Annual Report 2013

HOA PHAT GROUP
2 WWW.HOAPHAT.COM.VN
CONTENTS
PART I: OVERVIEW OF HOA PHAT GROUP 4
Message from the Chairman of the Board of Management 12
PART II: REPORT OF THE BOARD OF DIRECTORS 14

Assessment of business performance in 2013 15
Financial position 18
Production and business plan in 2014 21
Part III: PERFORMANCE DURING THE YEAR 22

Key financial indicators 23
Personnel organization 24
Investment and implement of major projects 28
Shareholder structure 29
Subsidiaries activities 32
Investors Relation (IR) 40
Social activities 42
Research and Development (R&D) 44
Part IV: THE BOARD OF MANAGEMENT’S ASSESSMENT 46
Part V: CORPORATE GOVERNANCE 50

Members and structure of the Board of Management 51
Risks Management 56
Supervisory Board Report 58
Part VI: AUDITED CONSOLIDATED FINANCIAL STATEMENTS 60
OVERVIEW OF HOA PHAT GROUP

2013 ANNUAL REPORT 3
Part I:
HOA PHAT GROUP

HOA PHAT GROUP PROFILE
Transaction name: Hoa Phat Group Joint Stock Company
Business Registration Certificate No.: 0900189284
Charter capital: VND4,190,525,330,000
Address: Pho Noi A Industrial Zone, Giai Pham Commune, Yen My District, Hung Yen Province
Head Office: 39 Nguyen Dinh Chieu, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi
Phone: (84) 4 62848666
Fax: (84) 4 62833456
Da Nang Branch 171 Truong Chinh, An Khe Ward, Thanh Khe District, Da Nang City
Phone: (84) 511 3721232
Fax: (84) 511 3722833
HCM City Branch: 129 Nguyen Huu Canh, Ward 22, Binh Thanh District, HCM City
Phone: (84) 8 35129896
Fax: (84) 8 38991730
Website: www.hoaphat.com.vn
SHARE INFORMATION
Stock sticker: HPG
Stock exchange: HOSE
Initial offering date: 15 November 2007
Shares in circulation: 419,052,533 shares
BUSINESS ACTIVITIES
1 Trading, exporting and importing iron and steel, materials and equipment for
refining and rolling steel;
2 Producing rolling steel and roof fabrication;
3 Producing steel pipes and galvanized ones, stainless ones;
4 Producing and trading non-ferrous metal and non-ferrous metal scrap;
5 Refining steel and casting iron;
6 Manufacturing and trading coke coal
7 Mining for metal ores; trading metals, metal ores and metal scrap;
8 Manufacturing and trading construction and mining equipment;
9 Producing interior furniture for offices, households and schools;
10 Manufacturing, trading, assembling, repairing, and maintaining electric, electronic,
refrigeration, civil electric products and air conditioners;
11 Investing and building infrastructure for industrial zones and urban areas;
12 Real estate business

GROUP STRUCTURE
HOA PHAT GROUP
Hoa Phat Steel JSC Hoa Phat Equipment Accessories Co., Ltd
Hoa Phat Urban Development

Hoa Phat Furniture JSC and Construction JSC
Hoa Phat Steel One member Co., Ltd
Golden Gain Vietnam JSC
Hoa Phat Refrigeration Engineering Co., Ltd
Hoa Phat Steel Pipe Co., Ltd
Hoa Phat Trading Co., Ltd

Hoa Phat Energy JSC
An Thong Mining Investment JSC
Hoa Phat Mining JSC
Nam Giang Mining One-Member Co.,Ltd
CORPORATE STRUCTURE
GENERAL SHAREHOLDERS
SUPERVISORY
BOARD
MANAGEMENT BOARD
DIRECTOR BOARD
SUBSIDIARIES THE GROUP OFFICE AFFILIATES
PR FINANCIAL IT CONTROLLER LEGAL ADMINISTRATION

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT
1. Hoa Phat Steel JSC

2. Hoa Phat Steel One member Co., Ltd 1. Hoa Phat - SSG Mining, JSC
3. Hoa Phat Steel Pipe Co., Ltd
2. Yen Phu Investment & Minning, JSC
4. Hoa Phat Energy JSC
5. An Thong Mining Investment JSC
6. Hoa Phat Mining JSC
7. Nam Giang Mining One-Member Co.,Ltd
8. Hoa Phat Equipment Accessories Co., Ltd
9. Hoa Phat Furniture JSC
10. Hoa Phat Refrigeration Engineering Co., Ltd
11. Hoa Phat Trading Co., Ltd
12. Hoa Phat Urban Development and Construction JSC
13. Golden Gain Vietnam JSC
HOA PHAT GROUP - FINANCIAL SUMMARY
Hoa Phat Group - financial highlights
Content (Unit: VND) 2011 2012 2013

Revenue 18,092,906,336,584 17,122,073,926,267 19,200,234,178,082

17,851,896,561,575
Net Sales 16,826,851,892,984 18,934,292,150,531

Cost of goods sold
14,979,112,891,099 14,341,642,566,494 15,650,540,636,204

Gross profit
2,872,783,670,476 2,485,209,326,490 3,283,751,514,327
Selling expenses
217,417,162,245 274,039,974,293 253,653,065,057
401,754,381,560
General and administration expenses 586,966,481,317 416,174,707,153
-13,166,531,076
Results of other activities 14,943,260,928 32,866,936,094
2,240,445,595,595
EBIT 1,639,146,131,809 2,646,790,678,211
541,922,822,267
Depreciation and amortisation expenses 596,227,337,059 720,195,566,311
2,782,368,417,862
EBITDA 2,235,373,468,868 3,366,986,244,522

Net financial profit (740,551,762,773) (420,399,492,992) (252,130,284,965)
1,489,142,843,681
Profit before tax 1,218,205,340,655 2,394,404,194,432
192,292,340,003
Corporate income tax 187,699,911,137 383,968,791,663
1,296,850,503,678
Net profit 1,030,505,429,517 2,010,435,402,769
9,485,630,335,670
Current assets 10,220,788,345,768 12,402,515,338,144
8,039,052,690,405
Long-term assets 8,794,975,115,778 10,673,862,524,545
17,524,683,026,074
Total assets 19,015,763,461,546 23,076,377,862,689
6,424,215,216,403
Short and long term debts 6,305,957,434,476 7,575,383,424,084
7,413,804,561,023
Owner’s equity 8,085,135,114,809 9,500,327,254,417

Financial ratios
16.09%
Gross profit margin 14.77% 17.34%
15.59%
EBITDA margin 13.28% 17.78%
12.55%
EBIT margin 9.74% 13.98%
Net profit margin

7.26% 6.12% 10.62%
Net Sales growth rate

25.13% -5.74% 12.52%
Net Profit growth rate

-5.77% -20.54% 95.09%
Quick
ratio (times) 0.45 0.43 0.37
Debts/ equity
86.65% 77.99% 79.74%
ROE
17.5% 12.7% 21.2%
ROA
7.4% 5.4% 8.7%
EPS
(VND/share) 3,573 2,386 4,663

SUBSIDIARIES AND ASSOCIATES
As of 31 December 2013 Hoa Phat Group Joint Stock Company has 13 subsidiaries and 2 associates:
Contributed % of
No. Subsidiaries Address Principal business charter equity
activities capital owned by
(VND billion) HPG
1 Hoa Phat Steel JSC Hiep Son Produce iron, steel, and cast iron;
Commune, Kinh
2,500 99.99%
Mon District, Hai
Duong Province
Pho Noi A
Hoa Phat Steel
2 Industrial Zone, Produce iron, steel, and cast iron;
One-member Giai Pham 600 100%
Co.,Ltd. Commune, Yen My
District, Hung Yen
Province, Vietnam
3 Hoa Phat Steel Pipe 39 Nguyen Dinh Produce and trade various kinds of
Co., Ltd. Chieu, Le Dai Hanh steel pipes.
Ward, Hai Ba Trung 450 99.89%
District, Hanoi,
Vietnam
4 Hoa Phat Energy Hiep Son Produce and trade coal coke
JSC Commune, Kinh
1,000 99.89%
Mon District, Hai
Duong Province
5 An Thong Mining 415 Tran Phu, Explore, exploit, prepare and make,
Investment JSC Ha Giang City, process, purchase and sell, export
Ha Giang Province, and import minerals, primarily iron 500 99.96%
Vietnam ores.
6 Hoa Phat Mining Pho Noi A Exploit and collect lignite; exploit
Industrial Zone, iron ore, aluminum ore, and other
JSC
Giai Pham rare metals; non-ferrous metal and
rare metal 150 99.8%
Commune, Yen My
District, Hung Yen
Province, Vietnam
7 Nam Giang Mining 119 Tran Cao Van, Exploit iron ore, rare metal ore, and
One-Member Vinh Dien Town, other non-iron metalore
Limited Liability Dien Ban District, 30 100%
Company Quang Nam
Province, Vietnam
8 Hoa Phat 39 Nguyen Dinh Manufacture construction
Equipments and Chieu, Le Dai Hanh equipment; trade construction and
Ward, Hai Ba Trung 180 99.72%
Accessories Co., mining machinery and equipment of
District, Hanoi,
Ltd. small and medium size.
Vietnam
HOA PHAT GROUP

Contributed % of
No. Subsidiaries Address Principal business charter equity
activities capital owned by
(VND billion) HPG
9 Hoa Phat Furniture Road B4, Area B, Produce and trade furniture and
JSC Pho Noi A interior products.
Industrial Zone, Lac
Hong Commune, 400 99.60%
Van Lam District,
Hung Yen Province,
Vietnam
Pho Noi A
10 Hoa Phat Produce and trade Refrigeration
Industrial Zone,
Refrigeration Giai Pham products.
150 99.67%
Engineering Co., Ltd. Commune, Yen My
District, Hung Yen
Province, Vietnam
11 Hoa Phat Trading 39 Nguyen Dinh Trade, import and export various
Co., Ltd. Chieu, Le Dai Hanh types of steel, construction materials,
50 99.00%
Ward, Hai Ba Trung interior furniture, air-conditioners,
District, Hanoi, washing machines and refrigerators.
Vietnam
12 Hoa Phat Urban 39 Nguyen Dinh Civil and industrial construction;

Development and Chieu, Le Dai Hanh trading of freehold or leasehold real
Construction JSC Ward, Hai Ba Trung estate; house and office leasing; 300 99.67%
District, Hanoi, integrated investment and
Vietnam construction of infrastructure.
13 Golden Gain No3 Dong Nam Real estate trading

Vietnam JSC Tran Duy Hung
Urban Zone, Hoang
Minh Giam Street, 433 84.954%
Trung Hoa Ward,
Cau Giay District,
Hanoi, Vietnam
Associates
1 Hoa Phat - SSG 55B Phan Dinh Exploit and collect lignite; exploit
Mining JSC Phung, Quyet non-iron ore; provide supporting
Thang Ward, Kon services for mining 5.73 38%
Tum City, Kon Tum

Province, Vietnam
2 Yen Phu 39 Nguyen Dinh Exploit and refine metal ores.
Investment and Chieu, Le Dai Hanh
1.5 50%
Mineral JSC Ward, Hai Ba Trung
District, Hanoi,
Vietnam

2013 ANNUAL REPORT
9
Hoa Phat Group is one of the leading private industrial industry to produce the input for the steel manufacturing
manufacturing groups in Vietnam. Originating as a small industry. Presently, the Hoa Phat Group is recognized as
construction machine and equipment trading company one of the three largest construction steel manufacturers
in August 1992, Hoa Phat has gradually expanded its in Vietnam.
business to trading and production of Furniture (1995), To date, the Hoa Phat Group has 13 subsidiaries specializing
Steel Pipes (1996), Steel (2000), Refrigeration (2001), and in steel manufacturing, mining, Coke Coal production,
Property Development (2001). In 2007, Hoa Phat was real estate trading, furniture manufacturing, construction
reorganized under a group structure with Hoa Phat Group machinery, and equipment manufacturing with branches
Joint Stock Company being the holding company of its and factories located in Hanoi, Hung Yen, Hai Duong, Lao
subsidiaries and associates. Since 15th November 2007, Cai, Yen Bai, Ha Giang, Ho Chi Minh City, and Binh Duong.
Hoa Phat has been officially listed on the Ho Chi Minh City
The production of steel and related products such as Coke
Stock Exchange under the stock ticker symbol “HPG.”
Coal and iron ore accounts for more than 78.7% of the
Since its reorganization, Hoa Phat Group has made a Group’s total revenue and is regarded as the core business
number of substantial developments, the most notable of activity of the Group. Hoa Phat Furniture is also a reputable
which are (i) the construction and completion of the Hoa brand in the office furniture segment with the largest
Phat Integrated Steel Complex in the Hai Duong Province market share in Vietnam. In addition, the development
using the modern steel production technology produced of real estate, industrial zones, and urban areas are other
from iron ores; and (ii) the investment in the mining well-growing businesses within the Group.
HOA PHAT GROUP

MISSION STATEMENT
“To establish a solid foundation for becoming ONE of the leading industrial
manufacturers in Vietnam with STEEL production as its core business segment”

MESSAGE FROM THE CHAIRMAN OF
THE BOARD OF MANAGEMENT
“Vững vàng vượt qua khó khăn” có thể

là cụm từ chính xác nhất để đánh giá về
Tập đoàn Hòa Phát năm 2012.
HOA PHAT GROUP

Dear Valued Shareholders,
Although the economy of Vietnam saw signs of While many enterprises have cut down on the
recovery in 2013, it is still exposed to the risks of number of employees, in 2013 the Hoa Phat Group
inflation, bad debts, and reduction in aggregate employed 10,000 direct employees and over 20,000
demand. Difficulties at the macro-economic level indirect employees nationwide. In 2013, the Hoa
have revealed only a few bright spots in the overall Phat Group also accomplished its commitment
landscape of Vietnamese enterprises ,business to social and charitable causes both in scale and
performance. The unfavorable business environment quality, with a total budget of tens of billions of
has had negative effects on the operations of the VND in the Ha Giang, Yen Bai, Lao Cai, Hung
Hoa Phat Group. However, thanks to its sound Yen, and Hai Duong provinces as well as in
strategies, its investments oriented towards Hanoi, especially in the mountainous and remote
large-scale end-to-end production cycles, its areas. To maintain and develop social activities
strong financial capability, and its well-recognized as well as secure jobs for tens of thousands of
reputation in the market, the Hoa Phat Group has employees every year is one of the sustainable
managed to overcome the economic crisis and has development objectives of the Group.
taken strong steps forward to become a phenomenon
in the industry. On behalf of the Board of Management, I would
like to express our respectful gratitude for the trust
Our review of 2013 showed that Hoa Phat Group and support of our valuable shareholders and for
(HPG) has achieved a total revenue of VND19,200 the close cooperation of our customers and business
billion and a net profit after tax of VND 2,010 partners over the past year. Especially, I would
billion, exceeding the annual targets by 4% and like to express my sincerest thanks and feelings of
68%, respectively, and its total contribution to the respect to all employees of Hoa Phat Group, who
State Budget reached VND1,830 billion. These have exhibited great dedication and aspiration to
impressive figures are a result of the sustainable achieve the successes of the Hoa Phat Group today.
development strategies implemented by the Group ,s
management board during the past 21 years. TYours sincerely,
Chairman of the Board of Management
When Phase 2 of the Hoa Phat Integrated Steel
Complex project in the Hai Duong Province was
completed in October 2013, the Hoa Phat Group
has fulfilled its most important mission of the year
and Steel production truly became the primary
business segment of the Group. Tran Dinh Long

Part II:
REPORT OF THE BOARD OF DIRECTORS
HOA PHAT GROUP


ASSESSMENT OF BUSINESS PERFORMANCE
In 2013, the economy of Vietnam has had many significant In 2013, the Group achieved total consolidated revenue of
achievements: inflation rates were adequately controlled, VND19,200 billion and a net consolidated profit after tax of
foreign exchange rates were stabilized, bank interest rates VND2,010 billion, recording 104% and 168% of the annual
were reduced and maintained at a relatively low level, approved budget, respectfully. These achievements
import and export activities have remarkably increased, represent the remarkable increases of 12% and 95% in
and foreign direct investment to Vietnam have been well revenue and profit, respectively, compared to 2012. All
maintained. However, the economic recovery still remains business segments of the Group achieved stable results,
at a low rate and many enterprises have not managed to and some segments exceeded their profit target for 2013.
revive under the challenging business environment. For Most importantly, the steel, coke and mineral production
the steel industry, domestic demand remained low, which segment played a leading role in the impressive growth
resulted in moderate steel production from many of the Group by contributing 78.7% of total revenue and
enterprises . By implementing strategic policies and nearly 83 % of the profit of the whole Group.
exercising sound corporate governance, the Hoa Phat
Group has managed to exceed the approved annual target.
Criteria 2012 2013 2013 plan % increase % achieved

(VND bn) (VND bn) (VND bn) compared to plan
Total revenue 17,122 19,200 18,500 12% 104%
Profit after tax 1,031 2,010 1,200 95% 168%
Revenue proportions by segments in 2013 Profit after tax proportion by segments in 2013
7.5% 2.2%
13.8% 14.9%
Steel
78.7% 82.9%
Other industrial production
Real estate
The impressive results for both revenue and profit are gross profit for the current year compared to the previous year;
attributed to the following factors: - The decreased interest costs from borrowing also enabled
- Positive changes in the economy along with widened the Group to reduce production costs.
production ability, reduced cost production, and the - Enclosed steel production process of the strategic
improvement of local market demand led to an increase in business segment helped Hoa Phat to get significant
the consumption of Hoa Phat’s products; as a result, sales advantages on costs compared to domestic competitors.
revenue increased by 12% compared to the previous year; This is also reason why Hoa Phat steel still got a large profit
- The improved production management techniques in the difficult situation of steel industry. Besides, the
enabled a reduction in fuel and raw material consumption others businesses segments of Hoa Phat such as other
during the production process and a 17.43% increase in industrial production, real estate also made a good result.

Steel production continues to be the business segment that
contributes most to the total revenue and profit of the Group.
In 2013, Hoa Phat’s construction steel output reached 727,000
tons, an increase of 17% compared to 2012. Sales of construction
steel grew to 699,000 tons, an increase of 14% compared to
2012. 2013 also marked a new milestone for the Hoa Phat steel
production segment, as Phase II of the Hoa Phat Integrated
Steel Complex was put into commercial operation in October,
raising the capacity of the Complex to 850,000 tons per year.
From 2014 onward, the total construction steel production
capacity of the whole Group will reach 1,150,000 tons per year.
Hoa Phat construction steel continued to increase its market
share, showing an increase from 13.7% in 2012 to 15.2% in
2013, solidifying Hoa Phat as the second largest producer of
construction steel in Vietnam. Hoa Phat also represents a brand
name with the largest coverage in the domestic market. Hoa
Phat is one of the few steel production companies in the North
that have managed to supply steel for the Southern market,
while still being able to balance transportation costs and its
competitiveness in the Vietnam steel market.
Market shares of Hoa Phat construction steel over the years
16.0%
15.2%
15.0%
14.0%
13.7%
13.0% 13.3%
12.0%
11.0%
2011 2012 2013
Outputs and market shares of 5 market leaders of Vietnam’s steel industry
2012 2013
Current designed Production Consumption Market Production Consumption Market

capacity(thousand capacity (thousand share capacity (thousand share
tons) (thousand tons) tons) (%) (thousand tons) tons) (%)
Pomina 1,600 686 697

15.6% 737 729
15.9%
Hoa Phat 1,150 621 611

13.7% 727 699
15.2%
Tisco 600 540 513

11.5% 482 521
11.4%
Vinakyoei 400 400 402 9.0% 427 443 9.7%
VNS 450 392 395 8.8% 386 374 8.2%
Source: VSA
HOA PHAT GROUP

In order to ensure stable sources of input materials for fully matured, Hoa Phat’s office furniture and refrigeration
the construction steel segment, Phase II of the Coke Coal segments focused on developing new products and
Plant under Hoa Phat Energy JSC was put into operation in expanding the distribution network, especially to remote
August 2013. Soon after, in October 2013, An Thong Mining areas. Scaffolding and film-coated formwork produced by
Investment JSC also inaugurated the Ball Iron Ore Plant Hoa Phat Equipment & Accessories Co., Ltd. have
with capacity of 300,000 tons per year in the Binh Vang demonstrated their presence in a number of ASEAN countries.
Industrial Zone, Ha Giang Province. The operation of Phase In the real estate segment, 2013 was recognized as a
II of the Coke Coal Plant and the Ball Iron Ore Plant enabled challenging year as the real estate market remained
Hoa Phat to ensure the input material needed for Phase II stagnant without any signs of recovery. However, in
and for the Hoa Phat Integrated Steel Complex. September 2013, the Mandarin Garden Complex was
Moreover, Hoa Phat Mineral JSC and Hoa Phat An Thong completed and put into operation earlier than scheduled
Mining Investment JSC continued to operate their ore plan, putting it under consideration as one of the most
exploitation and processing projects to supply the fine ore successful projects to date. The industrial zone infrastructure
for the blast furnaces. The Hoa Phat Group’s subsidiaries leasing segment remained stable and attracted a lot of
operating in the energy and mineral fields proactively seek Japanese and Korean companies interested in leasing the
sources of coal and iron ore to streamline production, land for investment purposes.
reducing input costs and accordingly reducing steel
production costs.
In the steel segment, steel pipe – a strategic product which

accounts for over 15% of the profit of the Group, exceeded
the yearly target with an increase of 33% in sales and
consumption compared to the year 2012.
Despite facing various challenges from the economic

recession, Hoa Phat’s other industrial product segment still
saw positive growth in both revenue and profit compared
to 2012. All companies in the segment exceeded their
respective targets for the year. In a market that has not

FINANCIAL POSITION
* Assets:
The total assets of the Group at the end of 2013 were VND23,076 billion, an increase of 21% compared to the beginning of
2013.
In which:
- Current assets were VND12,402 billion, an increase of 21% compared to the beginning of the year. This is mainly due to
the investment in the Mandarin Garden Complex which raised the Group’s inventories at the year end to VND8,065 billion.
In addition, the arrangements for supplies of materials to be utilized for the operations of some new projects including Hoa
Phat Integrated Steel Complex – Phase 2, the Coke Coal Plant – Phase 2, etc. also the factors contributed to the increase of
the Group’s inventory balance.
- Long-term assets at the end of 2013 went up by 21%, amounting to VND10,674 billion. This can be explained by the
Group completing various large scale projects during the year, including the Hoa Phat Integrated Steel Complex - Phase
2. In addition, the investments in other projects such as Binh Vang Ball Iron Ore Plant from An Thong Mining Investment
JSC, and the projects of Hoa Phat Steel Pipe Co., Ltd. and Hoa Phat Furniture JSC, etc. during the year have also resulted in a
remarkable increase in long-term assets as compared to 2012.
Total assets growth of Hoa Phat Group over 3-year period

of 2011 – 2013 (VND billion)
23,076
19,016
17,525
2011 2012 2013

* Liabilities
Total liabilities of the Group as of 31 December 2013 were
VND13,489 billion, showing an increase of VND3,051
billion, which can be expalained by the increases in other
Leverage ratios
short-term liabilities recognised from customer
1.60
prepayments for the purchase of Mandarin Garden 1.42
1.40
apartments, in short-term borrowings to meet the 1.20 1.22
working capital needs, and in long-term borrowings for 1.20
large scale project investments. 1.00
0.81 0.80
With regard to bank borrowings, as at 31 December 2013, 0.80 0.74
short-term borrowings and long-term borrowings of 0.60
the Group were VND5,744 billion and VND1,832 billion,
0.40
respectively, making a total of bank borrowings and
liabilities amounting to VND7,576 billion. This has 0.20
resulted in the Group’s total borrowings and liabilities to -

2011 2012 2013
equity ratio of 1.42 times. However, the bank borrowings
to equity ratio was only 0.80 times. This ratio is Total liabilities to equity ratio
considered to be a safe indicator for a typical heavy Total bank borrowings to equity ratio
industrial production group.
HOA PHAT GROUP

* The owners’ equity
The owners’ equity of the Group at the end of 2013 reached VND9,500 billion, showing significant growth compared to the
beginning of 2013, which was due to remarkable profit growth during year. Return on Assets (ROA) and Return on Equity
(ROE) ratios also reached impressive percentages of 8.7% and 21.2%, respectively, which are both higher than those of
2012.
ROA of the Hoa Phat Group ROE of the Hoa Phat Group
2011 - 2013 2011 - 2013
10.0% 8.7% 25.0%
21.2%
8.0% 7.4%
20.0% 17.5%
6.0% 15.0%
5.4%
4.0% 10.0% 12.7%
2.0% 5.0%
0.0% 0.0%
2011 2012 2013 2011 2012 2013
* Other financial indicators

- Financial expenses:
Benefited from the Government’s policies to reduce

interest rates, the Group’s interest expense decreased by
29.61% compared to 2012 and stood at VND371 billion for Current ratio
the year 2013. Hoa Phat’s average interest rate for the year
was always maintained at a low level relative to the 1.60
common market rate. The active utilisation of such 1.40
leverage has contributed to the lower operating costs and 1.43
1.20 1.39
higher competitiveness of the Group.
1.00 1.11
- Liquidity ratios: 0.80
In 2013, the Group’s liquidity ratios slightly declined 0.60
compared to those in 2012. The current ratio remained 1.11
0.40
times while the quick ratio was 0.37. The current ratio of
1.11 shows that the Group’s ability to meet its current 0.20
liabilities is at a safe level and the Group remains in a -

strong financial position. 2011 2012 2013
- Asset turnover ratio:
During the year 2013, the Group continued to invest in

large scale projects, resulting in higher value of assets.
However, due to most of the projects starting commercial
operations late in the year, high production capacity was Items 2011 2012 2013
not achieved and accordingly, significant revenue was not Current ratio (times) 1.43 1.39 1.11
generated; as a result, the asset turnover ratio was only
Quick ratio (times) 0.45 0.43 0.37
0.82 times per year. Nevertheless, from 2014 when the
projects reach their normal operations and generate stable
net revenue, the asset turnover will certainly be improved.

