Accounting procedures for tangible fixed asets at minh hoang trading and transportation limited company,graduation théis

STATE BANK OF VIETNAM BANKING ACADEMY FACULTY OF ACCOUNTING –AUDITING GRADUATION THESIS ACCOUNTING PROCEDURES FOR TANGIBLE FIXED ASSETS AT MINH HOANG TRADING AND TRANSPORTATION LIMITED COMPANY Student: Tran Thi Minh Anh Student ID: 19A4020067 Class: K19CLC-KTA Supervisor: PhD Nguyen Bich Ngoc Hanoi, June 2020 DECLARATION I hereby declare that the thesis “Accounting procedures for Tangible Fixed Assets in Minh Hoang Trading and Transportation Limited Company” is my own research work, conducted on the basis of theoretical research, specialized knowledge, practical situation surveys i ACKNOWLEDGMENTS First of all, I would like to express my sincere thanks to the Banking Academy teachers Especially, my research would have been impossible without valuable and insightful advices from my supervisor - PhD Nguyen Bich Ngoc I am profoundly grateful for her guidance throughout the thesis writing process I would also like to extend my thanks to The Board of Directors as well as the Finance and Accounting Department of Minh Hoang Trading and Transportation Limited Company for supporting and instructing me to practice at the company In the process of finalizing this thesis, although I have made the utmost effort, there might still be mistakes I sincerely look forward to teachers‟ guidance in favor of improving the thesis ii CONTENTS INTRODUCTION CHAPTER 1: BASIC THEORY OF ACCOUNTING FOR TANGIBLE FIXED ASSETS IN ENTERPRISES 1.1 Overview of Fixed Assets 1.1.1 Definition and characteristics 1.1.2 Management requirements and tasks of accounting for Tangible Fixed Assets 1.1.3 Classification of Fixed Assets 1.1.4 Evaluation of Tangible Fixed Assets 1.2 Accounting of Tangible Fixed Assets in enterprises 1.2.1 Documents used 1.2.2 Detailed accounting for Tangible Fixed Assets 10 1.2.3 General accounting for Tangible Fixed Assets 10 1.3 Accounting of depreciation of Tangible Fixed Assets 18 1.3.1 Definition of depreciation of Tangible Fixed Assets 18 1.3.2 Principles of depreciation of Tangible Fixed Assets 18 1.3.3 Methods of depreciation of Tangible Fixed Assets 19 1.4 Accounting for repair, maintenance and revaluation of Tangible Fixed Assets 23 1.4.1 Accounting for repair, maintenance of Tangible Fixed Assets 23 1.4.2 Counting and re-evaluating Tangible Fixed Assets 23 1.5 The arising events after initial recognition 24 1.5.1 VAS 23- Events after balance sheet date 24 1.5.2 VAS 29 - Changes in accounting policies, accounting estimates and errors 24 1.6 Accounting forms applied in accounting Tangible Fixed Assets 25 CHAPTER 2: CURRENT SITUATION OF ACCOUNTING PROCEDURES FOR TANGIBLE FIXED ASSETS AT MINH HOANG TRADING AND TRANSPORTATION LIMITED COMPANY 30 2.1 Overview of Minh Hoang Trading and Transportation Limited Company 30 2.1.1 History of establishment and development of Minh Hoang Trading and Transportation Limited Company 30 2.1.2 Functions, missions and specialized business sector 31 2.1.3 The organizational management structure of the enterprise 32 2.1.4 Performance indicators of Minh Hoang Trading and Transportation Limited Company 34 iii 2.2 Implementation of accounting practice in Minh Hoang Trading and Transportation Limited Company 36 2.2.1 Organization of the accounting apparatus 36 2.2.2 Applying accounting regimes and policies in Minh Hoang Trading and Transportation Limited Company 38 2.3 Current situation of accounting procedure for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 39 2.3.1 Characteristics of accounting Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 39 2.3.2 Detailed accounting for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 40 2.3.3 General accounting for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 41 2.3.4 Accounting for depreciation of Tangible Fixed Assets 53 2.3.5 Accounting for repair and maintenance of Tangible Fixed Assets 57 2.3.6 The arising events related to Tangible Fixed Assets after initial recognition 61 2.4 Assessment of the current accounting procedures for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 66 2.4.1 Advantages 66 2.4.2 Disadvantages 67 