CECO Consol Financial statement 2015 EN

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Chemical Industry Engineering Joint Stock Company

Consolidated financial statements for the year ended 31 December 2015

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Corporate Information

Business Registration

Certificate No 0100103520 13 June 2015

The Company’s Business Registration Certificate has been amended 13 times, the most recent of which is by Business Registration Certificate No 0100103520 dated 13 June 2015 The Business Registration Certificate was issued by Hanoi Department of Planning and Investment

Chemical Industry Engineering Joint Stock Company is formerly a state-owned enterprise member of Vietnam National Chemical Corporation (currently known as Vietnam National Chemical Group) The Company has been converted from a state-owned enterprise to a joint stock company in accordance with Decision No 3493/QD-BCN dated 24 October 2005 of the Minister of Industry (currently known as Ministry of Industry and Trade) and operates under the initial Business Registration Certificate No 0103010996 issued by Hanoi Department of Planning and Investment on 24 February 2006

Board of Management Mr Do Hien Ngang Chairman

Mr Nguyen Manh Hung Member

Mr Dinh Duc Bo Member

Mr Nguyen Cong Thang Member

Ms Nguyen Hong Hanh Member

Board of Directors Mr Nguyen Manh Hung General Director

Mr Van Duc Thang Deputy General Director

Mr Tran Dang Thai Deputy General Director

Mr Nguyen Cong Thang Deputy General Director

Supervisory Board Mr Nguyen Van Bang Head of the Board

Ms Nguyen Thi Bich Member Ms Nguyen Thi Kim Lien Member

Registered Office No 21A, Cat Linh Street

Cat Linh Ward Dong Da District Hanoi

Auditor KPMG Limited

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Statement of the Board of Directors

The Board of Directors of Chemical Industry Engineering Joint Stock Company (“the Company”) presents this statement and the accompanying consolidated financial statements of the Company for the year ended 31 December 2015

The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting In the opinion of the Board of Directors:

(a) _ the consolidated financial statements set out on pages 5 to 39 give a true and fair view of the consolidated financial position of the Company as at 31 December 2015, and of the consolidated results of operations and the consolidated cash flows of the Company for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting: and

(b) at the date of this statement, there are no reasons to believe that the Company and its subsidiary

will not be able to pay their debts as and when they fall due

The Board of Directors has, on the daté of this statement, authorized the accompanying consolidated

financial statements for issue

Directors

Hanoi, 25 March 2016

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46" Floor, Keangnam Hanoi Landmark Tower Telephone +84 (4) 3946 1600 72 Building, Plot E6, Pham Hung Street Fax +84 (4) 3946 1601 Me Tri, Tu Liem, Hanoi city Internet www.kpmg.com.vn The Socialist Republic of Vietnam

INDEPENDENT AUDITOR’S REPORT To the Shareholders

Chemical Industry Engineering Joint Stock Company

We have audited the accompanying consolidated financial statements of Chemical Industry Engineering Joint Stock Company (“the Company”), which comprise the consolidated balance sheet as at 31 December 2015, the consolidated statements of income and cash flows for the year then ended and the explanatory notes thereto which were authorised for issue by the Company’s Board of Directors on 25 March 2016, as set out on pages 5 to 39

Management’s Responsibility

The Company’s Board of Directors is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error

Auditor’s 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 of material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the 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 Company’s internal control An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the financial

statements ,

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

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In our opinion, the consolidated financial statements give a true and fair view, in all material respects of the consolidated financial position of Chemical Industry Engineering Joint Stock Company as at 31 December 2015 and of its consolidated results of operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting,

Other Matter

The consolidated financial statements of the Company for the year ended 31 December 2014 were audited by another firm of auditors whose report dated 10 March 2015 expressed an unqualified opinion on those consolidated statements

KPMG Limited

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cing Auditor Registration Practicing Auditor Registration

Certificate No 0861-2013-007-1 Certificate No 0296-2013-007-1

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Consolidated balance sheet as at 31 December 2015

Form B 01 - DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) 31/12/2015 1/1/2015 Code Note VND VND Reelassified ASSETS Current assets (100 = 110 + 130 + 140 + 150) 100 276,630,305,127 210,472,014,610 Cash and cash equivalents 110 5 117,454,630,871 79,425,908,865 Cash 111 37,454,630,871 79.425.908.865 Cash equivalents 112 80.000.000.000 -

Accounts receivable — short-term 130 107,658,585,742 78,708,939,252

Accounts receivable from customers 131 6 97.697.310.332 62.273.213.844

Prepayments to suppliers 132 5.882.486.104 6.870.926.551

Other receivables 136 7(a) 5,964,545,860 11,250,987,774

Allowance for doubtful debts 137 8 (1,885,756,554) (1,686,188,917)

