FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED 31 DECEMBER 2018 ROEDERS VIETNAM COMPANY LIMITEDBN = eS = i www eS ROEDERS VIETNAM COMPANY LIMITED 5. 6. CONTENTS Contents Statement of the Board of Directors Independent Auditor’s report Balance sheet as of 31 December 2018 Income statement for the fiscal year ended 31 December 2018 Cash flows statement for the fiscal year ended 31 December 2018 Notes to the financial statements for the fiscal year ended 31 December 2018 Page 10 1-12 13-28ee wet _—_ ROEDERS VIETNAM COMPANY LIMITED STATEMENT OF THE BOARD OF DIRECTORS The Board of Directors of Roeders Vietnam Company Limited (hereinafter referred to as “the Company”) presents this statement together with the Financial Statements forthe fiscal year ended 31 December 2018. Business highlights Roeders Vietnam Company Limited is a 100% foreign-owned company, which has been operating in accordance with: - the Business Registration Certificate No. 0312160841, registered for the 1* time on 08 February 2013 and amended for the 2" time on 02 October 2018, granted by the Ho Chi Minh City Department of Planning and Investment. = the Investment Registration Certificate (project code) No. 9851940234, certified for the 1*time on 08 February 2013 and amended for the 2™ time on 04 December 2018, granted by the Export Processing Zones and Industrial Parks Authority of Ho Chi Minh City (in replacement of the Investment Registration Certificate No. 412043000413, certified for the 1* time on 08 February 2013 and amended for the I* time on 01 August 2014), Project's location: Lot No. BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City. - the Investment Registration Certificate (project code) No. 9840893413 dated 31 August 2018, granted by the Export Processing Zones and Industrial Parks Authority of Ho Chi Minh City. Project’s location: Lots No. E10-2 and No. E11-1, Road No, N7B, Le Minh Xuan 3 Industrial Park, Le Minh Xuan Commune, Binh Chanh District, Ho Chi Minh City. Head office - Address Lot No. BS8/II-B59/Il, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh - Tel (028) 3765 6327 - Fax (028) 3765 6329 Principal activities of the Company as in the Investment Certificate are: = To manufacture all kinds of components and spare parts used for precision mechanics; manufacturing details of assembly machinery available in precision mechanical field; producing metal blow molds for PET plastic bottles; = To exercise the right to import and wholesale goods not on the list of goods banned from export or import or not distributed under the provisions of Vietnamese law or not subject to restritions under international commitments in international treaties to which Vietnam is a member; - To provide installation, maintenance and repair services for customers using Roeders branded products and products imported and distributed by Roeders Vietnam Company Limited; - To provide technical consultancy services on Roeders branded products and products imported and distributed by Roeders Vietnam Company Limited, Executive Officers ‘The Chairman and the Board of Directors of the Company during the year and as of the date of this statement are as follows: Full name Position _ Appointing date Mr. Juergen Roeders Chairman cum General Director 08 February 2013 Mr. Thomas Schroeder Deputy General Director 01 October 2013 ‘Legal Representative ‘The Company's legal representative during the year and as of the date of this statement is Mr. Juergen Roeders ~ Chairman cum General Director (appointed on 08 February 2013)| J = aS ROEDERS VIETNAM COMPANY LIMITED STATEMENT OF THE BOARD OF DIRECTORS (cont) Auditor A&C Auditing and Consulting Co., Ltd. has been appointed to perform the audit on the Company's Financial Statements for the fiscal year ended 31 December 2018. Responsibilities of the Board of Directors The Board of Directors of the Company is responsible for the preparation of the Financial Statements to give a true and fair view of the financial position, the financial performance and the cash flows of the ‘Company during the year. In order to prepare these Financial Statements, the Board of Directors must: select appropriate accounting policies and apply them consistently; © make judgments and estimates prudently; ‘state clearly whether the accounting standards applied to the Company are followed or not, and all the material differences from these standards are disclosed and explained in the Financial Statements; © prepare the Financial Statements of the Company on the going-concern basis, except for the cases that the going-concern assumption is considered inappropriate; ‘© design and implement effectively the internal control system in order to ensure that the preparation and presentation of the Financial Statements are free from material misstatements due to frauds or errors. The Board of Directors hereby ensures that all the accounting books of the Company have been fally recorded and can fairly reflect the financial position of the Company at any time, and that all the accounting books have been prepared in compliance with the applicable Accounting System. The Board of Directors is also responsible for managing the Company's assets and consequently has taken appropriat measures to prevent and detect frauds and other irregularities, Mh The Board of Directors hereby commits to the compliance with the aforementioned requirements ina preparation of the Financial Statements. Approval on the Financial Statements ‘The Board of Directors hereby approves the accompanying Financial Statements, which give a true andi fair view of the financial position as of 31 December 2018, the financial performance and the cash flows for the fiscal year then ended of Company, in conformity with the Vietnamese Accounting Standards and ‘System and other legal regulations related to the preparation and presentation of the Financial Statements. For and on behalf of the Board of Directors, Date: 19 March 2019] ] ] ] ] ] ] i i i a a a i i or s, ont an 2 Ten i, Yh Me, Ve BSE. bse Saree e SES? ease Tn Rete aon Branch in eno! 40.Gang V0 St,0209 Ds Di, HaNot aont 39287870" Fact 37367869 inwhngaccoman Branch in Nha Trang_ Lot STHOSA.0, La Hong Phong 180 Are, Proto He rd Nhe Trang Cy ® “eh 0250 3875555, Frc 0298 2876327 ewmga-ncomn eerie pacman ES Branch inCan The 153 Vo Nguyen ip St, Ci angDiet.Can Th Cy wor a2.c0m.vn Te 0202'9 700995 Fax USD 3754886 MWvet@accomyn No. 1.0466/19/TC-AC INDEPENDENT AUDITOR’S REPORT THE OWNERS, THE CHAIRMAN AND THE BOARD OF DIRECTORS ROEDERS VIETNAM COMPANY LIMITED We have audited the accompanying Financial Statements of Roeders Vietnam Company Limited (hereinafter referred to as “the Company”), which were prepared on 25 February 2019 (from page 06 to page 28), including the Balance Sheet as of 31 December 2018, the Income Statement, the Cash Flow Statement for the fiscal year then ended and the Notes to the Financial Statements. Responsibility of the Board of Directors ‘The Company's Board of Directors is responsible for the preparation, true and fair presentation of the Financial Statements in accordance with the Vietnamese Accounting Standards and System as well as the legal regulations related to the preparation and presentation of the Financial Statements: and responsible for the internal control as the Company’s Board of Directors determines necessary to enable the preparation and presentation of the Financial Statements to be free from material misstatement due to fraud or error. Responsibility of Auditors ur responsibility is to express an opinion on these 