sheet date, other than the investments disclosed
in Note 13, were as follows: (continued)
Related party
Relationship
Receivable (payable)
VND
Transaction
Trade payables
Tong Yuan Co., Ltd.
Related
party
Purchase of packaging
Related
party
Receiving on behalf
Kinh Do Saigon Bakery Joint Stock Corporation
Related
party
Purchase of finished goods
(16,819,913,538)
(1,071,225,527)
(619,006,502)
(18,510,145,567)
Other payables
Tan An Phuoc Co., Ltd.
Associate
Capital holding on behalf
(100,000,000,000)
Related
party
Payment on behalf
(563,130,800)
Related
party
Payment on behalf
(51,498,000)
(100,614,628,800)
Advance from customer
Related
party
Purchase of finished goods
(104,852,253)
111
B09-DN/HN
30.COMMITMENTS
Operating lease commitment
The Group leases land, offices and warehouses under operating lease arrangements. The minimum lease
commitment as at 31 December 2013 under the operating lease agreements is as follows:
Ending balance
VND
Beginning balance
VND
54,810,143,295
11,531,870,595
After one year but not more than five years
168,147,573,881
21,921,430,926
More than five years
170,712,526,759
817,920,000
393,670,243,935
34,271,221,521
Within one year
TOTAL
Capital contribution obligation
As at 31 December 2013, the Group had outstanding capital contribution obligation to an associate amounting
to VND 39,700,000,000.
31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial liabilities comprise loans and debts and trade and other payables. The main
purpose of these financial liabilities is to finance the Group’s operations. The Group has loans, receivables, trade
and other receivables, and cash and short-term deposits that arise directly from its operations. The Group does
not hold or issue derivative financial instruments.
The Group is exposed to market risk, credit risk and liquidity risk relating to its operations.
Risk management is integral to the whole business of the Group. The Group has a system of controls in place
to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The
management continually monitors the Group's risk management process to ensure that an appropriate balance
between risk and control is achieved.
Management reviews and agrees on the policies for managing each of these risks which are summarized below:
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity
price risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans
and borrowings, deposits and available-for-sale investments.
The sensitivity analyses in the following sections relate to the position as at 31 December 2013 and 2012.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating
interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.
31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Market risk (continued)
In calculating the sensitivity analyses, management assumed that the consolidated balance sheet relates to
available-for-sale debt instrument; the sensitivity of the relevant income statement item is the effect of the
assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at
31 December 2013 and 2012.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to market risk for changes in interest rate relates primarily
to the Group’s cash and short-term deposits. These investments are mainly short term in nature and they are not
held for speculative purposes.
The Group manages interest rate risk by looking at the competitive structure of the market to obtain rates which
are favourable for its purposes within its risk management limits.
Interest rate sensitivity
With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible
change in interest rates on that portion of loans and debts and deposits and its effect to the Group’s profit
before tax:
Increase/decrease
Effect on profit before tax
in basis points
VND
Current year
US$
+100
(2,439,546,151)
VND
+300
48,965,734,669
US$
-100
2,439,546,151
VND
-300
(48,965,734,669)
US$
+100
(101,196,123)
VND
+300
6,142,527,967
US$
-100
101,196,123
VND
-300
(6,142,527,967)
Previous year
The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable
market environment.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange
rates relates primarily to the Group’s operating activities.
The Group is not exposed to foreign currency risk as most of the Group’s operating activities, which are relating
to purchases and sales of goods, are denominated in VND, the Group’s accounting currency. The Group does not
employ any derivative financial instruments to hedge its foreign currency exposure.
113
B09-DN/HN
Market risk (continued)
Equity price risk
The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty
about future values of the investment securities. The Group manages equity price risk by placing a limit on
equity investments. The Group’s Board of Directors reviews and approves all equity investment decisions.
At the balance sheet date, the Group is not exposed to significant equity securities price risk.
Commodity price risk
The Group is exposed to commodity price risk in relation to purchase of certain commodities. The Group
manages its commodity price risk by keeping close watch on relevant information and situation of commodity
market in order to properly manage timing of purchases, production plans and inventories level. The Group does
not employ any derivative financial instruments to hedge its commodity price risk.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily
for trade receivables) and from its financing activities, including deposits with banks, short-term investments,
foreign exchange transactions and other financial instruments.
Trade receivables
Customer credit risk is managed by the Group based on its established policy, procedures and control to
minimise credit risk at an acceptable level. In view of the aforementioned and the fact that the Group’s trade
receivables relate to a large number of diversified customers, the Group’s management evaluates that there is no
significant concentration of credit risk.