IMPROVEMENT IN ORGANIZATIONAL STRUCTURE AND MANAGEMENT POLICY
To enhance corporate governance to be in alignment with the advanced models of the world, Hoa Phat
continues to strengthen the role of the holding company with its financial investments and governance. Hoa
Phat provides support to its subsidiaries with technical advice and operational strategy planning, without direct
involvement in actual production and business activities. In 2013, Hoa Phat initiated development of a personnel
hierarchy and benefit schemes, expected to be completed and applied to the whole Group in 2014. The personnel
hierarchy to be introduced will form the basis for establishing consistent salary, bonus, and benefit schemes
within the whole Group but will still ensure flexibility and appropriateness to the specific operations of each entity.
HOA PHAT GROUP

PRODUCTION AND BUSINESS PLAN IN 2014
With sustainable development strategies and with steel production leading as

a core production activity, the Hoa Phat Group will continue to exercise
prudence and flexibility with management policies in 2014: to promote sales
of goods, to reduce inventories of high value finished goods and raw materials,
to carefully review medium- and long-term investment plans, to flexibly and
quickly respond to foreign exchange rate movements, and to maintain positive
cash flow and capital preservation ratios.
On the basis of results achieved in 2013 and predictions of market

performance, the Group’s management has set targets for 2014 as follows:
Revenue: VND23,000 billion

Profit after tax: VND2,200 billion
As the total steel production capacity reaches 1.15 million tons in 2014, the
Hoa Phat Group in 2014 targets to achieve sales of over 800,000 tons of
construction steel in the domestic market and to actively seek new markets to
export steel billets. In addition, the Group will expand its market share in the
Southern and Central regions by upgrading the size of transit warehouses in
its branches. Supplementary segments to steel production such as energy and
mining will continue to proactively seek sources of iron and coal ore to meet
the demand of steel production of the Complex.
The growth target for other industrial production revenue is between 15 to

20%, using the enhanced development of new products to ceaselessly expand
in both domestic and export markets.
For the real estate segment in 2014, Hoa Phat targets to reach the highest
occupancy rate in the industrial parks where additional investment was made
in technical infrastructure during 2013. In addition, Hoa Phat plans to complete
the handover of the Mandarin Garden project’s apartments, while setting plans
to initiate the Apartment/Office/Commercial Complex project at No. 493
Truong Dinh Street, Hoang Mai District, Hanoi at an appropriate time.

Part III:
PERFORMANCE DURING THE YEAR
HOA PHAT GROUP

Financial summary
Increase/
No. Indicator Unit 2012 2013 decrease (%)
1 Total assets VND billion 19,016 23,076 21.35%
2 Revenue TVND billion 17,122 19,200 12.14%
3 Net revenue VND billion 16,827 18,934 12.52%
4 Profit from operating activities VND billion 1,204 2,362 96.19%
5 Other income VND billion 15 33 119.94%
6 Profit before tax VND billion 1,218 2,394 96.55%
7 Profit after tax VND billion 1,031 2,010 95.09%
8 Dividend payment rate % 20% 30%
Note: Dividend payment rate for 2013 is based on the budget
Key financial ratios

No. Ratios Unit 2012 2013
I Liquidity ratios
1 Current ratio Times 1.39 1.11
2 Quick ratio Times 0.43 0.37
II Capital structure ratios
1 Liabilities/Total assets Times 0.55 0.58
2 Liabilities/Owners’ Equity Times 1.29 1.42
III Operation capacity ratios
1 Inventory turnover Times 2.10 1.95
2 Total assets turnover Times 0.88 0.82
IV Profitability ratios
1 Profit after tax/Net revenue Times 0.06 0.11
2 Profit after tax/ Owners’ Equity Times 0.13 0.21
3 Profit after tax/Total assets Times 0.05 0.09
4 Profit from operating activities/Net revenue Times 0.10 0.14

PERSONNEL ORGANIZATION
Mr. Tran Tuan Duong Mr. Nguyen Viet Thang

General Director Deputy General Director
Educational qualification: Bachelor of Educational qualification: Bachelor of Civil

Economics – National Economics University, Engineering
Bachelor of Journalism – Vietnam National Joining date: 2003
University, Hanoi. Mr. Nguyen Viet Thang had several years in the
Joining date: 1992 management position as the Deputy Director of
Mr. Duong held various management positions Hoa Phat Urban Development and Construction JSC
in various subsidiaries of the Group such as Hoa before he was appointed as the Deputy General
Phat Equipments and Accessories Co., Ltd., Hoa Director of Hoa Phat Group Joint Stock Company
Phat Furniture JSC and Hoa Phat Steel Pipe Co., on 7 April 2012.
Ltd. before he was appointed as the
Vice-Chairman of Board of Management and
General Director of Hoa Phat Group Joint Stock
Company in January 2007.
HOA PHAT GROUP


LIST OF THE BOARD OF DIRECTORS MEMBERS:

No. Name Position Percentage of hares held as
at 25 February 2014 (%)
1 Mr. Tran Tuan Duong Vice-Chairman cum General Director 2.692
2 Ms. Nguyen Thi Thao Nguyen Deputy General Director 0.003
3 Mr. Nguyen Viet Thang Deputy General Director 0.348
4 Ms. Ly Thi Ngan Chief Accountant 0

Ms. Nguyen Thi Thao Nguyen Ms. Ly Thi Ngan

Deputy General Director Chief Accountant
Educational qualification: Bachelor of Economics Educational qualification: Master of Economics

– Hanoi University of Finance and Accounting Joining date: August 2007
Joining date: 1998 Ms. Ly Thi Ngan was appointed as
Ms. Nguyen Thi Thao Nguyen was the Chief Chief Accountant of Hoa Phat Group
Accountant of Hoa Phat Steel Pipe Co., Ltd. and Joint Stock Company on 1 January 2011.
the Head of Supervisory and Legal Board of Hoa
Phat Group Joint Stock Company before she was
appointed as the Deputy General Director of Hoa
Phat Group Joint Stock Company on 1 September
2010.

Number of employees of the Group
Academic level Gender

Total
No Company name

Post Vocational
Graduate Graduate school Other Male Female
1 Hoa Phat Group JSC 3 35 5 25 35 33 68
Group1:
Steel 8 1,937 1,021 3,567 5,729 804 6,533

1 Hoa Phat Steel JSC 875 415 1,647 2,597 340 2,937

2 Hoa Phat Steel One member Co., Ltd 1 229 204 471 795 110 905

3 H
oa Phat Steel Pipe Co., Ltd 4 275 189 562 1,017 113 1,130

4 Hoa Phat Energy JSC 216 79 245 434 106 540

5 An Thong Mining Investment JSC 1 181 112 461 670 85 755

6 Hoa Phat Mining JSC 2 61 22 181 216 50 266

Group2: Other industrial production 7 580 496 1,766 2,229 620 2,849

1 Hoa Phat Equipment Accessories Co., Ltd 1 83 81 167 276 56 332

2 Hoa Phat Furniture JSC 4 362 283 1,459 1,644 464 2,108

3 Hoa Phat Refrigeration Engineering Co., Ltd 123 131 139 300 93 393
2
4 Hoa Phat Trading Co., Ltd 12 1 1 9 7 16

Group 3: Real estate 0 114 8 201 255 68 323

1 HoaPhatUrbanDevelopmentandConstructionJSC 65 7 198 220 50 270

2 Golden Gain Vietnam JSC 49 1 3 35 18 53
Total 18 2,666 1,530 5,559 8,248 1,525 9,773
HOA PHAT GROUP

Human resources policies
In 2013, the Hoa Phat Group initiated the standardization
of human resources and restructured the employee
structure on a group-wide basis by buiding personnel
hierarchy.
Under the new structure, job descriptions for positions

across all entities will be revised and tasks will be
appropriately reassigned, to avoid overlapping of
responsibilities between employees and to enhance the
competency of staff. Employee benefit policies such as
social insurance, health insurance, and other benefit
schemes have been implemented in strict compliance with
the regulations issued by the Government and the labor
regulations of the Group.
In addition, various professional and technical training

courses, periodical health checks, fire safety training
sessions, sport and cultural activities, trade union activities,
gift-giving events for staff’s children who performed well
academically, and donations for disadvantaged staff took
place throughout the year. This created a working
environment that fosters safety, well-being,
high-achievement, and philanthropy.

INVESTMENT PROJECT IMPLEMENTATION
In 2013, the Hoa Phat Group commenced the following projects:
Hoa Phat Ball Iron Ore Plant
Project owner: An Thong Mining Investment JSC

Capacity: 300,000 tons of pelleted iron ore per year
Total investment: VND264 billion (owners’ capital: 50%; borrowed capital: 50%)
Progress: Commenced commercial operations starting in October 2013
Current capacity: Nearly 100% of designed capacity
Coke Coal Plant – Phase II
Project owner: Hoa Phat Energy JSC

Capacity: 350,000 tons of coke coal per year.
Total investment: VND1,200 billion (owners’ capital: 50%; borrowed
capital: 50%)
Progress: Commenced commercial operations starting in August 2013
Current capacity: 80% of designed capacity
Hoa Phat Integrated Steel Complex – Phase II:
Project owner: Hoa Phat Steel JSC

Capacity: 500,000 tons of steel per year
Total investment: VND3,200 billion (owners’ capital: 55%; borrowed capital: 45%)
Progress: Commenced commercial operations starting in October 2013
Current capacity: 100% of designed capacity
Mandarin Garden Complex:
Project owner: Golden Gain Vietnam JSC

Progress: Delivered apartments to buyers starting in September 2013
HOA PHAT GROUP

SHAREHOLDING STRUCTURE
Shares:
Share name: Share of Hoa Phat Group Joint Stock Company Number of free transfer shares: 419,052,533 shares
Share type: Ordinary share Number of shares subject to transfer restriction: 0 share
Stock sticker: HPG Charter capital 2013: No change
Par value: VND10,000 per share Treasury share transactions 2013: None
Total shares in circulation: 419,052,533 shares
Shareholding structure as at 25/02/2014 Shareholding structure

No Content Share volume Percentage %
1 State shareholders 0 0%
2 Internal shareholders 203,382,963 48.5%
34.4%
BOM, Supervisory Board, 45.5%
Board of Directors, Chief Accountant 144,302,542
34.4% 6.0% 8.5%
5.6%
Related people 35,522,483 8.5%
Employees 23,557,938 5.6%
3 Other shareholders 215,669,570 51.5%
Local shareholders 25,266,048 6.0% BOM, Supervisory Board,
Individual 20,800,841 5.0% Board of Directors, Chief Accountant
Institutional 4,465,207 1.0% Related people
Foreign shareholders 190,403,522 45.5% Employees
Individual 1,693,256 0.4% Local shareholders
Institutional 188,710,266 45.1% Foreign shareholders
Total 419,052,533 100.00%
Demographic shareholding structure as at 25/02/2014

1
Vietnam
228,649,011 54.6
Individual 224,183,804 53.5
Institutional 4,465,207 1.1
2
Foreigner
190,403,522 45.4
Individual 1,693,256 0.4
Institutional 188,710,266 45.0
Total
419,052,533 100.00
Shareholder structure by level of ownership as at 25/02/2014

1 Shareholders with ownership over 5% 219,725,567 52.4
2 Shareholders with ownership from 1% to 5% 101,885,181 24.3
3 Shareholders with ownership below 1% 97,441,785 23.3
Total 419,052,533 100.00

Largest shareholders as at 25/02/2014
No Full name Address Share volume Percentage %
1 Tran Dinh Long 12 Tran Hung Dao, Hoan Kiem, Ha Noi 101,059,200 24.12
2 Dragon Capital Group 1901 Me Linh Point Tower, 2 Ngo Duc Ke,
Dist 1, HCMC, Viet Nam 37,092,979 8.85
3 Vu Thi Hien 12 Tran Hung Dao, Hoan Kiem, Ha Noi 30,952,152 7.39
4 Deutsche Bank + Deutsche Asset Group Winchester House, 1 Great Winchester
Street, London EC2N 2DB 26,693,773 6.37
5 VOF Suite 1703, Sun Wah Tower,
115 Nguyen Hue, Quan 1, Tp HCM 23,927,463 5.71
Total 219,725,567 52.43
10 largest institutional shareholders as at 25/02/2014

No Name of Institutions Address Share volume Percentage %
1 Dragon capital 1901 Me Linh Point Tower, 2 Ngo Duc Ke,
Dist 1, HCMC, Viet Nam 37,092,979 8.85
2 Deutsche Bank + Deutsche Asset Winchester House, 1 Great Winchester Street,
London EC2N 2DB 26,693,773 6.37
3 VOF Suite 1703, Sun Wah Tower, 115 Nguyen Hue Bldv,
Dist.1, HCMC 23,927,463 5.71
4 PRIVATE EQUITY NEW MARKETS II K/S TRANEGARDSVEJ 20 2900 HELLERUP DENMARK 20,291,040 4.84
5 RED RIVER HOLDING 9A TU XUONG STREET, WARD 7, DIST.3,
HO CHI MINH CITY, S.R OF VIETNAM 16,535,402 3.95
6 FRANKLIN TEMPLETON INVESTMENT FUNDS 26,BOULEVARD ROYAL L-2449 LUXEMBOURG
-TEMPLETON FRONTIER MARKETS FUND GRAND DUCHY OF LUXEMBOURG 6,733,120 1.61
7 MARKET VECTORS ETF TRUST- 99 PARK AVENUE,8TH F1 NEW YORK, 5,053,920 1.21
MARKET VECTORS-VIETNAM ETF NY 1006 USA
8 KITMC 27-1, YEOUIDO-DONG, YEONGDEUNGPO
-GU, SEOUL, KOREA 4,409,787 1.05
9 LIONGLOBAL VIETNAM FUND 21 Collyer Quay #14-01 HSBC
Building Singapore 049320. 3,811,898 0.91
10 VIETNAM HOLDING LIMITED Unit 1202 Floor 12, Fideco Tower,
81-85 Ham Nghi, District, HCMC, Vietnam 3,748,070 0.89
Total 148,297,452 35.39
HOA PHAT GROUP

2012-2014 changes of HPG stock price
Biến động giá cổ phiếu HPG 2012-2014
60
50
40
30
20
10
0
10/8/2012
10/9/2012
8/10/2012
5/11/2012
3/12/2012
11/9/2013
9/10/2013
6/11/2013
4/12/2013
10/2/2014
17/01/2012
21/02/2012
20/03/2012
18/04/2012
18/05/2012
15/06/2012
29/06/2012
13/07/2012
27/07/2012
24/08/2012
24/09/2012
22/10/2012
19/11/2012
17/12/2012
16/01/2013
30/01/2013
20/02/2013
20/03/2013
17/04/2013
21/05/2013
18/06/2013
16/07/2013
30/07/2013
13/08/2013
27/08/2013
25/09/2013
23/10/2013
20/11/2013
18/12/2013
16/01/2014
24/02/2014
3/1/2012
7/2/2012
6/3/2012
4/4/2012
4/5/2012
1/6/2012
2/1/2013
6/3/2013
3/4/2013
7/5/2013
4/6/2013
2/7/2013
2/1/2014
Changing process of charter capital of Hoa Phat Group
2007-2013 (VND Billion)
VND Billion 4,191
3,178
1,964
1,100
Date
9/1/2007 8/5/2008 2/12/2010 22/11/2012
HPG’s rates of dividend payment
60%
50%
30% 30% 30%

20% 20%
2007 2008 2009 2010 2011 2012 2013

10% by cash, 40% 30% by cash 10% by cash and 20% by cash and 20% by shares 10% by cash 15% by cash and 15% by
by shares 50% by shares 10% by shares share (estimated)

SUBSIDIARIES’ PERFORMANCE
STEEL PRODUCTION, TRADING SEGMENT AND SUPPLEMENTARY SEGMENTS
2013 marked a successful year for this core segment of Hoa Phat Group – steel production, where total revenue
reached VND15,108 billion, showing an increase of 6% compared to 2012.
Construction steel
With the completion of Phase 2 of the Hoa Phat Integrated
Steel Complex, Hoa Phat Steel for the first time led the
market in domestic sales during the last months of the
year, accounting for nearly 18% of the nationwide market
share at certain points of time.
Hoa Phat’s construction steel sales reached nearly 700,000

tons, an increase of 14.2% compared to 2012. Its market
share reached 15.2%, an increase of 1.5% compared to the
previous year. Hoa Phat continues to be a strong brand
name for steel, with the largest coverage nationwide. As construction steel output, Hoa Phat Steel JSC plays the
a result of flexible sales methods, storage of goods until main role in producing the highly demanded Hoa Phat
the right time for consumption, constant improvement of steel. During the year, the blast furnace (Phase 1) of the
production processes, and upgrading of product Complex exceeded the planned target with an output of
quality to raise competitiveness, Hoa Phat Steel sales 383,000 tons, an increase of 25.8% over 2012.
sharply increased in all parts of the country, especially
The completion of Phase 2 of the Hoa Phat Integrated
in Central and Southern areas with growth rates of 45%
Steel Complex in October 2013 is a important milestone as
and 65%, respectively, in comparison to 2012. Sales in the
Hoa Phat’s construction steel capacity was raised to nearly
Northern area of Vietnam increased by nearly 10% as well.
1.2 million tons per year; the proportion of steel products
While Hoa Phat Steel One Member Co., Ltd. acts as the produced by the end-to-end blast furnace technology has
major distributor and supplies the market with now accounted for two-thirds of total output.
HOA PHAT GROUP

Coke Coal and thermoelectricity production Mining and mineral processing
The key source of energy and a catalyst to refine ore into In October 2013, the Hoa Phat Ball Iron Ore Processing
steel, coke coal has created a competitive advantage for Plant in the Binh Vang Industrial Zone, Vi Xuyen District,
Hoa Phat steel. During the year, Hoa Phat Energy JSC Ha Giang Province was put into operation, which affirmed
succeeded in putting the coke coal production line No. 2 the strategic step forward of Hoa Phat for deep processing
into stable operation. Control of furnace modes, of iron ore at the mining site so ore quality could be
maintenance of product quality, and waste reduction improved, transportation costs decreased, and prices of
continued to be reinforced and improved. At the same finished steel products reduced. The Plant, an investment
time, the Company proactively conducted research of new by An Thong Mining Investment JSC, has the capacity of
products to serve the special niche market. The Company 300,000 tons of ball iron ore per year and is currently the
also organized study tours to foreign countries to learn largest ball iron ore plant in Vietnam. For the 2013 year, the
and update about the new production technology and two companies Hoa Phat Mining JSC and An Thong Mining
seek more material sources. Investment JSC, have provided approximately 300,000
tons of fine iron ore and 42,800 tons of ball iron ore for the
In addition to its main function of providing coke coal Integrated Steel Complex.
for the Integrated Steel Complex, the Company has been
actively exploring domestic and export markets. Orders Exploration and initiation of new ore fields have always
of coke coal from local customers increased by 30% been promoted in the many mines that the Group was
compared to the previous year, and the Japanese market granted mining licenses in Ha Giang, Lao Cai, and Yen
continued to bring long-term customers for Hoa Phat with Bai. As a result, many ore beds with rich iron content and
regular monthly orders. Moreover, the electricity output high reserves have been exploited and exhausted in order
generated by the coke coal and thermo-electricity plant to economically use the natural resource for long-term
of Hoa Phat Energy JSC also increased by over 30% production. In addition, Hoa Phat conducted research,
compared to 2012, reaching over 120 million KWh of exploration, and mining of iron ores for local production,
electricity, contributing to steady production for the developed feasibility studies on new mine sites in Ha
whole Complex. Giang and Ha Tinh in accordance with the “socialization”
policy of the Government in the mining sector.

Steel pipe
For steel pipe products, Hoa Phat continued to strengthen

its position as the market-leading steel pipe producer in
Vietnam. Hoa Phat Steel Pipe Co., Ltd. showed impressive
growth in 2013 compared to 2012 in all of its budgeted
targets. Among these, sales of different types of steel pipes
exceeded 200,000 tons, an increase of 33% over 2012.
During the past year, Hoa Phat Steel Pipe Co., Ltd. has
intensively concentrated on investment, production
expansion, product quality improvement, and retention
and development of markets with a focus on unexploited
markets; sales services have been maintained and have
improved on a regular basis. Investment activities to
expand production have been implemented in all factories
in Hung Yen and Binh Duong provinces. Hoa Phat steel
pipe created the difference of quality, types and is always
the best favorite choice in the market.
HOA PHAT GROUP

OTHER INDUSTRIAL PRODUCTION SEGMENTS
In 2013, the other industrial production segment includes constructive machines, mining equipment, furniture,
refrigeration engineering…grew 16% compared to 2012 with VND2,659 billion, contributing 13.8% of revenue and
14.9% of net profit to the Group.
Construction and mining machinery

In 2013, the construction and real estate industries continued to
encounter difficulties, causing significant impact on the business
operations of Hoa Phat Equipment & Accessories Co., Ltd.
However, the Company managed to stabilize production and
attain revenue growth of 23%, totaling VND359 billion. Hoa Phat
Equipment & Accessories Co., Ltd. received an abundance of
orders for new-model stone crushers, scaffolds, and film-coated
formwork from ASEAN countries.
Reduction of inventory balance, enhancement of mechanization,

concentration on and specialization in the mechanic industry,
recruitment of qualified young employees, training of skilled
workers, and upgrading of the casting and heating system in
factories are the main activities undertaken that have led to
production stabilization and product quality improvement. In
addition, the Company has recently launched some new style
cage lifts, scaffolds, and formwork and introduced an array of
improvements in conveyor, stone crusher, and ore crusher
components.