Inventories 140 9 45,591,494,570 43,818,524,206

Inventories 141 45.591.494.570 43,818,524,206

Other current assets 150 5,925,593,944 8,518,642,287

Deductible value added tax 152 5,496,089,940 8,518,642,287

Taxes and other receivables from

State Treasury 153 429,504,004 -

Long-term assets

(200 = 210 + 220 + 240 + 250 + 260) 200 29,852,988,965 31,119,324,781

Accounts receivable — long-term 210 6,870,145,487 6,401,525,607

Other long-term receivables 216 7(b) 6,870, 145,487 6,401,525,607 Fixed assets 220 19,370,186,614 20,610,908,366 Tangible fixed assets 221 10 16,088,713,899 16,700,662,591 Cost 222 35,449,749,624 33,277,713,931 Accumulated depreciation 223 (19, 361,035,725) (16,577,05 1,340) Intangible fixed assets 227 II 3,281,472,715 3,910,245,775 Cost 228 4,970,216,400 5,080,216,400 Accumulated amortisation 229 (1,688, 743,685) (1,169,970,625) Long-term work in progress 240 12 25,571,626 1,109,430,679 Construction in progress 242 25,571,626 1,109,430,679

Long-term financial investments 250 1,638,000,000 1,638,000,000

Equity investments in other entities 253 13 1,638,000.000 1,638,000,000

Other long-term assets 260 1,949,085,238 1,359,460,129

Long-term prepaid expenses 261 1,949,085,238 1,359,460,129

TOTAL ASSETS (270 = 100 + 200) 270 306,483,294,092 241,591,339,391

The accompanying notes are an integral part of these consolidated financial statements

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Consolidated balance sheet as at 31 December 2015 (continued)

Form B 01 — DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) 31/12/2015 1/1/2015 Code Note VND VND Reclassified RESOURCES LIABILITIES (300 = 310 + 330) 300 241,845,809,200 175,526,218,763 2 Current liabilities 310 240,142,544/723 — 174,073,611330 £

Accounts payable to suppliers 311 14 39,182,995,275 50.276.237.337 k

Advances from customers 312 6(c) 145,023,402,027 3.689.605.406 3

Taxes payable to State Treasury 313 15 3.339.896.696 6,781,727,216 3

Payables to employees 314 2.259.621.453 7,257,958,875 a

Accrued expenses 315 16 39,859,675,035 14,126,08 1,354 =

Other payables — short-term 319 503,948,427 762,133,965

Short-term borrowings 320 l7(a) 9.498.779.797 91,108,486,707

Bonus and welfare funds 322 474,226,013 71,380,470 Long-term liabilities 330 1,703,264,477 1,452,607,433 Other payables — long-term 337 43.310.419 - Long-term borrowings 338 17(h) - 86.833.340 Provisions — long-term 342 995,929,965 - Science and technology development fund 343 664,024,093 1,365,774,093 EQUITY (400 = 410) 400 64,637,484,892 66,065,120,628 Owners’ equity 410 18 64,637,484,892 66,065,120,628 Share capital 411 19 29,885,180,000 29,885, 180,000

- Ordinary shares with voting rights 4lla 29,885, 180,000 29,885, 180,000

Investment and development fund 418 14,121,683,888 9,778,628,867

Retained profits 421 11,711,805,410 17,259,066,486

- Retained profits brought forward 42la 5,203,042, 135 2,875,899, 341

- Retained profit for the current year 421b 6,508, 763,275 14,383, 167,145 Non-controlling interest 429 8.918.815.594 9,142,245,275 TOTAL RESOURCES (440 = 300 + 400) 440 306,483,294,092 241,591,339,391 25 March 2016 Prepared by:

Tran Ngoc Son Dinh Duc Bo

General Accountant Chief Accountant

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Consolidated statement of income for the year ended 31 December 2015

Revenue from sales of goods and provision of services Revenue deductions Net revenue (10 = 01 - 02) Cost of sales Gross profit (20 = 10 - 11) Financial income Financial expenses

In which: Interest expense General and administration expenses Net operating profit

(30 = 20 + 21 - 22 - 26) Other income Other expenses

Results of other activities (40 = 31 - 32) Accounting profit before tax

(50 = 30 + 40)

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Consolidated statement of income for the year ended 31 December 2015 (continued)

Form B 02 — DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

2015 2014

Code Note VND VND

Net profit after tax (60 = 50 - 51)

(brought forward from prior page) op 7,866,303,473 15,758,995,306

Attributable to:

Equity holders of the Parent company 61 7,304,174,275 14.383.167.145

Non-controlling interest 62 562,129,198 1,375,828,161

Earnings per share

Basic earnings per share 70 30 2,178 4,813

25 March 2016 Prepared by:

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Tran Ngoc Son Dinh Duc Bo

General Accountant Chief Accountant

The accompanying notes are an integral part of these consolidated financial statements

