DELIVERING GROW TH
Transcription
DELIVERING GROW TH
D3 3 .6 in US ic 40 0 es rs ni o an m a m illi o n My elo p e ,d kk ev e i' sA sia 3 ld w i or sw W eb on Ser v , up pl o em nt er s e Se e N io ne t A i a E g r v AS en rpo s , o ' er i c s s e t e k r rg k c li e m , Ni e nts being la xp co 0 e e 0 l rth 1 y e o g t g n w e lo urci P 's no vid sh h G lobal Outso o e c r e p lad rd t to a g d e n n s 17 sta Ba cen i nternational g li t in to r Cl ner t r a p oud r se Ov up o V gr t, A hed Ni c f a , d e o as r s e n 0 r e ve n u a ro 10 Mic ns rs 0 0 d e i 4 0 y e es ces .9% Pr e gn i ei ill or f b 5 3 9 1,1 on ns, ,85 z 4 i n g 19 natio a at ND m IA O 10,6 The I nt c ettin g e roje s i fi r r p p r e m s t foreign ent yste S n eg tratio r a te d VAT Adminis R G G N I ER V I L DE ANNUAL REPORT TH OW 2015 CONTENT FPT IN 2015 BUSINESS PERFORMANCE ANALYSIS OVERVIEW 01 02 03 Chairman’s message 04 Vision, mission and general information 14 Key indicators for 2015 06 History 15 Business sectors 16 Geographical coverage 2015 outstanding events and 08 activities Financial highlights for the 2011 – 2015 period 10 Business performance and management discussion 38 Financial performance analysis 43 22 The BOD’s review on corporate activities and the BOM’s performance 52 Organizational structure 23 2016 outlook and business guidance Subsidiaries and associates 56 24 Leadership 26 Equity and shareholding information 31 Strategic directions for the 2016 –2018 period 32 ABBREVIATIONS IT Information technology S.M.A.C Social, mobile, analytics/big data, cloud IoT Internet of things BSC Balanced scorecard BOD Board of Directors BOM Board of Management CEO Chief Executive Officer AGM Annual General Meeting of Shareholders FPT FPT Corporation SUSTAINABILITY REPORT CORPORATE GOVERNANCE 04 AUDITED CONSOLIDATED FINANCIAL STATEMENTS 05 Overall corporate governance structure 60 Information and activities of the BOD 61 Report of the Supervisory Board 66 Transactions, remuneration and other benefits for the BOD, the Supervisory Board and the CEO 69 Implementation of corporate governance regulations 71 Risk management 72 Investor relations 76 06 The CEO’s message 82 Overview 83 Stakeholder engagement 88 Identification of material aspects 93 References to GRI’s guidance 108 FPT IS FPT Information System Company Limited FPT Telecom FPT Telecom Joint Stock Company FPT Software FPT Software Company Limited FPT Trading FPT Trading Group Company Limited FPT Retail FPT Digital Retail Joint Stock Company FPT Online FPT Online Service Joint Stock Company FPT Education FPT Education Company Limited FPT Investment FPT Investment Company Limited HCMC Ho Chi Minh City ICT Information Communications and Technology R&D Research and Development Statement of the Board of Management 113 Independent auditors' report 115 Consolidated balance sheet 116 Consolidated income statement 120 Consolidated cash flow statement 121 Notes to the Consolidated financial statements 123 3 S.M.A.C GROWTH IoT S.M.A.C Globlalization IoT S.M.A.C GLOBLALIZATION GROWTH IoT GROWTH Globlalization GROWTH IoT S.M.A.C LIZATION Growth IoT S.M.A.C GLOBLALIZATION wth IoT S.M.A.C GLOBLALIZATION IoT Growth S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C T S.M.A.C GROWTH IoT S.M.A.C Globlalization OWTH IoT S.M.A.C GLOBLALIZATION GROWTH GROWTH Globlalization GROWTH IoT S.M.A.C LIZATION Growth IoT S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C GLOBLALIZATION Growth S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C S.M.A.C GROWTH IoT S.M.A.C Globlalization WTH IoT S.M.A.C GLOBLALIZATION GROWTH GROWTH Globlalization GROWTH IoT S.M.A.C ZATION Growth IoTS.M.A.C GLOBLALIZATION Growth IoT S.M.A.C GLOBLALIZATION Growth S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C T S.M.A.C GROWTH IoT S.M.A.C Globlalization OWTH IoT S.M.A.C GLOBLALIZATION GROWTH GROWTH Globlalization GROWTH IoT S.M.A.C LIZATION Growth IoT S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C GLOBLALIZATION Growth S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C S.M.A.C GLOBLALIZATION Growth IoT S.M.A.C 4 ANNUAL REPORT 2015 www.fpt.com.vn CHAIRMAN’S MESSAGE Dear Valued Shareholders, “Mastering the 4th Industrial Revolution" is the main theme of the 46th annual conference of the World Economic Forum in Davos, Switzerland on January 20 - 23, 2016. Based on the popularity of Internet, mobile phones, sensors, the ability to handle big data information, artificial intelligence and the computer’s learning ability, the 4th Industrial Revolution is considered to be an unprecedented occasion in history, extremely different in terms of speed and scale, which will entirely transform the existing business models, production, management and governance systems. It is possible to predict that every enterprise will become a digital business and the application of technology will be an important motivation for growth. Attending the World Economic Forum in Davos has given me more confidence in where FPT is heading to. It can be said that FPT is fortunate to be able to join right from the very beginning stage of the 4th Industrial Revolution. We have cooperated with the top global technology groups which are leading the digital revolution and are participating more and more deeply into the global technology value chain, especially in the field of S.M.A.C technology and Internet of things (IoT). In Vietnam, new policies and mechanisms such as IT leasing in the form of public-private partnership are now allowing FPT to actively test the provision and transfer of the most advanced technology solutions, helping improve management capability, service delivery capability and competitiveness, as well as solve major socio-economic problems in such sectors as public finance, banking - finance, transportation, healthcare, etc. I am happy to share the achievements of the Corporation in 2015 and the new platforms which help create motivation for growth for FPT in the coming years. In 2015, FPT has returned the double-digit growth track in both revenue and profit before tax, delivering growth rates of 13.9% and 15.9%, respectively. The global market has more and more important contribution to the growth of FPT. Revenue from foreign markets continued to grow significantly at 40.9% and profit before tax accounted for 23.4% of total profit before tax of the Corporation. Besides, this is the first time the revenue of technology sector from the foreign markets has exceeded the revenue from the domestic market, accounting for 52% of the revenue of this sector. FPT's capabilities in implementing big projects, both in value and scale, have also been tested with projects for clients in Japan, the US, Bangladesh, Cambodia and Laos. Pioneering direction in the digital world also has remarkable progresses. FPT has developed technological capabilities in S.M.A.C/ IoT through providing services to big corporations in the fields of satellite broadcasting; aircraft production; automobile; energy. The Corporation has also developed new business models based on S.M.A.C/IoT technology to enable further growth going forward. FPT 2016 – Innovation for growth We strongly believe in the laid-down strategic directions which have been proved with 2015’s performance. 2016 and the following years are considered the turning point of FPT where FPT will innovate ourselves for growth. I would like to share what we will do to change, make a difference and determine a leading position in this period when the 4th industrial revolution is taking place. FPT will continually improve the business model to capture the best new opportunities arising from both domestic and overseas markets. It is the acceleration of the implementation of IT services in the form of public - private partnership for the Government of Vietnam. It is continual innovation in methods of providing services for customers based on digital technologies. FPT will actively invest in R&D and create new technological playground. The key points are the solutions, services based on S.M.A.C/IoT, Robotic which can be strongly applied in all business activities of the Corporation. FPT will deploy the ‘Open FPT’ project, in which we will share our IT infrastructure for the technology community, thereby promoting creative ideas, and at the same time, continually offering new forms of venture capital for the technology start-up community. FPT must innovate the organizational structure to be in line with global corporations. In particular, the focus is to upgrade overseas branches and to turn FPT into a learning organization. Each and every member in FPT will spend time on studying, from leadership skills, personal skills, to foreign languages, or technologies, etc. Studying will inspire creativity, make a difference and bring success to each individual and the Corporation. I myself am excited with the changes taking place and destination of transforming into a global corporation coming closer. We are aware of that the process is accompanied with enormous challenges of customer requirements, competitiveness enhancement, and large scale governance. But we have thoroughly understood these challenges and been determined to overcome. I believe in the