Bank deposits
The Group's bank balances are mainly maintained with well-known banks in Vietnam. Credit risk from balances
with banks is managed by the Group’s treasury department in accordance with the Group’s policy. The Group’s
maximum exposure to credit risk for the components of the consolidated balance sheet at each reporting dates
are the carrying amounts. The Group’s management evaluates the concentration of credit risk in respect to bank
deposit as low.
Credit risk (continued)
Other financial instruments
Other financial instruments of the Group mainly include short-term loans to related parties and the management
evaluate all financial assets are neither past due nor impaired as they related to recognized and creditworthy
counterparties except for the following receivable which are past due but not impaired as at 31 December 2013:
Trade receivables and other
receivables
35,700,000,000
792,422,791,241
1,953,810,221,399
Total
826,095,484,817
35,700,000,000
693,425,596,331
1,953,810,221,399
Neither past
due nor impaired
41,075,625,521
-
-
62,623,704,495
-
< 90 days
-
29,371,638,227
-
-
9,720,926,085
-
91–180 days
-
-
11,042,635,028
-
-
1,071,556,890
-
181–210 days
8,000,000,000
25,000,000,000
34,362,303,248
-
-
25,581,007,440
-
> 210 days
VND
826,095,484,817
572,134,743,602
-
-
Past due but not impaired
Bank deposits
687,986,945,626
192,619,036,288
-
31 December 2013
Trade receivables and other
receivables
217,619,036,288
-
31 December 2012
Bank deposits
8,000,000,000
115
B09-DN/HN
Liquidity risk
The liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligation due to shortage
of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of maturities of financial assets
and liabilities.
The Group monitors its liquidity risk by maintaining a level of cash and cash equivalents and bank loans deemed
adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash
flows.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual
discounted payments:
Less than 1 year
From 1 to 5 years
Total
VND
VND
VND
31 December 2013
Loans and debts
400,939,212,302
168,885,769,700
569,824,982,002
Trade payables
283,772,381,108
-
283,772,381,108
Other payables and accrued expenses
206,481,216,981
11,873,420,941
218,354,637,922
891,192,810,391
180,759,190,641
1,071,952,001,032
Loans and debts
529,559,033,303
52,633,096,500
582,192,129,803
Trade payables
274,618,256,546
-
274,618,256,546
Other payables and accrued expenses
181,982,847,190
15,766,479,023
197,749,326,213
986,160,137,039
68,399,575,523
1,054,559,712,562
31 December 2012
The Group’s management assessed the concentration of risk with respect to refinancing its debt and concluded
it to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be
rolled over with existing lenders.
32.
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments that
are carried in the consolidated financial statements:
Cost
(596,553,044)
Provision
15,996,392,600
32,741,487,000
Cost
-
(13,059,363,856)
(11,412,567,907)
Provision
98,000,000
15,000,000,000
3,000,000,000
681,723,350
Ending balance
880,399,390
98,000,000
15,000,000,000
2,937,028,744
21,328,919,093
Beginning balance
VND
1,278,276,394
(500,000,000)
15,000,000,000
-
13,240,682,284
205,119,036,288
Fair value
3,500,000,000
-
98,000,000
-
35,700,000,000
8,000,000,000
Carrying amount
Listed shares
15,000,000,000
-
880,399,390
(12,500,000,000)
-
178,898,760,789
Beginning balance
Unlisted shares
98,000,000
-
217,619,036,288
-
185,644,616,148
507,157,423,689
Ending balance
Fund certificates
13,240,682,284
-
8,000,000,000
(1,631,142,631)
603,491,045,600
829,459,259,294
Financial assets
Short-term deposits
35,700,000,000
(8,000,000,000)
180,529,903,420
-
1,958,064,548,124
1,768,878,827,287
Other receivables
Trade receivables
1,958,064,548,124
603,491,045,600
188,931,745,641
-
-
829,459,259,294
Corporate bond
Investments in securities
8,000,000,000
(3,287,129,493)
507,157,423,689
-
2,814,920,615,506
2,827,304,298,043
(12,383,682,537) 1,807,481,901,681 (38,603,074,394)
TOTAL
117
B09-DN/HN
32.
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (continued)
VND
Carrying amount
Fair value
Ending balance
Beginning balance
Ending balance
Beginning balance
Loans and debts
569,824,982,002
582,192,129,803
569,824,982,002
582,192,129,803
Trade payables
283,772,381,108
274,618,256,546
283,772,381,108
274,618,256,546
Other current liabilities
218,354,637,922
197,749,326,213
218,354,637,922
197,749,326,213
1,071,952,001,032
1,054,559,712,562
1,071,952,001,032
1,054,559,712,562
Financial liabilities
TOTAL
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following method and assumption were used to estimate the fair values:
»» Cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their
carrying amounts largely due to the short-term maturities of these instruments.
»» Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the Group based on
parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer
and the risk characteristics of the financed project. Based on this evaluation, allowances are taken to account
for the expected losses of these receivables.
»» Fair value of quoted bonds and shares is based on price quotations at the reporting date.
»» Fair value of available-for-sale financial assets is derived from quoted market prices in active markets, if
available.
33.
SEGMENT INFORMATION
The Group’s principal activities are to process agricultural products and foods which include purified drinks
and dairy products. The Group views these activities as one business segment. However, the Group manages
its geographical segments based on the location of the Group’s assets. Sales to external customers disclosed in
geographical segments are based on the geographical location of its customers.
The Group’s geographically segments comprise South and North of Vietnam. The following tables present
revenue, profit and certain asset information regarding the Group’s geographical segments:
VND
South segment
North segment
Total
3,129,441,180,449
1,545,355,235,461
4,674,796,415,910
Sales deductions
(88,181,185,216)
(26,016,945,356)
(114,198,130,572)
Inter-segment sales
304,367,007,200
60,331,807,297
364,698,814,497
3,345,627,002,433 1,579,670,097,402
4,925,297,099,835
Current year
Segment revenue
Sales to external customers
Reconciliation:
Elimination of inter-segment sales
(364,698,814,497)
Revenue for the year
4,560,598,285,338
Segment results
382,405,095,828
215,966,276,329
598,371,372,157
Reconciliation:
Interest income
108,281,743,978
Interest expense
(43,391,810,398)
(44,643,343,543)
Profit before tax
618,617,962,194
Segment assets
5,329,538,962,849
960,366,669,489
6,289,905,632,338
Reconciliation:
Elimination of inter-segment receivables
(237,982,219,361)
Unallocated assets
326,322,166,021
Total assets
Segment liabilities
6,378,245,578,998
1,273,148,393,589
459,864,203,500
1,733,012,597,089
Reconciliation:
Elimination of inter-segment payables
(237,982,219,361)
Total liabilities
1,495,030,377,728
Other segment information
168,430,076,741
61,622,899,219
230,052,975,960
1,758,295,537
(102,308,675)
1,655,986,862
8,473,486,616
(1,896,852,976)
6,576,633,640
(15,316,014,863)
(300,000,000)
(15,616,014,863)
Provision for investment diminution
119
33.
B09-DN/HN
SEGMENT INFORMATION (continued)
The following tables present revenue, profit and certain asset information regarding the Group’s geographical
segments: (continued)
VND
South segment
North segment
Total
3,026,404,677,984
1,285,509,548,297
4,311,914,226,281
Sales deductions
(22,096,413,959)
(4,020,368,911)
(26,116,782,870)
Inter-segment sales
198,304,298,996
15,915,689,606
214,219,988,602
3,202,612,563,021
1,297,404,868,992
4,500,017,432,013
Previous year
Segment revenue
Sales to external customers
Reconciliation:
Elimination of inter-segment sales
(214,219,988,602)
Revenue for the year
4,285,797,443,411
Segment results
392,840,886,046
184,987,499,176
577,828,385,222
Reconciliation:
Interest income
122,931,646,545
Interest expense
(94,369,615,032)
(43,591,115,630)
Loss on disposal of investments
(72,871,346,920)
Profit before tax
489,927,954,185
Segment assets
4,609,428,459,472
743,082,810,024
5,352,511,269,496
Reconciliation:
Elimination of inter-segment receivables
(187,727,758,791)
Unallocated assets
349,920,951,305
Total assets
Segment liabilities
5,514,704,462,010
1,258,501,133,350
398,557,256,384
1,657,058,389,734
Reconciliation:
Elimination of inter-segment payables
(187,727,758,791)
Total liabilities
1,469,330,630,943
Other segment information
156,970,415,897
58,178,141,582
215,148,557,479
(830,455,937)
-
(830,455,937)
5,991,163,344
(274,601,125)
5,716,562,219
Provision for investment diminution
6,127,874,988
-
6,127,874,988
34.
CORRESPONDING FIGURES
Certain corresponding figures on the consolidated balance sheet have been reclassified to reflect the presentation
of the current year’s consolidated financial statements.
35.
EVENTS AFTER THE BALANCE SHEET DATE
There has been no significant event occurring after the balance sheet date which would require adjustments or
disclosures to be made in the consolidated financial statements.
Tran Minh Nguyet
Preparer
26 March 2014
Nguyen Thi Oanh
Chief Accountant
Tran Le Nguyen
General Director
121
KINH DO CORPORATION
Address: 138 - 142 Hai Ba Trung Street,
Da Kao Ward, District 1, HCMC, Vietnam
Tel: (08-8) 3827 0838
Fax: (08-8) 3827 0839
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