Furniture
Despite the declined purchasing power Stabilization of product quality has
of the VND and the increasingly fierce always been the primary goal of
competition in the market, sales of production management within the
Hoa Phat Furniture JSC reached over Company.
VND1,460 billion, showing a slight
increase compared to 2012 and The network of the Company’s seven
contributing VND210 billion to the factories in the North operated at full
Group’s profit after tax, an increase of capacity to meet orders from customers,
34.6%. “Hoa Phat Furniture” maintained especially in the second half of 2013. The
its brand name as the lead in the sector. ability to meet orders in the South and
The Company’s coverage and market Central areas was significantly improved
share remain stable in different markets. due to the expansion of workshops in
Market share also increased in some the Binh Duong and Ho Chi Minh City
markets in the Northern and Southern factories. The distribution system was
regions. stabilized and even expanded into some
new markets with great potential,
Hoa Phat’s office and home furniture demonstrating wide coverage. The
has been the first choice of consumers. Northern and Southern markets had
Among these product lines are iron the same growth rates and developed
and polyurethane painted wooden through continuously expanding the
cabinets, rotary chairs, and products level 2 agent system and increasing
made from steel pipes (home and school Hoa Phat’s product presence in remote
furniture), which dominated the market districts, communes, and provinces. The
and accounted for a large proportion of pull and push sales strategy is closely
the product line’s revenue. Some new directed and promptly handled by the
products such as sofas, mesh chairs, and Company’s management, creating a
luxury chairs also made an impressive positive effect on sales and consumption.
mark in the market. In terms of In addition, the Company also
production, Hoa Phat Furniture conducted studies to open a new
constantly developed new products in distribution channel through
2013 and launched nearly 2.5 million supermarket chains.
types of product to the market.
HOA PHAT GROUP

Funiki refrigeration products
Most of product lines of air conditioners, refrigerators, freezers, and
water heaters have cemented their position in the market, competing
well against foreign products. The Funiki refrigeration products have
been the primary choice for projects, construction projects, buildings,
hotels, restaurants, hospitals, and schools nationwide. The Company’s
products are considered “the Pride of Vietnamese Goods” due to its
local manufacturing, diversified models, high quality, and reasonable
prices. Especially in 2013, air-conditioners and refrigerators produced
by the Company were labeled as economical and environment-friendly
products.
Hoa Phat Refrigeration Engineering Co., Ltd. has strengthened its

warranty system to provide the best after-sales service to customers.
It increased investment to launch an array of new
products to the market, and also advanced various promotional
activities to help consumers better access Funiki products. In August
2013, the Company initiated the project to expand its freezer
production plant with an investment of nearly VND200 billion, with the
goal of increasing output to 300,000 products per year starting from
March 2014. The Company hopes to speed up market domination, with
the effort of increasing revenue by 20% in 2014.

Hoa Phat Trading
In the context where other trading companies encountered numerous
difficulties from lower demand and from fiercer competition, Hoa Phat Trading
Company had a successful year of business. Apart from trading traditional iron
and steel products, the Company proactively adapted itself to market changes
by buying and selling goods at the right times. In addition, the Company acted
as a bridge between inputs and outputs for the Hoa Phat steel production plants.
An important highlight for the Company during the year was that the
Company was assigned by the Group the responsibility to sell and distribute
Hoa Phat steel billets in domestic and foreign markets and take a new step
forward in bringing Hoa Phat products to regional countries. Implementing
this activity from the fourth quarter of 2013, apart from domestic sales, export
of Hoa Phat steel billets to the Philippines market reached 12,000 tons with
the value of approximately USD6.4 million. In addition to trading of traditional
iron and steel products, continued market exploration and expansion for Hoa
Phat steel billets is a top priority for 2014.
HOA PHAT GROUP

REAL ESTATE SEGMENT
As at the end of 2013, real estate revenue reached VND1,433 billion, an increase of 198% compared to 2012.
Hoa Phat real estate business comprises of industrial zone Dinh. Construction for the project started in late 2013, and
and housing properties. Although the real estate segment is expected to be operational in the second quarter of 2014
represented a small portion of the Group’s total revenue to facilitate production activities of enterprises and ensure
and profit during the year, it will become a stronger environmental protection in the industrial zone.
business segnment in 2014 when the real estate market
For housing real estate, Hoa Phat has supported all owners
rebounds.
in the Hoa Phat Building at 257 Giai Phong Street, Dong Da
For industrial real estate, given its convenient geographical District, Hanoi to obtain house ownership certificates. This
location supported by significant incentives for investment, is considered one of the top apartment building projects in
Pho Noi A Industrial Zone and Hoa Mac Industrial Zone Hanoi where the issuance of house ownership certificates
have regularly welcomed new enterprises that invest in has been completed most quickly, demonstrating the
factories, especially from Japanese and South Korean project owner’s high reputation and stature.
investors. In addition to enhancing promotion for its
With a strategic location that “cannot be beat,” the
infrastructure leasing business, Hoa Phat Urban
Mandarin Garden Apartment Complex Project has
Development and Construction JSC completed site
essentially completed its interior and exterior landscape
clearance for the whole area of Hoa Mac Industrial Zone
construction; more than 90% of the total 999 apartments
(the total area of 131 ha), completed site clearance of
have been sold and the handover of apartments to
another 60 ha of the extension area of Pho Noi A Industrial
customers started from September 2013. The Mandarin
Zone (Hung Yen), and continued landfilling and technical
Garden is one of the few projects within the high-class
infrastructure construction work on the extension area.
apartment market having a high liquidity ratio during
Currently, Pho Noi A industrial Zone and Hoa Mac industrial
2013, due to its integrated infrastructure system,
Zone always have clear area with fulfilled infrastructure to
convenient location, modern facilities, and high value sale
serve investors here.
prices. Going forward, Hoa Phat will continue the handover
Especially, the wastewater treatment plant project in Hoa of the apartments to customers, and at the same time,
Phat’s Hoa Mac Industrial Zone was granted preferential perform procedures for issuance of house ownership
loans from the World Bank (WB) in accordance with the certificates to residents and complete all facilities and
donor program for water source and environmental services to serve the residents.
treatment in some provinces such as Ha Nam and Nam

INVESTOR RELATIONS
Since being listed on HoSE, Hoa Phat Group Joint Stock operations, and paid visits to the Group’s manufacturing
Company (HPG) has always complied with Government bases in Hai Duong, Hung Yen, and Ha Giang.
regulations on information disclosure as well as actively At the meetings with investors, HPG’s management and
enhancing investor relations (IR) activities, with the aim of other high-ranking employees were open with sharing
regularly updating its investors and shareholders of the information and willing to elaborately answer questions on
Group’s business operation results. the business segments of the Group, especially on
IR activities were implemented throughout 2013 in two construction steel, steel pipe, furniture, coal coke export,
ways: one, by proactively organizing meetings, updating and real estate projects. Representatives of securities
information for shareholders and investors, and companies, foreign investment funds, and HPG’s
organizing factory tours for groups of investors and shareholders were all satisfied after each visit. They all
securities companies when requested; secondly, by being expressed their trust in the Group’s business strategies and
prepared to answer questions, solving problems, or highly appreciated its development and bold investments,
providing as requested information regarding the as well as its leaders’ strong actions in governance.
Company’s operations. Plant tours for groups of investors at Hoa Phat Group were
During the year, securities companies including SSI, HSC, also regularly organized. Particularly in May and October
Ban Viet, Maybank Kim Eng, and Bao Viet, and foreign 2013, HPG’s Investor Relations Department organized a site
investment funds including Credit Suisse (Hong Kong), visit to the Hoa Phat Integrated Steel Complex in Kinh Mon
GMO (the United States, specializing in investment in District, Hai Duong Province for investors which included
emerging companies’ shares), Cube Capital (Hong Kong), representatives of many securities companies and
Harvest Global Investments (Hong Kong), LIM Advisors investment funds including Sai Gon Securities Company
(Hong Kong), Red River Holdings, Caravel Fund (USA), DCG (HSC), SSI Securities Company, Ban Viet, Agribank
Capital (Singapore), Asian Nikko Fund, and Charlemagne Securities, BIDV Securities; IPA fund, APS, Sarus Capital
Capital (the United Kingdom) sent their representatives to Management, and Nomura. The aim of the site visit was
HPG to obtain information on the Group’s business for investors to gain an understanding of steel production
HOA PHAT GROUP

processes using the end-to-end blast furnace technology,
as well as observing phase 2 of the Complex, and observing
the production status of the Hoa Phat coal coke and
thermo-electricity plants.
In addition, Hoa Phat organized many visits to other

factories during the year and proactively held meetings
with investors on a quarterly basis in order to update them
on the results of business operations for the year as well
as its plans for the future. HPG also actively took part in
the investor conference event (Frontier Trip) organized by
Maybank Kim Eng Security Company in June 2013, with
the participation of big investment funds such as P. Morgan
Asset Management, Forward Management, Jupiter Capital,
etc.
Furthermore, information on HPG’s business operations

is regularly updated on the Company’s website at
www.hoaphat.com.vn as well as in other mass media,
ensuring the most complete and timely information for
HPG’s shareholders in particular, and for investors in
general.

SOCIAL ACTIVITIES
Tet for the impoverished

In first days of 2013, Tet gifts comprising of candies and cash
were provided by Hoa Phat Group’s staff to the impoverished in
Ha Giang, Yen Bai, Lao Cai, Hai Duong, and Hung Yen. This is a
practical and meaningful activity organized annually by the Hoa
Phat Group near the Lunar New Year in order to bring joy to the
impoverished for the Tet holiday.
Tet for mountainous children

In parallel with the “Tet for the impoverished” activity, the “Tet
for mountainous children” program was implemented in Ha
Giang, Lao Cai and Yen Bai by the Hoa Phat Group. Nearly 700
gifts including clothes, milk, candies, stockings, and children’s
notebooks were given directly to children. The gifts were given
as encouragement, to foster motivation in the children to study
and become useful citizens of society in the future.
HOA PHAT GROUP

Sponsorship of Hiep Son Nursery School’s
Construction
The Hoa Phat Group pays great attention to taking care of the
younger generations, who are the future human forces of the
country. For the goal “Children today – World tomorrow,” the
Hoa Phat Group sponsored Hiep Son Nursery School’s
construction project in Hiep Son Ward, Kinh Mon District, Hai
Duong Province – with a total investment of over VND5.5 billion.
Hiep Son Nursery School’s construction project comprises of 2
stories with 8 classrooms and spacious modern multi-purposes
rooms built on the former Hiep Son School campus. The aim of
extending the facilities will reduce the number of students in
each class and ensure adequate space for enhanced child
development. This is also to satisfy the increasing demand of
parents whose children are at the nursery age. This project
carries special significance as when the Hiep Son Nursery
School opens, it will be a place to foster the development and
education of the next generation in their early life.
Joining hands for the community

As one of the meaningful activities implemented since late
2010, the Kind Heart Foundation of Hoa Phat Group donated
more than VND700 million each year to bring nutritious meals
to disadvantaged patients at the Vietnam National Cancer
Hospital (K Hospital). The 150 meals donated to the impoverished
each day expressed the spirit of “the good leaves protect the
worn-out leaves” and “mutual trust and cooperation,” which are
traditional beliefs of the Vietnamese in general and Hoa Phat in
particular. The Hoa Phat Group will endeavor to continue this
activity in the coming years in order to share and partly alleviate
the pain suffered by the impoverished patients.
In addition, the Hoa Phat Group also carried out various activities aiming to gradually improve the quality of life for people
as well as modernizing educational infrastructure. As a whole, Hoa Phat’s social policies and charitable activities are based
on the goals of supporting disadvantaged people in society using the most practical and effective means. It is through
such activities that affirm Hoa Phat as a brand name for the community.

RESEARCH AND DEVELOPMENT (R&D)
A series of improvement research conducted

in Hoa Phat Integrated Steel Complex
phases helps to control production more smoothly and

harmoniously.
The activities of production, research for improvement,

and upgrading of production lines and equipment
created initial increased efficiencies. In 2014, the Company
will research to upgrade blast furnaces; phase 1 from 350
to 400m3 at the earliest possible time in order to ensure
the stability and safety for long-term production. Hoa Phat
plans to conduct this in the third quarter of 2014 and at the
same time, to operate a more automated system to control
operation processes of the whole Complex.
The first improvement activity deserving of attention is the
additional provision of material spraying equipment for
sintering machines to increase the air permeability and the
stability of the sintering process, as well as the ore quality.
This system came into operation in December 2013. With
the coal gas filter system, the Company expanded investment
from 7 to 10 dust filter tanks and put them into use in
September 2013, and the result was the resolution of
overload problems caused by blast furnace coal gas. This
system not only ensures stable operation of the
equipment, but also resolves the problem of
environmental pollution and increases the useful life of
equipment fed with blast furnace coal gas. Research to successfully install a induction
In addition, technological engineers in the Complex furnace for the steel billet factory in Hung Yen
implemented the initiatives of adding coal gas converting Investments for the Hoa Phat Steel Billet Factory in Hung
furnaces coal gas collectors and coal gas tank in order to Yen have been made since the early 2000s with the arc
utilize coal gas from converting furnaces to feed heating furnace technology. After several technology improvements,
furnaces of Rolling Factory in the Complex. The system the factory is now equipped with two arc furnaces and
came into operation in November 2013, contributing to three-line billet casting lines. In 2013, Hoa Phat Steel One
significantly reduced coal consumption in gas generators. Member Co., Ltd. officially conducted research for installation
Now only 5 gas generators are used instead of the 8 gas and test run of the 30-ton medium frequency furnace
generators used in the past. The coal gas collector system system with the aim of increasing the steel billet output
will be expected to help reduce the volume of coal needed of the factory from 250,000 tons to the maximum 350,000
to feed gas generators. tons per year, which would minimize production costs.
In addition, Hoa Phat Steel JSC also upgraded the converting Making steel using medium frequency furnaces helps save
furnaces of the steel making factory; Phase 1 increased electricity and provide much higher durability of products
the capacity from 30 to 35 tons to meet the production than the arc furnace technology. The test run has been
demand. To be able to synchronize two air furnaces in two successfully completed.
HOA PHAT GROUP

Successful testing of new materials Restructuring of the factory system by
Hoa Phat Furniture
Searching for and testing new sources of coal became the In order to better support production, Hoa Phat Furniture
focus of research by Hoa Phat Energy JSC in 2013. Nearly JSC commenced restructuring of production areas in both
20 types of new coals were researched during the year and the Northern and Southern regions of Vietnam. In the
the Lake Vermont coal was successfully tested in production Northern region, the Company completed investment in
of coal coke with a quality grade 1, which is compatible infrastructure and expansion of the rotary chair factory; the
with the operation of blast furnaces in the Integrated Iron spacious and modern mechanical factory with the 3-floor
Steel Complex. The Company boldly imported 25,000 tons workshop area to be used for both production floors and
of Lake Vermont coal and PCI Jellinbah coal from Australia offices with an area of 6 ha can facilitate increasing
to commence mass production, with the aim of reducing production output and developing new product lines with
the use of high-priced premium coal. The establishment of a focus on mesh chairs, family sofas, office and high-class
the Technology Committee and organization of monthly leather chairs, etc. In the South, the Company restructured
meetings created more energy and excitement in research its factory system at Cat Lai (HCM City) and Binh Duong to
activities, and also created new production ideas, thus streamline production floors, appropriately apply
reducing costs and raising the competitiveness of Hoa Phat technology, and improve capacity and output of furniture
coal coke in the marketplace. products such as steel cabinets, safes, rotary chairs, and
polyurethane painted wood and industrial wood products.
Operation of the Vietnamese largest Ball Iron
In addition, Hoa Phat Furniture invested in new, modern
Ore Plant
machinery and equipment including CNC automatic
With the aim of providing a long-term ball iron ore source cutters, welding robots, etc.
for steel production, Hoa Phat commenced investment in
a ball iron ore plant in the Binh Vang Industrial Zone, Ha
Giang Province with the highest capacity in Vietnam. This
is an important strategic step in deep processing of iron
ore at the mining site, reducing transportation costs and
the abnormal waste. Input materials of the Plant come
from the rich source of fine iron ores from ore mining and
processing factories of An Thong Mining Investment JSC in
Ha Giang. The plant operates with leading-edge equipment
and the most advanced technology in the world, using the
pelleting iron ore rotary kiln fed with coal. With this plant,
Hoa Phat can proactively supply 100% of pelleted iron ore
for blast furnaces in the Integrated Steel Complex.

Part IV:
BOARD OF MANAGEMENT’S ASSESSMENT
HOA PHAT GROUP

ASSESSMENT OF THE BOARD OF MANAGEMENT ON THE GROUP’S OPERATIONS
Macro-economic statistics of 2013 showed that the economy Other industrial production segments saw stable and
of Vietnam regained some stability. The production sector has sustainable growth, achieving 13.8% and 14.9% of revenue
showed signs of growth since the late 3rd quarter, as and profit of the whole Group, respectively.
inflation has been controlled and the foreign exchange
market has been stabilized. The economy’s stability is To navigate the sluggish real estate market, the experienced
illustrated by some key indicators: the inflation rate was direction of the Board of Directors towards the Group’s real
maintained at a low level of 6.04% as compared to the set estate construction projects has allowed Hoa Phat to fulfill
target of 7 - 8%, and the interest rate tended to decline plans ahead of schedule and handover apartments in the
and become more stable without the “high interest rate Mandarin Garden Project to customers 3 months prior to
race” that occurred in previous years. The foreign exchange the committed deadline (end of September 2013 instead
rate was generally maintained at a relatively stable level of December 2013). Mandarin Garden was considered one
for a long period, although the unofficial currency rate of the “bright spots” in the stagnant real estate market in
fluctuated beyond the price band’s cap from time to time, Hanoi.
especially after the State bank of Vietnam increased the
official currency rate by 1% in June 2013. 2013 also saw the The Board of General Directors and the subsidiaries’ Boards
lowest growth in the consumer price index (CPI) in the past of Directors have made significant contributions and made
10 years with the average CPI increase by 6.6% in 2013 as great efforts for the Group’s target-exceeding performance
compared to that of 2012. The trade balance was for revenue and profit in 2013. To implement the directions
significantly improved to an “in-balance” status from its from the Annual General Shareholders’ Meeting and to
past trade deficit status. It is certain that the economic carry out the Board of Management’s suggestions for
stability over the past year was partly attributed to drastic specific actions, the Board of Directors for the Group’s
and appropriate solutions provided under the subsidiaries directed business operations in an active and
Government’s policies. thorough manner in all core projects including Hoa Phat
Integrated Steel Complex – Phase 2, the Mandarin Garden
However, despite positive signs of recovery of the Apartment Complex, and the Binh Vang Iron Ore Pelleting
macro-economy, the economy of Vietnam encountered Plant (Ha Giang).
various challenges when the market purchase power
remained moderate, the real estate freeze remained, and
the global economy was generally recovering at a lower
rate than expected. The steel sector alone encountered
multiple difficulties during the year due to increased input
costs, over-supply, and fierce competition with cheaper
steel imported from China; furthermore, steel and steel
pipe export suffered trade barriers from various importing
countries. By the end of 2013, the Hoa Phat Group
successfully reached its targets with a revenue of
VND19,200 billion and profit after tax of VND2,010 billion.
The steel production segment contributed mostly to the
Group’s target exceeding results and continued to further
its leading role contributing 78.7% of revenue and 82.9% of
net after tax profit. Hoa Phat construction steel continued
to solidify its position as the second largest seller of steel in
Vietnam.

Also in the past year, the Board of Directors continued to business competency. Strategic target programs of the
strengthen internal governance through application of a Group were implemented in accordance with the road
personnel rating scheme and standardization of personnel map with appropriate adjustments to adapt to the
positions, with compensation and benefit packages to macro-economic conditions and the competitive
appropriately reward staff for their dedication. Official conditions of the steel sector. The Board of Directors
document issuance was also enhanced when the Board of demonstrated their proactiveness and creativeness in
Directors speeded up review and finalization of regulations business operations and overcame market challenges by
to create legal and administrative corridor for the Group’s utilizing the Group’s strengths.
operation, and to properly realize the roles of risk
management at all levels. By maintaining stable and steady growth in a challenging
environment, Hoa Phat succeeded in building trust with its
Overall, the Board of Directors’ performance during the customers, business partners, and shareholders; Hoa Phat
year was superb. The Board of Directors properly followed has more and more strongly affirmed its position in the
the direction set forth by the General Shareholders’ market. This is also a reflection of the sound judgment by
Meeting and the Board of Management for 2013, by the Group’s Board of Management and the collaboration
gradually enhancing governance as well as demonstrating and direction of the Board of Directors.
HOA PHAT GROUP

Board of Management’s plans and orientations:
According to the assessments of many economic experts of
Vietnam economy’s prospects, 2014 will have a few bright
spots but the economy will encounter numerous
difficulties and challenges. 2014 will also be a strenuous
year for the steel industry due to domestic over
production, weaker tariff protection, and consequent
higher import of steel into Vietnam. Vietnamese steel
companies not only face strong competition in the
domestic market, but also face legal suits in countries to
which they export their products.

Given these difficulties and challenges, the Board of
Management sets the following direction:
- Collaborate with management and employees in striving

for proper management and governance of the business.
To keep the momentum of growth, the Board of Management
agrees to the Group’s business operation plan put forth
by the Board of Directors and will submit it at the General
Shareholders’ Meeting for approval, which includes the
revenue and profit after tax goals of VND23,000 billion and
VND2,200 billion, respectively, for 2014.
- Convene at regular meetings and maintain close

cooperation and communication among members of the
Board of Management, and strengthen the Company’s
governance aimed to promote efficiency and transparency.
- Continue to closely monitor the domestic and

international economic markets to make sound judgments,
as well as allow the Board of Directors to efficiently manage
the business to achieve the best results.