power of maximizing the potential of each FPT member. I sincerely thank all FPT employees because of their will to grow, their great efforts being made during the past year and thank shareholders who have always supported us. I hope that you shareholders will share with us the excitement and confidence in the future of the Corporation, and the opportunities that we are having to build a smarter and better society together. I conclude this with my heartfelt thanks to our shareholders. On behalf of the Board of Directors Chairman Truong Gia Binh FPT 2015 5 KEY INDICATORS FOR 2015 WORKFORCE BUSINESS PERFORMANCE Total number of employees 26,818 Revenue VND employees Total number of technology experts, engineers and developers 10,617 employees 40,003 VND 4,859 billion billion 13.9% 40.9% Profit before tax VND Overseas revenue 2,851 billion Overseas revenue of technology sector accounts for 52% of the revenue of this sector 15.9% PRIZES AND AWARDS 6 ANNUAL REPORT 2015 www.fpt.com.vn Asia Money’s Best overall for corporate governance in Vietnam Nikkei Asia Review’s Asia300 CLIENTS AND PARTNERS GEOGRAPHICAL COVERAGE STOCK PRICE AND MARKET CAPITALIZATION Clients Presence in Share price acceleration 400 large corporations worldwide 63 provinces and cities in Vietnam Presence in Senior Cloud partner to Microsoft, Amazon Web Services 19 countries all over the world (including Vietnam) Nikkei Asia Review’s ASEAN100 20.4% IAOP's Global Outsourcing 100 (as of December 31, 2015) Market capitalization 19,197 VND billion (as of December 31, 2015) 16.3% Forbes’ 50 Best listed Vietnamese companies FPT 2015 7 2015 OUTSTANDING EVENTS AND ACTIVITIES 01 Growing robustly in developing markets • Getting license to provide telecom services in Myanmar. With this license, FPT is allowed to build a national axis infrastructure, provide a full range of local and international telecommunication services and other network-based value-added services. • Obtaining the contract for the Integrated VAT Administration System (IVAS) project in Bangladesh with a total value of USD33.6 million. This is the biggest ‘turnkey’ contract ever in Bangladesh, with the value equals to 1/10 of the total trade turnover between Vietnam and Bangladesh during the first six months of 2015. • Putting into operation the Financial Management Information System for the State Treasury of the Royal Government of Cambodia (FMIS). The project, being worth nearly USD10 million, being sponsored by the World Bank. This is the first national scale IT system in Cambodia. • Putting into operation the ERP project for the leading paint corporation in Myanmar United Paints Group (UPG). This is FPT’s first ERP contract for enterprises in foreign markets, opening up opportunities in consultancy and implementation of business administration system in Myanmar. • Opening two delivery centers to provide IT services in Philippines and Myanmar, both aiming to attain human resources as well as to research and develop new technologies, supporting growth of the software outsourcing business. 02 Promoting the fiber optical conversion of telecom infrastructure and expanding the Pay TV service coverage • Having completed the fiber optical conversion for subscribers in Hanoi and HCM to enhance transmission quality and speed. • Covering FPT television services in 59 cities and provinces, while constantly offering new features and facilities, better content at more competitive costs. 03 Achieving the important steps in software outsourcing • Completing a record contract that worth more than USD25 million to a leading broadcasting service provider in the US. • The number of customers with revenue of over USD2 million rose by 50% as compared to 2014. • Launching the 10,000 Bridge Software Engineers (BrSE) program, with nearly 1,000 students being trained in Vietnam and Japan in 2015. 8 ANNUAL REPORT 2015 www.fpt.com.vn 04 Pioneering in deploying technology solutions in the form of leasing to help solve society's problems • Providing the E-ticket system for the Vietnam National Railways Corporation. • Implementing a pilot project to install a traffic violation surveillance and monitoring system on the Noi Bai-Phu Tho section of the Noi Bai-Lao Cai highway. • Getting the Hai Phong’s Online health insurance claim system connected to 100% medical facilities. 05 Boosting technology development inside and outside the Corporation, preparing resources for future growth • Playing a key role in the technology ecosystem of several major technology corporations: 99 Being recognized as a Managed Service Partner and a 2015 “Learn and Be Curious” Partner of Amazon Web Services (AWS), which helped FPT stay at the same rank with big names from Japan and India such as Hitachi, Fujitsu, NEC, Accenture, Tata and Cognizant. 99 Becoming a Strategic Partner in Cloud technology of Microsoft Japan, opening up the opportunity for FPT to become an end-to-end supplier of cloud services (from consulting to development, maintenance and customer support) in the Japanese market. • Launching FPT Ventures – a venture capital fund operating as a startup incubator. The fund has received 350 pitching documents so far. • Expanding the S.M.A.C Challenge contest nationwide to help Vietnamese young people access new technology trends and nurture a passion for information technology. 06 Growing strongly in revenue and profit in the retail segment • In 2015, the retail segment continued to lead growth of the Corporation with profit before tax and revenue up 335% and 50%. • Expanding to 252 shops nationwide, completing the 2016 plan ahead of schedule. 07 Leading in training high quality human resources and innovating training methods • The four important criteria of FPT University being rated 5-star by Quacquarelli Symonds (QS), are: Teaching, Employability, Facilities and Social Responsibility. • Launching the first online university in Vietnam, FUNiX. This has brought new education methods to Vietnam to train high quality human resources, meeting the growing demand of the IT market. FPT 2015 9 FINANCIAL HIGHLIGHTS FOR THE 2011-2015 PERIOD Unit: VND in billions Consolidated revenue VND 40,003 BILLION 13.9% 2011 95% 2012 92% 2013 91% 2014 90% 2015 88% 25,978 5% 25,350 8% Revenue from domestic market 28,647 9% 35,130 10% 40,003 12% Revenue from global market Unit: VND in billions Profit before tax VND 2,851 BILLION 15.9% 2011 88% 2012 85% 2013 79% 2014 76% 2015 77% Profit before tax from domestic market 2,502 12% 2,407 15% 21% 2,516 2,459 24% 23% 2,851 Profit before tax from global market Unit: VND in billions Earnings before interest, tax, depreciation and amortization (EBITDA) VND 3,847 BILLION 21.2% 2011 3,127 2012 3,035 2013 3,091 2014 3,173 2015 3,847 Unit: VND in billions Total assets VND 26,046 14.9% 10 ANNUAL REPORT 2015 www.fpt.com.vn BILLION 2011 14,943 2012 14,209 2013 17,571 2014 22,658 2015 26,046 Owner’s equity Return on equity (ROE) Unit: VND in billions Unit: % 2011 6,226 2011 36.0 2012 7,094 2012 28.9 2013 8,254 2013 26.5 2014 9,258 2014 23.6 2015 10,182 2015 24.8 VND 10,182 10.0% BILLION 24.8% 1.2% Note: Equity and ROE in the 2011-2014 period were adjusted and restated following the new financial statements template in the newly adopted Circular 202/2014/TT-BTC Unit: VND/ share Earnings per share (EPS) 4,386 VND/SHARE 17.8% 2011 3,907 2012 3,512 2013 3,645 2014 3,723 2015 4,386 Note: EPS in the 2011-2014 period was retroactively adjusted to take into account stock dividend of 15% in 2015 and followed the new regulation of EPS calculation under Circular 200/2014/TT-BTC Financial performance in 2011-2015 No. Metrics YoY change 2015 YoY change 35,130 22.6% 40,003 13.9% YoY 2014 change (restated) 2011 2012 YoY change 2013 25,978 25,350 -2.4% 28,647 13.0% 1 Total revenue 2 Operating profit 2,420 2,318 -4.2% 2,451 5.7% 2,389 -2.5% 2,802 17.3% 3 EBITDA 3,127 3,035 -2.9% 3,091 1.9% 3,173 2.6% 3,847 21.2% 4 EBIT 2,751 2,635 -4.2% 2,648 0.5% 2,625 -0.9% 3,114 18.6% 5 EBT 2,502 2,407 -3.8% 2,516 4.5% 2,459 -2.2% 2,851 15.9% 6 NPAT 2,079 1,985 -4.5% 2,065 4.0% 2,079 0.7% 2,438 17.3% 7 NPAT attributable to company's shareholders 1,682 1,540 -8.4% 1,608 4.4% 1,632 1.5% 1,931 18.3% FPT 2015 11 02 S.M.A.C/IoT OVERVIEW THE US Bestshore New technology migration EUROPE Cloud/IoT 10,000 BrSE Market – oriented technology: In the major markets, FPT has built the intensive technological capabilities to generate competitive advantages, accelerate the speed of customer scaling expansion and the growth rate. Implementation of World Bank-funded projects Services/Solutions for Government and Public finance sectors JAPAN DEVELOPING COUNTRIES Smart services/solutions for major economic sectors VIETNAM VISION, MISSION AND GENERAL INFORMATION VISION AND MISSION FPT is striving to become a company guided by technological innovations, committed to the highest level of customer satisfaction, contributing to the nation’s prosperity and providing its employees with the most favourable work environment possible, enabling them to reach their full potential in terms of their careers and personal lives. GENERAL INFORMATION Name : FPT Corporation Abbreviation : FPT Date of establishment : September 13, 1988 Stock code : FPT Charter capital : VND3,975,316,400,000 Owner’s equity : VND10,182,285,753,023 Headquarters : FPT Building, Duy Tan Street, Cau Giay District, Dich Vong Hau Ward, Hanoi, Vietnam Phone : +84 4 7300 7300 Fax : +84 4 3768 7410 Business registration certificate and tax code number: 0101248141 Website 14 ANNUAL REPORT 2015 www.fpt.com.vn : http://www.fpt.com.vn HISTORY 1988 On September 13, FPT was established in Hanoi with 13 members 1990 Renamed FPT – The Corporation for Financing and Promoting Technology, with IT declared its core business 1997 1994 Entered the distribution sector focused on bringing new technology products to Vietnam Participated in the developing internet sector 1999 Penetrated foreign markets via a strategic orientation to software exports. 