CHAPTER 3: COMPLETING THE ACCOUNTING PROCEDURES FOR TANGIBLE FIXED ASSETS AT MINH HOANG TRADING AND TRANSPORTATION LIMITED COMPANY 69 3.1 Development orientation of Minh Hoang Trading and Transportation Limited Company 69 3.2 The need to complete accounting procedures for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 70 3.3 Solutions to complete accounting procedures for Tangible Fixed Assets at Minh Hoang Trading and Transportation Limited Company 71 3.3.1 Solutions to deal with existing disadvantages 71 3.3.2 Solutions to improve the efficiency of using and management Tangible Fixed Assets 75 3.4 Recommendations to improve current accounting standards – an approach to harmonization and convergence 78 3.4.1 IAS 16- Property, Plant and Equipment and VAS 03- Tangible Fixed Assets 78 3.4.2 IFRS 16- Lease Accounting 80 CONCLUSION 83 iv LIST OF ABBREVIATION No Abbreviation Original words FA Fixed Asset (s) TFA Tangible Fixed Asset (s) FV Fair Value AD Accumulated depreciation RV Residual Value CIT Corporate Income Tax VAT Value Added Tax EBIT Earnings Before Interests and Taxes VAS Vietnamese Accounting Standards 10 IAS International Accounting Standards 11 IFRS International Financial Reporting Standards 12 LTD Limited Company v LIST OF DIAGRAMS, TABLES AND DOCUMENTS * List of Diagrams: Diagram 1.1 Accounting for increase in TFA purchased outside by the mode of deferred or installment payment 12 Diagram 1.2 Accounting for increase in TFA purchased outside which used in production and business activities (Tax credit method) 13 Diagram 1.3 Accounting for increase in TFA purchased in the form of exchange 14 Diagram 1.4 Accounting for increase in self-manufactured TFA 15 Diagram 1.5 Accounting for increase in TFA due to capital construction 15 Diagram 1.6 Accounting for decrease in TFA used in production and business activities due to liquidation or sale 16 Diagram1.7 Accounting for decrease in TFA due to conversion into tools and supplies 17 Diagram 1.8 Accounting for decrease in TFA used from bonus and welfare fund due to liquidation or sale 17 Diagram 1.9 Accounting for decrease in TFA due to contributing capital into other enterprises 18 Diagram 1.10 Accounting for depreciation of FA 22 Diagram 1.11 Process of recording accounting books in the form of General Journal 27 Diagram 1.12 Computerised accounting form 29 Diagram 2.1 Organization management structure of Minh Hoang Trading&Transportation LTD 32 Diagram 2.2 Organization of the accounting apparatus in Minh Hoang Trading&Transportation LTD 36 Diagram 2.3 Errors correction procedure of Minh Hoang Trading and Transportation LTD 62 * List of Tables Table 2.1 Performance indicators of Minh Hoang Trading & Transportation LTD 34 Table 2.2 Financial ratios of Minh Hoang Trading & Transportation LTD .35 Table 2.3 Purchase details of Liebher crawler crane 62 Table 2.4 Retrospective adjustment on 2018 financial statements 64 Table 2.5 Retrospective adjustment on 2019 financial statements 65 Table 3.1 Accelerated depreciation method………………………………………… ….72 Table 3.2 Budget for costs of using FA………………………………………… ……….73 Table 3.2 Comparison between IAS 16 and VAS 03………………………… …………78 vi * List of Documents Document 2.1 Minutes of hand over of FA 85 Document 2.2 FA book at using department……………………………………… ……86 Document 2.3 FA card 87 Document 2.4 FA book 88 Document 2.5 Declaration of imported goods 44 Document 2.6 Payment to Tax Authorities 89 Document 2.7 General Journal record increase in FA……………………………………45 Document 2.8 Ledger Ledger record increase in FA…………………………………… 46 Document 2.9 Decision on Liquidation of FA 90 Document 2.10 Minutes of liquidation of FA 91 Document 2.11 VAT invoice of FA liquidation‟s transaction 49 Document 2.12 General Journal recording decrease in FA 51 Document 2.13 General Ledger recording decrease in FA 52 Document 2.14 Summary of FA cost and depreciation amount 53 Document 2.15 FA depreciation spread sheet…………………………………………….54 Document 2.16 General Journal recording depreciation of FA 55 Document 2.17 General Ledger recording depreciation of FA 56 Document 2.18 Summary of AD according to each FA type…………………………….57 Document 2.19 Confirmation on damages of FA 92 Document 