Part V:
CORPORATE GOVERNANCE
HOA PHAT GROUP

BOARD OF MANAGEMENT
Members and structure

Shareholding percentage of members of the Board of Mangement
Percentage of shares
No. Name Position held as at
25 February 2014 (%)
1 Tran Dinh Long Chairman 24.12
2 Tran Tuan Duong Vice Chairman 2.69
3 Nguyen Manh Tuan Vice Chairman 2.65
4 Doan Gia Cuong Vice Chairman 1.98
5 Nguyen Ngoc Quang Member 1.98
6 Ta Tuan Quang Member 0.19
7 Hoang Quang Viet Member 0.47
8 Nguyen Viet Thang Member 0.35
9 Ho An T Member -
10 Hans Christian Member -
Total 34.43
Operation of the Board of Management:

In 2013, the Board of Management of Hoa Phat Group held the following meetings and passed resolutions on the
following matters:
- Increase capital contribution in Hoa Phat Steel Pipe Co. Ltd., An Thong Mining Investment JSC, Hoa Phat Steel JSC, and Hoa
Phat Furniture JSC.
- Take the transfer of land use rights and assets on land in Ho Chi Minh City for the construction of offices for the Group in
Ho Chi Minh City.
- Approve the payment plan for remaining cash dividends for 2012.
- Take the transfer of shares in Hoa Phat Steel JSC.
- Make other important decisions.
CURRICULUM VITAE OF KEY LEADERS
Mr. Tran Dinh Long Mr. Tran Tuan Duong

BOM Vice Chairman
BOM Chairman of Hoa Phat Group General Director of Hoa Phat Group JSC
Bachelor of Economics - National Economics Bachelor of Economics – National Economics

University University; Bachelor of Journalism - Hanoi General
University.
Joining date: 1992
Joining date: 1992
As founding shareholder and holding Chairman
position of member companies, Mr. Long was the Mr. Duong held management position in subsidiaries
first person setting up the foundation for Hoa Phat such as: Hoa Phat Equipment & Accessories, Hoa Phat
Equipment & Accessories, the earliest member in the Furniture and Hoa Phat Steel Pipe before he became
Group. Mr. Long employed so a lot of experts who had the Deputy Chairman of Management Board cum
consensus ambition and responsibilities. CEO of Hoa Phat Group since January 2007. With his in
deep experience, Mr. Duong has contributed greatly
During the establishment and development of Hoa to strengthen position of Hoa Phat steel and Hoa Phat
Phat, Mr. Long was the person who oriented business Group as a whole.
strategy for each susidiary.
HOA PHAT GROUP

Mr. Nguyen Manh Tuan Mr. Doan Gia Cuong
BOM Vice Chairman cum Director of BOM Vice Chairman cum Director of
Hoa Phat Steel Pipe Co., Ltd Hoa Phat Furniture JSC
Bachelor of Economics – National Economics MBA, National Economics University

University
Joining date: 1999
Joining date: 1996
Mr. Cuong was appointed first in the position of Vice
In 1996, Mr. Tuan was a Vice Director of Hoa Phat Steel Director before promoting as a Director of Hoa Phat
Pipe cum Head of trading department. Since 10/2004, Furniture JSC. From 01/2007, he additionally held the
holding director of Hoa Phat Steel Pipe Company, Mr. Deputy Chairman position of Hoa Phat Group JSC.
Tuan has helped the Hoa Phat steel pipe become a top With his straight forward orientation in achieving realistic
steel pipe maker. goals, Mr. Cuong has helped Hoa Phat Furniture
becoming familiar to every Vietnamese consumer.
Mr. Nguyen Ngoc Quang Mr. Ta Tuan Quang Mr. Nguyen Viet Thang
BOM Member cum Director of Hoa Phat BOM Member cum Director of Hoa Phat BOM Member cum Deputy General Director
Equipment & Accessories Co., Ltd Refrigeration Engineering Co., Ltd of Hoa Phat Group JSC
Vocational training Bachelor of Economics Educational qualification: Bachelor

National Economics University of Civil Engineering
Joining date: Since 1992
Joining date: Since 1995 Joining date: 2003
Mr. Nguyen Ngoc Quang has been
a Director of Hoa Phat Equipment & Mr. Quang was among founders for Mr. Nguyen Viet Thang had several
Accessories in Ho Chi Minh Hoa Phat Furniture, he was Director years in the management position
subsidiary for 4 years (1992-1996). of Hoa Phat Furniture for 11 years. as the Deputy Director of Hoa Phat
He has been a Director of the Since December 2006, he has been Urban Development and
Company since 1997. As one of Director of Hoa Phat Refrigeration Construction JSC before he was
the top construction equipments Engineering where he has contributed appointed as the Deputy General
producer in Vietnam, products of significantly to its success and brand Director of Hoa Phat Group Joint
Hoa Phat Equipment & Accessories name of Funiki position. Stock Company on 7 April 2012.
under his management have been
successfully persuading customers
in domestic and foreign country on
their qualities, prices and after sales
services.
HOA PHAT GROUP

Mr. Hoang Quang Viet Mr. Ho An T Mr. Hans Christian
BOM Member cum Director of Hoa Phat Urban BOM Member BOM Member
Development & Construction
Graduated from People’s Security Master of Business Administration Master of Business, Denmark
University
Joining date: 2012 Joining date: 2012
Joining date: Since 2001
Before appointed as a member of the Being appointed as a member of the
Joining the Group since 2001, Board of Management, Mr. Andy Ho Management Board in 2012,
Mr. Viet has been elected as a has held the position of investment Mr. HANS CHRISTIAN has held many
Director of Hoa Phat Urban director for Dell Computer Corp. important responsibilities of the
Development and Construction. He (2000 - 2004); Investment director for Industrialization Fund for
was so successful in real estate, Prudential Fund Management Developing Countries (IFU), Denmark
especially for industrial infrastructure Company (2004 - 2007); Managing (1983-1989); Regional Director,
such as Pho Noi A industrial park Director of VinaCapital Investment Fund for the Europe
where big international and domestic (from 4/2007-now). Mr Andy Ho is Central and East, Denmark
firms located. Mr. Viet and Board of also Chairman of the Management (1989 - 1991); CEO of array of
Directors are now going to deploy Board of Vinawealth Fund agriculture, the European Bank for
other housing and urban areas after Management Company, Khang construction and development
the success of Pho Noi A. Dien Business and Investment JSC; (EBRD), London (1991-2006); CEO
Management Board’s Member of Phu of PENM I, PENM II Fund, BankInvest
Nhuan Jewelry Joint Stock Company. (2006 - present)....
RISKS MANAGEMENT
Regulatory risks:
General context: Hoa Phat Group and its 13 subsidiaries operate
in multiple business segments including heavy industry and light
industry production, consumer goods production, mining, real
estate, etc. Any single regulatory change may therefore cause a
significant impact on one or more companies of within the Group.
Hoa Phat’s solution: The Hoa Phat Group has kept abreast of
relevant regulatory changes, being proactive in monitoring and
managing its corporate business activities. The Hoa Phat Group has
concentrated its investment in its core business activities and
specialized industries, representing the strengths of the Group
rather than spreading its resources to non-core businesses.
Results: The Hoa Phat Group is currently regarded as the leading

private industrial production group and one of the three largest
steel construction manufacturers in Vietnam. All of the Group’s
Macro-economic risks
three core business segments steel production, other industrial
production, and real estate have achieved stable growth and are General context: In 2013, the economy
synonymous with The Hoa Phat Group’s famous brand name within of Vietnam has made many significant
their respective industries. achievements: inflation rates were
adequately controlled, foreign exchange
rates were stabilized, bank interest rates
were reduced and maintained at a relatively
low level, import and export activities have
remarkably increased, and foreign direct
investment to Vietnam have been well
maintained. However, the economic
recovery still remains at a low rate and many
enterprises have not managed to revive
under the challenging business environment.
For the steel industry, domestic demand
remained low, which resulted in moderate
steel production from many enterprises.
Hoa Phat’s solution: The Hoa Phat Group

implemented specific strategic policies and
exercised flexible management and
governance.
Results: In 2013, the Group achieved total

consolidated revenue of VND19,200 billion
and a net consolidated profit after tax of
VND2,010 billion, recording 104% and 168%
of the annual approved budget, respec-
tively. These achievements represent the
remarkable increases of 12% and 95% in
revenue and profit, respectively, compared
to 2012.
HOA PHAT GROUP

Human resources risk:
General context: With nearly 10,000
employees from all over the country in the
early stages of their careers, changes in
personnel have always been considered
an important issue that is given special
attention. In addition, in order to meet the
continuous development demands, the Hoa
Phat Group has no choice but to constantly
improve its personnel’s expertise and
competency.
Hoa Phat’s solution: Hoa Phat considers

its people as its keys of success and has
always placed great importance on training Technology risks:
and improving the skills of its employees.
General context: Given that the core business activity is steel
Policies for human resources development
production, technology has always been regarded as the top priority in
have always been implemented and remain
production management, with the aim to reduce production costs
balanced between quality and quantity. Hoa
and enhance the competitiveness of the Group’s products. For other
Phat is currently developing a personnel
segments, continuous development and investment in technology
rating system aiming to standardize the
have been the focus of the Group’s management.
human resources management system
within the entire Group. Hoa Phat’s solution: Hoa Phat has been perpetually studying and
applying world-class advanced technologies relevant to its
Results: The quality of Hoa Phat’s employees,
activities; at the same time, Hoa Phat has been encouraging its
from blue-collar workers to white-collar
employees to actively conduct research activities, to apply and
workers, managers, and executive officers
improve current technologies to adapt with the practical operations
has remarkably improved over the years,
of the Group.
thus meeting the demand for long-term
development and orientation of the Group. Results: Hoa Phat’s factories are currently using the most advanced
technologies. At the same time, the continuous improvement of
manufacturing processes has also enabled the Group to reduce
production costs and enhance the competitiveness of its products
in the market. In addition, the application of modern and clean
technologies makes the Hoa Phat Group accessible to many foreign
partners, accelerating the export of its product.
Environmental risks:
General context: Industrial production, especially in heavy industry,
is inherently exposed to risks affecting the living environment.
Hoa Phat’s solution: Hoa Phat has always committed to comply
with environmental policies and regulations, to adopt modern
technologies, and to continuously improve the production
processes to minimize impacts on the environment.
Results: Environmental Impact Assessment Reports have been prepared
for all factories of the Group. A significant number of technologies
used by Hoa Phat are considered preeminent clean technologies
such as the super-clean Coke Coal production technology used by
Hoa Phat Integrated Steel Complex in the Hai Duong province.
SUPERVISORY BOARD
Ownership rate of members of the Supervisory Board
Percentage of shares
No Name Title held as at
25/02/2014 (%)
1 Nguyen Thi Thanh Van Head of Supervisory Board 0.00003

2 Dang Pham Minh Loan Member of Supervisory Board -
3 Truong Nu Minh Ngoc Member of Supervisory Board -
4 Le Tuan Anh Member of Supervisory Board -
5 Vu Thanh Thuy Member of Supervisory Board -
Total 0.00003
Ms. Nguyen Thi Thanh Van Mr. Le Tuan Anh Ms. Dang Pham Minh Loan Ms. Vu Thanh Thuy Ms. Truong Nu Minh Ngoc
Head of Supervisory Member of Supervisory Member of Supervisory Board Member of Supervisory Member of Supervisory
Board Board Board Board
Bachelor of Accountant, ACCA
BA,Accounting, Economic Bachelor; holder – UK, CPA Vietnam Degree in economics MBA
Academy of Finance, Accounting Practice
Working starting Working starting
Hanoi Certificate (Viet Working starting time:
time: Since 2005 time: Since 2011
Nam) Since 2007
Working starting
Before becoming a Ms Truong Nu Minh
time: 2007 Ms. Loan held a number
Working starting member of Ngoc has experienced
of senior positions in
Before appointed as time: Since 2006 Supervisory Board, many positions in
the large financial
Head of Supervisory Before appointed as Ms. Thuy held a large financial
organizations such as,
Board , Ms Nguyen member of the number of positions institutions such as:
Auditor, Assistant
Thi Thanh Van was a Supervisory Board, in: Staff member in Senior Auditor in
Manager of auditing
Chief Accountant of Mr.Le Tuan Anh accounting department Pricewaterhouse
department KPMG
Hoa Phat Group JSC worked in the of Hoa Phat Steel JSC Coopers (9/2000 –
(2000 - 2005); member of
from 2007 to 2010. accounting department (2005 - 2006), Staff 2/2005), financial
Supervisory Board,
Since 2011, she is also of Hoa Phat Steel Pipe member in Finance analyst in Vina Capital
Specialist and Head of
Chief Accountant of Co., Ltd. (2006 - 2007), department of Hoa (2/2005 – 7/2005),
investing department in
Hoa Phat Steel One specialist of the Phat Group (2006 – Investment Manager
the Vinacapital Investment
member Co. Ltd. Supervisory Board present). in Bank Invest (2007 -
Management Ltd’s
(2007 - 2011) and now).
Representative Office.
currently he is Since July 2010, she has
manager of Controller been a Vice Executive
Department of Hoa Director of Vinacapital
Phat Group JSC. Company.
HOA PHAT GROUP
Supervisory Board’s Report
Being comprised of members having a deep understanding financial position of the Company proved to be transparent
of specific operations of the Company, the Supervisory and stable.
Board implemented the following tasks during the year:
The Supervisory Board provided several suggestions to the
- Review quarterly and annual financial statements; review Company; details are as follows:
monthly and annual financial plans; obtain timely updated
Members of the Supervisory Board had regular
information of the Group’s financial performance in 2013;
communication and discussions with members of the
study, analyze, and regularly update information of the
Board of Management, the Board of Directors, and heads
steel production and trading businesses;
of functional departments to get updates on issues arising
- Obtain updated information of production and from the Company’s operation. The Supervisory Board
operations of the subsidiaries within the Group; provided timely recommendations on executive decisions
- Review the construction progress of Phase 2 of the in order to improve the efficiency of the Company’s
Integrated Steel Complex project and the real estate project; business operations.
- Review the financial plans and the implementation of the In 2013, there was no change in members of the
financial plans at the subsidiary and the Group levels; Supervisory Board.
- Monitor the inventory level, status of account receivables, Compensation for members of the Supervisory Board:
sales policies, and cash collection, etc.; VND20 million/member/year
- Review the continued acquisition of shares of Hoa Phat

Steel Joint Stock Company from ACB Investment Joint
Internal control
Stock Company; To fulfill the set plans for 2013, the Internal Control
Department implemented internal control activities for all
- Obtain updated information of the working schedule of
subsidiaries under Hoa Phat Group. During the process,
internal audit; review internal audit reports for each
upon detection of any errors or risks at the member entity
subsidiary in the Group;
level, the Internal Control Department coordinated with
- Review the implementation of resolutions passed by the these entities to fix the errors as well as provide
General Shareholders’ Meeting and the Board of recommended solutions to mitigate errors and risks in
Management; review management reports prepared by the future. Favorable results were attained in the general
the Board of Directors; activities of subsidiaries: member entities incurred virtually
- Attend all the meetings of the Board of Management; no bad debts, transactions in cash were minimized, no
provide recommendations to improve operational efficiency outstanding long-term advances existed, and companies
of the Group such as financial planning, budget plans, purchased materials and supplies at reasonable prices.
business strategies, trademark, and market promotion. In order to improve the function of internal control in the
The Supervisory Board held two meetings in 2013 with full Group’s activities in 2014, the Internal Control Department
attendance of the Board members to discuss important will continue to focus controls on the purchasing and sales
issues in relation to development and orientation of the processes; in addition, one of the key targets in 2014 is to
Group in general as well as those of each business sector. formalize the procedures of important processes such as
material and goods purchasing, selling processes, and the
The Supervisory Board is greatly appreciative of the
accounting and finance process in order to strengthen the
Company’s business results achieved in 2013; they
control function in member entities.
assessed that the business strategies of the Group properly
followed its orientation and proved to be effective, and the
HOA PHAT GROUP JOINT STOCK COMPANY
AND ITS SUBSIDIARIES
Consolidated financial statements for the

year ended as at 31 December 2013
2013 consolidated and separate financial statements were reported on the
Website: www.hoaphat.com.vn
HOA PHAT GROUP

CONTENTS
Report of The Board of Directors 62
Independent auditor’s report 65
Consolidated balance sheet 67
Consolidated income statement 70
Consolidated cash flow statement 71
Consolidated financial statements 73
2012 AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Hoa Phat Group Joint Stock Company
Report of the Board of Directors
The Board of Directors of Hoa Phat Group Joint Stock Company (“the Company”) is pleased to
present its report and the consolidated financial statements of the Company and its subsidiaries
(together referred to as “the Group”) for the year ended 31 December 2013.
The members of the Board of Management and the Board of Directors during the year and at the
date of this report are as follows:
Board of Management Mr. Tran Dinh Long Chairman

Mr. Tran Tuan Duong Vice Chairman
Mr. Nguyen Manh Tuan Vice Chairman
Mr. Doan Gia Cuong Vice Chairman
Mr. Nguyen Ngoc Quang Member
Mr. Ta Tuan Quang Member
Mr. Hoang Quang Viet Member
Mr. Nguyen Viet Thang Member
Mr. Andy Ho Member
Mr. Hans Christian Jacobsen Member
Board of Directors Mr. Tran Tuan Duong General Director

Mrs. Nguyen Thi Thao Nguyen Deputy General Director
Mr. Nguyen Viet Thang Deputy General Director
Corporate information
The Company was originated from Hoa Phat Steel Joint Stock Company incorporated under the
Law on Enterprise of Viet Nam pursuant to the initial Business Registration Certificate No.
0503000008 issued by Hung Yen Department of Planning and Investment on 26 October 2001. In
accordance with the 8th amendment of the Business Registration Certificate No. 0503000008 issued
by Hung Yen Department of Planning and Investment on 9 January 2007, Hoa Phat Steel Joint
Stock Company was transformed into Hoa Phat Group Joint Stock Company.
The Company’s Business Registration Certificate has been amended several times, the most recent
of which is by Business Registration Certificate No. 0900189284 dated 22 November 2012. The
Business Registration Certificate was issued by the Hung Yen Department of Planning and
Investment.
The registered office of the Company is located in Pho Noi A Industrial Zone, Giai Pham
Commune, Yen My District, Hung Yen Province, Vietnam.
The subsidiaries and associates of the Group are disclosed in Note 1 to the consolidated financial
statements.
HOA PHAT GROUP 1

Statement of the Board of Directors (continued)
Operating results and dividends
The consolidated net profit attributable to the equity holders of the Company for the year ended 31
December 2013 was VND1,954,188 million (2012: VND994,024 million).
During the year, the Company completed the second distribution of dividends in cash for 2012 to
the shareholders at the rate of 10% of par value of shares, amounting to VND419,053 million, in
accordance with Resolution No. 13/NQHP-2013 dated 21 August 2013 of the Company’s Board of
Management.
Post balance sheet events
There are no significant post balance sheet events that need to be adjusted or disclosed in the
consolidated financial statements.
Auditors
The auditors of the Company and the Group are KPMG Limited.

2
Statement of the Board of Directors (continued)
Statement of the Board of Directors’ responsibility in respect of the consolidated

financial statements
The Board of Directors is responsible for the consolidated financial statements which give a true
and fair view of the Group’s consolidated financial position, results of operations and cash flows
for the year ended 31 December 2013. In preparing the consolidated financial statements, the
Board of Directors is required to:
 select suitable accounting policies and then apply them consistently;

 make judgments and estimates that are reasonable and prudent;
 confirm that applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the consolidated financial statements; and
 prepare the consolidated financial statements on the going concern basis unless it is
inappropriate to presume that the Group will continue in business.
The Board of Directors is also responsible for ensuring that proper accounting records are kept
which disclose, with reasonable accuracy at any time, the financial position of the Group and to
ensure that the accounting records comply with Vietnamese Accounting Standards, the Vietnamese
Accounting System and the relevant statutory requirements applicable to financial reporting. The
Board of Directors is also responsible for safeguarding the assets of the Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Board of Directors confirms with the Company’s Board of Management and shareholders that
they have complied with the above requirements in preparing the consolidated financial statements.
Approval of the consolidated financial statements
We hereby approve the accompanying consolidated financial statements for the year ended 31
December 2013. These consolidated financial statements give a true and fair view of the
consolidated financial position of the Group as at 31 December 2013 and of their consolidated
results of operations and their consolidated cash flows for the year then ended in accordance with
the Vietnamese Accounting Standards, the Vietnamese Accounting System and the relevant
statutory requirements applicable to financial reporting.
On behalf of the Board of Directors
Tran Tuan Duong

General Director
Hanoi,
Hanoi, 15 March 2014
HOA PHAT GROUP

3
HOA PHAT GROUP
Công ty Cổ phần Tập đoàn Hòa Phát
Bảng cân đối kế toán hợp nhất tại ngày 31 tháng 12 năm 2013
Mẫu B 01 – DN/HN
Mã Thuyết
Consolidated balance sheet as at 31 December 2013 31/12/2013 31/12/2012
số minh VND VND
Form B 01 – DN/HN
TÀI SẢN
31/12/2013 31/12/2012
Tài sản ngắn hạn Code Note VND VND
100 12.402.515.338.144 10.220.788.345.768
(100 = 110 + 120 + 130 + 140 + 150)
ASSETS
Tiền và các khoản tương đương tiền 110 6 2.125.322.390.697 1.294.493.700.487
Current
Tiền assets 111100 282.763.115.669
12,402,515,338,144 171.268.004.046
10,220,788,345,768
(100 = 110
Các + 120
khoản + 130
tương + 140
đương tiền+ 150) 112 1.842.559.275.028 1.123.225.696.441
Cash and cash

Các khoản đầuequivalents
tư tài chính ngắn hạn 120110 14.1 6 2,125,322,390,697 219.951.513.600
387.793.671.402 1,294,493,700,487
Cash 111 282,763,115,669 171,268,004,046
Cash
Các equivalents
khoản phải thu ngắn hạn 130112 7 1,842,559,275,028 1.646.343.637.635
1.629.428.547.084 1,123,225,696,441
Phải thu khách hàng 131 1.258.518.278.675 1.150.508.510.152
Short-term
Trả trước investments
cho người bán 132120 14.1 387,793,671,402 381.695.830.668
350.774.484.077 219,951,513,600
Phải thu khác 135 34.778.986.769 292.729.021.071
Accounts
Dự phòng receivable
phải thu –khó
short-term
đòi 139130 7 1,629,428,547,084 (178.589.724.256)
(14.643.202.437) 1,646,343,637,635
Accounts receivable – trade 131 1,258,518,278,675 1,150,508,510,152
Prepayments
Hàng tồn kho to suppliers 140132 8 350,774,484,077 6.822.077.238.740
8.029.575.289.191 381,695,830,668
Othertồn
Hàng receivables
kho 141135 34,778,986,769 6.847.996.509.051
8.064.854.889.451 292,729,021,071
Allowance
Dự for doubtful
phòng giảm giá hàngdebts
tồn kho 149139 (14,643,202,437) (25.919.270.311)
(35.279.600.260) (178,589,724,256)
Inventories
Tài sản ngắn hạn khác 150140 8 8,029,575,289,191
230.395.439.770 6,822,077,238,740
237.922.255.306
Inventories
Chi phí trả trước ngắn hạn 151141 8,064,854,889,451
42.122.793.350 6,847,996,509,051
37.412.808.587
Allowance
Thuế giá trịfor
giainventories
tăng được khấu trừ 152149 (35,279,600,260)
127.795.589.569 (25,919,270,311)
141.403.013.965
Thuế và các khoản khác phải thu
Other
Ngân current
sách Nhàassets
nước 154150 9 230,395,439,770
34.144.629.790 237,922,255,306
32.413.440.414
Short-term
Tài sản ngắnprepayments
hạn khác 158151 42,122,793,350
26.332.427.061 37,412,808,587
26.692.992.340
Deductible value added tax 152 127,795,589,569 141,403,013,965
Taxes and other receivables from State
Treasury 154 9 34,144,629,790 32,413,440,414
Other current assets 158 26,332,427,061 26,692,992,340
Các thuyết minh đính kèm là bộ phận hợp thành của báo cáo tài chính hợp nhất này
The accompanying notes are an integral part of these consolidated financial statements 6
6
Công ty Cổ phần Tập đoàn Hòa Phát
Bảng cân đối kế toán hợp nhất tại ngày 31 tháng 12 năm 2013 (tiếp theo)
Hoa Phat Group Joint Stock Company Mẫu B 01 – DN/HN

Consolidated balance sheet as at 31 December 2013 (continued)
Mã Thuyết 31/12/2013 31/12/2012
số minh VND Form VND
B 01 – DN/HN
Tài sản dài hạn (200 = 210 + 220 + 31/12/2013 31/12/2012

200 10.673.862.524.545 8.794.975.115.778
240 + 250 + 260 + 269) Code Note VND VND
Các khoản phải thu dài hạn 210 7 449.759.238.679 448.979.590.000