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Consolidated statement of cash flows for the year ended 31 December 2015 (Indirect method)

2015

Code Note VND

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 01 10,233,649,860

Adjustments for

Depreciation and amortisation 02 3,789,600,267

Allowances and provisions 03 1,195,497,602

Exchange gains arising from revaluation of monetary items denominated in foreign currencies 04 (110,028,544) Profits from investing activities 05 (853.790.838) Interest expense 06 6.496.238.210 Operating profit before changes in 08 20,751,166,557 working capital Change in receivables 09 (27,024,785,664) Change in inventories 10 (1,772,970,364)

Change in payables and other liabilities ll 148,450,332,742

Change in prepaid expenses 12 (589,625,109)

139,814,118,162

Interest paid 14 (6,170,055,534)

Income tax paid 15 (3,783,254,062)

Other receipts from operating activities 16 -

Other payments for operating activities 17 (2.912.307.666)

Net cash flows from operating activities 20 126,948,500,900

CASH FLOWS FROM INVESTING ACTIVITIES Payments for additions to fixed assets

and other long-term assets 21 (1,465,019,462)

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Consolidated statement of cash flows for the year ended 31 December 2015 (Indirect method - continued)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings

Payments to settle loan principals Payments of dividends

Net cash flows from financing activities Net cash flows during the year

(50 = 20 + 30 + 40)

Cash and cash equivalents at the beginning of the year

Effect of exchange rate fluctuations on cash and cash equivalents

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(a)

(b)

Notes to the consolidated financial statements for the year ended 31 December 2015 Form B 09 - DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) These notes form an integral part of and should be read in conjunction with the accompanying consolidated financial statements

Reporting entity Ownership structure

Chemical Industry Engineering Joint Stock Company (“the Company”) is incorporated as a joint stock company in Vietnam The consolidated financial statements of the Company for the year ended 31 December 2015 comprise the Company and its subsidiary

Principal activities

The principal activities of the Company and its subsidiary are: ¢ Construction of assorted houses;

® Construction of railway works and road works: © Construction of public utility works:

© Construction of other civil works; construction of small and medium sized works for chemical industry, petrochemical industry and relevant industries (including overhaul, repair, reinforcement, corrosion resistant painting for structures and equipment; and supplying of materials, equipment; performing installation, calibration and technology transfer in electrical, automatic and measurement and control areas for industrial and civil works; construction of power works, power transmission lines and transformer stations);

¢ Trading real estate, land use rights of land owners, land users or land lessees; e Manufacturing metal structures;

® Manufacturing barrels, storage tanks and other storage tools made of metal; ¢ Mechanical fabrication, metal surface preparation and coating:

¢ Other manufacturing activities not elsewhere classified, details: production of chemical products (except for chemicals prohibited by the Government);

® _ Installation ofelectrical systems;

¢ Installation of water supply and drainage systems, heating systems, and air conditioning systems:

® Completion of construction works;

e Management consultancy;

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Notes to the consolidated financial statements for the year ended 31 December 2015 (continued)

® Architecture and architecture related consultancy services Details: designing power transmission lines and transformer stations up to 110K V; supervision for installation of electrical equipment, power transmission lines and transformer stations up to SOOKV; construction designing and planning; designing and installation of construction equipment, petrochemical equipment for industrial works; designing ventilation, heating and air conditioning systems for industrial works; designing firefighting systems; designing and manufacturing equipment for chemical industry; surveying and designing works for chemical industry, and industrial and civil works; consulting, supervision and execution of construction works (only applicable when all capacity conditions prescribed by law are met); consulting, supervision and execution of power transmission lines and transformer stations up to 35KV; consulting on preparation of investment projects, designing of power transmission lines and transformer stations up to 35KV; appraisal of investment projects, technical documents, total cost-estimation (in accordance with professional practice certificate), environmental impact assessment reports in chemical industry and relevant industries; consulting on construction investment and consulting supervision and execution of power transmission lines and transformer stations (within the extent permitted under the professional practice certificate); consulting on warranty and maintenance for equipment in chemical industry, petrochemical industry and other industries; inspecting, verifying and certifying quality of construction works in chemical industry, petrochemical industry and relevant industries; management of construction investment projects;

* Research and experimental development on natural sciences and engineering Details: conducting research and development on inventions, useful solutions, services and technology transfer in chemical industry and environmental protection; research on application of advanced technology and equipment in designing works for chemical industry and environmental protection;

e Other professional, science and technology activities not elsewhere classified Details: environmental impact assessment reports in chemical industry and relevant industries; treatment of industrial wastes, environmental impact assessment; geographical survey, water resources survey; developing prevention and response plan for events of chemical hazards; preparation of environmental protection plans; preparation of environmental protection commitment forms: environment monitoring services; environment consultancy;

¢ Leasing out machines, equipment and other tangible tools;

© Other business supporting activities not elsewhere classified Details: investment and trade promotion; supplying of materials and equipment for industrial works; import-export the commodities that the Company is trading:

e Finance supporting activities not elsewhere classified Details: investment consultancy; ® Education supporting services; and

¢ Technical inspection and analysis Details: inspection and measurement of environmental indexes (air pollution, water pollution, etc.)