2.20 List of FA‟s repair and maintenance expenses 93 Document 2.21 VAT invoice of FA repair and maintenance 58 Document 2.22 General Journal recording FA‟s repair and maintenance transaction 59 Document 2.23 General Ledger recording FA‟s repair and maintenance transaction 60 Document 2.24 Extract of Notes to Financial Statement 61 vii INTRODUCTION Rationale On the road of integration into the global economy, Vietnam has emerged as a promising economic market that brings tremendous opportunities but simultaneously puts pressure on Vietnamese enterprises When attempting to gain a foothold on the increasingly competitive markets, it is not only the external factors such as the target to strengthen institutional and regulatory framework to create a transparent and fair investing environment, policies to constantly improve infrastructure but also the internal characteristics like economic situation should be taken into account For businesses, proving the financial potential is certainly of great importance In this regard, the most effective tool to reflect as well as manage the financial position of the business is accounting In terms of financial position, beside other important items, investment on FA is an indicator of business‟s health, frequently plays a critical role when coming to assess businesses‟ actual value Likewise, accounting for FA correctly would give an insight to the real picture of the businesses; pave the way for managers and investors to make rational decisions As a result, the accounting procedure of FA has always been a major concern of the businesses and government agencies in compliance inspection As for Minh Hoang Trading and Transportation LTD, the company is operating in leasing FA field and TFA account for a large proportion of the total assets in the company The accounting process of the company recognizes many transactions related to fluctuations of FA In acknowledgement of the importance and impact of FA as well as the company characteristics, I have chosen: "Accounting procedure of TFA in Minh Hoang Trading and Transportation LTD” as the thesis topic Literature review The significant importance of TFA for the financial state of an enterprise and its activity results has been clearly indicated in Daiva.T et al (2019) TFA provide specific economic benefits for the enterprise and are intersted by not only managers, but also external information users, such as investors, banks, insurance companies, tax authorities, economics experts, in terms of composition, structure, technical condition Findings in Adegbite (2014) showed that there is a strong positive relationship between accounting record keeping and performance of enterprises Business adjustment and records help to improve business efficiency and productivity for effective business performance Furthermore, due to the financial crises of the twentieth and the twenty-first centuries, investors have largely lost their trust in earning and its quality seeing their own capital or that of others being lost Therefore, besides measuring quality of earnings, it is revealed in Dastgir M et al (2014) that considering TFA is also important since earnings quality has certain effect to TFA Therefore, accurate accounting and appropriate application of TFA is one of priorities when coming to evaluate the value of each enterprise However, in current ever-changing context, the obvious challenges in proper adoption of accounting standards such as: profeesional level of accountants, discrepancies in accouting standards (Linh N.T.A (2019)), In eaxmination of diferences in accounting standards, specifically for TFA, the study of Binh.P.D (2014) has provided guidance for the accounting regime of TFA, from which to propose solutions to improvement On the basis of acquiring and applying these solutions, this research paper will clarify the accounting process of TFA in a medium-sized enterprise and offer practical solutions Objectives of the thesis Subsequent to summarize the literature review of TFA accounting procedure and the current situation in Minh Hoang Trading and Transportation LTD, make assessments about advantages and disadvantages of the process then propose