Phải thuassets
Long-term khác 218 449.759.238.679 448.979.590.000
200 10,673,862,524,545 8,794,975,115,778
(200 = 210 + 220 + 240 + 250 + 260 + 269)
Tài sản cố định 220 9.187.130.524.312 7.007.089.647.235
Tài sảnreceivable
Accounts cố định hữu hình
– long-term 221210 10 7 8.864.496.339.790
449,759,238,679 4.295.767.594.850
448,979,590,000
OtherNguyên giá
receivables 222
218 11.747.912.985.324
449,759,238,679 6.529.948.378.267
448,979,590,000
Giá trị hao mòn lũy kế 223 (2.883.416.645.534) (2.234.180.783.417)
Fixed
Tàiassets
sản cố định vô hình 220
227 11 9,187,130,524,312
189.063.615.103 7,007,089,647,235
166.217.334.650
Nguyên
Tangible giáassets
fixed 221
228 10 8,864,496,339,790
215.917.099.640 4,295,767,594,850
188.296.995.886
Cost
Giá trị hao mòn lũy kế 222
229 11,747,912,985,324
(26.853.484.537) 6,529,948,378,267
(22.079.661.236)
Accumulated
Xây dựng cơ bảndepreciation
dở dang 223
230 12 (2,883,416,645,534) 2.545.104.717.735
133.570.569.419 (2,234,180,783,417)
Intangible fixed assets 227 11 189,063,615,103 166,217,334,650
Cost sản đầu tư
Bất động 228
240 13 215,917,099,640
62.002.294.764 188,296,995,886
66.519.066.085
Accumulated
Nguyên giá amortisation 229
241 (26,853,484,537)
88.066.912.353 (22,079,661,236)
88.066.912.353
Construction in progress
Giá trị hao mòn lũy kế 242230 12 133,570,569,419
(26.064.617.589) 2,545,104,717,735
(21.547.846.268)
Investment
Các khoảnproperty
đầu tư tài chính dài hạn 250240 14.213 62,002,294,764
21.255.298.806 66,519,066,085
26.218.497.620
ĐầuCost
tư vào công ty liên kết 241
252 88,066,912,353
5.553.170.441 88,066,912,353
5.809.369.255
ĐầuAccumulated depreciation
tư dài hạn khác 242
258 (26,064,617,589)
15.702.128.365 (21,547,846,268)
20.409.128.365
Long-term
Tài sản dàiinvestments
hạn khác 250
260 14.2 380.858.246.946
21,255,298,806 26,218,497,620
394.091.242.174
Investments in associates
Chi phí trả trước dài hạn 252 15
261 5,553,170,441
326.428.533.088 5,809,369,255
327.676.686.308
Other long-term investments
Tài sản thuế thu nhập hoãn lại 258
262 16 15,702,128,365
54.344.805.858 20,409,128,365
47.988.208.522
Tài sản dài hạn khác 268 84.908.000 18.426.347.344
Other long-term assets 260 380,858,246,946 394,091,242,174
Long-term
Lợi prepayments
thế thương mại 261
269 17 15 326,428,533,088
572.856.921.038 327,676,686,308
852.077.072.664
Deferred tax assets 262 16 54,344,805,858 47,988,208,522
Other long-term assets 268 84,908,000 18,426,347,344
TỔNG TÀI SẢN (270 = 100 + 200) 270 23.076.377.862.689 19.015.763.461.546
Goodwill 269 17 572,856,921,038 852,077,072,664
TOTAL ASSETS (270 = 100 + 200) 270 23,076,377,862,689 19,015,763,461,546
Các thuyết minh đính kèm là bộ phận hợp thành của báo cáo tài chính hợp nhất này
The accompanying notes are an integral part of these consolidated financial statements 7
7
HOA PHAT GROUP
Consolidated balance sheet as at 31 December 2013 (continued)
Form B 01 – DN/HN
31/12/2013 31/12/2012
Code Note VND VND
RESOURCES
LIABILITIES (300 = 310 + 330) 300 13,489,417,843,130 10,438,205,916,396
Current liabilities 310 11,142,521,402,951 7,362,009,487,292

Short-term borrowings 311 18 5,743,559,817,748 4,850,248,888,636
Accounts payable – trade 312 2,313,957,097,164 1,520,631,891,532
Advances from customers 313 79,676,433,981 187,595,273,309
Taxes payable to State Treasury 314 19 387,853,096,459 209,932,737,460
Payables to employees 315 122,128,725,001 95,436,269,206
Accrued expenses 316 20 345,447,630,212 332,804,558,333
Other payables 319 21 2,045,822,283,922 105,794,771,676
Provisions 320 22 13,212,673,156 11,211,707,436
Bonus and welfare funds 323 90,863,645,308 48,353,389,704
Long-term borrowings and liabilities 330 2,346,896,440,179 3,076,196,429,104

Other long-term liabilities 333 21 514,930,691,650 1,620,487,869,471
Long-term borrowings 334 23 1,831,823,606,336 1,455,708,545,840
Deferred tax liabilities 335 142,142,193 13,793
EQUITY (400 = 410) 400 9,500,327,254,417 8,085,135,114,809
Owners’ equity 410 24 9,500,327,254,417 8,085,135,114,809

Share capital 411 25 4,190,525,330,000 4,190,525,330,000
Capital surplus 412 24 2,207,350,817,068 2,207,350,817,068
Foreign exchange differences 416 - 4,421,231,105
Financial reserve 418 24, 27 459,080,197,478 290,114,305,696
Retained profits 420 2,643,370,909,871 1,392,723,430,940
MINORITY INTEREST 439 86,632,765,142 492,422,430,341
TOTAL RESOURCES
440 23,076,377,862,689 19,015,763,461,546
(440 = 300 + 400 +439)
Prepared by: Approved by:
Hoang Thi Thanh Huong Ly Thi Ngan Tran Tuan Duong

General Accountant Chief Accountant General Director
The accompanying notes are an integral part of these consolidated financial statements
8
Consolidated statement of income for the year ended 31 December 2013
Form B 02 – DN/HN
2013 2012
Code Note
VND VND
Total revenue 01 28 19,200,234,178,082 17,122,073,926,267
Less revenue deductions 02 28 265,942,027,551 295,222,033,283
Net revenue (10 = 01 - 02) 10 18,934,292,150,531 16,826,851,892,984
Cost of sales 11 29 15,650,540,636,204 14,341,642,566,494
Gross profit (20 = 10 - 11) 20 3,283,751,514,327 2,485,209,326,490

Financial income 21 30 276,278,618,993 164,624,612,181
Financial expenses 22 31 528,408,903,958 585,024,105,173
In which: Interest expense 23 370,947,849,826 526,970,967,624
Selling expenses 24 253,653,065,057 274,039,974,293
General and administration expenses 25 416,174,707,153 586,966,481,317
Net operating profit

30 2,361,793,457,152 1,203,803,377,888
{30 = 20 + (21 - 22) - (24 + 25)}
Other income 31 32 199,104,247,497 210,272,300,024
Other expenses 32 33 166,237,311,403 195,329,039,096
Results of other activities

40 32,866,936,094 14,943,260,928
(40 = 31 - 32)
Share of losses in associates 45 14 (256,198,814) (541,298,162)
Profit before tax
50 2,394,404,194,432 1,218,205,340,654
(50 = 30 + 40 + 45)
Income tax expense – current 51 34 390,183,260,599 168,282,075,477
Income tax (benefits)/expenses –
52 34 (6,214,468,936) 19,417,835,660
deferred
Net profit after tax
60 2,010,435,402,769 1,030,505,429,517
(60 = 50 - 51 - 52)
Attributable to:
Minority interest 61 56,247,864,906 36,481,107,081
Equity holders of the Company 62 1,954,187,537,863 994,024,322,436
Basic earnings per share 70 35 4,663 2,386

9
HOA PHAT GROUP
Consolidated statement of cash flows for the year ended 31 December 2013
(Indirect method)
Form B 03 – DN/HN
2013 2012
Code Note
VND VND
CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 01 2,394,404,194,432 1,218,205,340,654
Adjustments for
Depreciation and amortisation 02 720,195,566,311 596,227,337,059
Goodwill amortisation 02 275,023,878,726 125,092,018,440
Allowances and provisions 03 (147,647,242,587) 90,834,354,093
Unrealised foreign exchange losses 04 9,755,308,690 1,105,860,020
Profits from investing activities 05 (239,922,767,209) (127,834,058,603)
Interest expense 06 370,947,849,826 526,970,967,624
Operating profit before changes in

08 3,382,756,788,189 2,430,601,819,287
working capital
Change in receivables 09 184,894,312,063 (58,060,734,370)

Change in inventories 10 (1,216,858,380,400) (444,727,394,130)
Change in payables and other liabilities 11 1,674,080,391,405 1,256,558,631,126
Change in prepayments 12 43,029,826,617 46,907,773,104
Interest paid 13 (558,923,619,216) (620,947,691,630)
Income tax paid 14 (200,847,280,440) (230,283,194,389)
Other receipts from operating activities 15 21,180,037,819 3,021,354,308
Other payments for operating activities 16 (95,479,361,817) (113,692,912,579)
Net cash flows from operating activities 20 3,233,832,714,220 2,269,377,650,727
CASH FLOWS FROM INVESTING ACTIVITIES

Payments for additions to fixed assets
and other long-term assets 21 (2,921,311,668,380) (1,828,105,150,975)
Proceeds from disposals of fixed assets
and other long-term assets 22 11,605,368,430 51,448,674,795
Payments for purchase of debt
instruments of other entities 23 (163,135,157,802) (222,260,641,965)
Proceeds from sales of debt instruments
of other entities 24 - 1,600,000,000
Payments for investments in other
entities 25 - (1,500,000,000)
Collections on investments in other
entities 26 116,266,905,518 356,306,160,000
Receipts of interest on loans granted and
bank deposits 27 100,056,500,126 66,064,545,910
Acquisition of additional share capitals
of subsidiaries from minority interest
shareholders 29 (395,947,200,000) (83,221,860,000)
Net cash flows from investing activities 30 (3,252,465,252,108) (1,659,668,272,235)
10
(Indirect
Hoa Phatmethod - continued)
Group Joint Stock Company
Form B 03 – DN/HN
(Indirect method - continued)
2013 2012
Code Note Form B 03 VND
– DN/HN
VND
2013 2012
Code Note
CASH FLOWS FROM FINANCING ACTIVITIES
VND VND
Proceeds from equity issued to
minority
CASH shareholders
FLOWS FROM FINANCING ACTIVITIES31 620,000,000 -
Proceeds from reissuance of
Proceedsshares
treasury from equity issued to 31 - 100,459,025,089
minority shareholders
Proceeds from short-term and 31 620,000,000 -
Proceeds from reissuance
long-term borrowings of 33 18,941,877,013,166 18,070,024,211,394
treasury shares
Payments to settle loan principals 31
34 -
(17,672,451,806,682) 100,459,025,089
(18,188,281,993,321)
Proceeds from
Payments short-term and
of dividends 36 (420,496,176,570) (361,790,013,578)
long-term borrowings 33 18,941,877,013,166 18,070,024,211,394
Payments to settle loan principals 34 (17,672,451,806,682) (18,188,281,993,321)
Net cash flows
Payments from financing activities
of dividends 40
36 849,549,029,914
(420,496,176,570) (379,588,770,416)
(361,790,013,578)
Net cash flows during

from financing
the yearactivities 40 849,549,029,914 (379,588,770,416)
50 830,916,492,026 230,120,608,076
(50 = 20 + 30 + 40)
Cash andflows
Net cash cash during
equivalents at the
the year 60
50 1,294,493,700,487
830,916,492,026 1,064,384,090,542
230,120,608,076
beginning of the year
(50 = 20 + 30 + 40)
Effect of exchange
Cash and rate fluctuations
cash equivalents at the on 61
60 (87,801,816)
1,294,493,700,487 (10,998,131)
1,064,384,090,542
cash and cash equivalents
beginning of the year
Cash and
Effect cash equivalents
of exchange at the on
rate fluctuations 70
61 6 2,125,322,390,697
(87,801,816) 1,294,493,700,487
(10,998,131)
cash and cash equivalents + 61)
end of the year (70 = 50 + 60
Cash and cash equivalents at the
70 6 2,125,322,390,697 1,294,493,700,487
end of the year (70 = 50 + 60 + 61)

11
HOA PHAT GROUP
11
Notes to the consolidated financial statements for the year ended 31 December 2013
Form B 09 – DN/HN
These notes form an integral part of and should be read in conjunction with the accompanying
consolidated financial statements.
1. Reporting entity
Hoa Phat Group 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
2013 comprise the Company and its subsidiaries (together referred to as the “Group”) and the
Group’s interest in associates. The principal activities of the Company and its subsidiaries are as
follows:
 Office leasing;
 Financial investments;
 Integrated investment and construction of infrastructures, industrial zones and urban zones;
 Manufacturing of furniture for offices, households and schools;
 Timber production and processing;
 Manufacturing of mechanical products (mainly construction machinery, office desks, chairs
and cabinets);
 Leasing machines, equipment and motor vehicles;
 Dealing in automobiles, motorbikes, equipment, parts for transport and mining sectors,
transport vehicles;
 Production and trading of construction and mining machineries;
 Dealing in electrical, electronic appliances, optical and medical equipment;
 Production, trading, assembly, installation, repair and maintenance of electrical, electronic,
electrical refrigeration and civil electrical appliances and air-conditioners;
 Production and trading of raw materials and plastic products;
 Advertisement;
 Civil and industrial construction;
 Exploitation of sand, stones and gravel;
 Production, trading and assembly of furniture products and construction equipment;
 Real estate trading (excluding land price consultancy);
 Domestic and foreign investment advisory (excluding law advisory);
 Production and trading of non-ferrous metal and non-ferrous metal scraps;
 Trading and export and import of steel and supplies for steel making and rolling;
 Production of rolled steel products and roofing sheets;
 Exploitation of metal ores;
 Trading metals, metal ores, iron and steel scraps;
 Making cast iron and steel, and casting cast iron, iron and steel;
 Production of plated and non-plated steel tubes and inox tubes;
 Rendering sports and gymnastics services (training, competition organisation, athlete transfer);
 Building and renting sports practice ground and competition ground; and
 Entrusted export-import activities.

12
74
Notes to the consolidated financial statements for the year ended 31 December 2013 (continued)
Form B 09 – DN/HN
The subsidiaries and associates were incorporated in Vietnam. At as 31 December, the Group’s subsidiaries and associates are as follows:
Ownership and
HOA PHAT GROUP

voting rights of the Group
WWW.HOAPHAT.COM.VN
No. Tier 1 - subsidiaries Principal activities 31/12/2013 31/12/2012
1 Hoa Phat Equipment & Producing construction equipment, trading construction machinery and 99.72% 99.72%
Accessories Co., Ltd equipment, exploiting small and medium-sized minerals.
2 Hoa Phat Furniture JSC Producing and trading various kinds of furniture. 99.60% 99.60%
3 Hoa Phat Steel Pipe Co., Ltd Producing and trading various kinds of steel pipes. 99.89% 99.86%
4 Hoa Phat Refrigeration Producing and trading various kinds of refrigerant equipment. 99.67% 99.67%
Engineering Co., Ltd
5 Hoa Phat Urban Development & Civil and industrial construction, development of real estate for sales and 99.67% 99.67%
Construction JSC lease, leasing houses and offices, investing in and building technical
infrastructure.
6 Hoa Phat Trading Co., Ltd Export, import and trade steel, construction materials, furniture, air- 99.00% 99.00%
conditioners, washing machines, refrigerators.
7 Hoa Phat Steel JSC Producing steel, iron, exploiting iron ores, exploiting and collecting lignite; 99.99% 85.00%
wholesaling metals and metal ores; producing, trading coke coal.
8 An Thong Mineral Investment Exploring, exploiting, processing, importing and exporting minerals (mainly 99.96% 99.96%
JSC iron ores).
9 Golden Gain Vietnam JSC Real estate trading. 84.95% 84.95%
10 Hoa Phat Energy JSC Producing and wholesaling coke coal, exploiting and collecting coal; 99.89% 99.89%
producing refined petroleum products; wholesaling metals and metal ores;
and trading various kinds of coal.
11 Hoa Phat Steel One Member Co., Producing steel, iron, wholesaling metals and metal ores. 100% 100%
Ltd
12 Hoa Phat Mining JSC Exploiting and collecting lignite; exploiting ores of iron, aluminium, other 99.80% 99.80%
rare ores; exploiting stone, sand, gravel, clay; producing coke coal, gypsum,
lime, nonferrous metals and rare metals; casting iron and nonferrous metals.
13
Form B 09 – DN/HN
Indirect ownership and
Subsidiaries of Hoa Phat Equipment & Accessories Co. Ltd
1 Hoa Phat Mining & Construction Producing and trading construction and mining machines; producing 100% 99.72%
Machinery Manufacturing Co., Ltd engines and turbines.
2 Hoa Phat Mechanical Repairing and producing mechanical products; leasing machines, 99.90% 99.62%
Manufacturing Co., Ltd equipments and vehicles.
Subsidiaries of Hoa Phat Steel Pipe Co., Ltd

3 Hoa Phat Cold Rolled Steel Co., Producing of cold rolled steel products. 100% 99.86%
Ltd
4 Hoa Phat Binh Duong Steel Pipe Producing and trading various kinds of steel pipes. 100% 99.86%
One Member Co., Ltd
Subsidiaries of Hoa Phat Urban Development & Construction JSC
5 Pho Noi A Industrial Zone Civil and industrial construction, freehold or leasehold real estate trading, 100% 99.67%
Management and Operation workshop and office leasing, integrated investment and construction of
Company infrastructure, clean water trading, waste collection, exploitation, treatment
and supply of water and operation of restaurants.
6 Hoa Mac Industrial Zone Civil and industrial construction, freehold or leasehold real estate trading, 100% 99.67%
Management and Operation Co., workshop and office leasing, integrated investment and construction of
Ltd infrastructure, clean water trading, waste collection, exploitation, treatment
and supply of water.
Subsidiaries of Golden Gain Vietnam JSC

7 Hanoi Investment and Services Sports, entertainment activities, including tennis, badminton, billiards, 94.96% 94.96%
JSC swimming, body-building and games.
8 Hanoi Transportation and Trading Goods transport by automobiles, inter-provincial passenger transport by 99.57% 99.57%
Services JSC automobiles, machinery and equipment repair, domestic travel, petrol and
oil trading agency, transport agency services and automobiles keeping
services, office, warehouse and storage yard services.
2013 ANNUAL REPORT

14
75
76
Form B 09 – DN/HN
Indirect ownership and
HOA PHAT GROUP

WWW.HOAPHAT.COM.VN
Subsidiary of Hoa Phat Steel One Member Co., Ltd
9 Hoa Phat - Binh Dinh One Producing steel, iron, wholesaling metals and metal ores. 100% 100%
Member Limited Liability
Company
Subsidiaries of Hoa Phat Mining JSC
10 Hoa Yen Mining JSC Exploiting and production of iron, bauxite and other rare ores; trading metal 99.77% 99.57%
and metal ores and trading machines.
11 Duc Long Mining JSC Exploring and production of iron, bauxite and other rare ores; trading metal 99.98% 99.75%
and metal ores.
12 Hoa Phat Mitraco Mining JSC Exploring and production of iron, bauxite and other rare ores; trading metal 63.50% 63.37%
and metal ores.
13 Duc Tien Co., Ltd Searching and exploiting of copper ore, gold, silver and other ores. - 99.80%
Ownership and
No. Associates Principal activities 31/12/2013 31/12/2012
1 Hoa Phat – SSG Mining JSC Exploiting and collecting lignite; exploiting nonferrous ores; rendering 38% 38%
mining support services and producing coke coal, lime, gypsum.
2 Yen Phu Investment and Mineral Mining and ores of iron exploiting; producing coke coal; producing 50% 50%
JSC iron, steel, exploiting and collecting lignite, peat and bauxite.
As at 31 December 2013, the Group had 9,701 employees (31/12/2012: 8,084 employees).
15
(continued)
Form B 09 – DN/HN
2. Basis of preparation
2.1 Statement of compliance
The consolidated financial statements have been prepared in accordance with Vietnamese
Accounting Standards, the Vietnamese Accounting System and the relevant statutory requirements
applicable to financial reporting.
2.2 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.
2.3 Annual accounting period

The annual accounting period of the Group is from 1 January to 31 December.
2.4 Accounting currency

The financial statements are prepared and presented in Viet Nam Dong (“VND”).
3. Summary of significant accounting policies

The following significant accounting policies have been adopted by the Group in the preparation of
these consolidated financial statements.
3.1 Basis of consolidation
(a) Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date,
which is the date on which control is transferred to the Group. Control exists when the Group has
the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that presently are exercisable are taken into
account.
Under the purchase method, the assets and liabilities of the acquired entity are consolidated using
their fair values. Cost of acquisition consists of the aggregate fair value, at the date of exchange, of
assets given, liabilities incurred or assumed, and equity instruments issued by the Group. Goodwill
represents the excess of the cost of acquisition over the Group’s interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquired entity. When the excess is
negative, it is recognised immediately in profit or loss. Where fair value is not available, the Group
uses net book value based on historical cost concept to account for the assets and liabilities of the
acquired entity based on the Ministry of Finance official guidance letter to the Group.
Transaction costs that the Group incurred in connection with business combinations included any
costs directly attributable to the combination, such as professional fees paid to accountants, legal
advisers, valuers and other consultants to effect the combination. Transaction costs are capitalised
into the cost of business combination. General administrative costs and other costs that cannot be
directly attributed to the particular combination being accounted for are not included in the cost of
the combination; they are recognized as an expense when incurred.

16
(continued)
Form B 09 – DN/HN
(b) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to
govern the financial and operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that currently are exercisable are taken into account. The
financial statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
(c) Minority interests

For changes in the Group’s ownership interest in a subsidiary that do not result in change in control,
the difference between the cost of acquisition or proceeds on disposal of the interest and the
proportionate carrying amount of net assets acquired or disposed at the date of exchange is recorded
directly in equity.
(d) 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 Group’s interest in the investee.
(e) Associates
Associates are those entities in which the Group has significant influence, but not control, over the
financial and operating policies. Associates are accounted for using the equity method. The
consolidated financial statements include the Group’s share of the income and expenses of
associates, after adjustments to align the accounting policies with those of the Group, from the date
that significant influence or joint control commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest an associates, the carrying amount of that
interest (including any long-term investments) is reduced to nil and the recognition of further losses
is discontinued except to the extent that the Group has an obligation or has made payments on
behalf of the associates.
HOA PHAT GROUP

17
(continued)
Form B 09 – DN/HN
3.2 Foreign currency
(a) Foreign currency transactions

Monetary assets and liabilities denominated in currencies other than VND are translated into VND
at rates of exchange ruling at the balance sheet date. Transactions in currencies other than VND
during the year have been translated into VND at rates of exchange ruling at the transaction dates.
All foreign exchange differences are recorded in the consolidated statement of income, except when
they relate to the construction of tangible fixed assets or the translation of foreign currency
monetary items during the Company’s subsidiaries’ pre-operating stages, in which case they are
recorded in the Foreign exchange difference account in equity until the subsidiaries commence
operations and the tangible fixed assets are put into use. Once the subsidiaries commence
operations and the tangible fixed assets are put into use, the related foreign exchange gains are
transferred to the Unearned revenue account and foreign exchange losses are transferred to the
Long-term prepayment account. The gains and losses are then amortised on a straight line basis
over five years.
Foreign exchange differences are accounted for in accordance with Vietnamese Accounting
Standard No. 10 – The effects of changes in foreign exchange rates and Circular 179/2012/TT-BTC
dated 24 October 2012 issued by the Ministry of Finance providing regulation on recognition,
measurement and treatment of foreign exchange differences by enterprises.
(b) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on acquisition, are translated to VND at exchange rates at the balance sheet date. The
income and expenses of foreign operations are translated to VND at exchange rates at the dates of
transactions.
Foreign currency differences arising from the translation of foreign operations are recognised in the
consolidated balance sheet under the caption “Foreign exchange differences” in equity.
3.3 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 for investment or other purposes.
3.4 Investments
Investments are stated at cost. An allowance is made for reductions in investment values if market
value of the investment falls below cost or if the investee has suffered a loss. The allowance is
reversed if the subsequent increase in recoverable amount can be related objectively to an event
occurring after the allowance was recognised. An allowance is reversed only to the extent that the
investment’s carrying amount does not exceed the carrying amount that has been determined if no
allowance had been recognised.