2001 Launched VnExpress, Vietnam’s first online newspaper 2002 • Equitized and became a joint stock company 2006 • Began production of FPT branded products • Listed on the local stock market • Established FPT University 2012 • Invested to expand the technology product retailing chain (FPTShop) • Invested in e-commerce 2014 • Implemented the first cross border M&A acquiring a Vietnamese IT firm • Provided Pay TV services 2015 • Became the first foreign enterprise licensed to provide fixed line telecommunications services in Myanmar • Signed a record contract in Bangladesh, opening a new development direction in the South Asia market. OVERVIEW 15 BUSINESS SECTORS FPT operates in the most key IT and telecommunications fields, from software development, system integration, IT services, telecommunications, technology product distribution and retail, to high-quality IT human resource training, being grouped under four main sectors: TRIBUTIO DIS N ATION UC D E D RETAIL N A TE C COM TELE GY OLO HN TECHNOLOGY SECTOR (accounting for 22% of revenue and 33% of profit before tax) TECHNOLOGY 16 ANNUAL REPORT 2015 www.fpt.com.vn Software development + System integration + IT services SOFTWARE DEVELOPMENT Products, services • Software solutions in such domain expertises as Government, Public Finance, Telecommunications, Transportation, Banking-Finance, Electricity, Water, Gas and Healthcare; • Specialized Enterprise Resource Planning (ERP) on SAP, Oracle, People Soft platforms, and other technology firms; • Technology migration: 99 Application Services; 99 Business Application Services; 99 Business process outsourcing (BPO); 99 Software Testing Center of Excellence (TCOE); 99 Legacy Migration. • Consultancy, R&D, provision and deployment of S.M.A.C/IoT-based technology services:: 99 Cloud computing; 99 Big Data/Analytics; 99 Mobility; 99 IoT. • Product Design: 99 Embedded software; 99 CAD/CAM; 99 IC Design. Position and capacity Featured in IAOP’s Global Outsourcing 100; 10,617 engineers, developers and technology experts; 8,000 software outsourcing projects with 3.2 million man-days; 100 copyrighted software solutions in such domain expertise as Government, Public Finance, BankingFinance, Education, Healthcare and Transportation; Strategic partner of Microsoft Japan in Cloud and Managed Service Partner and Learn and Be Curious Partner of Amazon Web Services; Providing services/products to nearly 400 major corporations in the fields of automobile, energy, distribution. OVERVIEW 17 BUSINESS SECTORS (continued) SYSTEM INTEGRATION Products, services • IT infrastructure services; • Database design and construction for enterprises; • Network systems, security; • Payment, surveillance systems and specialised equipment for the banking sector; specialised products for banks, telecommunications, transport and customs; • Implementation of banking, securities, and telecommunications solutions; • Server hosting; • Database management. Position and capacity • Ranked Number 1 in Vietnam in terms of both revenue and scale of workforce; • Holding more than 2,000 international technology certificates issued by the world’s leading IT partners; • Several products and services earned international awards, including second prize at the 2014 Asia Pacific ICT Alliance (APICTA) Awards; Global Telecoms Business Innovation Award 2014; No.1 ranked in eAsia Awards 2013 and the gold and the silver awards at the ASEAN ICT Awards 2012; • Recognised as an Outstanding system integrator by Oracle; • Implementing the majority of the IT systems for organisations that form the backbone of Vietnam’s economy. IT SERVICES Products, services • FPT e-services: certificate of authorization service (FPT.CA), customs filing service (FPT.VNACCS), and online tax filing service (FPT.eTax); • Authorised warranty and maintenance of IT products for their hardware vendors, provision and repair of IT equipment and components. Position and capacity • Ranked Number 1 in Vietnam in terms of IT service provision; • Service center network covering all of Vietnam; • Warranty, maintaining over 50% of ATMs and POS in Vietnam; • Highest-ranking partner of Cisco, IBM, Microsoft, SAP and Symantec. 18 ANNUAL REPORT 2015 www.fpt.com.vn TELECOM SECTOR (accounting for 14% of revenue, 37% of profit before tax) TELECOM Telecommunications Services + Digital Content TELECOMMUNICATIONS SERVICES Products, services • Broadband internet (xDSL, FTTH); • Television services: FPT Television, FPT Play; • Leased lines; • Data centers; • Landline telephony; • Interprovincial and international connection service; • Online and OTT services: online music (Nhacso.net, Mix166.com) and online data sharing services (Fshare, FSend), Cloud Camera and Domain hosting; • Video conference. Position and capacity Ranked Number 2 in Vietnam in terms of fixed broadband internet access service (Source: 2014 White Book published by the Ministry of Information and Communication); The first foreign enterprise licensed to provide fixed line telecommunications services in Myanmar; Providing internet infrastructure coverage in 59 of the country’s 63 cities and provinces, fiberoptic subscribers accounting for 66% of the total number of subscribers; Pioneering in deploying IPv6 network protocol, successfully deploying IPv6 connectivity with international partners such as Google, NTT, Singtel and PCCW; Owning a large telecommunications infrastructure with total length of exceeding 9,200 km that includes a North - South axis; a Central Highlands axis; an international axis connecting China, Cambodia, Laos and other interprovincial axes connecting to 59 cities and provinces through the country; Member of AAG (Asia-American Gateway), APG (Asia- Pacific Gateway) and Asia-Africa-Europe Gateway. Putting into operation two hubs in the U.S and Singapore; International bandwidth capacity of 420 Gbps; Four data centres in Vietnam. OVERVIEW 19 BUSINESS SECTORS (continued) DIGITAL CONTENT Products, services • Online newspapers including VnExpress.net, Ngoisao.net, iOne.net, Gamethu.net; • Online advertisement; • Smart advertisement system Ad Network eClick. Position and capacity • Ranked Number 1 in online advertisement services; • The most popular Vietnamese online newspapers VnExpress which had a total of 13.5 billion visits in 2015. TECHNOLOGY PRODUCT DISTRIBUTION AND RETAIL SECTOR (accounting for 63% of revenue, 26% of profit before tax) TECHNOLOGY PRODUCT DISTRIBUTION AND RETAIL Technology product distribution + Technology product retail TECHNOLOGY PRODUCT DISTRIBUTION Products, services • Distribution of products and solutions from Apple, IBM, Lenovo, Microsoft, HP, Nokia, Toshiba and others; • Production of FPT-branded products, including desktops, smart phones and tablets. Position and capacity Ranked Number 1 in Vietnam with a 21.4% market share in mobile handset and a 27.4% market share in IT equipment; Distributor for over 30 large technology partners; 1,500 distribution agents in Vietnam’s 63 cities and provinces; Logistics networks in Hanoi, Ho Chi Minh City, Da Nang, and Can Tho, and smaller warehouses in satellite cities such as Nghe An and Hai Phong. These are all managed online which allows updating and reporting sales revenue in real-time. 20 ANNUAL REPORT 2015 www.fpt.com.vn TECHNOLOGY PRODUCT RETAIL Products, services • Computers; • Tablets; • Smartphones; • Accessories; • Apple products sold via chain of Apple-format retail stores. Position and capacity • Top 10 retailers in Vietnam in 2015, receiving the Vietnam Trusted Brand Award in 2015; • 252 ‘FPT Shop’-branded retail stores, in all 63 cities and provinces nationwide (as of December 31,2015); • Retail chain of all of Apple’s licensed retail store formats, including Level 1 - APR (Apple Premium Reseller), Level 2 - AAR (Apple Authorized Reseller) and CES (Consumer Electronic Stores) under ‘F.Studio’ brand in Hanoi, Ho Chi Minh and Da Nang; • One of two Vietnamese retailers being entitled to directly import Apple products; • The only retailer in Vietnam with distribution rights for Motorola’s MotoX mobile handset, HP Stream and Asus X205TA laptop product lines; • The best agent of Acer and Dell in Vietnam. EDUCATION SEGMENT Products, services • Upper secondary education; • Vocational education; • Graduate and Post-graduate education; • International associated programs; • International student development programs; • Corporate training programs. Position