solutions, recommendations to complete the FA accounting procedure entity reviews the carrying amount of its assets, determines the recoverable amount of an asset, and when it recognized, or reverses the recognition of, an impairment loss Table 3.3 Comparison between IAS 16 and VAS 03 Based on the comparison in the above table, there are following points that should be taken into consideration - First of all, VAS 03 should be modified to allow the revaluation model in measurement after recognition of FA Although the approach of the cost model is simple and ensures the appropriateness and reliability of accounting information for users, it is biased toward providing historical information and therefore economic decisions solely based on historical value would not be adaptable to fluctuation of the market, effects of inflation, for example + It is necessary to adjust and supplement the Accounting Law, accounting standards in order to be appropriate and tied to reality, helping businesses have a legal basis when implementing Specifically, it can be supplemented in VAS 03 on regulations allowing businesses to choose whether the cost model or the revaluation model of FA However, in order to apply this model, assets are required to be recorded at FV, therefore determining the FV is of great importance However, Vietnam currently has no specific guiding documents to apply FV, basis for determining FV, method of accounting by FV… + With a view to having FV in recording reliable collateral, a suitable business environment is required However, in the context that the market economy in Vietnam is still in a transitional period, the market in which all assets can operate does not really exist, so the basis for determining FV for a number of assets is not genuinely reliable There should be a complete commodity market, operating under a full and transparent market mechanism + Due to the fact that the infrastructure of enterprises is still limited, accountants‟ qualifications are unequal; the application of FV will also cause many 79 inadequacies Therefore, it is imperative to promote communication and training, which can be done through seminars and training programs to raise awareness as well as consensus in the use of FV when recognizing assets In addition, businesses need to build a qualified team to be able to appraise assets to determine the FV of assets reliably - Another point that should be mentioned is that IAS has an accounting standard of Impairment of assets (IAS 36) while VAS is silent in this section A typical case can be mentioned is the old passenger ship that Vinashin bought from Italy recorded at book value is 80 million EU but after a very short operation period of time, can only be sold for 10 million EU It is obvious that not recording an impairment loss would distort the financial position reflected in the financial statements and thereby affect the decision of users Similarly, for a company that has a large proportion of FA like Minh Hoang, the recognition of impairment loss is important in ensuring transparency of information on Financial Statements Therefore, it is essential to research, draft and issue this standard in order to be appropriate with the characteristics of Vietnam‟s economy, so that the determination of the original cost of FA would be consistent with IAS Increasing the transparency of accounting information will also change Vietnam‟s accounting environment and business culture The use of accounting estimates will be easier to apply in VAS The higher the transparency is, the more useful of information provided by financial statements to users For example, the property trading market needs to be transparent and operational in order to use FV as a basis for measuring asset value The recommendations are investing more in the analysis and development team, drafting standards requires funding for the training of accountants… 3.4.2 IFRS 16- Lease Accounting Currently, VAS has no equivalent standard to IFRS 16 and according to the first draft of the IFRS roadmap proposal dated March 23, 2019 by the Ministry of Finance, Vietnam is in the Phase of implementation of IFRS- the preparation phase Specifically, from 2019 to 2021, the