18
(continued)
Form B 09 – DN/HN
3.5 Accounts receivable

Trade and other receivables are stated at cost less allowance for doubtful debts.
Allowance for doubtful debts is established for amount of outstanding receivables at the balance
sheet date which are overdue more than 6 months or are doubtful of recovery. Increases and
decreases to the allowance for doubtful debts balance are recorded as general and administration
expense account in the consolidated statement of income.
3.6 Inventories
Inventories are stated at the lower of cost and net realisable value.
Net realisable value is the estimated selling price of inventory items, less the estimated costs of
completion and selling expenses.
Allowance for inventories is established for the estimated losses arising due to the impairment of
value (through diminution, damage or obsolescence) of inventories owned by the Group, based on
appropriate evidences of impairment available at the balance sheet date. Increases and decreases to
the allowances for inventories balance are recorded as cost of goods sold account in the
consolidated statement of income.
Cost is determined on a weighted average basis and includes all costs incurred in bringing the
inventories to their present location and condition.
Manufacturing, trading and production of goods
Cost in the case of finished goods and manufactured work in progress includes raw materials, direct
labour and attributable production overheads.
The Group applies the perpetual method of accounting for inventories.
Real estate development for future sales

Cost is determined on a specific identification basis and includes land costs and other related
development and infrastructure costs, and other directly attributable costs.
3.7 Tangible fixed assets
(a) 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 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 consolidated 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.
HOA PHAT GROUP

19
(continued)
Form B 09 – DN/HN
(b) 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 5 – 50 years
 office equipment 3 – 12 years
 machinery and equipment 2 – 25 years
 motor vehicles 4 – 10 years
 others 3 – 10 years
3.8 Intangible fixed assets
(a) Land use rights

Land use rights comprise:
 those granted by the State for which land use payments are collected;
 those acquired in a legitimate transfer; and
 rights to use leased land obtained before the effective date of Land Law (2003) for which
payments have been made in advance for more than 5 years and supported by land use rights
certificate issued by competent authority.
Land use rights are stated at cost less accumulated amortisation. The initial cost of land use rights
comprise the value of the rights as stated in the purchase price and any directly attributable costs
incurred in conjunction with securing the land use rights. For land use rights with definite useful
lives, amortisation is computed on a straight-line basis over 15 to 46 years. No amortisation is
provided for land use rights with indefinite useful lives.
(b) 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 2 to 6
years.
3.9 Investment property
(a) Cost
Investment property is stated at cost less accumulated depreciation. The initial cost of an
investment property comprises its purchase price, construction cost and any directly attributable
expenditures of bringing the property to the condition necessary for it to be capable of operating in
the manner intended by management. Expenditure incurred after the investment property has been
put into operation, such as repairs and maintenance, is charged to the consolidated statement of
income in the year in which the expenditure is incurred. In situations where it can be clearly
demonstrated that the expenditure has resulted in future economic benefits in excess of the
originally assessed standard of performance of the existing investment property, the expenditure is
capitalised as an additional cost of the investment property.

20
(continued)
Form B 09 – DN/HN
(b) Depreciation
Depreciation is computed on a straight-line basis over the estimated useful lives of investment
property. The estimated useful lives are as follows:
 buildings 3 – 49 years
3.10 Construction in progress

Construction in progress represents the costs of construction and machineries which have not been
fully completed or installed. No depreciation is provided for construction in progress during the
year of construction and installation.
3.11 Long-term prepayments
(a) Pre-operating expenses

Pre-operating expenses are recorded in the consolidated statement of income, except for
establishment costs and expenditures on training, advertising and promotional activities incurred
from the incorporation date to the commercial operation date. These expenses are recognised as
long-term prepayments, initially stated at cost, and are amortised on a straight-line basis over three
years starting from the date of commercial operation.
(b) Tools and supplies

Tools and instruments include assets held for use by the Group 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 under Circular 45/2013/TT-BTC dated 25 April 2013 of the Ministry of
Finance which provides guidance on management, use and depreciation of fixed assets (“Circular
45”). Cost of tools and instruments are amortised on a straight-line basis over a period ranging
from 2 to 3 years.
(c) Overhaul and major maintenance expenses

These comprise major overhaul and maintenance expenses incurred on a periodical basis during the
use of assets. These expenses are initially stated at cost and are amortised to the consolidated
statement of income on a straight line basis over two to three years.
(d) Foreign exchange differences

Realised and unrealised foreign exchange differences in the pre-operating period of some of the
Company’s subsidiaries were recorded in the foreign exchange differences account in equity until
these subsidiaries commence operations. Then, the foreign exchange losses in the pre-operating
period will be transferred to the long-term prepayment account and amortised on a straight-line
basis over five years.
HOA PHAT GROUP

21
(continued)
Form B 09 – DN/HN
(e) Exploration and evaluation costs

Exploration and evaluation activity involves the search for mineral resources, the determination of
technical feasibility and the assessment of commercial viability of an identified resource.
Exploration and evaluation costs are capitalised as long as the Group’s right of tenure to the area of
interest is current and active and significant exploration activities in the area of interest are
continuing and there are indicators that future economic benefits will flow to the Group.
Exploration and evaluation costs that do not satisfy the above criteria are written off in the year in
which they are incurred, except as follows:
At such time as exploration and evaluation procedures have sufficiently progressed to permit the
determination of the existence of economically recoverable reserves:
 Exploration and evaluation costs that are expected to be recouped by successful development
and exploitation of the area are capitalised until commencement of commercial operations and
thereafter amortised in the statement of income over the expected commercial duration of the
project.
 Exploration and evaluation costs in respect of which exploration and evaluation procedures
determine that economically recoverable reserves do not exist are written off.
(f) Prepaid land costs

Prepaid land costs comprise prepaid land lease rentals and other costs incurred in conjunction with
securing the use of the leased land. These costs are recognised in the consolidated statement of
income on a straight-line basis over the term of the leases.
(g) Site clearance costs

Site clearance costs comprise compensation and clearance fee paid by the Group. These expenses
are initially stated at cost and amortised on a straight-line basis over the useful lives of land lease
period.
(h) Bond issuance fees

Bond issuance fees reflect the costs incurred related to the issuance of bonds. These expenses were
recognised in the consolidated statement of income on a straight-line basis over three years.
(i) Mines road construction and upgrading costs

These comprise the costs for construction and upgrading mine roads which are initially stated at
cost and amortised on a straight-line basis over 8 years.

22
(continued)
Form B 09 – DN/HN
3.12 Goodwill
Goodwill arises on the acquisition of subsidiaries and associates. Goodwill is measured at cost less
accumulated amortisation. Cost of goodwill represents the excess of the cost of the acquisition over
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities of the acquirees. If the fair value of the net assets which the Group acquired from
subsidiaries and associates exceeds the purchase price, the surplus will be recorded in the
consolidated statement of income during the year. Goodwill is amortised on a straight-line basis
over 4 - 10 years. In respect of equity accounted investees, the carrying amount of goodwill is
included in the carrying amount of the investment.
During the year, the Group revised the amortisation period of goodwill arisen from the acquisition
of Golden Gain Vietnam JSC in previous years from 10 years to 4 years to more accurately reflect
the period the Group realises the economic benefits from this acquisition. The effect on the
amortisation charge for the year was to increase the amortisation expense by VND148,338 million.
3.13 Trade and other payables

Trade and other payables are stated at their cost.
3.14 Provisions
A provision is recognised if, as a result of a past event, the Group 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.
3.15 Classification of financial instruments

Solely for the purpose of providing disclosures about the significance of financial instruments to the
Group’s financial position and results of operations and the nature and extent of risk arising from
financial instruments, the Group classifies its financial instruments as follow:
(a) Financial assets

Financial assets at fair value through profit or loss
A financial asset at fair value through profit or loss is a financial asset that meets either of the
following conditions:
 It is considered by management as held for trading. A financial asset is considered as held for
trading if:
- it is acquired principally for the purpose of selling it in the near term;

- there is evidence of a recent pattern of short-term profit-taking; or
- a derivative (except for a derivative that is financial guarantee contract or a designated and
effective hedging instrument).
 Upon initial recognition, it is designated by the Group as at fair value through profit or loss.
HOA PHAT GROUP

84 WWW.HOAPHAT.COM.VN 23
(continued)
Form B 09 – DN/HN
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and a fixed maturity that the Group has the positive intention and ability to hold to
maturity, other than:
 those that the Group upon initial recognition designates as at fair value through profit or loss;
 those that the Group designates as available-for-sale; and
 those that meet the definition of loans and receivables.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market, other than those:
 that the Group intends to sell immediately or in the near term, which are classified as held for
trading, and those that the Group on initial recognition designates as at fair value through profit
or loss;
 that the Group upon initial recognition designates as available-for-sale; or
 for which the Group may not recover substantially all of its initial investment, other than
because of credit deterioration, which are classified as available-for-sale.
Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as
available for sale or that are not classified as:
 financial assets at fair value through profit or loss;

 held-to-maturity investments; or
 loans and receivables.
(b) Financial liabilities

Financial liabilities at fair value through profit or loss
A financial liability at fair value through profit or loss is a financial liability that meets either of the
following conditions:
 It is considered by management as held for trading. A financial liability is considered as held

for trading if:
- it is incurred principally for the purpose of repurchasing it in the near term;

- there is evidence of a recent pattern of short-term profit-taking; or
- a derivative (except for a derivative that is financial guarantee contract or a designated and
effective hedging instrument).
 Upon initial recognition, it is designated by the Group as at fair value through profit or loss.

24
(continued)
Form B 09 – DN/HN
Financial liabilities carried at amortised cost

Financial liabilities which are not classified as financial liabilities at fair value through profit or loss
are classified as financial liabilities carried at amortised cost.
The above described classification of financial instruments is solely for presentation and disclosure
purpose and is not intended to be a description of how the instruments are measured. Accounting
policies for measurement of financial instruments are disclosed in other relevant notes.
3.16 Income tax

Income tax on the 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.
3.17 Revenue
(a) 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.
(b) 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.
HOA PHAT GROUP

25
(continued)
Form B 09 – DN/HN
(c) 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 surveys of work
performed. No revenue is recognised if there are significant uncertainties regarding recovery of the
consideration due.
(d) Rental income

Rental income from leased property is recognised in the consolidated statement of income on a
straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral
part of the total rental income.
(e) Sales of apartments

Revenue from the sale of apartments 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. The
transfer of significant risks and rewards is determined to be at the time of sale or completion and
hand over of the apartments, whichever is later.
3.18 Operating lease payments

Payments made under operating leases are recognised in the consolidated statement of income on a
straight-line basis over the term of the lease. Lease incentives received are recognised in the
consolidated statement of income as an integral part of the total lease expense.
3.19 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 year of construction are capitalised as part of the cost
of the assets concerned.
3.20 Basic earnings per share

The Group presents basic 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.
3.21 Related parties

Related parties include the shareholders of the Company, the Group’s associates and other parties
as defined in Vietnamese Accounting Standards and the Vietnamese Accounting System.

26
(continued)
Form B 09 – DN/HN
4. Segment reporting
A segment is a distinguishable component of the Group 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. The Group’s primary format for segment reporting is based
on business segments. The Group comprises the following main business segments:
 Production and trading of various kinds of steel: refining steel; casting steel, iron; trading and
import-export of steel, steel-producing machinery and equipment; production of industrial steel
including steel sheet, hot rolled steel, cold rolled steel, steel pipe, steel scrap; production and
trading of steel pipes; production of steel string machinery;
 Trading of construction machinery; production and trading of construction equipment and

exploitation of medium and small sized metals;
 Manufacturing of furniture and refrigeration products: producing and trading various kinds of
interior furniture and refrigerant products;
 Construction and development of real estates: civil construction, industrial construction, trading
of real estate under its ownership or lease from others; leasing houses, offices and investing in
construction of infrastructure; and
 Energy and exploring and exploiting minerals: Exploring, exploiting, refining, processing,
import-export of minerals, mainly iron ores; production and wholesales of coke coal, exploiting
and collecting fossil coal; producing refined oil products; production, transmission, distribution
of electricity; wholesales of metals and metal ores and trading of various kinds of coals.
27

(continued)
Form B 09 – DN/HN
4. Segment reporting
A segment is a distinguishable component of the Group 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. The Group’s primary format for segment reporting is based
on business segments. The Group comprises the following main business segments:
 Production and trading of various kinds of steel: refining steel; casting steel, iron; trading and
import-export of steel, steel-producing machinery and equipment; production of industrial steel
including steel sheet, hot rolled steel, cold rolled steel, steel pipe, steel scrap; production and
trading of steel pipes; production of steel string machinery;
 Trading of construction machinery; production and trading of construction equipment and

exploitation of medium and small sized metals;
 Manufacturing of furniture and refrigeration products: producing and trading various kinds of
interior furniture and refrigerant products;
 Construction and development of real estates: civil construction, industrial construction, trading
of real estate under its ownership or lease from others; leasing houses, offices and investing in
construction of infrastructure; and
 Energy and exploring and exploiting minerals: Exploring, exploiting, refining, processing,
import-export of minerals, mainly iron ores; production and wholesales of coke coal, exploiting
and collecting fossil coal; producing refined oil products; production, transmission, distribution
of electricity; wholesales of metals and metal ores and trading of various kinds of coals.
HOA PHAT GROUP

27
Form B 09 – DN/HN
Trading of
Production and construction Furniture & Energy and mining Consolidated
trading of steels machinery refrigerators Real estates exploration Elimination total
VND VND VND VND VND VND VND
For the year ended 31 December 2013
Net external revenue 14,644,765,632,684 261,223,153,267 1,900,062,537,069 1,425,038,532,460 703,202,295,051 - 18,934,292,150,531
Net inter-segment revenue 6,328,048,795,292 97,386,033,526 66,960,224,790 8,317,676,895 2,692,425,506,263 (9,193,138,236,766) -
20,972,814,427,976 358,609,186,793 1,967,022,761,859 1,433,356,209,355 3,395,627,801,314 (9,193,138,236,766) 18,934,292,150,531
Segment net operating profits 2,655,988,753,812 47,266,481,354 314,532,590,352 301,866,652,851 632,243,154,264 (1,590,104,175,481) 2,361,793,457,152
Other income 174,560,080,681 2,852,508,519 5,247,775,755 7,458,954,172 7,592,158,266 1,392,770,104 199,104,247,497

Other expenses (153,029,986,572) (374,319,496) (1,752,890,351) (4,223,262,806) (6,856,852,178) - (166,237,311,403)
Share of loss in associates - - - - - (256,198,814) (256,198,814)
Income tax expenses – current (163,662,188,384) (9,508,411,922) (69,796,085,788) (75,017,822,116) (72,198,752,389) - (390,183,260,599)
Income tax benefits/(expenses) –
deferred 2,917,619,794 (207,799,306) 402,302,636 1,552,677,652 (281,290,948) 1,830,959,108 6,214,468,936
Net profit after tax 2,516,774,279,331 40,028,459,149 248,633,692,604 231,637,199,753 560,498,417,015 (1,587,136,645,083) 2,010,435,402,769
28
2013 ANNUAL REPORT

89
90
Form B 09 – DN/HN
Trading of
trading of steels machinery refrigerators Real estates exploration Elimination Total
HOA PHAT GROUP

WWW.HOAPHAT.COM.VN
As at 31 December 2013
Segment assets 21,861,336,872,015 267,428,224,910 1,387,681,607,248 3,616,561,415,557 4,527,137,556,499 (8,589,320,983,981) 23,070,824,692,248
Investments in associates 5,553,170,441 - - - - - 5,553,170,441
Total assets 21,866,890,042,456 267,428,224,910 1,387,681,607,248 3,616,561,415,557 4,527,137,556,499 (8,589,320,983,981) 23,076,377,862,689
Segment liabilities 9,026,844,532,326 52,479,312,594 700,837,451,721 2,667,016,740,032 2,159,942,758,354 (1,117,702,951,897) 13,489,417,843,130
Total liabilities 9,026,844,532,326 52,479,312,594 700,837,451,721 2,667,016,740,032 2,159,942,758,354 (1,117,702,951,897) 13,489,417,843,130
Capital expenditure 2,459,096,278,412 2,438,661,210 68,098,175,041 3,942,227,433 549,879,218,117 (9,631,363,196) 3,073,823,197,017

Depreciation of tangible fixed (410,080,404,315) (14,338,508,601) (64,970,494,673) (10,797,693,677) (220,289,582,640) 5,350,691,729 (715,125,992,177)
assets, finance leases assets
and investment properties
Amortisation of intangible (2,118,649,141) (902,333,448) (2,126,275,028) - (231,126,873) 308,810,356 (5,069,574,134)
fixed assets
29
Form B 09 – DN/HN
Trading of
For the year ended 31 December 2012
Net external revenue 13,209,200,217,416 240,731,985,407 1,736,495,943,515 447,425,123,385 1,192,998,623,261 - 16,826,851,892,984
Net inter-segment revenue 6,147,123,638,135 50,980,760,137 114,555,229,689 7,067,553,532 2,077,511,267,928 (8,397,238,449,421) -
19,356,323,855,551 291,712,745,544 1,851,051,173,204 454,492,676,917 3,270,509,891,189 (8,397,238,449,421) 16,826,851,892,984
Segment net operating profits 1,288,929,557,607 24,879,678,480 216,664,888,253 146,082,675,511 188,115,471,516 (660,868,893,479) 1,203,803,377,888
Other income 138,894,728,571 28,569,705,141 45,363,328,372 7,050,443,276 14,376,897,799 (23,982,803,135) 210,272,300,024

Other expenses (135,337,510,217) (14,563,932,660) (29,903,014,388) (4,350,075,301) (13,616,480,002) 2,441,973,472 (195,329,039,096)
Share of loss in associates - - - - - (541,298,162) (541,298,162)
Income tax expenses – current (65,498,001,679) (5,215,024,821) (49,777,174,206) (31,423,660,394) (16,368,214,377) - (168,282,075,477)
Income tax benefits/(expenses) –
deferred (17,779,578,681) (1,782,210,577) (1,984,445,803) (574,988,532) 3,542,223,938 (838,836,005) (19,417,835,660)
Net profit after tax 1,209,209,195,601 31,888,215,563 180,363,582,228 116,784,394,560 176,049,898,874 (683,789,857,309) 1,030,505,429,517
2013 ANNUAL REPORT

30
91
92
Form B 09 – DN/HN
Trading of
HOA PHAT GROUP

WWW.HOAPHAT.COM.VN
As at 31 December 2012
Segment assets 17,563,949,492,469 328,480,484,003 1,176,468,555,095 3,380,847,120,331 3,892,550,239,550 (7,332,341,799,156) 19,009,954,092,292
Investments in associates 5,809,369,254 - - - - - 5,809,369,254
Total assets 17,569,758,861,723 328,480,484,003 1,176,468,555,095 3,380,847,120,331 3,892,550,239,550 (7,332,341,799,156) 19,015,763,461,546
Segment liabilities 6,679,932,965,016 118,385,543,645 644,768,856,790 2,491,841,349,686 1,938,074,925,012 (1,434,797,723,753) 10,438,205,916,396
Total liabilities 6,679,932,965,016 118,385,543,645 644,768,856,790 2,491,841,349,686 1,938,074,925,012 (1,434,797,723,753) 10,438,205,916,396
Capital expenditure 1,505,513,671,464 5,326,545,521 76,713,718,648 70,811,890,700 174,875,045,518 (5,135,720,877) 1,828,105,150,975

Depreciation of tangible fixed
assets, finance leases assets and
investment properties (356,096,894,345) (16,644,612,562) (62,285,055,498) (8,491,224,097) (156,020,000,178) 4,377,537,488 (595,160,249,191)
Amortisation of intangible
fixed assets (1,937,874,081) (942,567,648) (1,898,414,000) - (224,978,729) 299,651,181 (4,704,183,277)
31
(continued)
Form B 09 – DN/HN
5. Business combination
On 30 September 2013, the Group received the transfer of additional 11.99% of share capital and
corresponding voting rights of Hoa Phat Steel JSC, a subsidiary of the Group. Accordingly, the
Group’s share interest and voting rights in this subsidiary increased from 88% (*) to 99.99%.
(*) Prior to the acquisition, the Group increased its shareholdings in this subsidiary from 85% to
88% through share capital contribution during the year.
The acquisition had the following effects on the Group’s assets and liabilities on acquisition date:
Recognised value on
acquisition of the additional
share capital of
Hoa Phat Steel JSC
VND
Current assets 2,840,192,759,420

Fixed assets (net book value) 4,853,027,327,662
Other long-term assets 81,605,195,281
Current liabilities (2,741,144,540,852)
Long-term borrowings (1,429,053,523,285)
Net identifiable assets and liabilities 3,604,627,218,226
Additionally acquired share in carrying value of net assets of the

432,497,592,151
subsidiary on the acquisition date
Goodwill from acquisition (36,550,392,151)
Cost of acquisition 395,947,200,000
Based on the official guidance letter from the Ministry of Finance to the Group, when the Group
was not able to determine the net fair value of the identifiable assets, liabilities and contingent
liabilities of the acquiree, the Group had used the net carrying amounts of the assets and liabilities
of the acquiree to determine the goodwill arising from acquisition.