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 standards and requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from 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 judgment, 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 true 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 evaluati the overall presentation of the Financial Statements. We believe that the audit evidences we have obtai our audit opinior clare sufficient and appropriate to provide a basis for Ss, a dee ebro 4 BAKER TILLY INTERNATIONALAUDITOR'S REPORT (cont.) Opinion of Auditors In our opinion, the Financial Statements referred to above, give a true and fair view, in all material respects, of the financial position as of 31 December 2018 of Roeders Vietnam Company Limited, its financial performance and its cash flows for the fiscal year then ended, in conformity with the Vietnamese Accounting Standards and System as well as the other legal regulations relevant to preparation and presentation of Financial Statements. For and on behalf of Consulting Co., Ltd. = Le Thi Thu Nga - Auditor Audit Practice Registration Certificate Audit Practice Registration Certificate No, 0099-2018-008-1 No. 1182-2018-008-1 Ho Chi Minh City, 19 March 2019 Feet 5ROEDERS VIETNAM COMPANY LIMITED ‘Adress: Lot No. BS81I-B59/II, Road No. 2E, Vinh Loc Industral Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Min City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 BALANCE SHEET As of 31 December 2018 Unit: VND ITEMS Code Note ___Ending balance _ Beginning batance As CURRENT ASSETS 100 68.210.091.501 36318434.842 1. Cash and eash equivatents Wo va 24.771.984.637 15,763.456.063 1 Cash m1 24.777.988.657 15.763.456.063 2. Cash equivalents 12 : - II, Short-term financial investments 120 - E 1. Trading securities 121 * - | 2. Provisions for devaluation of trading securities 122 - - 3. Held-to-maturity investments 123 . : | UL, Short-term receivables 130 21.993.121.475 1.934.030.366 | 1.” Short-term trade receivables BI v2 5.456 843.757 1.767.598.077 2. Short-term prepayments to suppliers 2 v3 16250,922.428 94,617,000 3. Shartterm intercompany receivables 133 : : 4. Receivable according tothe progress of construction contract 134 . 5. Receivables for short-term loans 135 d - 6. Other short-term receivables 136 Va 285355310 71.815.289 7. Allowance for short-term doubtfil debts 37 : - 8. Deficit assets for treatment 9 - : 1V, Inventories 40 13,804.246.956 11.979.088.339 1. Inventories ul vs 13,804.246.956 11.979.088.339 2. Allowance for inventories a9 : - V. Other current assets 150 7.634.738.433, 6.638.860,074 | 1. Shorten prepaid expenses 151 V.6a 610.797.708 532,251,062 2. Deductible VAT 152 7.923 940.725, 6,106.609.012 3. Taxes and other receivable from the State 153 : 4. Trading Government bonds 15a : : 5. Other eurrent assets 155, : : This statement shouldbe read in confunetion with the Notes tothe Financial Statements 6ROEDERS VIETNAM COMPANY LIMITED Address: Lot No, BSB/II-BS9/II, Road No, 2E, Vinh Loc Industral Park, Vinh Loe A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS. For the fiscal year ended 31 December 2018 Balance Sheet (cont.) ITEMS B- NON-CURRENT ASSETS Long-term receivables Long-term trade receivables Long-term prepayments to suppliers Working capital in affiliates Long-term inter-company receivables Receivables for long-term loans Other long-term receivables Allowance for long-term doubtful debts II, Fixed assets 1. Tangible fixed assets = Historical cost = Accumulated depreciation 2. Financial leased assets = Historical cost = Accumulated depreciation 3. Intangible fixed assets = Initial cost = Accumulated amortization IIL, Investment property = Historical costs = Accumulated depreciation TV. Long-term assets in process 1. Long-term work in process 2. Construction-in-progress Long-term financial investments Investments in subsidiaries Investments in joint ventures and associates Investments in other entities Provisions for devaluation of long-term financial investments Held-to-maturity investments peres L. Other non-current assets Long-term prepaid expenses Deferred income tax assets Long-term components and spare parts Other non-current assets none < TOTAL ASSETS Code 200 210 2u1 212 213 214 215 216 219 220 21 222 223 224 225 226 21 228 229 230 231 232 240 241 242 250 251 252 253 254 235 260 261 262 263 268 270 Note ding bal 107.564.242.643 600.1 5.900 Vb 600.135.900 55.617.393.306 va 533.898.589.937 97.142.227,242 (43.243,637,305) va 1.718.803.369 3.130.468.377 (1.411,665.008) 879.559.640 vo 879.559.640 50.467.183.797 v.66 590.467.153.797 THT This statement should be read in conjunction with the Notes to the Financial Statements Beginning balance 771.385.036.241 600.135.900 600.135.900 155.059.526.428 53.693,202.052 80.502.662.327 (26,809.460.275) 1,366.324.376 2,266,373.632 (900.049.256) 14.614.243.050 14,614.243.050 1.111.130.863 1.111,130.863 TF 00-FT STa _E ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No, BS8/II-BS9/II, Road No. 2B, Vinh Loc Industrial Park, Vinh Loe A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Balance Sheet (cont.) ITEMS Code Note __Ending balance __ Beginning balance C- LIABILITIES 300 69,348,977.654 82.457.229.459 1. Current liabilities 310 214.288.027.654 446.811.229.459 1. Short-term trade payables 3n v.10 9,806.307.323 22,921.799.751 2. Short-term advances from customers, 32 - : 3. Taxes and other obligations to the State Budget. © 313—V.I 677.370.538 soaa7a73 4, Payables to employees 314 v.12 1.580.043,703 1.017.432.839 | 5, Short-term accrued expenses 315.13 2.217.586.591 420,870,596 | 6. Short-term inter-company payables 316 : : 7. Payable according tothe progress of construction contracts 317 : - 8, Short-term unearned revenue 318 - : 9. Other shor-term payables 319° Val 6.719.499 1.294.678.900 10, Short-term borrowings and financial leases 320, V.15a - 20.565.000.000 11, Provisions for short-term payables 321 : - 12, Bonus and welfere funds 322 : - 13. Price stabilization fund 323 - - 14, Trading Government bonds 34 : | 1, Non-current abilies x0 ss.60.950.000 | 1. Long-term trade payables 331 - 2. Long-term advances from customers 332 - 3. Long-term accrued expenses 333 - 4. Inter-company payables for working capital 334 : 5. Long-term inter-company payables 335, - 1 6, Long-term unearned revenue 336 - 7. Other long-term payables 337 : 8. Long-term borrowings and financial leases 338 V.lsb _55.060.950.000 9. Convertible bonds 339 - : 10, Preferred shares 340 : : 11. Deferred ineome tax liability 341 : - 12. Provisions for long-term payables 342 - - 1. Science and technology development Fund 343 : : This statement should be read in conjunction with the Notes o the Finaneial Statements 8ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No, BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loe A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Balance Sheet (cont.) ITEMS Code D- OWNER'S EQUITY 400 1. Owner's equity 410 1. Capital aul 2. Share premiums 412 3. Bond conversion options 413 4. Other sources of capital 414 5. Treasury stocks 41s 6. Differences on asset revaluati 416 7. Foreign exchange differences 417 8. Investment and development fund 418 9, Business arrangement supporting fund 419 10. Other funds 420 11, Retained earnings 421 = Retained earnings accumulated 10 the end of the previous period aia + Retained earnings of the current period 4216 12, Construction investment fund 422 II. Other sources and funds 430 1, Sources of expenditure 431 2. Fund to form fixed assets 432 ‘TOTAL LIABILITIES AND OWNER'S EQUITY 440 ‘Nguyen Thi Thuy Ngan Chief Accountant Practice Cerificate No. 1816/2017/KET Mazars Vietnam Co.,Ltd. Note ding bi 106.425.356.490 106.425.356.490 v.16 60.144.500.000 v.16 446.280.856.490 22,536.241.624 23.744.614.866 Beginning balance 125.243.241.624 25.243.241.624 2.707.000.000 22,536.241,624 22,536.241.624 ‘Address: 10th 1th Floor, Viet Dragon Building, No, 141 Nguyen Du Street, District 1, Ho Chi Minh City, Vietnam This statement should be read in conjunction with the Notes to the Finanetal StatementsROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No, BS8/I-B59/I, Road No, 2E, Vinh Loc Industrial Park, Vink Loc A Commune, Binh Chanh Distt, Ho Chi Minh City FINANCIAL STATEMENTS. For the fiscal year ended 31 December 2018 INCOME STATEMENT For the fiscal year ended 31 December 2018 Unit: VND. ITEMS Code Note ____Current year __Previous year. 1. Sales oF VE 128.492.161.179. 