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TRAPHACO JOINT STOCK COMPANY
75 Yen Ninh - Ba Dinh - Hanoi
COMPANY
Traphaco Joint Stock Company is a joint stock company which was transformed from State-owned Company into Joint-
Stock Company under Decision No. 2566/1999/QDD-BGTVT dated 27 September 1999 of Mister of Transport.
Under Business License No 058437 issued by Hanoi office for Planning and Investment dated 24 December 1999 (the
11th amended on 14 December 2009), the Company’s business fields are:
Company's Legal capital: VND 101,981,500,000 (One hundred and one billion, ninety hundred eighty one million and
five hundred thousand Vietnamese Dongs). Equivalent to 10,198,150 shares with the price of VND 10,000 per share.
- Traphacosapa One Member Limited Company Sapa town - Sapa district - Lao Cai province
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TRAPHACO JOINT STOCK COMPANY
75 Yen Ninh - Ba Dinh - Hanoi
AUDITORS
The auditors of Auditing and Accounting Financial Consultancy Service Company Limited (AASC) take the audit of
financial statements for the Company.
The Board of Directors is responsible for ensuring that proper accounting records are kept which disclosed, with
reasonable accuracy at any time, the financial position of Company and to ensure that the accounting records comply
with the registered accounting system. It is responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
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TRAPHACO JOINT STOCK COMPANY
75 Yen Ninh - Ba Dinh - Hanoi
We, The Board of Directors, confirm that the consolidated financial statements for the year ended 31 December 2009
prepared by us, give a true and fair view of the financial position at 31 December 2009, its operation results and cash
flows in the year 2009 of Company accordance with the Vietnamese Accounting System and comply with relevant
statutory requirements.
Other commitments
The Board of Directorspledges that the company does not offend obligation of information disclosure under regulation
in Circular No.38/2007/ND-CP dated 18 April 2007 issued by Ministry of Finance guiding disclosure of information on
Securities Market.
Vu Thi Thuan
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No.: /2010/BC.KTTC-AASC.KT2
AUDITORS’ REPORT
On the consolidated financial statements for the year ended 31 December 2009
of Traphaco Joint Stock Company
We have audited the consolidated financial statements of Traphaco Joint Stock Company prepared on 25
January 2010 including: Balance Sheet as at 31 December 2009, Income Statement, Cash Flow Statement and
Notes to Financial Statements for the year ended 31 December 2009 as set out on pages 06 to 26.
These financial statements are the responsibility of the Company’s Boad of Directors. Our responsibility is to
express an opinion on these financial statements based on our audit.
Basis of opinion
We conducted our audit in accordance with Vietnamese and International standards on Auditing. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
compliance with current accounting standards and system and the accounting principles used and significant
estimates made by Boad of Directors, as well as evaluating the overall financial statements presentation. We
believe that our audit provides a reasonable basis for our opinion.
Auditor’s opinion
In our opinion, the Consolidated Financial Statements of Traphaco Joint Stock Company give a true and fair
view, in all material respects, of the financial position of the Company as at 31 December 2009, and of the
results of its operations and its cash flows for the year then ended in accordance with the Vietnamese
Accounting Standards and system and comply with relevant statutory requirements.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
5 Foreign currencies - -
- USD 3,139.29 6,466.82
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
1 . BACKGROUND
The form of owner's equity
Traphaco Joint Stock Company is a joint stock company which was transformed from State-owned Company into
Joint- Stock Company under Decision No. 2566/1999/QDD-BGTVT dated 27 September 1999 of Mister of
Transport.
The company’s head office is located at 75 Yen Ninh - Ba Dinh - Hanoi.
Principal activities
Principal activities of the Company are: Pharmaceutical field.
Business field
Under Business License No 058437 issued by Hanoi office for Planning and Investment dated 24 December 1999
(the 11th amended on 14 December 2009), the Company’s business fields are:
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Accounting System
The company applies Enterprise Accounting System issued under Decision No.15/2006/QĐ-BTC dated 20
March, 2006 by Minister of Finance.
The company applies Vietnamese Accounting Standards and supplement documents issued by the State. Financial
statements are prepared in accordance with regulations of each standard and supplement documents as well as
with current accounting system.