Normal operating cycle

The normal operating cycle of the Company and its subsidiary is generally within 12 months

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(d) (a) (b) (©) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) € Form B 09 - DN/HN š

(Issued under Circular No 202/2014/TT-BTC +

dated 22 December 2014 of the Ministry of Finance) ¢ Company structure

As at 31 December 2015, the Company had 1 subsidiary (1/1/2015: | subsidiary), | representative office in the Lao People's Democratic Republic and the following branches:

Branch Address

¢ Chemical Industry Engineering Joint Stock Company Hanoi, Vietnam Hanoi Branch

¢ Chemical Industry Engineering Joint Stock Company Hai Phong, Vietnam

Hai Phong Branch

e Chemical Industry Engineering Joint Stock Company Ho Chi Minh City, Vietnam

Ho Chi Minh City Branch

Phu Tho Branch

* Chemical Industry Engineering Joint Stock Company Quang Ngai, Vietnam Quang Ngai Branch

Information of the Company’s subsidiary at the reporting date is as follows: Ì

Subsidiary Business activities Interest and voting right

31/12/2015 1/1/2015 Mechanical processing

and production for the $5.33% 55.33%

chemical industry Vietnam Machinery and Equipment

for Chemical Industry JSC As at 31 December 2015, the Company and its subsidiary had 382 employees (1/1/2015: 385 employees) Basis of preparation Statement of compliance

These consolidated financial statements have been prepared in accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System for Enterprises and the relevant statutory requirements applicable to financial reporting

Basis of measurement

The consolidated financial statements, except for the consolidated statement of cash flows, are

prepared on the accrual basis using the historical cost concept The consolidated statement of cash flows is prepared using the indirect method

Annual accounting period

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(d) (a) @ (ii) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Accounting and presentation currency

The Company’s and its subsidiary’s accounting currency is Vietnam Dong (“VND”), which is also the currency used for consolidated financial statement presentation purpose

Adoption of new guidance on accounting system for enterprises

On 22 December 2014, the Ministry of Finance issued Circular No 200/2014/TT-BTC providing guidance on Vietnamese Accounting System for Enterprises (“Circular 200”) Circular 200 replaces previous guidance on Vietnamese Accounting System for Enterprises under Decision No 15/2006- QD/BTC dated 20 March 2006 and Circular No 244/2009/TT-BTC dated 31 December 2009 Circular 200 is effective after 45 days from the signing date and applicable for annual accounting periods beginning on or after | January 2015

On the same date of 22 December 2014, the Ministry of Finance also issued Circular No 202/2014/TT-BTC providing guidance on preparation and presentation of consolidated financial statements (“Circular 202”) Circular 202 replaces previous guidance on preparation and presentation of consolidated financial statements provided in Part XIII of Circular No 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance Circular 202 is also effective after 45 days from the signing date and applicable for annual accounting periods beginning on or after 1 January 2015 The Company and its subsidiary have adopted the applicable requirements of Circular 200 and Circular 202 effective from | January 2015 on a prospective basis The significant changes to the Company’s and its subsidiary’s accounting policies and the effects on the Company’s consolidated financial statements are disclosed in the following notes to the financial statements:

= Foreign currency transactions (Note 4(b)); and

= Earnings per share (Note 4(r))

Summary of significant accounting policies

The following significant accounting policies have been adopted by the Company and its subsidiary in the preparation of these consolidated financial statements

Basis of consolidation Subsidiaries

Subsidiaries are entities controlled by the Company The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases

Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at date of acquisition

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(iii) (b) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 - DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Transactions eliminated on consolidation

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements Unrealised gains and losses arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee

Foreign currency transactions

Transactions in currencies other than VND during the year have been translated into VND at actual tates of exchange ruling at the transaction dates The actual rates of exchange applied to account for foreign currency transaction are determined as follows:

= Exchange rate applied to buying or selling foreign currency is the exchange rate stipulated in the

currency exchange contract between the Company or its subsidiary and the bank

= Exchange rate applied to recognize trade and other receivables is the foreign currency buying rate at the transaction date quoted by the bank through which the Company or its subsidiary receives money from the customer or counterparty