and capacity • The first Vietnamese university to be given 3-star rating by QS for two consecutive years. In 2015 in particular, four important criteria including: teaching, employability, facilities, social responsibility were rated the highest 5-star rating by QS; • Currently enrolling 17,900 students at all levels; • 98% of graduates being able to find jobs within six months; • Established FUNiX, the first online university in Vietnam. OVERVIEW 21 GEOGRAPHICAL COVERAGE Revenue 63 cities and provinces nationwide 12% 88% 19 countries worldwide Profit before tax The US Japan 23% Europe 77% Foreign countries Vietnam 22 ANNUAL REPORT 2015 www.fpt.com.vn The UK France Germany Slovakia Netherlands Asia Pacific Vietnam Kuwait Philippines Bangladesh Cambodia Laos Malaysia Singapore Thailand Indonesia Myanmar Australia ORGANIZATIONAL STRUCTURE ANNUAL GENERAL MEETING OF SHAREHOLDERS THE SUPERVISORY BOARD THE BOARD OF DIRECTORS THE BOARD OF MANAGEMENT TECHNOLOGY SECTOR 100% * TELECOM SECTOR 45.64%* FPT SOFTWARE 100% * FPT TELECOM 51.95%* FPT IS DISTRIBUTION AND RETAIL SECTOR 100% * FPT TRADING 85% * FPT ONLINE EDUCATION SEGMENT AND OTHERS 100% * 100% * FPT RETAIL FPT EDUCATION FPT INVESTMENT (*): FPT's ownership rate OVERVIEW 23 SUBSIDIARIES AND ASSOCIATES Subsidiaries As of December 31, 2015 FPT has eight subsidiaries (excluding a subsidiary which has been scaled down since 2011) and two associates. Name of subsidiary FPT Software Company Limited FPT Information System Company Limited FPT Telecom Joint Stock Company FPT Online Service Joint Stock Company FPT Education Company Limited 24 ANNUAL REPORT 2015 www.fpt.com.vn Charter capital (VND) FPT’s ownership rate (%) Providing software products and services 700,000,000,000 100 Providing applications, software solutions, ERP, IT services and integrated system services 850,000,000,000 100 1,246,198,090,000 45.64 140,853,360,000 51.95 250,000,000,000 100 Place of incorporation and operation Principal activities Floor 6-12, FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Floor 22, Keangnam Landmark 72, E6 Pham Hung, Nam Tu Liem District, Hanoi Providing broadband Floor 2, FPT Building, internet services, leased Duy Tan Street, Dich Vong lines, data centers, voice, Hau Ward, Cau Giay District, television services and Hanoi other online services Floor 2, Tan Thuan FPT Building, Lot 29B-31B-33B, Tan Thuan Street, Tan Thuan Export Processing Zone, Tan Thuan Dong Ward, District 7, Ho Chi Minh City Higher Education Division of the Hoa Lac Hi-Tech Park, Km 29, Thang Long Boulevard, Thach That District, Hanoi E-newspapers, online advertising Providing Upper secondary education; Vocational education; Graduate and Post-graduate education; International Associate degree programs; International student development programs; Corporate training programs Name of subsidiary FPT Trading Company Limited FPT Digital Retail Joint Stock Company FPT Investment Company Limited Place of incorporation and operation Principal activities FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Distributing ICT products, solutions and components; Manufacturing desktops, smart phones and tablets 261-263 Khanh Hoi, Ward 5, Retail of ICT products, District 4, Ho Chi Minh City components Charter capital (VND) FPT’s ownership rate (%) 680,000,000,000 100 200,000,000,000 85 800,000,000,000 100 Charter capital (VND) FPT’s ownership rate (%) FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Financial services’ supporting activities (investment consulting excluding legal and financial advice) Place of incorporation and operation Principal activities Floor 2, 71 Nguyen Chi Thanh Street, Dong Da District, Hanoi Securities trading, brokerage, investment advisory and securities depository services 806,648,700,000 20 Floor 9, TTC Building, Lot B1A, Dich Vong Hau Ward, Cau Giay District, Hanoi Portfolio and fund management and other services 110,000,000,000 25 Associates Name of associate FPT Securities Joint Stock Company FPT Fund Management Joint Stock Company OVERVIEW 25 LEADERSHIP THE BOARD OF DIRECTORS Graduated from the Math–Mechanics Department, Lomonosov Moscow State University, Russia, in 1979. Successfully defended his doctoral thesis at the university in 1982. Awarded title of Associate Professor by the State in 1991. TRUONG GIA BINH Founding member, Chairman of the BOD Being given Nikkei Asia Award by the Nikkei Group, Japan, in 2013 for his contributions to the development of Vietnam’s IT sector. Founded FPT in 1988. During the firm’s development process, he laid out the firm’s long-term vision and strategic orientations that have enabled FPT to maintain its growth. Graduated from the Mathematics Department, Kishinhov University, Moldova, in 1979. Successfully defended his doctoral thesis on databases at the University of Grenoble, France, in 1986. Being a leading IT expert of FPT since the 1990s and was selected as one of the top 10 chief information officers in Indochina in 2005. BUI QUANG NGOC Founding member, Vice Chairman of the BOD and Chief Executive Officer Being an FPT’s prominent administration, he thoroughly understands FPT’s business models and characteristics and has always been pioneering the modernization of the company’s administration systems and has a considerable experience in managing large and complex projects which require a mobilization of various resources. Graduated from the Military Technical Academy in Vietnam with a degree in Mathematics of Control in 1984. Since 1994, as the top leader of FPT IS, he made FPT IS one of FPT’s technology flagships, continuously leading Vietnam’s System integration, Software development and IT service markets. DO CAO BAO Founding member, member of the BOD 26 ANNUAL REPORT 2015 www.fpt.com.vn He is the Chairman of FPT IS, Chairman of the FPT Personnel and Remuneration Committee, Vice Chairman of the Vietnam Information Security Association for the 1st term from 2008 to 2012, Member of the Vietnam Association for Information Processing for the 6th term from 2007 to 2011, and the 7th term from 2011 to 2014. Received his MA in law from Hanoi National University in 1998 from Cambridge University, UK in 1999. LE SONG LAI Non-executive member of the BOD Currently a Deputy General Director of the State Capital and Investment Corporation (SCIC); Member of the BOD of Bao Minh Corporation; Member of the BOD of Vietnam National Reinsurance Corporation. Having been nominated by the SCIC for a position in FPT’s BOD for the 2012-2017 term. SCIC currently holds 6.02% of FPT’s shares as of February 24, 2016. MBA at the École Supérieure de Commerce de Reims, France. Has worked in Vietnam for 14 years. He used to be the CEO of a well-known French bank in Vietnam. He is a banking expert with 25 years of experience in corporate finance, technical finance and project finance. JEAN-CHARLES BELLIOL He is also the commercial counselor of the French Embassy in Vietnam, a member of the BOD at Tri Tin International JSC and Everpia Corporation. Non-executive member of the BOD Being nominated by Red River Holdings for a position in FPT’s BOD for the 2012-2017 term. Red River Holdings holds 5.70% of FPT’s shares as of February 24, 2016. World renowned IT guru with 40 years of experience. Formerly Chairman and CEO of NTT Data, the world’s sixth largest IT service provider. NTT Data is a part of the NTT Group, which ranked 32th on Fortune’s Global 500 list in 2013. TOMOKAZU HAMAGUCHI Independent member of the BOD Mr. Tomokazu Hamaguchi is currently the Chairman of JISA, a member of the IHI Corporation’ s BOD, an independent member of JR East Japan Railway Company’s BOD, and an independent member of Kuararay Co.Ltd’s BOD. Officially became an independent member of FPT’s BOD since April 2015, playing the role of strategic consultant of FPT’s globalization strategy, particularly in the Japanese market. Over 25 years of experience in IT. Having been a top leader in many prestigious technology organizations throughout the world, including the Southeast Asia Information Technology Organization (SITO), and the Asian-Oceanian Computing Industry Organization (ASOCIO). DAN E KHOO Independent member of the BOD Currently holds the Chairman Emeritus of the World Information Technology and Services Alliance (WITSA). Took the post of an independent member on FPT’s BOD since April 2015, providing instruction on implementing FPT’s globalization strategy and consultation on its strategies and operations in developing countries. OVERVIEW 27 LEADERSHIP (continued) THE BOARD OF MANAGEMENT Being one of FPT’s 13 founders and the first to lead FPT’s technology sector, which was the precursor of several important subsidiaries such as FPT IS, FPT Software, FPT Telecom and FPT Trading. BUI QUANG NGOC Chief Executive Officer Being an FPT’s prominent administrator, he thoroughly understands FPT’s business models and characteristics and has always been the pioneer in modernizing the company’s administration systems and has great deal of experience in managing large and complex projects which require mobilization of various resources. In August 2013, he was appointed FPT’s CEO to segregate the role of chairman of the BOD and the CEO according