Ministry of Finance prepares necessary conditions for the scheme‟s implementation, ensuring support for enterprises such 80 as publishing IFRS translations into Vietnamese, training human resources, developing IFRS application guidelines… In this regard, businesses which are operating in the leasing field as Minh Hoang should prepare for changes and effects that IFRS 16 would bring about IFRS 16 mainly affects the lessee and gives only one model instead of two models (finance lease and operating lease) as IAS 17 Lessor accounting does not change and lessors continue to reflect the underlying asset subject to the lease arrangement on the balance sheet for leases classified as operating For financing arrangements or sales, the balance sheet reflects a lease receivable and the lessor‟s residual interest, if any Although the accounting treatments basically remain unchanged to lessors, there are still several worth-noticing points: - Requirement to present financial statement for lessors of operating lease: + Rental income, interpret separately the income related to varied rental payments independent with index + Maturity analysis of rent payments for a minimum of each first five years plus the total for the remaining years + Requirement of disclosure under IAS 36, IAS 38, IAS 40 and IAS 41 for operating lease assets + Requirement of disclosure under IAS 16 for properties, factories and equipment are subject to operating leases - Qualitative notes for all leases: the nature of the lease activity to the lessor, managing risks related to rights held by the lessor - According to Pricewaterhouse Cooper, the equipment lessor industry is considered to be affected in their business model because of changes in lessees‟ behaviours + Changing in lessee needs: lessees‟ changing behaviors possibly lead to requests for shorter lease terms and more variable lease payments, which raises risk for lessors This also alters the economics of leases and brings pressure to pricing There is a possibility that equipment lessors find it challenging to require higher lease rates in the prevailing economic context, which could influence the performance of equipment lessors, increase cash flow volatility and risk In turn, the 81 change in lesses‟ behaviours may impact lessors‟ own ability to obtain favorable financing for their investments + New service opportunities: These alterations may generate a greater workload for lessors but also provide a catalyst for change in the industry These new dynamics offer opportunities for new services and products Various developments in the market may be accelerated by the new leases standard such as the increased focus on services This may require a shift in some lessors‟ traditional business models CHAPTER – CONCLUSION Chapter has drawn out solutions to deal with the existing limitations of the company‟s TFA accounting procedure In order for the company to operate effectively, it is critical to take advantage of FA in the most optimal way As a result, Chapter also proposed solutions to improve the efficiency of using and management TFA Following the growing trend of harmonization and convergence in accounting practices, Vietnam is in need of minimizing the gap between VAS and IFRS This chapter has additionally indicated the differences between currently applied VAS relating to TFA and Leasing versus the equivalent IFRS Accordingly, appropriate recommendations are suggested to update and synchronize VAS standards with the international standards 82 CONCLUSION In the context that the company has intention to expand its business areas, it is imperative to consider the reform tendency of Vietnam in order to have adequate organizational resources, proper management methods As a matter of harmonization and convergence trend in Vietnam, the company should have proper preparation to cope with changes in accounting regimes and regulation Further examination into FA accounting procedures of the company has given a thorough prospect of the current situation The strong points in the accounting of TFA should be maintained and the company's limitations should be improved Simultaneously, it is imperative for accounting standards to update and