32
(continued)
Form B 09 – DN/HN
6. Cash and cash equivalents

31/12/2013 31/12/2012
VND VND
Cash on hand 4,268,531,258 7,290,746,319
Cash in banks 278,483,558,353 160,931,606,040
Cash in transit 11,026,058 3,045,651,687
Cash equivalents 1,842,559,275,028 1,123,225,696,441
2,125,322,390,697 1,294,493,700,487
7. Accounts receivable short-term and long-term

Other short-term receivable comprises:
31/12/2013 31/12/2012
VND VND
Advance for land clearance 8,433,878,502 8,201,388,502
Interest receivables 11,299,623,837 6,780,609,597
Materials issued for outside processing 1,110,597,665 920,717,401
Other receivables (*) 13,934,886,765 276,826,305,571
34,778,986,769 292,729,021,071
(*) Included in the other short-term receivables as at 31 December 2012 was VND264,000 million
paid for the purchase of shares in a subsidiary of the Group from a shareholder of this subsidiary.
In 2013, this receivable was fully recovered.
Other long-term receivables comprised:

31/12/2013 31/12/2012
VND VND
Entrusted investment received (**) 448,979,590,000 448,979,590,000
Other receivables 779,648,679 -
449,759,238,679 448,979,590,000
(**) The entrusted investment represents the amount the Group invested in Vinaconex-Viettel Urban
Development JSC based on the entrustment agreement with Hoa Phat A Chau Real Estate Joint
Stock Company. All responsibilities, risks and losses as well as benefits of the investment
belong to Hoa Phat - A Chau Real Estate Joint Stock Company. This amount is corresponding
to the amount of entrusted investment being recorded in other long-term liabilities (Note 21).
HOA PHAT GROUP

(continued)
Form B 09 – DN/HN
8. Inventories
31/12/2013 31/12/2012
VND VND
Goods in transit 886,720,639,117 721,681,193,928

Raw materials 2,383,614,274,577 1,440,630,638,196
Tools and supplies 250,397,310,728 194,695,141,551
Work in progress 2,724,837,093,296 2,837,866,560,636
Finished goods 1,760,046,969,711 1,596,687,095,873
Merchandise inventories 55,818,315,348 53,548,434,481
Goods on consignment 3,420,286,674 2,887,444,386
8,064,854,889,451 6,847,996,509,051
Allowance for inventories (35,279,600,260) (25,919,270,311)
8,029,575,289,191 6,822,077,238,740
At 31 December 2013 inventories with a carrying value of VND3,151,854 million (31/12/2012:

VND1,726,232 million) were pledged with banks as security for loans granted to the Group.
Included in inventories at 31 December 2013 was VND137,251 million (31/12/2012: VND90,085

million) of finished goods carried at net realisable value.
9. Taxes and other receivables from State Treasury

31/12/2013 31/12/2012
VND VND
Corporate income tax overpaid 14,086,226,322 14,567,433,831

Corporate income tax prepaid to the State Treasury for
the advances from the customers buying apartments 19,975,680,534 17,348,307,138
Other receivables from State Treasury 82,722,934 497,699,445
34,144,629,790 32,413,440,414

34
96
Form B 09 – DN/HN
10. Tangible fixed assets
HOA PHAT GROUP

Machinery and
WWW.HOAPHAT.COM.VN
Buildings Office equipment equipment Motor vehicles Others Total
VND VND VND VND VND VND
Cost
Opening balance 1,700,374,671,936 26,709,863,664 4,522,170,700,065 277,416,748,034 3,276,394,568 6,529,948,378,267
Additions 19,584,753,617 3,271,461,283 52,464,482,945 23,528,663,665 - 98,849,361,510
Transfer from construction in progress 628,032,928,378 680,475,681 4,546,642,287,516 31,835,085,115 - 5,207,190,776,690
Disposal of a tier 2 - subsidiary (3,710,182,000) (27,465,146) (2,760,825,000) - - (6,498,472,146)
Disposals and written off (1,814,271,939) (566,717,764) (13,304,201,710) (16,171,138,298) - (31,856,329,711)
Reclassifications (*) (582,705,600) (6,513,276,665) (34,814,524,704) (508,290,391) (70,476,190) (42,489,273,550)
Other movements (178,462,214) (726,018,911) (3,802,214,841) 52,715,946 (2,577,475,716) (7,231,455,736)
Closing balance 2,341,706,732,178 22,828,322,142 9,066,595,704,271 316,153,784,071 628,442,662 11,747,912,985,324
Accumulated depreciation
Opening balance 355,159,198,420 16,007,842,508 1,734,039,330,101 125,940,075,411 3,034,336,977 2,234,180,783,417
Charge for the year 138,238,743,284 3,953,106,188 533,993,101,025 34,265,299,121 158,971,238 710,609,220,856
Disposal of a tier 2 - subsidiary (896,173,802) - (2,235,497,723) - - (3,131,671,525)
Disposals and written off (1,280,148,872) (505,971,158) (5,637,447,543) (10,718,488,840) - (18,142,056,413)
Reclassifications (*) (628,291,600) (4,814,333,234) (29,462,981,356) (253,448,550) (70,476,190) (35,229,530,930)
Other movements 129,959,067 (673,662,291) (1,795,623,255) (36,384,029) (2,494,389,363) (4,870,099,871)
Closing balance 490,723,286,497 13,966,982,013 2,228,900,881,249 149,197,053,113 628,442,662 2,883,416,645,534
Net book value

Opening balance 1,345,215,473,516 10,702,021,156 2,788,131,369,964 151,476,672,623 242,057,591 4,295,767,594,850
Closing balance 1,850,983,445,681 8,861,340,129 6,837,694,823,022 166,956,730,958 - 8,864,496,339,790
Included in the cost of tangible fixed assets were assets costing VND787,029 million which were fully depreciated as of 31 December 2013 (31/12/2012:
VND561,513 million), but still in active use.
35
(continued)
Form B 09 – DN/HN
At 31 December 2013, tangible fixed assets with a carrying value of VND6,967,473 million
(31/12/2012: VND3,068,910 million) were pledged with banks as security for loans granted to the
Group.
(*) The reclassification represents net book value of existing fixed assets’ cost which do not meet
one of the criteria for recognition as fixed assets as regulated in Article 3 of Circular 45, i.e.
costing VND30 million or more. These assets are reclassified to Long-term prepayments and
Short-term prepayments.
11. Intangible fixed assets

Land use rights Software Others Total
VND VND VND VND
Cost
Opening balance 184,285,115,653 2,644,303,901 1,367,576,332 188,296,995,886
Additions 26,000,000,000 662,977,540 - 26,662,977,540
Transfer from construction
in progress 1,267,660,800 - - 1,267,660,800
Disposals and written off - (16,055,000) - (16,055,000)
Reclassifications (*) - (294,479,586) - (294,479,586)
Closing balance 211,552,776,453 2,996,746,855 1,367,576,332 215,917,099,640
Accumulated amortisation
Opening balance 19,654,677,272 1,549,200,334 875,783,630 22,079,661,236
Charge for the year 4,250,963,046 617,747,692 200,863,396 5,069,574,134
Disposals and written off - (16,055,000) - (16,055,000)
Reclassifications (*) - (279,695,833) - (279,695,833)
Closing balance 23,905,640,318 1,871,197,193 1,076,647,026 26,853,484,537
Net book value

Opening balance 164,630,438,381 1,095,103,567 491,792,702 166,217,334,650
Closing balance 187,647,136,135 1,125,549,662 290,929,306 189,063,615,103
At 31 December 2013 intangible fixed assets with a carrying value of VND96,265 million
(31/12/2012: VND68,955 million) were pledged with banks as security for loans granted to the
Group.
(*) The reclassification represents net book values of existing fixed assets’ cost which do not meet
one of the criteria for recognition as fixed assets as regulated in Article 3 of Circular 45, i.e.
costing VND30 million or more. These assets are reclassified to Long-term prepayments and
Short-term prepayments.

36
(continued)
Form B 09 – DN/HN
12. Construction in progress

2013 2012
VND VND
Opening balance 2,545,104,717,735 1,354,316,650,072

Additions during the year 2,948,310,857,967 1,524,586,904,146
Disposal of a tier 1 – subsidiary - (675,421,490)
Disposal of a tier 2 – subsidiary (104,523,432,005) -
Transfer to tangible fixed assets (5,207,190,776,690) (219,180,090,759)
Transfer to intangible fixed assets (1,267,660,800) (22,486,759,346)
Transfer to investment property - (58,960,334,604)
Transfer to long-term prepayments (30,392,219,720) (8,851,100,428)
Transfer to short-term prepayments (8,824,912,067) (334,536,103)
Transfer to inventories (5,282,408,650) -
Disposals - (23,732,892,826)
Others (2,363,596,351) 422,299,073
Closing balance 133,570,569,419 2,545,104,717,735
Major constructions in progress were as follows:
31/12/2013 31/12/2012
VND VND
Steel billet factory expansion project 44,999,800,849 -

Mould factory and swivel chair plant expansion 44,753,315,330 -
project
Electricity factory – Phase II - 404,131,469,719
Coke factory – Phase II - 690,186,392,879
Hoa Phat steel and iron complex – Phase II - 1,061,656,962,228
Duc Tien Mine - 92,222,081,327
Coal baking and grinding system - 71,084,748,112
Binh Vang Factory - 20,431,308,120
Other projects 43,817,453,240 205,391,755,350
133,570,569,419 2,545,104,717,735
During the year, borrowing costs capitalised into construction in progress amounting to
VND152,512 million (2012: VND54,390 million).
HOA PHAT GROUP

37
(continued)
Form B 09 – DN/HN
13. Investment property

Buildings
VND
Cost
Opening balance and closing balance 88,066,912,353
Accumulated depreciation
Opening balance 21,547,846,268
Charge for the year 4,516,771,321
Closing balance 26,064,617,589
Net book value

The Group’s investment property represents the workshops and factories for rent in Pho Noi A
Industrial Park, Giai Pham Commune, Yen My District, Hung Yen Province, Vietnam and certain
floors for rent of the building at 257 Giai Phong Street, Hai Ba Trung District, Hanoi, Vietnam.
At the reporting date, the fair value of the Group’s investment property has not been determined as
there is no active market for such property.
14. Financial investments

14.1. Short-term investments
31/12/2013 31/12/2012
VND VND
Term deposits 387,793,671,402 219,951,513,600
14.2. Long term investments

31/12/2013 31/12/2012
VND VND
Investment in associates (*) 5,553,170,441 5,809,369,255

Other long-term investments (**) 15,702,128,365 20,409,128,365
21,255,298,806 26,218,497,620

38
(continued)
Form B 09 – DN/HN
(*) Details of long-term investments in associates are as follows:
31/12/2013 31/12/2012
VND VND
Yen Phu Investment and Mineral JSC 1,470,784,883 1,500,000,000

Hoa Phat - SSG Mining JSC 4,082,385,558 4,309,369,255
5,553,170,441 5,809,369,255
Details of movements of long-term investments in associates as follows:
31/12/2013 31/12/2012
VND VND
Opening balance 5,809,369,255 183,056,336,459

Additions - 1,500,000,000
Share of losses in associates (256,198,814) (541,298,162)
Disposal of an associate - (177,522,561,718)
Other movements - (683,107,324)
5,553,170,441 5,809,369,255
(**) Details of other long-term investments are as follows:
31/12/2013 31/12/2012
VND VND
Viet Ha Brewery JSC (***) 15,000,000,000 15,000,000,000

Bac Ha Noi Urban Development JSC (***) 700,000,000 700,000,000
Hai Duong Electricity One Member Co., Ltd (****) - 2,400,000,000
Others 2,128,365 2,309,128,365
15,702,128,365 20,409,128,365
(***) These were long-term equity investments with the percentage of equity owned less than
20%.
(****) This was an unsecured loan which bore interest at rate of 1% per annum.
HOA PHAT GROUP

39
Form B 09 – DN/HN
15. Long-term prepayments

Overhaul
and major Foreign Exploration and Mines road
Pre-operating Tools and maintenance exchange evaluation Prepaid Site clearance Bond construction and
expenses supplies expenses differences costs land costs costs issuance fees upgrading costs Others Total
VND VND VND VND VND VND VND VND VND VND VND
Opening balance 6,008,458,928 38,347,260,521 2,320,599,767 22,227,718,177 47,389,000,881 59,888,316,321 41,952,428,261 1,175,474,764 58,701,078,187 49,666,350,501 327,676,686,308
Additions 286,467,008 67,878,779,900 3,246,667,872 - 8,000,000 - 1,001,511,059 - 2,774,183,453 6,689,873,214 81,885,482,506
Transfer from
construction in
progress - 6,218,456,803 - - - - 738,735,901 - 19,444,220,316 3,990,806,700 30,392,219,720
Reclassifications (*) - 2,862,404,233 - - - - - - - 90,714,326 2,953,118,559
Written off - (39,447,919) - - - - - - - - (39,447,919)
Amortisation for the
year (5,478,439,017) (55,205,664,757) (1,631,908,486) (7,255,696,431) (2,916,733,843) (3,905,806,577) (1,840,460,727) (1,175,474,764) (8,068,608,816) (28,960,732,668) (116,439,526,086)
Other movements - 9,800,849,281 - - - - - - - (9,800,849,281) -
Closing balance 816,486,919 69,862,638,062 3,935,359,153 14,972,021,746 44,480,267,038 55,982,509,744 41,852,214,494 - 72,850,873,140 21,676,162,792 326,428,533,088
At 31 December 2013, long-term prepayments with a carrying value of VND38,955 million (31/12/2012: VND40,014 million) were pledged with banks as security for
loans granted to the Group.
(*) Reclassification from fixed assets represents the net book value of existing fixed assets’ cost which do not meet one of the criteria for recognition as fixed assets,
i.e. costing VND30 million or more, as regulated in Article 3 of Circular 45. These assets were reclassified from tangible and intangible fixed assets during the
year (Note 10 and Note 11). The remaining net book values of these assets are amortised on a straight line basis over their remaining estimated useful lives, but
not exceeding three years.
40
2013 ANNUAL REPORT

101
(continued)
Form B 09 – DN/HN
16. Recognised deferred tax assets

Deferred tax assets were recognised in respect of the following items:
31/12/2013 31/12/2012
VND VND
Accrued expenses 11,110,638,686 9,110,679,876

Unrealised profits arising on the intra-group sales of
inventories and fixed assets 43,114,983,133 37,933,449,536
Unrealised foreign exchange losses 119,184,039 944,079,110
54,344,805,858 47,988,208,522
HOA PHAT GROUP

41
Form B 09 – DN/HN
17. Goodwill
An Thong Hanoi Hanoi
Mineral Investment Transportation and Duc Long Hoa Yen Duc Tien
Investment Hoa Phat Golden Gain Hoa Phat and Service trading services JSC Viet Packing Mining JSC Mining JSC Co., Ltd.
JSC Energy JSC Vietnam JSC Mining JSC JSC (*) (*) Co., Ltd. (**) (***) (***) (***) Total
VND VND VND VND VND VND VND VND VND VND VND
Cost
Opening balance 350,232,527,609 206,244,396,684 355,059,967,828 34,014,618,203 74,526,572,949 89,496,114,296 29,824,917,043 88,314,041,292 2,783,778,959 5,787,962,619 1,236,284,897,482
Disposal of a tier 2
- subsidiary - - - - - - - - - (5,787,962,619) (5,787,962,619)
Closing balance 350,232,527,609 206,244,396,684 355,059,967,828 34,014,618,203 74,526,572,949 89,496,114,296 29,824,917,043 88,314,041,292 2,783,778,959 - 1,230,496,934,863
Accumulated amortisation
Opening balance 125,499,988,264 53,279,802,476 94,613,880,817 5,493,761,115 31,227,656,241 21,225,665,458 18,392,032,184 32,490,816,564 440,765,002 1,543,456,697 384,207,824,818
Amortisation for
the year 35,023,252,757 20,624,439,668 183,844,296,714 3,401,461,820 7,483,024,675 9,524,404,637 5,964,983,409 8,831,404,128 278,377,896 48,233,022 275,023,878,726
Disposal of a tier 2
– subsidiary - - - - - - - - - (1,591,689,719) (1,591,689,719)
Other movements - - - - (1,599,231,341) 1,599,231,341 - - - - -
Closing balance 160,523,241,021 73,904,242,144 278,458,177,531 8,895,222,935 37,111,449,575 32,349,301,436 24,357,015,593 41,322,220,692 719,142,898 - 657,640,013,825
Net book value

Opening balance 224,732,539,345 152,964,594,208 260,446,087,011 28,520,857,088 43,298,916,708 68,270,448,838 11,432,884,859 55,823,224,728 2,343,013,957 4,244,505,922 852,077,072,664
Closing balance 189,709,286,588 132,340,154,540 76,601,790,297 25,119,395,268 37,415,123,374 57,146,812,860 5,467,901,450 46,991,820,600 2,064,636,061 - 572,856,921,038
(*) These are subsidiaries of Golden Gain Vietnam JSC. As at 31 December 2012, they were subsidiaries of Hoa Phat Urban Development and Construction JSC.
(**) This is a subsidiary of Hoa Phat Equipment & Accessories Co., Ltd.
(***) These are subsidiaries of Hoa Phat Mining JSC.
42
2013 ANNUAL REPORT

103
(continued)
Form B 09 – DN/HN
18. Short-term borrowings

31/12/2013 31/12/2012
VND VND
Short-term borrowings 5,523,878,392,658 4,421,192,510,273

Current portion of long-term borrowings (Note 23) 219,681,425,090 429,056,378,363
5,743,559,817,748 4,850,248,888,636
At 31 December 2013, short-term borrowings include borrowings in VND and USD with carrying
amounts of VND4,812,292 million and VND711,586 million (31/12/2012: VND2,952,060 million
and VND1,469,132 million), respectively.
At 31 December 2013, the short-term borrowings in VND and USD with the carrying amounts of
VND4,486,590 million and VND399,663 million (31/12/2012: VND1,651,050 million and
VND961,392 million), respectively, are secured by certain inventories, trade receivables and fixed
assets of the Group and a number of Hoa Phat Group Joint Stock Company (“HPG”) shares owned
by a number of the members of the Board of Management of the Company. The remaining short-
term borrowings were unsecured.
The borrowings denominated in VND and USD bore interest at rates ranging from 4% to 9.5%
(2012: 4% to 17%) per annum and 1.6% to 6% (2012: 3% to 7%) per annum, respectively during
the year.
19. Taxes payable to State Treasury

31/12/2013 31/12/2012
VND VND
Value added tax 31,168,739,243 63,038,488,570

Special consumption tax 2,150,007,216 1,944,505,846
Import-export tax 41,473,189 3,683,487,535
Corporate income tax 315,239,777,566 124,017,842,930
Corporate income tax temporarily calculated on the
progress payments from customers 3,769,734,413 2,897,134,787
Personal income tax 821,584,289 911,925,456
Natural resource taxes 8,667,249,873 5,347,434,394
Land and housing taxes 11,313,731,067 4,070,550,435
Other taxes 14,680,799,603 4,021,367,507
387,853,096,459 209,932,737,460
HOA PHAT GROUP

43
(continued)
Form B 09 – DN/HN
20. Accrued expenses

31/12/2013 31/12/2012
VND VND
Payables to contractors 240,573,720,111 200,946,259,441

Interest expense 24,902,187,906 49,133,268,178
Hoa Mac Industrial Zone construction expense 18,252,745,742 12,015,766,307
Pho Noi A Industrial Zone construction expense 22,383,303,206 22,383,303,206
Electricity expense 9,180,712,054 7,028,807,646
Service fees 1,363,626,166 181,870,000
Promotion expense 17,090,615,414 23,554,892,096
Guarantee expenses 1,903,451,185 4,112,803,561
Salaries and bonuses 2,117,875,473 2,362,252,166
Transportation cost 3,065,411,255 -
Others 4,613,981,700 11,085,335,732
345,447,630,212 332,804,558,333
21. Other payables

Other short-term payables comprised:
31/12/2013 31/12/2012
VND VND
Unearned revenue 74,709,180 4,546,262,597

Temporarily received goods 24,923,444,550 17,298,357,276
Payable to RHI Retractories Asia-Pacific PTE 11,983,252,776 12,770,664,171
Payable to Golden Gain Enterprises JSC 3,756,425,917 11,864,540,153
Dividends payable 29,507,020,000 746,511,000
Short-term deposits and collaterals received 24,861,007,010 17,647,236,019
Sales discounts 26,375,446,235 9,559,659,369
Trade union fee, social and health insurance 2,819,340,463 1,862,326,208
Progress payments from customers (*) 1,881,758,028,828 -
Others 38,013,958,722 16,516,404,161
2,045,822,283,922 105,794,771,676
(*) These were the amounts net of value added tax received from customers in accordance with
the payment schedule to purchase apartments from the Group.

(continued)
Form B 09 – DN/HN
Other long-term liabilities comprised:

31/12/2013 31/12/2012
VND VND
Progress payments from customers - 1,146,772,731,369

Entrusted investment received (**) 448,979,590,000 448,979,590,000
Other payables 65,951,101,650 24,735,548,102
514,930,691,650 1,620,487,869,471
(**) The entrusted investment received represents the amount the Group received from Hoa Phat
A Chau Real Estate Joint Stock Company to invest in Vinaconex-Viettel Urban Development
JSC (Note 7).
22. Provisions
Movement of provisions during the year were as follows:
Warranties
VND

Provision made during the year 6,535,902,055
Provision used during the year (2,393,111,155)
Provision reversed during the year (2,141,825,180)
The provision for warranties relates mainly to goods sold and services rendered during the years
ended 31 December 2013 and 31 December 2012. The provision is based on estimates derived from
historical warranty data associated with similar products and services.
23. Long-term borrowings

31/12/2013 31/12/2012
VND VND
Long-term borrowings (a) 2,051,505,031,426 1,684,764,924,203

Long-term bonds (b) - 200,000,000,000
2,051,505,031,426 1,884,764,924,203
Repayable within twelve months (Note 18) (219,681,425,090) (429,056,378,363)
Repayable after twelve months 1,831,823,606,336 1,455,708,545,840
HOA PHAT GROUP

45
(continued)
Form B 09 – DN/HN
Terms and conditions of outstanding long-term borrowings were as follows:
Annual Year of 31/12/2013 31/12/2012

Currency interest rate maturity VND VND
BIDV (a) VND Floating 2020 714,021,685,457 362,063,874,010

VDB (a) VND 9.6% 2026 255,561,278,592 271,209,278,592
Techcombank (a) USD Floating 2014 16,447,082,225 146,432,953,664
Vietcombank (a) VND/USD Floating 2015 10,000,000,000 63,297,250,000
Indovina Bank (a) VND/USD Floating 2014 56,505,291,803 112,874,304,652
HSBC (a) VND/USD Floating 2013 - 10,069,051,878
ANZ (a) VND/USD Floating 2016 181,674,830,721 262,419,199,649
Vietinbank (a) VND Floating 2017 367,294,862,628 297,399,011,758
Borrowings from
an individual (b) VND 12% 2015 450,000,000,000 159,000,000,000
Long-term bonds
(c) VND Floating 2013 - 200,000,000,000
2,051,505,031,426 1,884,764,924,203
(a) The long-term bank borrowings are secured by certain inventories, fixed assets and long-term
prepayments of the Group. In addition, some of these long-term borrowings are also secured
by some HPG shares, land use rights and assets of a subsidiary to be formed in the future, a
real estate of a member of the Board of Management of the Company and the mining rights of
a subsidiary and all plants, machineries and equipment to be formed in the future at these
mines.
(b) The borrowings from an individual which is a related party are unsecured.
(c) The bonds bore interest at the rate equal to 14.5% per annum for the first year commencing
from 21 July 2010 and the sum of the reference interest rate (an average derived from four
quotations for 12-month VND saving deposit rate payable in arrears provided by Transactions
Centres in Hanoi of four major banks (namely, Joint Stock Bank for Investment and
Development of Vietnam, Joint Stock Commercial Bank for Foreign Trade of Vietnam,
Vietnam Joint Stock Commercial Bank for Industry and Trade and Vietnam Bank for
Agriculture and Rural Development) as at the Interest Fixing Date annually plus 3.5% per
annum). The bonds were fully repaid in 2013.

46
108
Form B 09 – DN/HN
HOA PHAT GROUP

24. Changes in owners’ equity
WWW.HOAPHAT.COM.VN
Share Foreign exchange Financial
capital Capital surplus Other capital Treasury shares differences reserve Retained profits Total
VND VND VND VND VND VND VND VND
Balance at 1 January 2012 3,178,497,600,000 2,257,862,350,000 313,613,480,000 (150,970,558,021) 5,594,607,014 269,337,278,874 1,539,869,803,156 7,413,804,561,023
Share capital issued 313,613,480,000 - (313,613,480,000) - - - - -
Treasury shares reissued - (50,511,532,932) - 150,970,558,021 - - - 100,459,025,089
Net profit for the year - - - - - - 994,024,322,436 994,024,322,436
Appropriation to financial reserve - - - - - 30,471,197,332 (30,471,197,332) -
Appropriation to bonus and
welfare funds - - - - - - (60,973,138,627) (60,973,138,627)
Fund utilisations - - - - - (9,130,386,122) - (9,130,386,122)
Dividends 698,414,250,000 - - - - - (1,047,625,358,000) (349,211,108,000)
Members of Supervising Board and
Board of Management allowances - - - - - - (2,646,000,000) (2,646,000,000)
Other movements - - - - (1,173,375,909) (563,784,388) 544,999,307 (1,192,160,990)
Balance at 1 January 2013 4,190,525,330,000 2,207,350,817,068 - - 4,421,231,105 290,114,305,696 1,392,723,430,940 8,085,135,114,809
Net profit for the year - - - - - - 1,954,187,537,863 1,954,187,537,863

Appropriation to financial reserve - - - - - 169,215,674,105 (169,215,674,105) -
Appropriation to bonus and
welfare funds - - - - - - (114,372,976,377) (114,372,976,377)
Dividends (Note 26) - - - - - - (419,052,533,000) (419,052,533,000)
Members of Supervising Board
and Board of Management
allowances - - - - - - (2,556,000,000) (2,556,000,000)
Other movements - - - - (4,421,231,105) (249,782,323) 1,657,124,550 (3,013,888,878)
Balance at 31 December 2013 4,190,525,330,000 2,207,350,817,068 - - - 459,080,197,478 2,643,370,909,871 9,500,327,254,417
47
(continued)
Form B 09 – DN/HN
25. Share capital

The Company’s authorised and issued share capitals are:
31/12/2013 31/12/2012
Number of Number of
shares VND shares VND
Authorised share capital 419,052,533 4,190,525,330,000 419,052,533 4,190,525,330,000
Issued share capital

Ordinary shares 419,052,533 4,190,525,330,000 419,052,533 4,190,525,330,000
Shares in circulation
Ordinary shares 419,052,533 4,190,525,330,000 419,052,533 4,190,525,330,000
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.
Movements in shares in circulation during the year were as follows:

2013 2012
Number of VND Number of VND
shares (at par value) shares (at par value)
Balance at the beginning

419,052,533 4,190,525,330,000 313,618,830 3,136,188,300,000
of the year
Shares issued during
the year - - 101,202,773 1,012,027,730,000
Treasury shares reissued - - 4,230,930 42,309,300,000
Balance at the end of

419,052,533 4,190,525,330,000 419,052,533 4,190,525,330,000
the year
26. Dividends
During the year, the Company completed the second distribution of dividends in cash for 2012 to
the shareholders at the rate of 10% of par value of shares, amounting to VND419,053 million, in
accordance with Resolution No. 13/NQHP-2013 dated 21 August 2013 of the Company’s Board of
Management.
27. Financial reserve

Hoa Phat Group Joint Stock Company and its subsidiaries appropriated their net profit after tax on
an annual basis to financial reserves in the equity section. The annual appropriation rate is not over
5% of net profit after tax and the total must not exceed 10% of share capital.