170.673.449.766 2, Sales deductions 2 Via 127.787.049 38.630.480, | 3. Net sales 10 128.364.374.130 770.634.819.286 | 4. Cost of sales nM VES 186.347.272.127 53.335.893.617 | 5, Gross profit 20 442.017.102.003 17.298.925.669 6, Financial income 21 VL 2.829.861.265 278.417.672 7, Financial expenses 22 VIS 2.283.805.315 6.195.357.7536 In which: Loan interest expenses 23 2.111.406.769 1.384.343.466 8, Selling expenses 25° VL6 4.649.816.912 2.085.307.717 9, General and administration expenses 260 -VLT 11,195.459.159 7.641.674.608 10, Net operating profit 30 126.717.881.882 1,655.003.260 11, Other income 3 10.214.045 107.839.581 12, Other expenses 32 -VLB 248.611.822 66.591.241 f 13, Other profit/(loss) 40 (235.397.777) 41.248.340 | 14, Total accounting profit before tax 50 126.482.484.105 1.696.251.600 15, Current income tax st V.IL 2.737.869.239 133.469.8053 1 16, Deferred income tax 32 : & 17, Profit after tax 60 Nguyen Thi Thuy Ngan Chief Accountant Practice Certificate No, 1816/2017/KET Mazars Vietnam Co, Lid ] ‘Adddeess; !Othe1 Ith Floor. Viet Dragon Building, No. 141 Nguyen Du Street, District I, Ho Chi Minh City, Vietnam This statement should be read in conjunction with the Notes 1 the Financial Statements 10i | ROEDERS VIETNAM COMPANY LIMITED ‘Address Lot No, BSW/II-BS9/I, Road No. 2E, Vinh Loe Industrial Park, Vinh Loe A Commune, Bish Chan District, Ho Chi Minh City FINANCIAL STATEMENTS, For the fiscal year ended 31 December 2018, CASH FLOW STATEMEN’ (Indirect method) For the fiscal year ended 31 December 2018 Unit: VND ITEMS Code Note Current year Previous year 1. Cash flows from operating activities 1. Profit before tax a 126.482.484.105 1.696.251.600 Adjustments = Depreciation of fixed assets and investment properties. 02S V7, V8 16.945.792.782 410.100.903.146 = Provisions and allowances 03 : 7 | = Exchange gain/(loss) due to revaluation of ‘monetary items in foreign currencies os La (1.068.954.674) 4.136.340.262 = Gaini(loss) from investing activities os = 7 = Interest expenses. 06 IS. 2.111.406.769 1,384.343.466 = Others a7 : Z 3. Operating profit before changes of working capital 08 44,470,728.982—_‘IT.3IT.838.474 ~ Increase/(decrease) of receivables 09 (20.986.564.317) 1.020.045.000 = Increase/(decrease) of inventories 10 (1.825.158.617) _(6.156.394.166) = Increase/(decrease) of payables n 1.344,105.583, 5.775.195.302 = Increase/(decrease) of prepaid expenses 2 (49.434.569.580) 426,593.407 = Tnerease/(decrease) of trading securities B : : = Interests paid v.13, & 14 VIG VLS——(1.284.627.000)—_(1.169.213.500) = Corporate income tax paid Is Val (2.255.485.740) (468.255.6001) Sy = Other cash inflows 16 - : = Other cash outflows 7 : : [Net cash flows from operating activities 20 TITAS TETAS BORIS IL. Cash flows from investing activities 1. Purchases and construction of fixed assets VIS and other non-current assets 21 -V9,VIL—(18.383.219.300) —_(28.554.852.051) 2. Proveeds from disposals of fixed assets and other non-current assets 2 . : ' 3. Cash outflow for lending, buying debt instruments of other entities 2B - : 4, Cash recovered from lending, selling debt instruments of other entities 4 - - 5. Investments into other entities 25 - : 6. Withdrawals of investments in other entities 26 : : 7. Interest earned, dividends and profits received 7 : : 30 Net cash flows from investing act 219.500) — (28.554.552051) This statement should be read in conjunction with the Notes t the Financial Statements i————— ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No, BS8/II-B59/I, Roed No, 2, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS. For the fiscal year ended 31 December 2018, Cash Flow Statement (cont.) ITEMS Code Note Current year Previous year MIL, Cash flows from fi cing activities 1. Proceeds from is 1g stocks and capital contributions from owners 31 : a 2. Repayment for capital contributions and re-purchases lof stocks already issued 2 2 E 3. Proceeds from borrowings. 3 VASa 57.437.00.000 _20.365.500.000 4, Repayment for loan principal 4 3 - 5. Payments for financial leased assets 35 - : 6. Dividends and profit paid to the owners 36 Z 7 [Net cash flows from financing activities 40 TST SOIT 70305. 500.000- [Net eash flows during the year so 9.082.710.011 8.556.456.8964 Beginning cash and cash equivalents 60 val 185.763.456.063, 7.084.509.811 Effects of fluctuations in foreign exchange rates 6 (68.181.437) 122.489.388 Ending eash and cash equivalents ” val OREGT __ASTOSASEUOS c J ‘7 oy) ad Nguyen Thi Thuy Nean Chief Accountant Practice Cerificate No, 1816/2017/KET Mazars Vietnam Co.,Ltd ‘Address: |0theI th Floor, Viet Dragon Building, No. ll Nguyen Du Street, Distt 1, Ho Chi Minh City, Vietnam “Thic eintomont chawld he vend in coniunction with the Notes 0 the Financial Statements 2ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. B58/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Finacial Statements NOTES TO THE FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 1. GENERAL INFORMATION 1. Ownership form Roeders Vietnam Company Limited (hereinafter referred to as “the Company”) is a 100% foreign- owned company which was established by Roeders Geschaftsfuhrungs GmbH; located in Federal Republic of Germany with the Establishment License No. HRB 101298 dated 12 December 1984 in Germany, represented by Mr. Jurgen Roeders (nationality: German). As of the balance sheet date, Roeders Geschaftsfuhrungs GmbH fully invested 100% of charter capital. 2. Operating field ‘The Company's operating field is industrial manufacturing, 3. Principal business activities ‘The principal business activity of the Company is to manufacture and process all kinds of components, and spare parts used in precision mechanics. 4, Normal operating cycle Sy Normal operating cycle of the Company is within 12 months. a) ne 5. Effects of the Company’s operation during the year on the Financial Statements a The Company's revenue and profit in the current year strongly increased as compared to those of the / previous year mainly due to the double growth of sales in the current year. Also, the Company has Come into stable operation and made full use of machine capacity, resulted in cost reduction in the current year ey ie bd et is es es eis a During the current year, the Company increased its capital to invest in the construction of new ‘workshop at Lots No. E10-2 and No. El 1-1, Road No. N7B, Le Minh Xuan 3 Industrial park, Le Minh Xuan Commune, Binh Chanh District, Ho Chi Minh City. The total investment of new project is VND. 134 billion, in which the owner's contribution capital is VND 57,5 billion. The project is expected to ‘come into operation in July 2020. tw Statement on information comparability on the Financial Statements ‘The figures in the current year can be comparable with corresponding figures in the previous year. td 2 Employees ‘AS at the balance sheet date, there have been 105 employees working for the Company (at the beginning of the year: 65 employees). Se) I, FISCAL YEAR AND ACCOUNTING CURRENCY Fiscal year The fiscal year of the Company is from 01 January to 31 December annually. } 2. Accounting currency unit The accounting currency unit is Vietnamese Dong (VND) because the transactions of the Company are primarily made in VND. These Notes form an negra part of and shouldbe read in conjncton with the Financial Satements 3ted ed ed ed ed ed dd rs ew tae as es oad ware te ta te te ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. B58/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) Ill. ACCOUNTING STANDARDS AND SYSTEM. 