to modern administration standards, and to help enhance the group’s operational efficiency. Graduated from the Foreign Trade University, Hanoi, Vietnam, in 1999. Since joining FPT in August 2000, he has made remarkable contributions to the construction of FPT’s finance and accounting system, bringing them up to international standards. NGUYEN THE PHUONG Executive Vice President and Chief Financial Officer In the last 16 years, he has held many important positions in finance and financial control. He is also currently FPT’s Chief Financial Officer. Graduated from the University of Science and Technology in 1995. Being part of the FPT team since 1995, he has a wealth of experience in managing and implementing FPT’s large IT projects in banking, telecommunications and tax sectors in both domestic and foreign markets. DUONG DUNG TRIEU Executive Vice President of Global Expansion Having been the CEO of FPT IS during the 2010-2014 period, he has made important contributions to FPT IS, presiding over its selection as EPC contractor for many large-scale IT projects, including the personal income tax management application project for the tax authorities, the ERP project for Petrolimex, as well as the driving license database management construction project for the General Department of Vietnam Roads. In May 2014, he was appointed FPT’s Executive Vice President of Global Expansion. Joined FPT in 1991, he was a Deputy Director of FPT’s software production unit and directly participated in ensuring human resources for software outsourcing. During the 1999-2004 period, he was the Director of the Indian franchised International Programmers Training Center following Aptech model. He has helped make FPT Aptech become Vietnam’s No. 1 international programmer training institution. NGUYEN KHAC THANH Executive Vice President of Global Human Resources 28 ANNUAL REPORT 2015 www.fpt.com.vn He was one of the founding members of FPT University and has helped steer the expansion of its training fields and scope. In May 2014, he was appointed FPT’s Executive Vice President of Global Human Resources. In 2015, membership of the FPT BOM underwent some changes. The board has approved the termination of Mrs. Chu Thi Thanh Ha as FPT’s Executive Vice President, and Mr. Nguyen Lam Phuong as FPT’s Chief Technology Officer. The board was pleased to approve the appointment of Mr. Le Hong Viet as Chief Technology Officer, Mr. Uwe Schlager, formerly Director of FPT in Germany as FPT’s M&A Director, and Mr. Hoang Viet Ha as Chief Operating Officer. Graduated from Sydney University (Australia) with a software engineering degree in 2004. Having joined FPT since 2005, he has held many important positions and contributed positively in technology activities and manufacturing business of the software outsourcing segment. LE HONG VIET Chief Technology Officer With a solid technical foundation and working experience in many countries, he is one of the people who has laid the foundation for the application and development of new technologies at FPT. In November 2015, he took the post of FPT’s Chief Technology Officer (2015-2018). Having joined FPT Software since the middle of 2012 with a market development mission in Germany and Europe, he used to work for Daimler Benz and T-Systems in Germany and Singapore in the role of senior manager of operations and sales. UWE SCHLAGER M&A Director He was the most important contributor in FPT’s M&A deal with the RWE Group in June 2014. This was first M&A deal in a foreign market of FPT in particular and Vietnam’s IT industry in general. In April 2015, he was appointed FPT’s Director of M&A with the expectation to boost overseas revenue from M&A activities and to promote the globalization strategy of the Corporation. Holding a doctoral degree in Business Management from the Macquairie Graduate School of Management, Sydney, Australia. HOANG VIET HA Chief Operating Officer He has had many years of experience managing large companies and groups. He served as the Chief Operating Officer of Bao Viet Group from 2011 to January 2015, Vice Chairman of HIPT’s BOD for the term from 2012 to 2016, and a member of the National Reinsurance Company’s BOD. In April 2015, he was appointed of the Chief Operating Officer of FPT. OVERVIEW 29 LEADERSHIP (continued) THE SUPERVISORY BOARD Graduated from the Hanoi Commerce University in 1989, and received an MBA at Rushmore University in the US in 2006. From 1997 to 2009, he acted as the Deputy Head of the Business Administration Department of Hanoi National University. NGUYEN VIET THANG Head of the Supervisory Board Having been the Vice Principal of FPT University cum Director of FPT Academy International since October 13, 2009. Having been a member of FPT’s Supervisory Board since 2008 and was appointed the Head of the board at the AGM in 2012. Graduated from the Finance Institute, Russia, in 1999 and holds a doctoral degree in Economics (major in investment) from the Economics Institute of the Russian Academy of Sciences, 2003. NGUYEN KHAI HOAN Member of the Supervisory Board Joined FPT in 2003, from 2005 to 2010, he was the Head of Finance Department cum Chief Accountant of FPT Software. Since January 1, 2011, he has been the Executive Vice President of Finance of FPT Software. Awarded an honorary BA degree in Economics from the New South Wales University (Australia); a BA degree in Finance and Banking at the Newcastle University (Australia) and a Master degree in Asset Management at the SMU (Singapore). He is a candidate of CFA – Level III. CAO DUY HA Member of the Supervisory Board 30 ANNUAL REPORT 2015 www.fpt.com.vn He is currently Deputy Head of SCIC’s Business Investment Department. He has been a BOD and Supervisory Board member at various SCIC portfolio companies, such as Head of the Supervisory Board of the National Seed Joint Stock Company (NSC) for the term from 2012 to 2017 and he is a member of FPT’s Supervisory Board for the term from 2012 to 2017. EQUITY AND SHAREHOLDING INFORMATION STOCK INFORMATION Shareholding structure Foreign investors 49 % Internal investors 23.15 The State (SCIC) % 6.02 Other domestic investors % 21.83 % Some key indicators As of December 31, 2015 Charter capital VND3,975,316,400,000 Number of listed shares 397,531,640 Type of shares Common shares Number of current shares 397,449,264 Treasury shares 82,376 Par value VND10,000/share DIVIDEND PAYMENT HISTORY FROM 2011 TO 2015 Unit: VND in billions 2011 432 2012 548 2013 810 2014 676 2015 779 Note: Cash dividends are made at the rate that has been approved by the AGM for the respective years. Therefore, it is not the same as “dividends and profits paid” in the Consolidated cash flow statement, because this number includes advance dividend payment of the current respectively years and the dividend payment of the previous year (if any). OVERVIEW 31 STRATEGIC DIRECTIONS FOR THE 2016 - 2018 PERIOD MACROECONOMIC PROSPECTS Regarding the prospects of the global economy, in the context of many remaining risks and uncertainties, the International Monetary Fund (IMF) forecasts a GDP growth of the world economy of 3.6% in 2016, higher than the growth rate of 3.3% in 2015. Regarding the prospects of the Vietnamese economy, the National Assembly set the target for GDP growth at 6.7% in 2016, as compared to 6.68% in 2015. Besides, joining free trade agreements, particularly the TransPacific Strategic Economic Partnership Agreement (TPP) and the ASEAN Economic Community (AEC) will create numerous technology opportunities for Vietnam in international cooperation. INDUSTRIAL PROSPECTS AND OPPORTUNITIES FOR FPT Global market to bring great opportunities Global IT services trends According to Gartner's Invest Quarterly Sector outlook report, the global IT services market is expected to grow 4.0% in 2016, reaching over USD1,000 billion and will continue to grow at an average of 4.3% per annum for the next three years. In 2016, it is forecasted that outsourcing contracts will require greater flexibility and efficiency, Big Data will be used more; companies with limited financial resources will look to external suppliers to increase their ability to handle big data and cloud computing-equipped vendors will have a competitive advantage in the IT services market. S.M.A.C, IoT migration trends IDC's forecast on IoT by 2020 50 TRILLION Gigabytes of data 4 BILLION MORE THAN 25 connected people MILLION applications USD 4 TRILLION in revenue 32 ANNUAL REPORT 2015 www.fpt.com.vn 2020 MORE THAN 25 BILLION embedded and intelligent systems According to Gartner's survey on IoT and Digital enterprises, enterprises are now considering information and Internet to be key elements to become digital enterprises. However, there is still less than 10% of companies integrating their activities with a digital business strategy and this is the opportunity for technology companies, like FPT, to help customers migrate into the digital world. In particular, S.M.A.C and IoT continue to be the two mainstream trends of the global IT industry. Domestic IT-Telecommunication market trends Integrated system and infrastructure solutions market - Expectations of new policies On October 14, 2015, the Government