synchronize with the national standards Over all, during the internship, I was able to study about the actual procedures carried out at the company and apply the knowledge taught at school into practice 83 REFERENCE Binh P.D, (2014), “ Tangible fixed assets accounting system for enterprise in Vietnam” Daiva T et al., (2019), “Methodolody of complex analysis of tangible fixed assets” Dastgir M G, (2014), “The effect of earnings quality on tangible fixed assets and long-term investments”, p.75-97 Finance and Accounting Department of Minh Hoang Trading and Transportation LTD, Documents and Financial statements from 2017-2019 IASB, International Financial Reporting Standards Khanh B.C, “Ung dung cac mo hinh ke toan quan tri tai cac doanh nghiep Vietnam”, gec.edu.vn Linh N.T.A, (2019), “Cac nhan to anh huong den viec ap dung chuan muc bao cao tai chinh quoc te cho doanh nghiep nho va vua” Ministry of Finance , (2016), Circular No 133/2016/TT-BTC - Accounting for small and medium enterprises Ministry of Finance, (2013), Circular No 45/2013/TT-BTC - Guilding regulation on manaement, use and depreciation of FA 10 Ministry of Finance, Vietnamese Accounting Standards 11 Nguyen T D T, (2019), “Research on Management Accounting of Fixed Assets at Vinacomin, Vietnam” 12 Onaolapo A A et al., (2014), “The Analysis of the impact of Accounting Records Keeping on the Performance of the Small Scale Enterprises” 13 PwC, (2016), “The leases standard is changing Are you ready?”, p.9, www.pwc.com 14 PwC, (2018), “A comparison of International Financial Reporting Standards (IFRS) and Vietnamese GAAP”, p.61-64, www.pwc.com 84 APPENDIX Form 01 – TSCĐ (According to Circular No.133/2016/TT-BTC dated August 26th 2016 of the Ministry of Finance ) MINH HOANG TRADING & TRANSPORTATION LTD Address: 308 Le Thanh Tong Street, May Chai Ward, Ngo Quyen District, HaiPhong MINUTES OF HANDOVER OF FIXED ASETS Date 21/ 10 /2019 No:… Debit: Acc 2111 Credit: Acc 3331/3339 According to Decision no: 18/2019 of Director of Minh Hoang Trading & Transportation LTD on purchasing and handing over the fixed asset: 02 Wind Blade Semi-trailer Representatives include: - Mr: Pham Quoc Minh: Representatives of hander - Mr: Tran Xuan Quang - Director: Representatives of recipient - Mr: Nguyen Xuan Hoang – Engineering manager Fixed asset handover location: Workshop of Minh Hoang Trading & Transportation LTD Affirm the handover of FA as follows: Unit: VND Fixed Assets cost Notation Origin MFG Using Loading NO Description Code country year year Capacity A B C D C Registration Fixed asset Related IC W cost cost docs Price E 56m Wind 15R145 Blade SemiChina 2019 2019 60 tons 1,338,645,000 08 trailer 29,272,100 1,367,917,100 56m Wind 15R145 Blade SemiChina 2019 2019 60 tons 1,338,645,000 85 trailer 29,272,100 1,367,917,100 Total 2,677,290,000 58,544,200 2,735,834,200 … ATTACHMENTS No Description Unit Quantity Value A B C Director of recipient Chief accountant of recipient Recipient Deliver (Signature, full name, seal) (Signature, full name) (Signature, full name) (Signature, full name) Document 2.1 Minutes of hand over of FA 85 MINH HOANG TRADING & TRANSPORTATION LTD Address: 308 Le Thanh Tong Street, May Chai Ward, Ngo Quyen District, HaiPhong Form S10-DNN (According to Circular No.133/2016/TT-BTC dated August 26th 2016 of the Ministry of Finance) FIXED ASSETS BOOK AT USING DEPARTMENT Year: 2019 Using department: Engineering department Increase Decrease Voucher Name and UOM Quantity description No Date A B C D 56m Wind Blade Semi- VND trailer 02 Voucher Price Value 3=1x2 Notes Reason Quantity Value No Date E G H I 1,367,917,100 2,735,834,200 - There are pages in this book, numbered from page 01 to page… Date…… - Date opened: Bookkeeper (Signature, full name) Chief accountant (Signature, full name) Legal representative (Signature, full name, seal) Document 2.2 FA book at using department 86 Form S11-DNN (According to Circular No.133/2016/TT-BTC dated August 26th2016 of the Ministry of Finance) MINH HOANG TRADING & TRANSPORTATION LTD Address: 308 Le Thanh Tong Street, May Chai Ward, Ngo Quyen District, HaiPhong FIXED ASSETS CARD No: 02/2019 At 21/10/2019 According to FA handover report No 02 dated 