1. Accounting System ‘The Company applies the Vietnamese Accounting Standards and System, which were issued together with the Circular No. 200/2014/TT-BTC dated 22 December 2014 as well as other Circulars guiding the implementation of Vietnamese Accounting Standards of the Ministry of Finance in the preparation and presentation of Financial Statements, 2, Statement on the compliance with the Accounting Standards and System The Board of Directors ensures to follow all the requirements of the Vietnamese Accounting Standards and System, which were issued together with the Circular No. 200/2014/TT-BTC dated 22 December 2014 as well as the Citculars guiding the implementation of the Accounting Standards and System of the Ministry of Finance in the preparation and presentation of these Financial Statements. IV. ACCOUNTING POLICIES 1. Accounting convention All the Financial Statements are prepared on the accrual basis (except for the information related to cash flows). 2. Foreign currency transactions ‘Transactions in foreign currencies are converted at the actual exchange rates ruling as of the transaction dates. The ending balances of monetary items in foreign currencies are converted at the actual exchange rates ruling as of the balance sheet date, Foreign exchange differences arisen from foreign currency transactions during the period shall be included into financial income or financial expenses. Foreign exchange differences due to the revaluation of ending balances of the monetary items in foreign currencies after offsetting their positive differences against negative differences shall be included into financial income or financial expenses. ‘The exchange rate used to convert foreign currency transactions is the actual exchange rate ruling as at the time of these transactions, The actual exchange rates applied to foreign currency transactions are as follows: © For the foreign currency trading contract (including spot contract, forward contract, future contract, option contract, currency swap): the exchange rate stipulated in the contracts of trading foreign currency between the Company and the Bank. * For capital contribution made or received: the buying rate of the bank where the Company opens its account to receive capital contributed from investors as of the date of capital contribution. * For receivables: the buying rate ruling as at the time of transaction of the commercial bank where the Company designates the customers to make payments. + For payables: the selling rate ruling as at the time of transaction of the commercial bank where the Company supposes to make payments. * For acquisition of assets or immediate payments in foreign currency (not included into payable accounts): the buying rate of the commercial bank where the Company makes payments. ‘These Notes form an egrl part of and shouldbe read n conjunction with the Financial Statements 14Qe ted ded ed ed ed ad sd a lw ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-BS9/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) ‘The exchange rates used to re-evaluate the ending balances of monetary items in foreign currencies are determined according to the following principles: For foreign currency deposits: the buying rate of the bank where the Company opens its foreign ‘currency account. For monetary items in foreign currencies classified as other assets: the buying rate of ANZ. Bank (Vietnam) Limited where the Company frequently conducts transactions. ‘+ For monetary items in foreign currencies classified as liabilities: the selling rate of ANZ Bank (Vietnam) Limited where the Company frequently conducts transactions, 3. Cash and cash equivalents Cash includes cash on hand and demand deposits in banks. Cash equivalents are short-term investments of which the due dates cannot exceed 03 months from the dates of the investments and the convertibility into cash is easy, and which do not have a lot of risks in the conversion into cash as of the balance sheet date. 4, Receivables Receivables are recognized at the carrying amounts less allowances for doubtful debts. The classification of receivables as trade receivables and other receivables is made according the following principles: ‘+ Trade receivables reflect receivables concerning the commercial nature arising from purchase and sale transactions between the Company and customers who are independent to the Company. + Other receivables reflect receivables not concerning the commercial nature and irrelevant to purchase and sale transactions. Allowance is made for each doubtful debt on the basis of the debt age or estimated loss as follows: + As for outstanding debts: 30% of the value of debts outstanding from over 06 months to under O1 year. 50% of the value of debts outstanding from 01 year to under 02 years, = 70% of the value of debts outstanding from 02 years to under 03 years, 100% of the value of debts outstanding from over 03 years, ‘+ As for doubtful debts: Allowance is made on the basis of the estimated loss, Increases/(decreases) in the obligatory allowance for doubtful debts as of the balance sheet date are recorded into “General and administration expenses” 5. Inventories Inventories are recognized at the lower of cost or net realizable value. Cost of inventories is determined as follows: ‘+ For materials, tools and merchandises: Costs comprise costs of purchases and other directly relevant costs incurred in bringing the inventories to their present location and conditions. * Work-in-process: Cost comprises main costs of main materials, labor and other directly related expenses. * For finished goods: Cost comprises costs of materials, direct labor and directly relevant general manufacturing expenses allocated on the basis of normal operations. These Nows form an integral port ofan ohould be read in conjunction withthe Finacial Satements 15ROEDERS VIETNAM COMPANY LIMITED Address: Lot No, BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loe A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont,) Stock-out costs are determined in accordance with the weighted average method and recorded in line with the perpetual method, Net realizable value is the estimated selling price of inventories in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Allowance for inventories is recognized for each type of inventories when their costs are higher than their net realizable values. Increases/(decreases) in the obligatory allowance for inventories as of the balance sheet date are recorded into “Costs of sales”. 