issued Resolution No. 36a/NQ-CP on e-government for the 2015-2017 period. This Resolution focuses on three main objectives to develop e-government which are: connecting electronic documents from the central government to the provincial, district and communal levels; 100% of public services are to be provided via electronic network; and establishing a national public service portal at a single website. Resolution No. 36a/NQ-CP was promulgated to improve the position of the Vietnam Electronic government as ranked by the United Nations and to provide FPT and other Vietnamese IT enterprises with the opportunity to participate in the process of administrative reform and e-government. Besides, Decision No. 80/2014/QD-TTg regulating on pilot leasing IT in state agencies which officially took effect in February 2015, created a new business model for enterprises delivering IT services. FPT had its first success with this business model with its implementation of the e-ticketing system for the Vietnam Railways Corporation. Meanwhile, according to International Data Corporation (IDC), Vietnam is developing strongly and more investment is needed in infrastructure, especially IT infrastructure. Besides, spending on IT also tends to shift from hardware to software and services. IDC forecasted that in the 2016-2018 period, spending on hardware growth rate will decrease 2.1% per year averagely, while the growth rate of spending on software and services is expected to remain double-digit of 12.9% per annum. This is also in line with FPT’s growth strategy which focuses on investing in software solutions development and IT services provision. IT spending in information systems in Vietnam during 2014 - 2018 Unit: USD in millions 2014 573 1,270 2015 642 1,289 2016 728 1,285 2017 823 1,209 2018 925 1,211 Software and services Hardware Source: IDC, 2015 Fixed-line telecommunication and Pay TV market – Full of growth potential According to the summary report on 2015 performance and 2016 plan of the Ministry of Information and Communications, from 2011 to 2015, the telecommunication market has grown an average of 30-50% per year. Vietnam’s telecommunication network and Internet infrastructure is continuously growing and new Internet resources are being developed which are consistent with the trend of science and technology convergence and development. In the Pay TV business, we have witnessed impressive growth and the expansion of various forms of services such as: cable TV, digital terrestrial television, satellite television, Internet protocol TV and mobile TV in recent years. Mobile phone and IT product market According to a recent GfK report, the phone consumption market in Vietnam has witnessed positive movements thanks to the growth of smartphones which support online activities. Accordingly, in 2015, 12.9 million smartphones were sold in Vietnam, an increase of 28.1% against 2014. This makes Vietnam the fastest growing and also the third largest smartphone market in Southeast Asia. OVERVIEW 33 STRATEGIC DIRECTIONS FOR THE 2016 - 2018 PERIOD (continued) STRATEGIC BUSINESS DIRECTIONS FOR THE 2016-2018 PERIOD Becoming a global corporation Target • Revenue from overseas markets to account for 30% of total revenue in 2020; • Internationalizing the ‘FPT Culture’. Strategic actions • Providing new products/services for global markets; • Applying international standards; • Pursuing cross-border M&A; • Popularizing the use of English throughout the Corporation. Revenue from overseas markets 30% in 2020 Pioneering in the digital world Target • Being a pioneer in the digital world; participating in the formation of the global technology ecosystems; • Growing revenue from providing digital services to customers by more than 70% a year. Growing 70%/year revenue from providing digital services to customers Strategic actions • Providing digital services to customers; • Pioneering in digitalizing management and business model; • Investing in IT startups which complement FPT’s ecosystems; • Inspiring FPT employees to be pioneers in the digital world. Transforming into a world-class company Target • Being on the Forbes Global 2000 list by 2020; • Becoming a learning organization, improving leadership ability. Strategic actions • Enhancing the international rankings of all business segments; • Signing long term and high value contracts; developing turnkey products and services in specialized domains and value added services; • Growing strategic ‘start-ups’ that can contribute to generate revenue growth; • Requiring FPT staff to spend at least 20hours/year on learning so that they can improve their skills and increase their knowledge and developing a criteria matrix that will enable the assessment and improvement of leadership capacity. 34 ANNUAL REPORT 2015 www.fpt.com.vn FPT being on the Forbes Global 2000 list by 2020 BECOMING A GLOBAL CORPORATION PIONEERING IN THE DIGITAL WORLD STRATEGIC BUSINESS DIRECTIONS FOR THE 2016-2018 PERIOD TRANSFORMING INTO A WORLD-CLASS COMPANY SUSTAINABLE DEVELOPMENT ORIENTATIONS Sustainable development orientations As the largest IT company in Vietnam’s private economic sector, FPT is aware of the importance of this strategy and strives to achieve the objective of combining economic, environmental and social good to ensure a balance of interests for all parties involved in current and future operations. Key objectives of FPT’s sustainable development strategy includes: • Sustainable growth in revenue and profit; • Developing highly skilled human resources; actively participating in; and contributing to community activities; • Raising awareness for environmental protection and energy conservation; ‘Greening’ the business and lifestyle. (Refer to FPT's Sustainability Report, page 80) OVERVIEW 35 03 Provide IT services for RWE– the leading energy group in Europe BUSINESS PERFORMANCE ANALYSIS ENERGY (electricity, gas) SMART HEALTHCARE 15 years’ experience Applied in more than 100 hospitals and health facilities Online health insurance claim system FPT's technology Typical projects: Bach Mai hospital, Cho Ray hospital, Electronic health insurance claim system (FPT.eClaim) AUTOMOBILE Nearly 10 years’ experience Develop an in-car entertainment system for several foreign automobile manufacturers INSURANCE SMART TRANSPORTATION Online train tickets 8 years’ experience Insurance agency management system of 15,000 - 20,000 agents nationwide Bus Management System Transportation monitoring of the Noi Bai - Lao Cai Highway E-bus ticket system GOVERNMENT Domain business - oriented technology: Based on experience in implementing large-scale and complex projects in domestic and foreign markets, FPT has developed advanced technological capabilities by domain business. 22 years’ experience FPT.eGov implemented at 539 state-owned authorities in 22 cities and provinces nationwide 14 years’ experience Provide IT services for telecom enterprises TELECOMMUNICATIONS capability PUBLIC FINANCE 09 big 17 years’ experience PIT project (Vietnam): manage 20 million taxpayers FMIS project (Cambodia): used by 33 financial units in Cambodia BANKING More 20 years’ experience Typical projects: Vietcombank, BIDV, Viettinbank, Maritime bank ERP 20 years’ experience BROADCASTING 60 million households in the US and Latin America use the application provided by FPT cooperating with the No.1US satellite television services provider. More than 100 customers The project with Petrolimex: 1,500 users nationwide BUSINESS PERFORMANCE AND MANAGEMENT DISCUSSION THE MACRO ECONOMIC CONTEXT IN 2015 The macro-economic context in Vietnam started to have some more positive factors in 2015 as compared to 2014 which included GDP growth of 6.68%, the highest growth rate in recent five years. Inflation has set a record low with CPI increased by only 0.6% in 2015. Interest rate kept being low which helped boost investment and consumption. Vietnam continued to be an attractive investment destination thanks to improving investment environment and the integration into international trade environment by signing the Transpacific Partnership (TPP) and integrating into ASEAN Economic Community (AEC). However, the fact that Vietnam Dong has devaluated by more than 5% in 2015 – a high fluctuation as compared to a recent five-year trading band, has some negative impacts on import-related enterprises. Besides, factors such as the world oil price has slumped, China economy slowed down and Vietnam’s state budget continued to have a higher deficit continued to challenge Vietnam’s macro-economic targets. BUSINESS PERFORMANCE IN 2015 AND MANAGEMENT DISCUSSION In such a macro-economic context, FPT has fulfilled both revenue and profit targets, especially with profit returned to the double-digit growth track. Specifically, consolidated business revenue in 2015 reached VND40,003 billion, equal to 101% of target, up 13.9% versus 2014; profit before tax reached VND2,851 billion, equal to 100% of the target, up 15.9% versus 2014. Profit after tax (PAT) and PAT attributable to parent company’s shareholders was VND2,438 billion and VND1,931 billion in 2015, up 17.3% and 18.3% year-on-year, respectively. EPS increased by 17.8% year-on-year, to