Financial statements of subsidiaries are prepared for the same fiscal year with that of parent companies. If
necessary, financial statements of subisidaries may be adjusted to ensure the consistence between accounting
policies applied at the company and its subsidiaries.
Operation results of subsidiaries which were purchased or liquidated in the period are presented on consolidated
financial statements since the purchasing or liquidated dates.
Balance, main income and expense, including unrealized profits from intra-group transactions are eliminated in
full from consolidated financial statements.
Minority interest reflecting profits or losses and net assets which are not held by shareholders of the company will
be presented in a separate item on consolidated balance sheet and consolidated income statement.
Goodwill
Goodwill presented on consolidated financial statements is the surplus between its purchase cost and benefit of
the company in total fair value of assets, liabilities and contingent liabilities of subsidiaries, associates or joint
ventures at the investment date. Goodwill is treated as intangible fixed assets, amortized under straight-line basis
with estimated useful life not beyond 10 years.
When selling subsidiaries, associates and joint ventures, the carrying amount of goodwill which is not fully
amortised is accounted into profit/loss of the selling transaction.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Cash and cash equivalents comprise cash on hand, cash in banks and short term, highly liquid investment with an
original maturity of three months or less since the date of financial statements which are readily convertible into
known amounts of cash without notice.
Recognition of inventory
Inventories are stated at original cost. Where the net realizable value is lower than cost, inventories should be
measured at the net realizable value. The cost of inventories should comprise all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and condition.
Provisions for inventories obsolescence made at the end of the year are the excess of original cost of inventory
over their net realizable value.
Fixed assets (tangible and intangible) are stated at the historical cost. During the using time, fixed assets (tangible
and intangible) are recorded at cost, accumulated depreciation (armotisation) and net book value.
The cost of finance lease fixed assets is recognised at fair value or present value of the minimum lease payments
(excluded value added tax) and initial cost directly attributable to finance lease fixed assets. During the using
time, finance lease fixed assets are recorded at cost, accumulated depreciation and net book value.
Depreciation is provided on a straight-line basis. Annual rates calculated to write off the cost of each asset evenly
over its expected useful life as follows:
- Buildings 15 - 25 year
- Machinery, equipment 03 - 07 year
- Transportation equipment 05 - 08 year
- Office equipment and furniture 03 - 06 year
- Other properties 05 - 15 year
Investments in subsidiaries over which the Company has control are stated at original cost. Distributions from
accumulated net profits from subsidiaries arising subsequent to the date of acquisition are recognized in the
Income Statement. Other distributions received (in excess of such profits) are considered a recovery of investment
and are deducted to the cost of the investment.
- Having maturity not over than 3 months from the date of acquisition are recognised as “cash equivalents”;
- Having maturity less than 1 year/1 operating cycle are recognised as short-term assets;
- Having maturity over than 1 year/1 operating cycle are recognised as long-term assets.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Provisions for devaluation of investments are made based on the excess of original cost in accounting books over
their market value at year-end.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
should be included (capitalized) in the cost of that asset, includes interest on borrowings, amortization of
discounts or premiums relating to issuing bonds and ancillary costs incurred in connection with the arrangement
of borrowings.
Prepaid expenses only related to present fiscal year are recognised as short-term prepaid expenses and are
allocated into operating costs.
The following types of expenses incurred during the year are recorded as long-term prepaid expenses, and are
amortised to the income statement in several years:
- Test run and trial production costs;
- Tools and consumables with large value issued into production;
- Substantial expenditure on fixed asset overhaul.
The calculation and allocation of long-term prepaid expenses to profit and loss account in the period should be
based on nature of those expenses to choose reasonable method and allocated factors. Prepaid expenses are
allocated partly into operating expenses on a straight-line basis.
Recognition of provision
Value of a provision is a reasonable estimate of an amount used to settle present liabilities at the balance sheet
date.
Only expenditures that relate to the original provision are set against it.
In case provision set for the previous period but not used up exceeds the one set for the current period, the
difference is recorded as decrease in production and operation expenditures. This method is not applied for
provision for warranty of construction work that is recorded into other income.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Undistributed earnings is the profit of business operations after deduction (-) regulated items due to applying a
change in accounting retrospectively or to make a retrospective restatement to correct materiality in previous year.