15/10/2019 FA name, Notation code, FA configuration (rank): Wind Blade Semi-trailer, RM18 Made in: China MFG year: 2019 Using department: Transportation service division of Engineering department Capacity, Area, Design: 60 tons (21,5mx56m) Using suspension date:…month…year Suspension reason: FA Historical cost FA Depreciation value Voucher No Date Description Cost Year Depr Value AD A B C RM18 21/10/2019 RM19 21/10/2019 56m Wind Blade Semitrailer 56m Wind Blade Semitrailer 1,367,917,100 2019 28,498,273 28,498,273 1,367,917,100 2019 28,498,273 28,498,273 Attachments UOM No Description (unit of Quantity Amount measure) A B C FA decrease voucher no: …date… month… year… Decrease reason: …………………………… Date 21 month 10 year 2019 Bookkeeper Chief accountant (Signature, full name) (Signature, full name) Document 2.3 FA card 87 Legal representative (Signature, full name, seal) Form S09-DNN (According to Circular No.133/2016/TT-BTC dated August 26th 2016 of the Ministry of Finance ) MINH HOANG TRADING & TRANSPORTATION LTD Address: 308 Le Thanh Tong Street, May Chai Ward, Ngo Quyen District, HaiPhong FIXED ASSETS BOOK Year: 2019 Specification: Means of conveyance Unit: VND Increase Voucher No A Notati on code Date B C … Asset name Made and Using date in description D E G Depreciation Decrease Depreciation FA No Original cost Rate (%) H Value Voucher Acc Depre Notation code I x x … 56m Wind 18 RM18 21/10/2019 Blade Semi- China 01/11/2019 trailer 15R14508 1,367,917,100 12.5% 28,498,273 56m Wind 19 RM19 21/10/2019 Blade Semi- China 01/11/2019 trailer 15R14585 1,367,917,100 12.5% 28,498,273 … … Total … … - There are … pages in this book, numbered from page 01 to page… - Date opened: … Date…… Bookkeeper (Signature, full name) Chief accountant (Signature, full name) Document 2.4 FA book 88 Legal representative (Signature, full name, seal) According to Circular No.184/2015/TT- BTC dated 17/11/2015 of Ministry of Finance PAYMENT TO TAX AUTHORITIES Cash Transfer  Currency VND  USD  Code: 0131400119 No: 0098953 Other  Tax Payment Applicant: MINH HOANG TRADING & TRANSPORTATION LTD Tax code: 0200454025 Address: 308 Le Thanh Tong Street, May Chai Ward District: Ngo Quyen City: HaiPhong Tax Payment Substitute: Tax code: We request Dien Bien Phu Transaction Office debit our Account No… or collect our cash To deposit to National budget or Provisional Account  of the Colleting Authority/ at State Treasury (ST) : Hong Bang- HaiPhong Opened Encashment Order at Bank (EOB): VIB Bank Name of Collecting Authority: Customs Sub-Department of Haiphong Port border gate Zone IImport and export goods procedures team No No of ref 10284946034 Section forTax Payment Applicant Date of Payment declaration Content VAT on imported 03/09/2019 goods (excluding VAT on imported goods across the land border) Section for EOB/ ST Subsection Code code Amount 266,110,000 1702 754 266,110,000 Total Total in words: Two hundred and sixty six million one hundred and ten thousand dong For State Treasury Use Only: Code: 2995022 Area Code: 303HH Debit Account: 012704060005248 Deposit Account: 03270490000193 Payment Applicant Date month year 2019 Payment Applicant (Signature, full name) Chief Accountant (Signature, full name) BIDV Bank Date month year 2019 Director (Signature, full name, seal) Budget Holder (Signature, full name) Accountant (Signature, full name) Document 2.6 Payment to Tax Authorities 89 Chief Accountant (Signature, full name) SOCIALIST REPUBLIC OF VIETNAM MINH HOANG TRADING & TRANSPORTATION LTD Independence – Freedom – Happiness No:06/2019/QĐ-TLTS Haiphong, date 04 month 06 year 2019 DECISION Rev LIQUIDATION OF FIXED ASSETS DIRECTOR OF MINH HOANG TRADING & TRANSPORTATION LTD According to Circular No 45/2013/TT-BTC dated April 24th 2013 of Ministry of Finance Based on the actual operational situation of the company after inspection, a FA of the company incurred cost overruns in the first months of 2019 DECIDES Article Liquidate following fixed asset: Name: Used 45T Rubber-tyred crane Brand: Kobelco Made in: Japan MFG year: 2010 Article This decision shall be enforced from the date 04/06/2019 Article 3.Liquidation Council of FA and relevant departments are responsible for the implementation