= Exchange rate applied to recognize trade and other payables is the foreign currency selling rate

at the transaction date quoted by the bank through which the Company or its subsidiary intends to make payment for the liability

= For asset acquisitions or expenses that are settled with immediate payment, the exchange rate applied is the foreign currency buying rate at the transaction date quoted by the bank through which the Company or its subsidiary makes payment

Monetary assets and liabilities denominated in currencies other than VND are translated into VND at actual rates of exchange ruling at the balance sheet date The actual rates of exchange applied to retranslate monetary items denominated in foreign currency at reporting date are determined as follows:

= For monetary assets (cash on hand and receivables): the foreign currency buying rate at the

reporting date quoted by the commercial bank where the Company or its subsidiary most frequently conducts transactions Cash at bank and bank deposits are retranslated using the foreign currency buying rate of the bank where the Company or its subsidiary deposits the money or maintain those bank accounts

= For monetary liabilities (payables and borrowings): the foreign currency selling rate at reporting date quoted by the commercial bank where the Company or its subsidiary most frequently conducts transactions

All foreign exchange differences are recorded in the consolidated statement of income

Cash and cash equivalents

Cash comprises cash balances and call deposits Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value, and are held for the purpose of meeting short-term cash commitments rather than

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(d) (e) (f) (g) @ Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 — DN/HN (Issued under Circular No, 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Investments

Investments in equity instruments of other entities

Investments in equity instruments of other entities are initially recognized at cost which include purchase price plus any directly attributable transaction costs Subsequent to initial recognition, these investment are stated at cost less allowance for diminution in value An allowance is made for diminution in investment values if the investee has suffered a loss, except where such a loss was anticipated by the Company’s management before making the investment The allowance is reversed if the investee subsequently made a profit that offsets the previous loss for which the allowance had been made An allowance is reversed only to the extent that the investment’s carrying amount does not exceed the carrying amount that would have been determined if no allowance had been recognised

Accounts receivable

Trade and other receivables are stated at cost less allowance for doubtful debts Inventories

Inventories are stated at the lower of cost and net realisable value Cost is determined on a weighted average basis and includes all costs incurred in bringing the inventories to their present location and condition Cost in the case of finished goods and work in progress includes raw materials, direct labour and attributable manufacturing overheads Net realisable value is the estimated selling price of inventory items, less the estimated costs of completion and selling expenses

The Company and its subsidiary apply the perpetual method of accounting for inventories Tangible fixed assets

Cost

Tangible fixed assets are stated at cost less accumulated depreciation The initial cost of a tangible fixed asset comprises its purchase price, including import duties, non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition for its intended use Expenditure incurred after tangible fixed assets have been put into operation, such as repair, maintenance and overhaul cost, is charged to the statement of income in the year in which the cost is incurred In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of tangible fixed assets beyond their originally assessed standard of performance, the expenditure is capitalised as an additional cost of tangible fixed assets

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(ii) (h) (i) (i) (i) (k) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Depreciation

Depreciation is computed on a straight-line basis over the estimated useful lives of tangible fixed assets The estimated useful lives are as follows:

= buildings and structures 5 —40 years

= machinery and equipment 3—10 years

= office equipment 3-8 years

= motor vehicles 6— 10 years

Intangible fixed assets Land use rights

Land use rights granted by the State with indefinite terms are not amortised

Land use rights granted by the State for which land use payments are collected are stated at cost less accumulated amortisation The initial cost of a land use rights comprises its purchase price and any directly attributable costs incurred in conjunction with securing the land use rights Amortisation is computed on a straight-line basis over 41 years

Software

Cost of acquiring new software, which is not an integral part of the related hardware, is capitalised and treated as an intangible asset Software cost is amortised on a straight-line basis over 3 to 5 years,

Construction in progress

Construction in progress represents the costs of construction and machinery which have not been fully completed or installed No depreciation is provided for construction in progress during the period of construction and installation

Long-term prepaid expenses Tools and instruments

Tools and instruments include assets held for use by the Company and its subsidiary in the normal course of business whose costs of individual items are less than VND30 million and therefore not qualified for recognition as fixed assets Cost of tools and instruments are amortised on a straight-

line basis over 2 years Trade and other payables

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@) (m) (n) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Provisions

A provision is recognised if, as a result of a past event, the Company and its subsidiary has a present

legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability

Warranties

The provision for warranties relates mainly to goods sold and services rendered during the accounting period The provision is based on estimates derived from historical warranty data associated with similar products and services

Share capital Ordinary shares

Incremental costs directly attributable to the issue of shares, net of tax effects, are recognized as a deduction from share premium

Taxation

Income tax on the consolidated profit or loss for the year comprises current and deferred tax Income tax is recognised in the consolidated statement of income except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years

Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities using the tax rates enacted or substantively enacted at the balance sheet date

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised

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(0) Revenue and other incomes

( Construction contracts

Revenue from construction contracts is recognised in the consolidated statement of income in proportion to the stage of completion of the contract when the outcome of a construction contract can be estimated reliably The stage of completion is assessed by reference to the value of work certified by the customer following each check and acceptance No revenue is recognized if there are significant uncertainties regarding recovery of the consideration due

(ii) — Services rendered

Revenue from services rendered is recognised in the consolidated statement of income in proportion to the stage of completion of the transaction at the balance sheet date The stage of completion is assessed by reference to surveys of work performed No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due

(iii) | Goods sold

Revenue from the sale of goods is recognised in the consolidated statement of income when the significant risks and rewards of ownership have been transferred to the buyer No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or the possible return of goods Revenue on sales of goods is recognized at the net amount after deducting sales discounts stated on the invoice

(iv) Interest income

Interest income is recognized on a time proportion basis with reference to the principal outstanding and the applicable interest rate

(vy) Dividend income

Dividend income is recognized when the right to receive dividend is established (p) Operating lease payments

Payments made under operating leases are recognised in the statement of income on a straight-line basis over the term of the lease Lease incentives received are recognized in the consolidated statement of income as an integral part of the total lease expense

(q) Borrowing costs

Borrowing costs are recognised as an expense in the year in which they are incurred, except where the borrowing costs relate to borrowings in respect of the construction of qualifying assets, in which case the borrowing costs incurred during the period of construction are capitalized as part of the cost of the assets concerned

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(r) (s) (t) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 — DN; (Issued under Circular No 202/2014/TT-BTC

dated 22 December 2014 of the Ministry of Finance)

Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) for its ordinary shares Basic EPS is calculated by dividing the profit or loss attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year

Prior to 1 January 2015, the profit or loss attributable to the ordinary shareholders of the Company included amounts appropriated to bonus and welfare funds, if any Effective from | January 2015, the profit or loss attributable to the ordinary shareholders of the Company is determined after deducting any amounts appropriated to bonus and welfare funds This change in accounting policy has been applied prospectively

Segment reporting

A segment is a distinguishable component of the Company and its subsidiary that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments Management considers that the Company and its subsidiary operate in one business area which is project designing consultancy and construction for the chemical industry and in one geographical area which is Vietnam with similar economic, political and regulatory conditions

Related parties

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Notes to the consolidated financial statements for the year ended 31 December 2015 | (continued)

Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) 6 Accounts receivable from customers — short-term

(a) Accounts receivable from customers — short-term detailed by significant customer

31/12/2015 1/1/2015

VND VND

DAP No 2 Joint Stock Company 51,212,122,649 5,478,190,309

Lam Thao Fertilizers & Chemicals Joint Stock Company 6, 198,690,007 5,184,566,151

Ha Bac Nitrogen Fertilizers & Chemical One Member 5,054,694,538 1.274,512,638

Limited Company i

Hai Phong Thermal Power Joint Stock Company 3,935,178,765 2.892.869.630

Power Generation Corporation | 3,474,520,171 2.952.006.144 >

Pha Lai Thermal Power Joint Stock Company 1,674,434,907 8,549,606,933 =

Hanoi Housing Development and Investment 655,920,878 1,619,920,878

Joint Stock Company 22

Vietnam National Chemical Group 60.171.600 1.705.981.200

Agricultural Products and Materials JSC - 12,901,946,925

Vinacomin - Minerals Holding Corporation - 3.150.000.000 Other customers 25.431.576.817 16,563,613,036 97,697,310,332 62,273,213,844 (b) Accounts receivable from customers — short-term who are related parties 31/12/2015 1/1/2015 VND VND

DAP No 2 Joint Stock Company 51,212,122,649 5,478,190,309

Lam Thao Fertilizers & Chemicals Joint Stock Company —_ 6, 198,690,007 5,184,566,151

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(c) (d) (a) (b) Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 - DN/H: (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) Advances from customers 31/12/2015 1/1/2015 VND VND Viet Lao Chemical and Rock Salt Co., Ltd 132,467,703,877 - Other customers 12,555,698, 150 3,689,605,406 145,023,402,027 3.689.605.406 Advances from customers who are related parties 31/12/2015 1/1/2015 VND VND Viet Lao Chemical and Rock Salt Co., Ltd 132,467,703,877 - Other receivables Other short-term receivables comprised 31/12/2015 1/1/2015 VND VND Reclassified Advances to employees 4,104,582,709 9,03 1,896,545