48
(continued)
Form B 09 – DN/HN
28. Total revenue

Total revenue represents the gross value of goods sold and services rendered exclusive of value
added tax. Net sales comprised:
2013 2012
VND VND
Total revenue
 Sales of finished goods 17,564,294,359,178 16,544,777,846,020
 Services rendered 264,267,154,127 137,763,116,377
 Land rental 72,593,851,920 64,847,616,600
 Construction contract - 1,559,667,271
 Sales of apartments 1,299,078,812,857 373,125,679,999
19,200,234,178,082 17,122,073,926,267
Less sales deductions

 Sales discounts 200,412,506,403 180,653,811,626
 Sales allowances 767,780,830 186,823,682
 Sales returns 38,932,293,233 67,450,890,997
 Special sales taxes 18,646,201,132 15,920,662,537
 Export duties 7,183,245,953 31,009,844,441
265,942,027,551 295,222,033,283
Net sales 18,934,292,150,531 16,826,851,892,984
29. Cost of sales

2013 2012
VND VND
Finished goods sold 8,473,421,172,978 13,188,489,538,270

Merchandise goods sold 5,924,836,990,217 899,851,855,533
Services provided 188,878,344,199 26,143,183,678
Land rental 35,183,000,651 15,779,228,922
Construction contract - 1,447,778,044
Sales of apartments 1,018,860,798,210 260,346,416,138
Allowance for inventories 9,360,329,949 (50,415,434,091)
15,650,540,636,204 14,341,642,566,494
HOA PHAT GROUP

49
(continued)
Form B 09 – DN/HN
30. Financial income

2013 2012
VND VND
Interest income from deposits and loans 104,575,514,366 69,159,064,148

Realised foreign exchange gains 28,502,845,950 32,327,219,920
Unrealised foreign exchange gains 297,821,748 1,360,532,817
Gain from disposal of long-term investments - 61,093,160,000
Gain from disposal of a tier 2 – subsidiary (*) 142,728,081,604 -
Other financial income 174,355,325 684,635,296
276,278,618,993 164,624,612,181
(*) On 31 January 2013, Hoa Phat Mining JSC, a tier 1 – subsidiary of the Group, disposed its
shareholdings in Duc Tien Company Limited (“Duc Tien Co., Ltd”).
The disposal had the following effects on the Group’s assets and liabilities at the disposal date:
Recognised value on the

disposal of shareholdings in
Duc Tien Co., Ltd
VND
Cash and cash equivalents 8,803,344,502

Other current assets 7,415,711,034
Fixed assets (net book value) 3,388,157,715
Construction in progress 104,523,432,005
Net identifiable assets and liabilities 124,130,645,256
The Group’s share in carrying value of net assets of the

124,130,645,256
disposed company at the disposal date
Net book value of goodwill arisen previously in connection with
4,196,272,900
acquiring the tier 2 – subsidiary at the disposal date
The carrying value of the Group’s investment in the tier 2 –

128,326,918,156
subsidiary at the disposal date
Proceeds from the disposal
Advance received from the acquirer in 2012 145,984,749,740
Payment in cash by the acquirer during the year 125,070,250,020
Gain from the disposal 142,728,081,604

50
(continued)
Form B 09 – DN/HN
31. Financial expenses

2013 2012
VND VND

Payment discounts 10,991,021,005 10,837,433,095
Realised foreign exchange losses 83,009,497,041 36,562,312,844
Unrealised foreign exchange losses 10,053,130,438 2,466,425,644
Commission fee paid to a third party relating to the
disposal of a tier 2 – subsidiary 42,247,074,304 -
Other financial expenses 11,160,331,344 8,186,965,966
528,408,903,958 585,024,105,173
32. Other income

2013 2012
VND VND
Proceeds from disposals of fixed assets 11,605,368,430 51,448,674,795

Income from sales of electricity, water and
rendering services 137,657,560,272 109,974,610,976
Compensation received from other parties 1,337,297,969 746,555,121
Bad debts recovered - 3,438,901,761
Reversal of provision for severance allowance - 27,840,010,801
Negative goodwill on acquisition of additional share
capital of a subsidiary (Note 5) 36,550,392,151 -
Others 11,953,628,675 16,823,546,570
199,104,247,497 210,272,300,024
HOA PHAT GROUP

(continued)
Form B 09 – DN/HN
33. Other expenses

2013 2012
VND VND
Net book value of disposed and written off fixed assets 13,289,515,039 53,325,542,178
Costs of electricity, water sold and services rendered 135,129,274,388 105,586,225,602
Compensation paid and payables to others 4,354,203,398 22,614,020,434
Other expenses 13,464,318,578 13,803,250,882
166,237,311,403 195,329,039,096
34. Income tax

34.1 Recognised in the consolidated statement of income
2013 2012
VND VND
Current tax expense

Current year 387,541,030,040 168,073,770,557
Under provision in prior years 2,642,230,559 208,304,920
390,183,260,599 168,282,075,477
Deferred tax (benefits)/expenses

Origination and reversal of temporary differences (6,214,468,936) 3,886,216,637
Reversal of deferred tax assets on tax losses recognised
- 15,531,619,023
in previous years
(6,214,468,936) 19,417,835,660
Income tax expense 383,968,791,663 187,699,911,137

52
(continued)
Form B 09 – DN/HN
34.2 Current income tax

2013 2012
VND VND
Profit before tax 2,394,404,194,432 1,218,205,340,654
Adjustment to increase/(decrease) accounting profit

Share of losses from associates (256,198,814) (541,298,162)
Goodwill amortisation 275,023,878,726 125,092,018,440
Reversal of provision for severance allowance - (22,186,024,154)
Non-deductible expenses 51,873,936,263 34,136,034,739
Origination and reversal of temporary differences 15,884,305,241 (6,683,958,020)
2,736,930,115,848 1,348,022,113,497
Tax losses utilised (11,144,642,716) (58,729,817,637)
Current year taxable profit 2,725,785,473,132 1,289,292,295,860
Current year income tax expense 681,446,368,283 322,323,073,965

Tax incentives in subsidiaries (281,104,928,159) (136,084,420,204)
Effect of different tax rates in subsidiaries (24,934,988,654) (18,164,883,204)
Deferred tax assets unrecognised on tax
losses of subsidiaries 12,134,578,570 -
Current income tax expense 387,541,030,040 168,073,770,557
Income tax payable at the beginning of the year 124,017,842,930 168,012,714,066

Under provision in prior years 2,642,230,559 208,304,920
Over-payment of income tax at the beginning of
the year (14,567,433,831) (475,508,634)
Income tax temporarily calculated on the progress
payments from customers in previous years - (5,274,697,905)
Income tax paid during the year (198,260,005,335) (221,484,562,928)
Others (220,113,119) 390,389,023
Income tax payable at the end of the year 301,153,551,244 109,450,409,099
In which:
 Income tax payable 315,239,777,566 124,017,842,930
 Over-payment of income tax (14,086,226,322) (14,567,433,831)
HOA PHAT GROUP

53
(continued)
Form B 09 – DN/HN
34.3 Applicable tax rates

The Company has obligation to pay the State Treasury income tax at rate of 25% of taxable profits.
The Company’s subsidiaries have obligations to pay the State Treasury income tax at the rate in
accordance with the enacted tax regulations.
On 19 June 2013, the National Assembly passed the amended and supplemented Corporate Income
Tax (“CIT”) Law, according to which the Company has an obligation to pay the standard CIT rate
22% from 2014 and 20% from 2016.
35. Basic earnings per share

The calculation of basic earnings per share was based on the consolidated net profit attributable to
ordinary shareholders of the Company and the weighted average number of ordinary shares
outstanding during the year, calculated as follows:
35.1. Weighted average number of ordinary shares

2013 2012
VND VND
Issued ordinary shares at the beginning of the year (*) 419,052,533 344,980,178
Effect of dividends paid in the form of shares - 69,841,425
Effect of treasury shares reissued during the year - 1,848,618
Weighted average number of ordinary shares outstanding

419,052,533 416,670,221
during the year
(*) As at 31 December 2012, the issued ordinary shares included 31,361,348 ordinary shares
issued for dividend payment.
35.2. Basic earnings per share

2013 2012
VND VND
Net profit attributable to ordinary shareholders 1,954,187,537,863 994,024,322,436

Weighted average number of ordinary shares
outstanding during the year 419,052,533 416,670,221
4,663 2,386

54
(continued)
Form B 09 – DN/HN
36. Financial instruments

36.1 Financial risk management
(a) Overview
The Group has exposure to the following risks from its use of financial instruments:
 credit risk;
 liquidity risk; and
 market risk.
This note presents information about the Group’s exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and managing risk.
The Company’s Board of Management oversees how management monitors compliance with the
Group’s risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
(b) Risk management framework

The Company’s and its subsidiaries’ Board of Directors has overall responsibility for the
establishment and oversight of the Group’s risk management framework. The Company’s and its
subsidiaries’ Board of Directors are responsible for developing and monitoring the Group’s risk
management policies.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions
and the Group’s activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all
employees understand their roles and obligations.
36.2 Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Group’s
receivables from customers and cash placed at financial institutions.
Exposure to credit risk

The total of carrying amounts of financial assets represents the maximum credit exposure. The
maximum exposure to credit risk at the reporting date was as follows:
Note 31/12/2013 31/12/2012

VND million VND million
Cash at banks and cash equivalents (i) 2,121,054 1,287,203

Short-term and long-term investments (ii) 387,794 224,661
Trade and other receivables (iii) 1,279,434 1,264,648
3,788,282 2,776,512
HOA PHAT GROUP
(continued)
Form B 09 – DN/HN
(i) Cash at banks and cash equivalents

The cash and cash equivalents at banks of the Group is mainly held with well-known financial
institutions. The Board of Directors does not foresee any significant credit risks from these deposits
and does not expect that these financial institutions may default and cause losses to the Group.
(ii) Long-term and short-term investments

Short-term and long-term investments of the Group represent time deposits with the well-known
financial institutions and loans granted to several other companies. The Board of Directors does not
foresee any significant credit risks from these deposits and loans and does not expect that these
financial institutions and companies may default and cause losses to the Group.
(iii) Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. In response to the risk, the Board of Directors of the Company and its subsidiaries have
established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment and delivery terms and conditions are
offered. Credit purchase limit is established for each customer, which represents the maximum open
amount without requiring approval from the Board of Directors. The limit is reviewed annually. No
collateral is collected from the customers.
Based on historic default rates, the Group management believes that apart from the amount
provided for as per below, no further allowance for doubtful debts is necessary in respect of the
outstanding trade and other receivables at the reporting date.
The aging of trade and other receivables at the year end is as follows:
31/12/2013 31/12/2012
Not past due 1,153,575 1,067,896

Past due 0 – 30 days 74,676 156,396
Past due 31 – 180 days 42,692 25,115
Past due more than 180 days 8,491 15,241
1,279,434 1,264,648
Movements in the allowance for doubtful debts during the year were as follows:
31/12/2013 31/12/2012
VND VND
Opening balance 178,589,724,256 13,082,396,194

Increase in allowance during the year 3,678,712,679 166,860,274,959
Decrease due to disposal of a subsidiary - (10,422,876)
Allowance utilised during the year (2,544,872,408) -
Written back (165,080,362,090) (1,342,524,021)
Closing balance 14,643,202,437 178,589,724,256

56
(continued)
Form B 09 – DN/HN
36.3 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.
At the reporting date, the financial liabilities with fixed or determinable payments have the
following contractual maturities including the estimated interest payments:
Carrying Contractual Within More than

amount cash flows 1 year 1 – 2 years 2 – 5 years 5 years
VND VND VND VND VND VND
31 December 2013 million million million million million million
Trade and other

payables 2,828,249 2,828,249 2,828,249 - - -
Borrowings 7,575,383 8,377,416 6,350,171 747,177 967,419 312,649
10,403,632 11,205,665 9,178,420 747,177 967,419 312,649
31 December 2012
Trade and other
payables 1,954,685 1,954,685 1,954,685 - - -
Borrowings 6,305,958 7,019,474 5,226,872 772,634 816,067 203,900
8,260,643 8,974,159 7,181,557 772,634 816,067 203,900
The Group manages its ability to meet the expected operational expenses and servicing its debts by
investing its cash surpluses in term deposits and maintaining several bank facilities from some
domestic banks.
36.4 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
rates will affect the Group’s results of operations or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
(a) Currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a
currency other than VND, the accounting currency of the Group. The currencies in which these
transactions primarily are denominated are USD.
The Group’s exposure to currency risk is managed by keeping the exposure to an acceptable level
by buying or selling foreign currencies at spot rates when necessary to address short-term over-
exposures.
HOA PHAT GROUP

(continued)
Form B 09 – DN/HN
Exposure to currency risk

At the reporting date, the Group had the following net monetary liability position exposed to
currency risk:
31/12/2013 31/12/2012
USD USD
Cash and cash equivalents 1,309,800 3,673,622

Accounts receivable – trade 1,084,011 2,380,125
Other monetary assets 181,024 -
Accounts payable – trade (62,413,466) (43,941,723)
Short-term borrowings (34,447,456) (65,272,411)
Long-term borrowings (2,224,876) (2,370,419)
(96,510,963) (105,530,806)
The followings are the significant exchange rates applied by the Group:
Exchange rate as at
31/12/2013 31/12/2012
USD/VND 21,125 20,855
Below is an analysis of the possible impact on the consolidated profit before tax of the Group, after
taking into account the current level of exchange rates and the historical volatility as well as market
expectations as at 31 December. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecasted sales and purchases:
Effect to consolidated
profit before tax
VND
31 December 2013
USD (2% strengthening against VND) (40,775,881,868)
31 December 2012
USD (4% strengthening against VND) (88,033,798,365)
The opposite movement of the currencies would have the equal but opposite effect to the
consolidated profit before tax of the Group.

58
(continued)
Form B 09 – DN/HN
(b) Interest rate risk

At the reporting date, the interest rate profile of the Group’s interest-bearing financial instruments
was:
Carrying amount
31/12/2013 31/12/2012
Fixed rate instruments

Financial assets 2,230,353 1,347,886
Financial liabilities (6,229,440) (4,851,402)
(3,999,087) (3,503,516)
Variable rate instruments

Financial liabilities (1,345,944) (1,454,556)
A change of 1% per annum in interest rate would have increased or decreased the consolidated
profit before tax of the Group by VND13,459 million (2012: VND14,546 million). This analysis
assumes that all other variables, in particular foreign currency rates, remain constant.
36.5 Fair values
(a) Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in the
balance sheet, are as follows:
31/12/2013 31/12/2012
Carrying Carrying Fair
amount Fair value amount value
VND VND VND VND
million million million million
Categorised as loans and receivables:

- Cash and cash equivalents 2,125,322 2,125,322 1,294,494 1,294,494
- Trade and other receivables 1,279,434 1,279,434 1,264,648 1,264,648
- Other financial assets 387,794 387,794 224,661 224,661
Categorised as liabilities at amortised cost:

- Trade and other payables (2,828,249) (2,828,249) (1,932,593) (1,932,593)
- Borrowings (7,575,383) (7,678,237) (6,305,958) (6,251,522)
(6,611,082) (6,713,936) (5,454,748) (5,400,312)
HOA PHAT GROUP

(continued)
Form B 09 – DN/HN
(b) Basis for determining fair values
Cash and cash equivalents, trade and other receivables and short-term non-derivative financial
assets and liabilities
The fair value of cash and cash equivalents, trade and other receivables and short-term non-
derivative financial assets and liabilities approximates the carrying value due to the short-term
nature of these financial instruments. The fair value of the instruments is determined for disclosure
purpose only.
The long-term non-derivative financial liabilities

The fair value of the long-term non-derivative financial liabilities, which is determined for
disclosure purposes only, is calculated based on the present value of future principal and interest
cash flows, discounted at the market rate of interest at the balance sheet date.
37. Non-cash investing and financing activities

2013 2012
VND VND
Payments of dividends in the form of shares - 698,414,250,000

Depreciation expenses of fixed assets capitalized into
- 3,637,095,409
construction in progress
Net assets of a disposed subsidiary at the disposal date: -
Cash and cash equivalents 8,803,344,502 717,862,192
Accounts receivable - short-term - 67,463,205,734
Inventories (net-off allowance for inventories) - 20,112,435,473
Other current assets 7,415,711,034 239,083,685
Tangible fixed assets - net book value 3,388,157,715 14,671,602,827
Intangible fixed assets - net book value - 9,503,981,699
Construction in progress 104,523,432,005 675,421,490
Long-term prepayments - 607,802,227
Current liabilities - (33,166,861,590)
38. Significant transactions with related parties

In addition to related party balances disclosed in other notes to the consolidated financial
statements, the Group had the following significant transactions with related parties during the year.
2013 2012
VND VND
Members of Supervisory Board and Board of Management

Salary and bonus 5,607,141,669 5,247,050,747
Allowances 2,556,000,000 2,646,000,000

60
(continued)
Form B 09 – DN/HN
39. Commitments
39.1 Capital expenditure commitment
At the reporting date, the Group had the following outstanding capital expenditure commitments
approved but not provided for in the consolidated balance sheet:
31/12/2013 31/12/2012
VND VND
Approved but not contracted - 477,161,062,664

Approved and contracted 511,029,000,000 1,518,235,019,557
511,029,000,000 1,995,396,082,221
39.2 Leases commitment

At the reporting date, the future minimum lease payments under non-cancellable operating leases
were:
31/12/2013 31/12/2012
VND VND
Within one year 7,361,064,432 3,971,941,597

Within two to five years 7,775,643,474 10,876,303,724
More than five years 97,005,325,952 58,758,170,924
112,142,033,858 73,606,416,245
39.3 Mineral mining right fees

In accordance with the Law on Minerals No. 60/2010/QH12 dated 17 November 2010,
organizations and individuals conducting mineral mining activities must pay fees for issuance of
mineral mining rights. Article 77.3 of the Law mentioned that the Government shall provide
specific regulations on the method for calculation of fees and the rates of fees for issuance of
mineral mining rights.
On 28 November 2013, the Government issued Decree No. 203/2013/ND-CP (“Decree 203”)
regulating the method for calculation of fees and the rates of fees for issuance of mineral mining
rights which became effective from 20 January 2014. According to Article 7 of Decree 203, the
prices applied in calculation of mining right fees shall be determined based on the taxable natural
resource prices announced by the respective Provincial People’s Committees. To date, the People’s
Committees of the provinces where the Group’s current mine sites are located, have not provided
detailed guidance on the method for calculation of mining right fees for some of the minerals that
the Group is mining. Accordingly, the mining right fees on the mineral reserves could not presently
be determined.
HOA PHAT GROUP

(continued)
Form B 09 – DN/HN
40. Production and business costs by element

2013 2012
VND VND
Raw material costs included in production costs 13,937,102,306,181 11,460,355,982,964

Labour costs and staff costs 592,780,194,503 530,032,080,739
Depreciation and amortisation 720,195,566,311 596,227,337,059
Outside services 1,085,670,258,288 1,540,952,035,136
Other expenses 1,201,478,463,530 650,986,015,744


62

Annual Report 2013

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HOA PHAT GROUP

PART II: REPORT OF THE BOARD OF DIRECTORS 14

Part III: PERFORMANCE DURING THE YEAR 22

Part IV: THE BOARD OF MANAGEMENT’S ASSESSMENT 46

Part V: CORPORATE GOVERNANCE 50

Part VI: AUDITED CONSOLIDATED FINANCIAL STATEMENTS 60

OVERVIEW OF HOA PHAT GROUP

OVERVIEW OF HOA PHAT GROUP

HOA PHAT GROUP

OVERVIEW OF HOA PHAT GROUP

HOA PHAT GROUP

Hoa Phat Urban Development

Hoa Phat Trading Co., Ltd

An Thong Mining Investment JSC

Hoa Phat Mining JSC

Nam Giang Mining One-Member Co.,Ltd

SUBSIDIARIES THE GROUP OFFICE AFFILIATES

PR FINANCIAL IT CONTROLLER LEGAL ADMINISTRATION

1. Hoa Phat Steel JSC

Hoa Phat Group - financial highlights

Content (Unit: VND) 2011 2012 2013

Net profit margin

Net Sales growth rate

Net Profit growth rate

OVERVIEW OF HOA PHAT GROUP

HOA PHAT GROUP

12 Hoa Phat Urban 39 Nguyen Dinh Civil and industrial construction;

13 Golden Gain No3 Dong Nam Real estate trading

Tum City, Kon Tum

OVERVIEW OF HOA PHAT GROUP

HOA PHAT GROUP

OVERVIEW OF HOA PHAT GROUP

“Vững vàng vượt qua khó khăn” có thể

HOA PHAT GROUP

OVERVIEW OF HOA PHAT GROUP

REPORT OF THE BOARD OF DIRECTORS

HOA PHAT GROUP

Criteria 2012 2013 2013 plan % increase % achieved

Total revenue 17,122 19,200 18,500 12% 104%

Profit after tax 1,031 2,010 1,200 95% 168%

REPORT OF THE BOARD OF DIRECTORS

Market shares of Hoa Phat construction steel over the years

Outputs and market shares of 5 market leaders of Vietnam’s steel industry

Current designed Production Consumption Market Production Consumption Market

Pomina 1,600 686 697

Hoa Phat 1,150 621 611

Tisco 600 540 513

Vinakyoei 400 400 402 9.0% 427 443 9.7%

VNS 450 392 395 8.8% 386 374 8.2%

HOA PHAT GROUP

In the steel segment, steel pipe – a strategic product which

Despite facing various challenges from the economic

REPORT OF THE BOARD OF DIRECTORS

Total assets growth of Hoa Phat Group over 3-year period

2011 2012 2013

resulted in the Group’s total borrowings and liabilities to -

HOA PHAT GROUP

* Other financial indicators

Benefited from the Government’s policies to reduce

liabilities is at a safe level and the Group remains in a -

- Asset turnover ratio:

During the year 2013, the Group continued to invest in

REPORT OF THE BOARD OF DIRECTORS

HOA PHAT GROUP