of this Decision Recipient: - Accounting department - As article DIRECTOR Tran Xuan Quang Document 2.9 Decision on Liquidation of FA 90 Form 02-TSCĐ (According to Circular No.133/2016/TT-BTC dated August 26th 2016 of the Ministry of Finance ) MINH HOANG TRADING & TRANSPORTATION LTD MINUTES OF LIQUIDATION OF FA Date 06 month 06 year 2019 DR Acc 811: CR Acc 211: DR Acc 2141: CR Acc 211: 465,253,727 465,253,727 1.962,019,000 1.962,019,000 DR Acc 131: CR Acc 711: CR Acc3331: 605,000,000 550,000,000 55,000,000 According to Decision no: 06/2019/QĐ-TLTS date 04 month 06 year 2019 of Minh Hoang Trading & Transportation LTD on liquidating fixed asset: I Fixed asset liquidation committee includes: Mr: Tran Xuan Quang Position: Director – Director of Committee Mr: Nguyen Xuan Hoang Position: Engineering manager – Member Ms: Doan Thi Hong Position: Chief accountant – Member II Proceed to liquidate FA: - Name and description: Kobelco 45T Rubber-tyred crane - Notation code of fixed asset: XC04/2011 - Made in: Japan - Manufactured year: 2010 - Using year: 2011 - Fixed asset card No: 04/2011 - Original cost: 2,427,272,727 - Accumulated depreciation until liquidation point of time: VND 1,962,019,000 - Residual value: 465,253,727 III Conclusion of fixed asset liquidation committee: Agreed on liquidating the Kobelco 45T Rubber-tyred crane IV Result of FA liquidation: - Cost to sell (selling expense): VND 465,253,727 (Four hundred sixty five milion and two hundred fifty three thousand and seven hundred twenty seven dong) - Recoverable amount: 550,000,000 (Five hundred and fifty million dong) - Decrease in FA recorded at 06/06/2019 Chief accountant (Signature, full name) Director (Signature, full name, seal) Date month .year Director of Committee (Signature, full name) Document 2.10 Minutes of liquidation of FA 91 SOCIALIST REPUBLIC OF VIETNAM MINH HOANG TRADING & TRANSPORTATION LTD Independence-Freedom-Happiness Haiphong, date month year 2019 CONFIRMATION ON THE DAMAGES OF FIXED ASSETS I The inspectors including: Mr Tran Xuan Quang – Director of Minh Hoang Trading & Transportation LTD Mr Nguyen Xuan Hoang- Engineering manager Based on the actual inspection of machine and quipment, confirmed the damaged situation of a Liebherr750T : 3.Fixed asset malfunction condition Some equipment parts of the crane need to be replaced, some need repair and maintenance II Reason Periodic maintenance repairs III Conclusion and decision Realizing that such deterioration will affect the quality and progress of construction, the company decided to repair and maintain the damaged FA (details attached to the list) Representative of Engineering Department DIRECTOR Nguyen Xuan Hoang Tran Xuan Quang Document 2.19 Confirmation on damages of FA 92 MINH HOANG TRADING & TRANSPORTATION LTD EXPENSES OF REPAIR AND MAINTENANCE THE 750T CRAWLER CRANE SPARE PARTS (Enclosed with invoice No 0002123 on December 6, 2019) Party A: Hoang Phat Trading Joint Stock Company Address: Area 3, Nam Hai Ward, Hai An District, Hai Phong Tax code: 0200659985 Party B: Minh Hoang Trading & Transportation LTD Address: 308 Le Thanh Tong, May Chai Ward, Hai An Distict, Hai Phong Tax code: 0200454025 Description Process and rectify main pipe Cover the driver‟s seat Replace the air filter Replace hydraulic oil Replace exhaust pipe Replace hydraulic valve Maintenance of hydraulic system Replace radiator Auxiliary supplier: gasoline, lubricant grease… Primer paint Silver welder 7/7 Steel welding rod Paint colors Labor (4 people) Unit Quantity Unit Price Amount Pipe 5,000,000 20,000,000 Piece 1,550,000 1,550,000 Piece Liter Pipe 50 1,250,000 75,000 4,560,000 1,250,000 3,750,000 9,120,000 Piece 1,250,000 1,250,000 Car 10,600,000 10,600,000 Piece 8,560,000 8,560,000 7,500,000 Bucket Days Kg Bucket Working unit 10 14 100 12 920,000 500,000 100,000 560,000 9,200,000 7,000,000 10,000,000 6,720,000 20 1,625,000 32,500,000 129,000,000 12,900,000 141,900,000 Sub Total 10% VAT Total (Amount in words: One hundred forty-one and nine hundred thousand dong) REPRESENTATIVE OF PARTY A (Signature, full name, seal) REPRESENTATIVE OF PARTY B (Signature, full name, seal) Document 2.20 List of FA’s repair and maintenance expenses 93