6. Prepaid expenses Prepaid expenses comprise actual expenses arising and relevant to financial performance in several accounting periods. Prepaid expenses of the Company mainly include expenses on tools, land rental, insurance premiums and repair expenses. These prepaid expenses are allocated over the prepayment period or period of corresponding economic benefits generated from these expenses. Tools Expenses of tools being put into use are allocated into expenses in accordance with the straight-line ‘method for the maximum period of 03 years. Land rental Land rental is allocated into expenses in accordance with the straight-line method over the projects ‘operation term. Insurance premiums Insurance premiums are allocated into expenses in accordance with the straight-line method for the ‘maximum period of O1 year. Repair expenses Repair expenses are allocated into expenses in accordance with the straight-line method for the maximum period of 02 years. 7. Operating leased assets A lease is classified as an operating lease if it transfers substantially all the risks and rewards incident to ownership belonging to the lessor. The lease expenses are allocated in the Company's operation costs in accordance with the straight-line method over the lease term and do not depend on the method of lease payment, Tangible fixed assets ‘Tangible fixed assets are determined by their historical costs less accumulated depreciation. Historical costs of tangible fixed assets include all the expenses paid by the Company to bring the asset to its working condition for its intended use. Other expenses arising subsequent to initial recognition are included into historical costs of fixed assets only if it can be clearly demonstrated that the expenditure has resulted in future economic benefits expected to be obtained from the use of these assets. Those which do not meet the above conditions will be recorded into operation costs during the year. When a tangible fixed asset is sold or disposed, its historical cost and accumulated depreciation are written off, then any gain or loss arising from such disposal is included in the income or the expenses during the year. These Nows form an negro par af and shouldbe read n conjunction with the Financial Statements 16tdi od ee a lod Se ae a ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No. BS8/II-BS9/IL, Road No. 2E, Vinh Loc Industrial Park, Vinh Loe A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont) Tangible fixed assets are depreciated i useful lives. The depreciation years applied are as follows: Fixed assets Years Machinery and equipment 05-08 Vehicles 05-06 Office equipment 03-06 9, Intangible fixed assets accordance with the straight-line method over their estimated Intangible fixed assets are determined by their initial costs less accumulated amortization. The Company’s intangible fixed asset includes only computer software. ‘The buying expenses of computer software whit is not a part associated with the relevant hardware, will be capitalized. Costs of computer software include all the expenses paid by the Company until the date the software is put into use. Computer software is amortized in accordance with the straight-line method from 03 to 05 years. 10, Payables and accrued expenses Payables and accrued expenses are recorded for the amounts payable in the future associated with the goods and services already received. Accrued expenses are recorded based on reasonable estimates for the amounts payable. ‘The classification of payables as trade payables, accrued expenses and other payables is made on the basis of following principles: Trade payables reflect payables of commercial nature arising from the purchase of goods, services, or assets, of which the seller is an independent entity with the Company. © Accrued expenses reflect expenses for goods, services received from supplicts or supplied to customers but have not been paid, invoiced or lack of accounting records and supporting documents; pay on leave payable to employees; and accrual of operation expenses. © Other payables reflect payables of non-commercial nature and irrelevant to purchase, sales of goods or provisions of services. ‘The payables and accrued expenses are classified as short-term and long-term items in the Balance Sheet on the basis of their remaining term as of the balance sheet date. 11. Owner’s equity Capital Capital is recorded according to the actual amounts invested by owners, 12. Profit istribution Profit after tax is distributed to the owners after appropriation for funds under the Charter of the Company as well as legal regulations and approved by the Company's Chairman, ‘The distribution of profits to the owners is made with consideration toward non-cash items in the retained earnings that may affect cash flows and payment of profit such as profit due to revaluation of assets contributed as investment capital, profit due to revaluation of monetary items, financial instruments and other non-cash items. Profit is recorded as payables upon approval of the Company"s Chairman. These Notes form an integrl part afand shouldbe readin conjunction wih the Financial Stataments 7a ae a ae | a a | ROEDERS VIETNAM COMPANY LIMITED Address: Lot No, B58/II-BS9/II, Road No. 2E, Vinh Loe Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont,) 13. Recognition of sales and income Sales of finished goods Sales finished goods shall be recognized when all of the following conditions are satisfied: The Company transfers most of risks and benefits incident to the ownership of products or goods, to customers, ‘+ The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. ‘+ The amount of sales can be measured reliably. When the contracts stipulate that buyers have the right to return products, goods purchased under specific conditions, sales are recorded only when those specific conditions are no longer exist and buyers retains no right to return products, goods (except for the case that such returns are in exchange for other goods or services). + The Company received or shall probably receive the economic benefits associated with sale transactions. ‘+ The cost incurred or to be incurred in respect of the sale transaction can be measured reliably. Interest Interest is recorded, based on the term and the actual interest rate applied in each particular period. 14, Borrowing costs Borrowing costs are interests and other costs that the Company directly incurs in connection with borrowing, Ke an) Borrowing costs are recorded as an expense when it is incurred. In case the borrowing costs af¥ directly attributable to the construction or the production of an asset in progress, which takes substantial period of time (over 12 months) to get ready for intended use or sales of the asset, the: costs will be included in the cost of that asset. To the extent that the borrowings are especially for th¢ purpose of construction of fixed assets and investment properties, the borrowing cost is eligible for capitalization even if construction period is under 12 months. Incomes arisen from provisional investments as loans are recognized as a decrease in the costs of relevant assets. In the event that general borrowings are partly used for the aequisition, construction or production of an asset in progress, the costs eligible for capitalization will be determined by applying the capitalization rate to average accumulated expenditure on construction or production of that asset. The capitalization rate is computed at the weighted average interest rate of the borrowings not yet paid during the year, except for particular borrowings serving the purpose of obtaining a specific asset. 