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DID: Explanation for audit exception in FS 2013
On 16/4/2014, DIC Dong Tien JSC announced explanation for
audit exception in FS 2013 as follows:
1. Reason for delay
of announcing information on audit exception in FS 2013:
- Due to delay in publishing report so until 02/4/2013, the
Company received report from auditing company. Therefore, on 03/4/2014, the
Company was able to announce information on audited financial statement. The
Company committed to not relapse.
2. Audit exception in
FS 2013
- On 31/12/2013, overdue receivable of the Company was VND
2,237,375,934, in which the Company extracted to provision for bad debts in
2012 and 2013 of VND 1,047,671,312, the remaining value of VND 1,189,704,622
was required to be extracted to provision in 2013. Customers could not pay the
investor, however, the Company would attempt to collect all debts in 2014.
- The Company recorded long-term prepayment as contribution
by brand of DIC Corporation. This was “DIC” brand use right with value of VND
500,000,000, which was paid in cash by DIC Dong Tien JSC.
- At the moment of publishing auditing report, Dong Phuc
Tien Investment Construction JSC, associated company of DIC Dong Tien, did not
finish FS 2013 so DIC Dong Tien JSC could not provide FS of associated company
to the Auditor. The Company would require associated company to provide FS in
4/2014 and in reviewed FS of first 06 months in 2014 there would be detailed
figures of associated company.
3. Reason and
solutions for status of stock under alert
Profit after tax in 2013 in audited financial statement on
31/12/2013 was negative (VND -89,357,023) because:
- In 2013, the Company bought 01 concrete station in Phu My
1 Industrial Zone, Tan Thanh Dist., Ba Ria Vung Tau province, 05 concrete tank
trucks and 01 wheel-loader. Input expense increased, depreciation of fixed
assets increased so cost of goods sold increased.
- In 2013, macro-economy still had difficulties,
construction – real estate market was frozen, price of materials continuously
increased, which raised production cost while concrete selling price did not
increase.
- Construction contractor applied method of competitive
tender so construction material suppliers must have to compete fiercely in
price; therefore, the Company had to decrease concrete selling price to compete
and expand market;
- In 2013, the Company implemented big repair of all
equipment and machines, repair expense was VND 3.5 billion, which made concrete
price increased highly.
- Financial expense increased because the Company had to
maintain high debts to ensure floating capital for production and business.
* Solutions:
In 2014, DIC Dong Tien JSC committed to withdraw DID shares
from status of stock under alert by running production-business profitably:
- Renovate types of material in order to reduce product
price
- Restructure organization, rearrange personnel to each
position HNX
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