Personal income tax receivable from employees 996,141,741 859.058.241

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10 Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Inventories Raw materials Tools and supplies Work in progress Merchandise inventories Tangible fixed assets Form B 09 — DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) Cost 31/12/2015 1/1/2015 VND VND 525,929,280 400,743,555 42,865,650 15,582,828 44,981,575,326 43,402,197.823 41,124,314 - 45,591,494,570 43.818.524.206

Buildings and Machinery and Office

structures equipment equipment Motor vehicles Total VND VND VND VND VND Cost Opening balance 15,572,659,593 7.163,814.758 744,217,272 —9,797,022,308 33,277,713,931 Additions ~ 774,800,000 60,000,000 ~ 834,800,000 Transfer from 206,771,455 — 1,507,307,060 - - — 1,714,078,515 construction in progress Disposals 3 (158,978,182) - (217,864,640) (376.842.822) Closing balance 15,779,431,048 9.286.943.636 804,217,272 9,579,157,668 35.449.749.624 Accumulated depreciation 4,279,634,662 971,201,529 (158,978,182) 339,131,153 4,921,678,226 16,577,051,340 154,176,696 —1,170,520,404 3.160.827.207 - (217,864,640) (376.842.822) Opening balance 7,036,607,299 Charge for the year 864,928,578 Disposals - Closing balance 7,901,535,877 5,091,858,009 493,307,849 —5,874,333,990 19,361,035,725 Net book value Opening balance 8,536,052,294 Closing balance 7,877,895,171 2.884.180.096 4.195.085.627 405,086,119 — 4,875,344,082 16.700.662.591 310,909,423 3,704,823,678 16,088,713.899

Included in tangible fixed assets were assets costing VND8,823 million which were fully depreciated as of 31 December 2015 (1/1/2015: VND6,641 million), but which are still in active use

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11 12: Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Intangible fixed assets Cost Opening balance Written off Closing balance Accumulated amortization Opening balance Charge for the year Written off Closing balance Net book value Opening balance Closing balance Land use rights VND 2,377,166,400 Form B 09 — DN/HN (Issued under Circular No 202/2014/TT-BTC Software VND 2,703,050,000 dated 22 December 2014 of the Ministry of Finance) 5.080,216,400 (110,000,000) (110,000,000) 2,377,166,400 2,593,050,000 4,970,216,400 30,332,313 1,139,638,312 1,169,970,625 \ 40,443,084 588,329,976 628,773,060 z = (110,000,000) (110,000,000) z 70,775,397 1,617,968,288 1,688,743,685 7 2,346,834,087 1,563,411,688 3,910,245,775 2.306.391.003 975.081.712 3,281,472,715

As at 31 December 2015 land use rights with a net book value of VND1,587 million were pledged with banks as security for loans granted to the Company and its subsidiary (Note 17)

Construction in progress

Opening balance

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19 20 21 Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 — DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) Share capital The Company’s authorised and issued share capital are: 31/12/2015 1/1/2015 Number of Number of shares VND shares VND Authorised and issued share capital Ordinary shares 2988.518 29.885.180.000 2.988.518 29.885.180.000 Shares in circulation Ordinary shares 2,988,518 29.885.180.000 2.988.518 29.885.180.000

All ordinary shares have a par value of VND10,000 Each share is entitled to one vote at meetings of the Company Shareholders are entitled to receive dividend as declared from time to time All ordinary shares are ranked equally with regard to the Company’s residual assets In respect of shares bought back by the Company, all rights are suspended until those shares are reissued

Dividends

The General Meeting of Shareholders of the Company on 20 April 2015 resolved to distribute dividends amounting to VND5,977 million from the net profit after tax of 2014 (2014: VND5,977 million from the net profit after tax of 2013)

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Form B 09 —- DN/HN (Issued under Circular No, 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) 22 Revenue from sales of goods and provision of services

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24 Financial income

Interest income from deposits Foreign exchange gains Other financial income

25 Financial expenses

Interest expense

Foreign exchange losses Other financial expenses

26 General administrative expenses

Salary expenses Office equipment

Depreciation and amortisation Taxes, charges and fees Allowance for doubtful debts Insurance expenses

Outside services

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27 Other income

2015 VND Gain from disposals of fixed assets 22,409,091 Accounts payable to suppliers forgiven 5,499,805,725 Others 1,822,737 5,524,037,553 28 Production and business costs by element 2015 VND

Raw material costs included in production costs 193.603.253.216

Labour costs and staff costs 58,256,855,896

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(b) (c) 30 Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance)

Reconciliation of effective tax rate

2015 2014

VND VND

Accounting profit before tax 10,233,649,860 20,260,701,108

Tax at the Company’s tax rate 2.251.402.969 4.457.354.244

Non-deductible expenses 99.658.738 44.351.558

Under provision in prior years 16,284,680 -

2,367,346,387 4,501,705,802

Applicable tax rates

The Company and its subsidiary have an obligation to pay the government income tax at the rate of 22% of taxable profits for 2014 and 2015 and this rate will be reduced to 20% from 2016