VND4,386. Total consolidated assets increased by 14.9% year-on-year, reaching VND26,046 billion. Overseas market continued to grow healthily and contributed considerably, especially in terms of profit to the consolidated financial performance. Revenue from overseas markets in 2015 was VND4,859 billion, up 40.9% versus 2014, which was roughly equal to USD221 million. Profit before tax from overseas markets was VND668 billion (or roughly USD30.4 million) in 2015, up 15.1% versus 2014, accounting for nearly one-fourth of the consolidated profit before tax of the Corporation. Some financial indicators Unit: VND in billions except for EPS Items 2014 2015 Change Total assets 22,658 26,046 14.9% Consolidated business revenue 35,130 40,003 13.9% Operating profit 2,389 2,802 17.3% EBITDA 3,173 3,847 21.2% Profit before tax 2,459 2,851 15.9% Profit after tax 2,079 2,438 17.3% Earnings per share (VND) 3,723 4,386 17.8% Payout ratio 42.1% 41.2% Consolidated business revenue 38 ANNUAL REPORT 2015 www.fpt.com.vn 13.9% versus 2014 Profit after tax 17.3% versus 2014 FINANCIAL POSITION Total assets Total assets was VND26,046 billion as of December 31, 2015, up 14.9% yearon-year. Return on assets (ROA) was 10.4%. Accounts receivable balance as of December 31, 2015 increased from VND4,286 billion to VND4,994 billion as revenue increased strongly by 13.9%. However, accounts receivable turnover has improved from 8.68 times in 2014 to 8.91 times in 2015, suggesting improvement in debt collection. Pertaining to the balance of provision for doubtful accounts receivable, in Telecom services segment, the provision was made based on historical percentage of dropped out customers of whom the receivable amount is unable to collect. In the telecommunication business, this is considered an operation expense. However, as per accounting regulations, the company cannot net-off the amount due from dropped out subscribers with the provision made for such accounts, which resulted in considerably large amount of provision being accumulated throughout the years. The balance of provision for doubtful accounts receivable as of December 31, 2015, if excluding such provision in the Telecom services segment, was VND88 billion, accounting for 2.28% total short-term accounts receivable balance, which was equal to the ratio as of December 31, 2014 of 2.27% and remained low. Total assets 14.9% versus 2014 Total liabilities As of December 31, 2015, total interest-bearing debts has increased from VND6,865 billion (as as of December 31, 2014) to VND8,806 billion, in which short-term borrowing balance increased by VND1,469 billion, and long-term borrowing increased by VND472 billion. Short-term borrowing increase was mainly to finance working capital in the retail segment, and to invest in the Telecom services and Software outsourcing segments. Short-term borrowing balance as of December 31, 2015 increased year-on-year was mainly due to the Telecom services segment (increased by VND962 billion), Retail segment (increased by VND733 billion), and Software outsourcing (increased by VND309 billion). The Distribution segment, which accounts for the majority of the consolidated short-term borrowing balance, had its balance reduced by VND557 billion. Long-term borrowing was to finance capital expenditure investments at the subsidiaries, in which the Telecom services segment has its balance increased by the most. As of December 31, 2015, long-term borrowing balance at the Telecom services segment increased by VND445 billion (2014: zero balance), which accounted for 95% of the difference in consolidated long-term borrowing balance between the two periods. The net debt to equity ratio of the Corporation was 0.27 times, albeit being higher than the 0.13 times as at December 31, 2014, remaining low, implying high financial safety as well as the potential to mobilize more financial resources for business expansion going forward. The net debt to equity ratio of the Corporation was 0.27times versus 2014 BUSINESS PERFORMANCE ANALYSIS 39 BUSINESS PERFORMANCE AND MANAGEMENT DISCUSSION (continued) Fundamental ratios Ratios 2014 2015 Current ratio 1.29 1.27 Quick ratio 0.94 0.91 Debt/Total assets 0.30 0.34 Debt/Equity 0.74 0.86 Net debt/Equity 0.13 0.27 Interest coverage 15.80 11.86 Inventory turnover 6.70 6.19 Accounts receivable turnover 8.68 8.91 Accounts payable turnover 10.62 10.68 Cash conversion cycle (in days) 62.15 65.73 Operating profit margin 6.8% 7.0% Profit before tax margin 7.0% 7.1% Profit after tax margin 5.9% 6.1% Return on capital 16.3% 16.4% Return on equity (ROE) 23.6% 24.8% Return on assets (ROA) 10.9% 10.4% 1. Liquidity ratios 2. Leverage and coverage ratios 3. Operating efficiency ratios 4. Profitability ratios PERSONNEL AND ORGANIZATION STRUCTURE The Board of Executive Officers and Chief Accountant No. 40 Member 1 Bui Quang Ngoc 2 Position Voting rights Chief Executive Officer 3.72% Nguyen The Phuong Executive Vice President 0.07% 3 Duong Dung Trieu Executive Vice President 0.27% 4 Nguyen Khac Thanh Executive Vice President 0.19% 5 Hoang Huu Chien Chief Accountant 0.01% ANNUAL REPORT 2015 www.fpt.com.vn Changes in the Board of Management • Appointing Mr. Le Hong Viet as Chief Technology Officer. • Appointing Mr. Uwe Schlager as Director of Merger and Acquisition (M&A). • Appointing Mr. Hoang Viet Ha as Chief Operating Officer. Number of staff and employees’ policies By the end of December 2015, FPT had 26,818 employees, a 21.8% increase against 2014, including 1,135 foreign employees with 25 nationalities. In order to provide every employee with the most favourable work environment possible, enabling them to reach their full potential in terms of their careers and personal lives, FPT always focuses on drafting and implementing beneficial treatment policies and creating active, inspirational working environment. 26,818 1,135 employees 25 foreign employees nationalities INVESTMENTS AND MAJOR CAPITAL EXPENDITURE PROJECTS Major capital expenditure projects As usual, major capital expenditure projects mainly incurred in Telecom sector (to invest in infrastructure, expand the customer base and invest in new products), Technology sector (to build office complex to meet the rising demand of office space thanks to increasing workforce) and invest in technology R&D. Total cash reimbursement relating (to such projects in 2015 was VND2,090 billion), being summed up from sectors as follows: Unit: VND in billions Reimbursement in 2015 Business sectors Major projects Telecom sector Investment in infrastructure, customer acquisition, fiber optic swap project, pay TV services… Technology sector Investment in office building to support business expansion R&D of technologies (Cloud, Mobility, DMS, etc) Distribution and Retail sector 1,487.6 511.6 24.6 6.1 Education segment and Others 60.3 Total capital expenditure 2,090.2 BUSINESS PERFORMANCE ANALYSIS 41 BUSINESS PERFORMANCE AND MANAGEMENT DISCUSSION (continued) Subsidiaries and associates As of December 31, 2015 FPT has eight subsidiaries (excluding a subsidiary which has been scaled down since 2011) and two associates, which are divided into four business sectors including Technology, Telecom, Distribution & Retail, and Others. Subsidiaries 99 FPT Online: please refer to the analysis of the Digital content segment. • In Distribution and Retail sector: 99 FPT Trading Group: please refer to the analysis of the Distribution of IT products; 99 FPT Digital Retail: please refer to the analysis of the Retail of IT products. • In Technology sector: 99 FPT Software: please refer to the analysis of the Software outsourcing segment; 99 FPT Information System (FPT IS): please refer to the analysis of the Software solutions, System integration and IT services segments. • In Telecom sector: • In Education segment and others: 99 FPT Education: please refer to the analysis of the Education segment; 99 FPT Investment: manages FPT’s investment. Associates • FPT Fund Management Joint Stock Company. 