15. Expenses Expenses are those that result in outflows of the economic benefits and are recorded at the time of transactions or when incurrence of the transaction is reliable regardless of whether payment for expenses is made or not. Expenses and their corresponding revenues are simultaneously recognized in accordance with matching principle. In the event that matching principle conflicts with prudence principle, expenses are recognized based on the nature and regulations of accounting standards in order to guarantee that transactions can be fairly and truly reflected. These Notes form an integral part of and shoud be readin conuncton with the Financial Sttements 18Glas) ca) i) ddd a te — re ti) tJ ts ] ] ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No. BS8/II-B59/II, Road No, 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) 16. Corporate income tax Corporate income tax includes current income tax and deferred income tax. Current income tax Current income tax is the tax amount computed based on the taxable income. Taxable income is different from accounting profit due to the adjustments of temporary differences between tax and accounting figures, non-deductible expenses as well as those of non-taxable income and losses brought forward, Deferred income tax Deferred income tax is the amount of corporate income tax payable or refundable due to temporary differences between book values of assets and liabilities serving the preparation of the Financial Statements and the values for tax purposes. Deferred income tax liabilities are recognized for all the temporary taxable differences. Deferred income tax assets are recorded only when there is an assurance on the availability of taxable income in the future against which the temporarily deductible differences can be used Carrying values of deferred corporate income tax assets are considered as of the balance sheet date and will be reduced to the rate that ensures enough taxable income against which the benefits from part of or all of the deferred income tax can be used. Deferred corporate income tax assets, which have not been recorded before, are considered as of the balance sheet date and are recorded when there is, certainly enough taxable income to use these unrecognized deferred corporate income tax assets. Deferred income tax assets and deferred income tax liabilities are determined at the estimated rate to bbe applied in the year when the assets are recovered or the liabilities are settled based on the effective tax rates as of the balance sheet date. Deferred income tax is recognized in the Income Statement. In the case that deferred income tax is related to the items of the owner's equity, corporate income tax will be included in the owner’s equity. ‘The Company shall offset deferred tax assets and deferred tax liabilities ift + The Company has the legal right to offset current income tax assets against current income tax. liabilities; and © Deferred income tax assets and deferred income tax liabilities are relevant to corporate income tax. which is under the management of one tax authority either: = Of the same subject to corporate income tax; or - The Company has intention to pay current income tax liabilities and current income tax assets on a net basis or recover tax assets and settle tax liability simultaneously in each future period to the extent that the majority of deferred income tax liabilities or deferred income tax assets are paid or recovered. 17. Related parties A party is considered a related party of the Company in case that party is able to control the Company or to cause material effects on the financial decisions as well as the operations of the Company. A party is also considered a related party of the Company in case that party is under the same control or is subject to the same material effects. Considering the relationship of related parties, the nature of relationship is focused more than its legal form. ‘These Notes form an integral port of and ahould be read n conjunction with the Financial Sotements 19ROEDERS VIETNAM COMPANY LIMITED Address: Lot No, B58/1I-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont) Y. ADDITIONAL INFORMATION ON THE ITEMS OF THE BALANCE SHEET 1. Cash and cash equivalents ‘Ending balance Beginning balance Cash on hand 67.882.007 48,327.11 Demand deposits in banks 24.710.102.630 15.715.128.952 Total 24,777.984.637 15.763.456.063 2. Short-term trade receivables Ending balance Beginning balance Receivables from related parties 4.286.565.584 1.730.293,527 Roeders GmbH 4,286.565.584 1,730.293.527 Receivables from other customers 1.170.278.1353 37,304,550 Framas Vietnam Ltd. 886.380.000 5 Other customers 283.898.153 37,304,550 Total 843.737 1.767.598.077 3. Short-term prepayments to suppliers Ending balanee Beginning balance HSB Construction Co., Ltd. 16.181,698.474 - Other customers 69.223.954 94.617.000 Total 16.250,922.428 4. Other short-term/long-term receivables 4a, Other short-term receivables Ending balance Beginning balance Value Allowance Value __ Allowance Short-term deposits and mortgages 92.506.994 = 60,506,994 7 Advances 1.498.986 - - Other short-term receivables 191.349.330 = __11,308.295 : Total 285.355.310 = __71.815.289 = 4b. Other long-term receivables This item reflects long-term deposits and mortgages, 5. Inventories Ending balance Beginning balance Original costs Allowance Original costs_Allowance_ Goods in transit, 12.596.000 - : = Materials and supplies 3.104.897.576 = 2,867.620.096 : Tools 2.827.558.033 = 3.368.235.206 : Work-in-process 3.548.114.231 = 3.255.715.067 + Finished goods 4311.081.116 2.487.517.970 Total 13.804.246.956 = 11.979.088.339 - “These Notes form a integral part of and shouldbe readin conjunction withthe Financial Sarements 20 z2ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. B58/II-BS9/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh Distriet, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) 6. Short-term/long-term prepaid expenses, 6a. Short-term prepaid expenses __Ending balance Beginning balance Tools 339.427.602 236.346.400 Insurance premiums 226.166.706 160,299,854 Other short-term prepaid expenses 45.203.400 135,604,808 Total 610.797.708 532,251,062 6b. Long-term prepaid expenses Tools 1.440. Land rental 48.792 Insurance premiums 84 Repair expenses 149. Total 7. Increases/(decreases) of tangible fixed assets Buildings and Machinery and Office Other tangible structures equipment ___Vehieles__ equipment ___ fixed assets ‘Total Historical costs Beginning balance 407,889,500 76.564.996.613 1.603.776.0090 770.349.934 1.155.650.190 80,502.662327 ‘Acquistion during the year 1.286,322.066 = = 180,885,000 1.427.207.0665 ‘Completed constructions = 15.212,357.849 - 2 = 15212.357.849 Ending balance 407.889.500 _93.023.676.528 _1,603.776.000 __770349.934 97.142.227 242 In which: Assets fully depreciated but stil in use 794924027 528,529,090 191.191.246 = 1514644363 Ascets waiting for liquidation 7 : : 7 c Depreciation Beginning balance 56,651,320 25.249,073.320 820.117.537 360,904.694 322.713.404 26.809.460.275 Depreciation during the year __135.963.168 _15.556.130.998 _273.839.777 _144.676.105__323.566.982 _16.434.177.030. Ending balance —192.614.488 _40,805.204.318 _1,093.957314 __505.580.799, __646.280.586 43.243.637.305, [Net book values Beginning balance 351.238.180 _51.315.923.293 __783.658.553 __409.445.240 __832.936.786 _53.693.202.052 Ending balance 2IS27S.012 _S2218472.210 _ SO9SIB.T76 —264.760.135 __690.254.804 _53.898.589.937 Inwhich Assets temporarily not in use e : 7 Assets waiting for liquidation - - 7 8, Increases/(decreases) of intangible fixed assets, Initial costs 2.266.373.632 864,094,745 Beginning balance Acquisition during the year Amortization during the year Ending balance 3.130.468.377 Intangible fixed assets fully amortized but still in use is VND '50.467.153.797 — Beginning balance. 