Net profit after tax is available for appropriation to investors after approval by Board of Management and after
making appropriation to financial reserve funds and other funds in accordance with the Company’s Charter and
Vietnamese regulatory requirements.
Dividends to be paid to shareholders are recognised as a payable in Balance sheet after declaration from the
Board of management.
Revenue from sale of goods should be recognised when all the following conditions have been satisfied:
- The significant risks and rewards of ownership of the goods have been transferred to the buyer;
The Company retains neither continuing managerial involvement as a neither owner nor effective control over
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the goods sold;
- The amount of revenue can be measured reliably;
- The economic benefits associated with the transaction of goods sold have flown or will flow to the Company;
- The costs incurred or to be incurred in respect of the transaction of goods sold can be measured reliably.
The stage of completion of a transaction may be determined by surveys of work completed method
Financial income
Income from interest, royalties and dividends and other financial income earned by the Company should be
recognised when these two conditions are satisfied:
- It is probable that the economic benefits associated with the transaction will flow to the Company;
- The amount of the income can be measured reliably.
Dividends should be recognised when the Company’s right to receive payment is established
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Revenue is recognised based on completed stage of construction contract, completed stage is measured by
reference to actual expenses of completed work incurred to date as a percentage of total estimated expenses for
each contract.
Current tax assets and liabilities for the current and prior periods 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.
Deferred 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 income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance
sheet date.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
3 . CASH
31/12/2009 01/01/2009
VND VND
Cash on hand 1,039,425,204 944,445,604
Cash at bank 4,394,422,864 9,232,018,613
6 . INVENTORY
31/12/2009 01/01/2009
VND VND
Raw material 53,012,562,810 66,267,040,776
Work in process 14,453,635,399 13,117,589,707
Finished goods 21,030,960,047 25,302,044,960
Merchandise 29,467,217,162 42,687,647,771
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
9 . CONSTRUCTION IN PROGRESS
31/12/2009 01/01/2009
VND VND
Construction in progress 1,353,158,068 3,491,484,342
- New office construction in Hochiminh Branch 47,902,584 43,813,182
- New office construction in Hoang Liet 622,559,591 3,447,671,160
- New office construction in Yen Ninh 588,042,802 -
- New office construction in Nghe An 67,454,455 -
- New office construction in Thanh Hoa 10,073,636 -
- Other constructions 17,125,000 -
(*) On 24/6/2009, Traphaco Joint Stock Company has bought the shares of other shareholders in Trapacosapa
Limited Company, Trapacosapa Limited Company has become Traphacosapa One Member Limited Company -
Subsidiary of Traphaco Joint Stock Company.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Short-term loans:
Type of
Balance of loan
Loan agreement Interest rate Term Total principle secure
Bank for Investment and Development of Vietnam - Transaction office No. III
Contract No. 10,5% - 12% 6 months 2,266,065,286 2,266,065,286 Pledged (*)
01/2467488/2009/HĐTD
Contract No. 10.50% 3 months 6,216,729,742 6,216,729,742 Pledged (*)
02/2467488/2009/HĐTD
Contract No. 4,717,912,088 4,717,912,088 Pledged (*)
03/2467488/2009/HĐTD
- From 17/11/2009 to 16/02/2010 10.50% 6 months
- From 17/02/2010 to 17/05/2010 saving interest 6 months
+ 2,7%/annum
Debt Receipt from No. 15 to 23 10.3% -10.5% 6 months 29,597,703,529 26,450,614,373 Pledged (**)
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
The Company’s tax settlements are subject to examination by the tax authorities. Because the application of tax
laws and regulations on many types of transactions is susceptible to varying interpretations, amounts reported in
the financial statements could be changed at a later date upon final determination by the tax authorities.