Basic earnings per share

The calculation of basic earnings per share for the year ended 31 December 2015 was based on the profit attributable to ordinary shareholders of VND7,304,174,275 (2014: VND14,383,167,145) and a weighted average number of ordinary shares outstanding of 2,988,518 (2014: 2,988,518), calculated as follows:

2015 2014

VND VND

Net profit attributable to ordinary shareholders (*) 7,304,174,275 14,383,167,145

Appropriation to bonus and welfare funds (*) (795,411,000) - 6,508,763,275 14,383,167,145

Weighted average number of ordinary shares 2.988.518 2.988.518

Basic earnings per share 2,178 4,813

(*) This represents net profit attributable to ordinary shareholders of the Company after deducting the amounts temporarily appropriated to bonus and welfare funds from profit after tax for the year ended 31 December 2015 However, the Company and its subsidiary had not estimated reliably the amount of profit for the year ended 31 December 2015 which may be additionally appropriated to bonus and welfare fund Had the Company and its subsidiary made additional appropriation to bonus and welfare fund, net profit attributable to ordinary shareholders would have decreased and basic earnings per share would have decreased accordingly

Prior to 1 January 2015, net profit attributable to ordinary shareholders of the Company included estimated amounts appropriated to bonus and welfare funds (Note 4(r))

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31

Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) Significant transactions with related parties

In addition to related party balances disclosed in other notes to the consolidated financial statements, the Company and its subsidiary had the following significant transactions with related parties during the year: Vietnam National Chemical Group Dividend Sale of services Danang Rubber Joint Stock Company Sale of services DAP No 2 Joint Stock Company Sale of services Viet Lao Chemical and Rock Salt Co., Ltd Sale of services

Lam Thao Fertilizers & Chemicals Joint Stock Company

Sale of services

Ha Bac Nitrogen Fertilizers & Chemical One Member Limited Company

Sale of services

Viet Tri Chemical Joint Stock Company Sale of services

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32 Notes to the consolidated financial statements for the year ended 31 December 2015 (continued) Net Detergent Joint Stock Company Sale of services Ninh Binh Nitrogenous Fertilizer Limited Company Sale of services Vietnam Apatite Limited Company Sale of services

Orient Manufacture & Trading Joint Stock Company

Sale of services

Ninh Binh Nitrogenous Fertilizer Project Management Unit Sale of services

South Basic Chemicals Joint Stock Company Sale of services

Industrial Gas and Welding Electrode Joint Stock Company Sale of services Members of Board of Directors Compensation Members of Board of Management Compensation Post consolidated balance sheet event Form B 09 —- DN/HN (Issued under Circular No 202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance) Transaction value 2015 VND 453,700,000 2,773,325,757 457,000,000 2014 VND 560,000,000 286,299,359 1,254,140,046 410,916,394 51,828,182 120,000,000 139,897,900 2.286.307.620 300.000.000

On 16 December 2015, the Company’s Board of Management issued Decisions No 386/QD-CECO, No 387/QD-CECO and No 388/QD-CECO on dissolution of Hai Phong branch and incorporation of Chemical Industry Technical Services Joint Stock Company; dissolution of Phu Tho branch and incorporation of CECO Hanoi Joint Stock Company; and dissolution of Hanoi branch and merging this branch into the Company’s office

Charter capital of Chemical Industry Technical Services Joint Stock Company and CECO Hanoi Joint Stock Company is VND6 billion each, 51% of which is owned by Chemical Industry Engineering Joint Stock Company These Decisions take effects from | January 2016

Z3

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33

Corresponding figures

As described in Note 3, the Company and its subsidiary adopted Circular 200 and Circular 202 effective from | January 2015 As a result, the presentation of certain financial statement captions has been changed Certain corresponding figures as at | January 2015 have been reclassified to conform to the requirements of Circular 200 and Circular 202 in respect of financial statement presentation A comparison of the amounts previously reported and as reclassified is as follows: Consolidated balance sheet 1/1/2015 1/1/2015 (as reclassified) (as previously reported) VND VND Other receivables 11,250,987,774 2,136,401,827

Other current assets - 9.114.585.947

Other long-term receivables 6,401,525,607 -

Other long-term assets - 6,401,525,607

Accounts payable to suppliers 50,276,237,337 45,833,149,989

Other payables — short-term 762,133,965 $,205,221,313 Financial reserve - 1,854,662,747 Investment and development fund 9,778,628,867 7,923,966,120 25 March 2016 Prepared by: we

Tran Ngoc Son Dinh Due Bo

General Accountant Chief Accountant @neral Director

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