918.700 1.027.057.724 612.463 - 345.344 - 277.290 84,073,139 30,863 Amortization 900.049.256 Net book values_ 1,366.324.376 511.615.1752 1.411,665.008 1,718.803.369 509.535.000. “These Nows form an integral part of and shouldbe readin conjunction wit he Financial Statements 21 Ros eeROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS. For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) 9. Construction-in-progress Details of increase/(decrease) during the year are as follows: Inclusion into Beginning fixed assets Ending balance Increase during the year__balance Acquisition of fixed assets 14,614.243.050 598.114.799 _(15.212.357.849) : Consiruction-in-progress = 879,559,640 = 879.559.640 Construction of new workshop 879.559.640 = 879.539.640 Total 14.614.243.050 _1.477.674.439 (15.212.387.849) 879.559.640 10. Short-term trade payables Ending balance Beginning balance Payables to related parties 568.953.391 15.225.878.79 Roeders GmbH 568.953.391 15.225.878.779 Payables to other suppliers 9.237.353.9532 7.695.920.972 Mechanical Engineering And Metallurgy Joint Stock Company - Sadakim es 1.177.363.113 655:323.669 Tuan Nam Hai Co,, Ltd 2.414.946.472 1.762.151.000 Other suppliers Total 645.044.347 5.278.446.303 806.307.323 222.921.799.751 The Company has no outstanding trade payable. 11. Taxes and other obligations to the State Budget Beginning Amount Amount already Ending balance payable paid balance VAT on imports 1.119.546 1.841.330.684 _(1.842.450.230) E Import- export duties 439.171 172.654.109—_(173.093.280) - Corporate income tax 133.469.805 2.737.869.239 (2.255.485.740) _615.853.304 Personal income tax 346.025.236 676.065.973 (989.556.033) —_-32.535.176 Withholding tax 110.393.615 604.491.524 — (685.903.081) 28,982.58 Other taxes : 2.037.800 2.037.800) = Total S91447.373 _6.034.449.329 _ (5.948.526.164) __677.370.538 Value added tax (VAT) ‘The Company has paid VAT in accordance with the deduction method. The tax rates applied are as follows: = Exports 0% = Local sales 10% Export-import duties ‘The Company has declared and paid these duties in line with the Customs’ notices, Corporate income tax ‘The Company is responsible to pay corporate income tax for taxable income at the rate of 20%, ‘According to the regulations of the Circular No. 78/2014/TT-BTC dated 18 June 2014, Circular No. 151/2014/TT-BTC dated 10 October 2014 and Circular No. 96/2015/TT-BTC dated 22 June 2015, the ‘Company is exempted from tax in 02 years and is reduced 50% of taxable payable in the following 04 years from the first year earning taxable income, ie. year 2014. ‘The Company is allowed to get tax incentives from the taxable year of 2015 onwards. ‘These Notes orm an negra part of and ahould be read in conjunction with the Fnanciel Satoments 22 Jf Ty aus uy ea > %Co God od Co ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-B59/I, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chank District, Ho Chi Minh City FINANCIAL STATEMENTS, For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) Estimated corporate income tax payable during the year is as follows: Current year Previous year Total accounting profit before tax 726.482.484.105 1,696.251.600 Increases/(decreases) of accounting profit to 5 determine profit subject to corporate income tax: = Increases 1.287.310.070 777.176.887 = Decreases (391.101.782) (2.357.996.635) ‘Taxable income 27.378.692.393, 1.115.431.852 Corporate income tax rate 20% 20% Corporate income tax payable at common tax rate 5.A75.738.479 223.086.370 Corporate income tax exempted, reduced (2.737,869.239) (111.543,185) Adjustments of corporate income tax of the previous years s 21.926.620 Corporate income tax to be pai 169.239 133.469.805 Determination of corporate income tax liability of the Company is based on prevailing regulations on tax. Nonetheless, these tax regulations may change from time to time and tax regulations applicable to variety of transactions can be interpreted differently. Hence, the tax amounts presented in the Financial Statements can be changed upon the inspection of tax authorities. »d Other taxes \ ‘The Company has declared and paid these taxes in line with the prevailing regulations. a 12, Payables to employees a) This item reflects 134. month salary, seniority bonus and pay on leave, J 13. Short-term accrued expenses Ending balance Beginning balance Payables to related parties 2.001.097.234 - Roeders Geschaftsfuhrungs GmbH - Loan interest accent expenses : Payables to other organizations and indis 216,489,357 £20,870.596 Withholding tax on loan interest 105.320.906 64.472.660 Other short-term accrued expenses 111.168.451 356.397.936 Total 2.217,586.591 420.870.596 14, Other short-term payables Ending balance Beginning balance Payables to related parties - 1.284.627.000 Roeders Geschaftsfuuhrungs GmbH - Loan interest expenses : 1.284.627.000 Payables to other organizations and individuals 6.719.499 10.051.900 Other short-term payables 6.719.499 10.051.900 Total 6.719.499 1.294.678.900 ‘These Notes form an imegral part aFand shoul be read in conjunction with te Fnancal Statements 23‘s) tel ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) 15. Short-term/long-term borrowings and financial lease 15a, Short-term borrowings Details of increases/ (decreases) of short-term borrowings during the year are as follows: Current year Previous year Beginning balance 20.565.000.000 - Increase during the year 357.437.500.000 20.365.500.000 Transfer to contribution capital (57.437.500.000) - ‘Transfer to long-term loans and financial leases (20.565.000.000) - Exchange difference : g 199.500.000 Ending balance = 220.565.000.000 15h, Long-term borrowings ‘The loan from Rocders Geschaftsfuhrungs GmbH ~ the Parent Company is to supplement the working capital. Details of Loan Agreements are as follows: Principal Maturity. Interest rate No. Loan Agreement Currency (EUR) date _(*h/year) 1. Loan Agreement dated 01 March 2013 EUR 500.000 28/02/2024 3,00% 2. Loan Agreement dated 29 April 2013 EUR 200.000 28/02/2024 3,00% 3. Loan Agreement dated 01 August2013 EUR 200.000 02/08/2024 3,50% 4. Loan Agreement dated 07 October 2013 EUR 200.000 o8v10/2024 3.50% 5. Loan Agreement dated 02 January 2014 EUR 200.000 92/01/2020 3,50% 6. Loan Agreement dated 01 December 2017 i bur 750-0 51/10/2023 3.109% Total 2.050.000 ‘The Company is solvent over long-term borrowings. Payment schedule of long-term borrowings is over 01 year and under 05 years. Details of increases/ (decreases) of long-term loans are as follows: Current year Previous year Beginning balance 35.646,000.000 31.605.600.000 ‘Transfer from short-term loans and financial leases -—_-20.565.000.000 - Exchange difference (1.150.050.000) 4.040.400.000 Ending balance 55.060.950.000 35.646.000.000 16. Owner’s equity 16a, Statement on fluctuations in owner’s equity Capital ___Retained earnings Total Beginning balance of the previous year 2.707.000.000 ~20.973.459.829 ~ 23.680.459.829 Profit during the year - 1,562.781.795 _1.562.781.795 Ending balance of the previous year 2.707.000.000 __22.536.241.624 _25.243.241.624 Beginning balance of the current year 2.707.000.000 -22.536.241.624 25.243.241.624 Capital increase from short-term borrowings $7.437.500.000 + 57.437.500.000 Profit during the year = __23.744.614.866 _23.744.614.866 Ending balance of the current year ‘60.144.500.000 __46.280.856.490 106.425.356.490 ‘These Notes form an integral part of and shouldbe read n conjunction with the Finacial Statements 24ROEDERS VIETNAM COMPANY LIMITED ‘Address: Lot No. B58/II-B59/II, Road No, 2E, Vinh Loc industrial Park, Vinh Loc A Commune, Binh Chan District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) 16b. Details of capital contribution of the owners As of 31 December 2018, Roeders Geschaftsfuhrungs GmbH fully contributed the charter capital of USD 2.629.450 as in the Investment License. 