14 . ACCRUED EXPENSES
31/12/2009 01/01/2009
VND VND
Electrics, water expense of December in Hoang Liet 104,774,600 -
Advertising expense 463,367,270 -
Renting store 240,000,000 -
Accrued loan interest expenses 27,612,379 -
Other accrued expenses 667,041,517 258,833,890
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
17 . OWNER’S EQUITY
a) Increase and decrease in owner’s equity
Unit: VND
Foreign Investment and
Contributed legal Share capital Financial Retained
Item Treasury Stock exchange development Total
capital surplus reserve fund earnings
differences funds
Beginning balance of previous 80,000,000,000 112,460,000,000 - - 37,436,995,872 6,607,885,967 - 236,504,881,839
year
Profit of the previous year - - - - - - 46,038,376,633 46,038,376,633
Other increase - - - - 14,072,966,075 2,019,843,437 - 16,092,809,512
Other decrease - - - - - - 46,038,376,633 46,038,376,633
Ending balance of previous 80,000,000,000 112,460,000,000 - - 51,509,961,947 8,627,729,404 - 252,597,691,351
year
Increase in capital 21,981,500,000 - - - - - - 21,981,500,000
Profit of the previous year - - - - - - 51,047,163,781 51,047,163,781
Other increase - - 2,020,000,000 - 3,397,968,610 2,574,802,172 11,018,366 8,003,789,148
Decrease in capital - 20,396,300,000 - - - - - 20,396,300,000
Decrease for distribution of
- - - - - - 51,600,394,574 51,600,394,574
funds and divident
Other decrease - - 2,022,520,000 407,499,441 - - 26,543,269 2,456,562,710
Ending balance of current 101,981,500,000 92,063,700,000 (2,520,000) (407,499,441) 54,907,930,557 11,202,531,576 (568,755,696) 259,176,886,996
year
Profit of Traphaco Joint Stock Company is distributed fully in the year, balance of Retained earning is negative as it is effected of:
- Retained earning in Subsidiary is VND (12,035,532)
- Eliminating unrealized internal profit in inventories with the value of VND 468,065,368 as well as increasing Deferred tax assets with the value of VND 117,016,342;
- Apporting Goodwill in the year with the value of VND 91,746,210.
- Eliminating retained earning of Subsidiary as at the date of acquisition when preparing consolidated financial statements with the value of VND 113,924,928.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
According to Resolution No. 10/2009/NQ-ĐHĐCĐ dated 20 March 2009 of Annual Congress of Shareholders,
the Company announced its plan of dividend distribution in 2009 is 36% on par value.
d) Stock
Closing Beginning
VND VND
Quantity of Authorized issuing stocks 10,198,150 8,000,000
Quantity of issued stocks 10,198,150 8,000,000
- Common stocks 10,198,150 6,624,000
- Preferred stocks - 1,376,000
Quantity of repurchased stocks 252 -
- Common stocks 252 -
Quantity of circulation stocks 10,197,898 8,000,000
- Common stocks 10,197,898 6,624,000
- Preferred stocks - 1,376,000
Par value per stock 10,000 10,000
e) Company’s funds
Closing Beginning
VND VND
Investment and development fund 54,907,930,557 51,509,961,947
Financial reserve fund 11,202,531,576 8,627,729,404
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
21 . FINANCIAL INCOME
Year 2009 Year 2008
VND VND
Interest income 3,994,632,630 4,805,710,737
Dividends, profits earned 540,000,000 570,558,000
Realized gain from foreign exchange difference 103,088,068 123,860,928
Unrealized gain from foreign exchange difference - 88,869,793
Total 4,637,720,698 5,588,999,458
22 . FINANCIAL EXPENSES
Year 2009 Year 2008
VND VND
Interest expenses 4,619,625,653 3,750,061,772
Realized loss from foreign exchange difference 2,174,216,751 682,912,861
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
Tax expenses in respect of the current year taxable profit 18,626,847,235 12,757,211,817
Earning per share distributed to common shareholders of the company is calculated as follows :
There have been no significant events occurring after the balance sheet date, which would require adjustments or
disclosures to be made in the financial statements.
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TRAPHACO JOINT STOCK COMPANY Consolidated Financial Statements
75 Yen Ninh - Ba Dinh - Hanoi for the year ended 31/12/2009
During operation, there are a number of transactions between the companies with related parties as follows:
Year 2009 Year 2008
Related parties Relation VND VND
Revenue
- Traphaco High Tech Joint Stock
Company Other investment 49,089,090,668 105,049,686,348
Purchase of raw materials
- Traphaco High Tech Joint Stock
Company (purchasing goods,
materials) Other investment 176,935,491,237 188,160,110,685
28 . COMPARATIVE FIGURES
The corresponding figures are those taken from the accounts for the fiscal year ended as at 31 December 2008,
which was audited by Auditing and Accounting Financial Consultancy Company Limited (AASC).
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