17. _Off-balance sheet items 1. External leased assets ‘The total minimum lease payment in the future for irrevocable leasing contracts will be settled as follows: Ending balance Beginning balance Under 01 year 5.242.117.680 3.216.970.200 From 01 year to 05 years 8.796.609.980 8.947.735.200 Total 14.038.727.660 12.164.705.400 17b, Foreign currencies ___Ending balance Beginning balance US Dollar (USD) 1,044.581,31 137.913,85 Euro (EUR) 846,86 460.092,02 VI. ADDITIONAL INFORMATION ON THE ITEMS OF THE INCOME STATEMENT 1. Sales Ja. Gross sales Current year Previous year_ Sales of finished goods 125.507.838.362 770.074.268.840 Sales of service provisions 2.934.519.043, 599.180.926 Others 49.803.774 ae = Total 128.492.161.179 70.673.449.766 Ib, Sales to retated parties During the year, the Company only has sales of goods and service provision to Roeders GmbH for an amount of VND 124.493.284.139 (previous year: VND 67.822.649.150). 2, Sales deduetions ‘This item reflects sales allowances. 3. Costs of sales Current year Previous year Costs of finished goods sold 86.347.272.127 353.378.507.850 Treatment of differences in goods in stock : (42.614.233} Total 86.347.272.127 353.335.893.617 4, Financial income Current year Previous year Exchange gain arising 1,760.906.591 278.417.6172 Exchange gain due to the revaluation of monetary items in foreign currencies 1,068.954.674 - Total 2.829.861.2658 ‘These Notes form an integral part of and shouldbe read in conjunction with the Financial Statements 25] ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-BS9/II, Road No, 2E, Vinh Loc Industrial Park, Vinh Loe A Commune, Binh Chanh District, J Ho Chi Minh City FINANCIAL STATEMENTS 5 For the fiscal year ended 31 December 2018 J Notes to the Financial Statements (cont.) 5. Financial expenses a Current year Previous year Loan interest expenses 2.111.406,769 1,384.343.466 7 Exchange loss arising 172,398,546 674,674,028 7 Exchange loss due to the revaluation of monetary items in foreign currencies ____4.136,340.262 7 Total 2.283.805.315 6.195.357.7156 L 6. Selling expenses Current year Previous year r Employees 257.931.143 : Materials, packages 1.788.569.722 418.665.229 ] External services rendered 2.603.316.0417 1.658.092.488 Other expenses i 8.550.000 7] Total 4.649.816.912 2.085.307.717 7. General and administration expenses 7 Current year Previous year J Employees 3.791.407.220 2.975.221.352 Office supplies 14,962,587 42,572.332 * Tl Office stationery 262.812.823 271.710.432 u - Depreciation/(amortization) of fixed assets 150337.825 173.058.299 Taxes, fees and legal fees 167.442.936 223.209.086 J External services rendered 6.235,722.905 3.545.407.389 Other expenses 572.772.863 410.495.718 Total 11.195.459.159 7.641.674.608 a Other expenses Current year __ Previous year 4 Fines and compensations 223.737.965 27.388.237 Others i 21,873.857 39.203.004 7 Total 245,611,822 66.591.241 [ 9. Operating costs Current year ___ Previous year a Materials and supplies 44.306.038.469 27.210.845.047 3 Labor 21.306.983.771 13.905.980.508 Depreciation/(amortization) of fixed assets 16,945,792.782 10.100.903.146 E External services rendered 20,984.953.257 14.109.851.920 F Other expenses 1.428,557.717 1.144.550571 4 Total These Nowes form an integral part of and shoul be read in conjunction with the Financial Statements 26— J ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. BS8/II-B59/II, Road No. 2E, Vinh Loc Industrial Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont.) VII. ADDITIONAL INFORMATION ON THE ITEMS OF THE CASH FLOW STATEMENT. At the end of the current year, the Company has no payable for fix asset acquisition (beginning balance: VND 14.614.243,050). VIII. OTHER DISCLOSURES 1. Transactions and balances with related parties ‘The Company’s related parties include the key managers, their related individuals and other related parties. 1a. Transactions and balances with the key managers and their related individuals ‘The key managers include the Company's Chairman and members of the Board of Directors. The key managers’ related individuals are their close family members, Transactions with the key managers and their related individuals ‘The Company has no sales of goods and service provi managers and their related individuals. jons as well as other transactions with the key Receivables from and payables to the key managers and their related individuals The Company has no receivables from and payables to the key managers and their related individuals, Income of the key managers ‘The Company has no income of key managers because the key managers have been supported by the Group Company - Roeders GmbH and the Company has charged for management service fee. 1b. Transactions and balances with other related parties Other related parties of the Company include: Other related parties Relationship Roeders Geschaftsfuhrungs GmbH Parent Company Roeders GmbH Group Company Roeders Technologies (Shenzhen) Ltd Group Company Transactions with other related parties ‘Apart from sales of goods and service provisions presented in Note No. VI.1b, the Company also has other transactions with related parties as follows: Current year Previous year Roeders Geschafisfuhrungs GmbH Short-term loans $7.437.500.000 20.365.500.000, Loan interest 2.001.097.232 1,284.627.000 ‘These Notes form an integral part of and shouldbe read in conjunction withthe Financial Stawements 27ROEDERS VIETNAM COMPANY LIMITED Address: Lot No. B58/II-B59/II, Road No. 2E, Vinh Loc Industral Park, Vinh Loc A Commune, Binh Chanh District, Ho Chi Minh City FINANCIAL STATEMENTS For the fiscal year ended 31 December 2018 Notes to the Financial Statements (cont,) Current year Previous year Roeders GmbH Purchase of tools, materials 1.918.968.006 2.197.326.864 Purchases of fixed assets - 24.098.285.741 Management service fees 1.911.866.134 2.016.800.660 Training fees - 174.987.458 Other service fees 720.012.052, 462.638.108 Roeders Technologies (Shenzhen) Lid Machine repairing fees - 96,391,658 ‘The prices of merchandises and services supplied to other related parties are agreed by the parties involved by themselves. The purchases of merchandises and services from other related parties are done at the agreed prices. Receivables from and payables to other related parties Receivables from and payables to other related parties are presented in Notes No. V.2, V.10, V.13, V.14 and V.15. The receivables from other related parties are unsecured and will be paid in cash. There are no allowances for doubtfisl debts made for the receivables from other related parties. 2. Subsequent events There is no material subsequent event which is required to adjust figures or disclosures in th Financial Statements. ‘Nguyen Thi Thuy Ngan Chief Accountant Practice Certificate No. 1816201 7/KET Mazars Vietnam Co, Lid. ‘Address: 10th -11th Floor, Viet Dragon Building, No. 141 Nguyen Du Street, District 1, Ho Chi Minh City, Vietnam ‘These Nows form an negra part ofan shouldbe read wn conjunciton with the Financial Sotememts 28