99 FPT Telecom: please refer to the analysis of the Telecom services segment; • FPT Securities Joint Stock Company. REPORT ON THE CORPORATION’S SOCIAL AND ENVIRONMENTAL RESPONSIBILITIES Apart from continuously improving the business performance and corporate governance of the Corporation, FPT has fully realized our role in making contributions to add more values to the development of Vietnamese environment and society, with special focus on education support, making it best for the younger generation to grow in the future. In 2015, FPT has spent nearly VND33.6 billion for activities involving corporate social responsibilities (CSR), in which: • The Corporation has sponsored VND30.8 billion to support education and the youth, which has benefited around 20 million students and pupils in Vietnam; • The Corporation has sponsored VND2.8 billion for humanity and charity programs. Spending on CSR activities in 2015 No. 42 Name of program I Supporting education and the youth 1 Scholarships 2 Implementation of technology application enhancement programs in education 3 Number of attendants/ beneficiaries Amount (in VND) 30,803,964,252 955 20,749,879,700 20,000,000 7,072,000,000 Provision of learning tools (computers, books, etc.) 15,000 2,132,331,552 4 Honouring and encouraging outstanding students in their own majors 13,216 849,753,000 II Humanity and charity activities ANNUAL REPORT 2015 www.fpt.com.vn 2,751,664,530 FINANCIAL PERFORMANCE ANALYSIS OVERVIEW OF BUSINESS PERFORMANCE BY SECTORS In 2015, consolidated business revenue and profit before tax of FPT has recorded double-digit growth rate, meeting initial guidance, in which core business sectors have recorded impressive growth rates. Unit: VND in billions Actual 2015 Business sectors Percentage of guidance completion 2015 guidance Business revenue Profit before tax Business revenue Profit before tax Business revenue Profit before tax Technology sector 8,605 927 8,310 998 103.5% 92.9% Telecom sector 5,484 1,044 5,134 1,005 106.8% 103.9% Distribution and Retail sector 25,213 728 25,510 698 98.8% 104.3% Education segment and Others 702 151 646 149 108.7% 101.5% 40,003(*) 2,851(*) 39,600 2,850 101.0% 100.0% Total (*): Total may not add up due to rounding error. The Technology sector: has delivered 103.5% of the revenue guidance, and 92.9% of the profit before tax guidance, up 22.3% and 25.3% yearon-year, respectively. For the first time, revenue from overseas markets in the Technology sector has surpassed which from the domestic market, accounting for 52% of the sector’s revenue, up 40.5% year-on-year. Going forward, overseas markets are playing a more and more important role as a key growth driver, not only for the Technology sector, but also for the Corporation. The Telecom sector: has delivered the annual guidance earlier than planned, recording VND5,484 billion, up 16% year-on-year, and PBT of VND1,044 billion, up 11.6% year-on-year, fulfilling 106.8% and 103.9% of the full year guidance. In 2015, the Telecom services segment has completed the fiber optics conversion project in Hanoi and Ho Chi Minh City, and gradually expand the project to the next cities. Besides, the Online advertising segment has delivered a healthy growth with revenue and PBT up by 15.4% and 9.8% year-over-year, respectively, fulfilling the full year targets. The Distribution and Retail sector: has its revenue up 10.9%, fulfilling 98.8% of the full year target, and PBT up 23.6% year-over-year, fulfilling 104.3% of the full year target. The Distribution segment has a flat performance compared to previous year. The Retail segment has become a key driver for the sector’s growth by delivering an outstanding performance thanks to the continued expansion of the retail chain, as well as continuous operational improvements. The Education segment: has recorded a turnaround in the number of new enrolments in 2015 with an increase of 15.4% year-over-year, especially the university which recorded a growth rate of 32.6% year-over-year. The first online university in Vietnam, named it FUNiX – has also been introduced with the offering of bachelor degree in IT, which is expected to help train even more software engineers in Vietnam going forward. Profit before tax of the Technology sector 25.3% Versus 2014 Profit before tax of the Telecom sector 11.6% Versus 2014 Profit before tax of the Distribution and Retail sector 23.6% Versus 2014 BUSINESS PERFORMANCE ANALYSIS 43 FINANCIAL PERFORMANCE ANALYSIS (continued) BUSINESS SEGMENT ANALYSIS Technology sector Profit before tax Revenue Unit: VND in billions Unit: VND in billions 10% 29% 10% 8,605 BILLION 10% 48% +22% 12% 927 BILLION 68% +25% 13% IT services 873 +12% IT services 90 +6% System integration 2,530 -6% System integration 96 -30% Software solutions 1,098 +68% Software solutions 107 +8068% Software outsourcing 4,104 +40% Software outsourcing 634 +23% Software development segment The Software development segment includes two businesses which are Software outsourcing and Software solutions. In which, the Software outsourcing business provides IT outsourcing services such as technology migration, advisory and R&D services that relate to S.M.A.C/IoT technology trends, application development services, etc for customers in developed markets. The Software solution business provides solutions in verticals such as Public sector, Public Finance, Telecom, Transportation, Banking and Finance, Electricity/ Water / Gas supply, Healthcare for customers in developing markets. In 2015, the Software development segment was a key growth driver for the group with recorded revenue of VND5,202 billion, and PBT of VND741 billion, up 45% and 43%, respectively year-over-year. As such, the Software outsourcing business has maintained high growth with revenue increased by 40% year-over-year and Software solutions business has a considerable recovery, especially in terms of profit. Revenue »» Software outsourcing business Continued to grow healthily with 40% increase versus prior year in terms of revenue, and 23% year-over-year in terms of profit before tax, being named in IAOP’s Global Outsourcing 100 list for the 3rd consecutive year. 44 ANNUAL REPORT 2015 www.fpt.com.vn 40% versus 2014 Highlights in 2015 Revenue accounted for 84% of FPT’s total business revenue from overseas markets In 2015, revenue from Software outsourcing business reached VND4,104 billion, which was equal to roughly USD184 million, and profit before tax was VND634 billion, up 40% and 23% year-over-year, respectively, in VND term. FPT has continued to be named in IAOP’s Global outsourcing 100 list. PBT margin was 15.5% in 2015, which was 2.2% lower than in 2014 due to one-off factors including (1) FPT Slovakia was in the transition period towards using more Vietnambased human resource; (2) increased investment in expanding the delivery workforce with the ‘10,000 Bridge Software Engineer (BrSE)’ program, and the sales force. Profit margin in 2016 is expected to increase thanks to (1) expected higher margin from FPT Slovakia, and (2) optimizing the use of human resource pool. Continued to diversify the customer base, while being able to simultaneously increase work volume with key account Criteria Revenue Unit: VND in billions Percentage of total Growth in 2015/2014 2015 2013 2014 2015 2013 2014 Top 10 customers 882 1,133 1,684 41% 39% 41% 49% Top 20 customers 1,307 1,633 2,199 61% 56% 54% 35% Top 30 customers 1,530 1,933 2,559 71% 66% 62% 32% In 2015, Top 30 customers accounted for 62% of total Software outsourcing revenue, which was lower than previous years (2014: 66%; 2013: 71%). This has shown that customer diversification has been conducting well. Besides, the group of top 30 customers also maintained high revenue growth with a growth rate of 32% in 2015. All key markets have delivered impressive growth Japan market: accounts for 45% of total revenue from Software outsourcing business and has maintained an impressive growth with revenue up 40% year-over-year. The severe shortage of IT engineers in Japan, coupling with the trending movement of Software outsourcing work out of China will continue to be opportunities for Vietnam in general, and FPT in particular in Japan market. The US market: has been the second largest market in the Software outsourcing business. Revenue from the US market increased by 37% year-over-year, accounting for 27% of Software outsourcing revenue in 2015. FPT is currently investing in researching for solutions involving S.M.A.C and IoT technology trends in order to compete with bigger players. The Europe market: has continuously scaled up in which FY2015 revenue increased by 56% year-over-year, and FY2014 revenue also increased by 117%, partially thanks to the newly incorporated M&A strategy. Together with Japan and the US, Europe market is expected to become one of the three key markets which form a “tripod” for FPT’s Software outsourcing business going forward. Software outsourcing revenue and contribution by markets in 2015 12% 16% Unit: VND in billions 45% 27% APAC484 Europe656 The US 1,121 Japan1,843 Software outsourcing revenue growth by markets APAC 30% Europe 56% The US 37% Japan 40% The Asia Pacific market (APAC): has delivered a 30% revenue growth in 2015, contributing 12% to Software outsourcing revenue. BUSINESS PERFORMANCE ANALYSIS 45 FINANCIAL PERFORMANCE ANALYSIS (continued) Key changes aiming towards the ambitious goal of reaching USD1 billion in revenue from overseas markets for the Corporation 99 Adding high ranking officers at strategic markets For business expansion and better management of resources that serve Japan and the US markets, especially the human resource, FPT Software has appointed Mr. Hatakeyama Tsutomu as Vice President of FPT Japan, and Mr. Malay Verma as Business Development Director of FPT USA. Both Mr. Hatakeyama Tsutomu and Mr. Malay Verma have extensive leadership experience in multinational corporates. The appointment was also to diversify knowledge and experience among FPT’s management team, helping make FPT to transform into a really global company in the future. 99 Opening new delivery centres and expanding existing ones in Vietnam, Phillippines and Myanmar To meet high demand of scaling up the human resource, respectively with the increased orders from customers, FPT Software has opened offices in Philippines and Myanmar, and also offices in Hanoi. As such, the Software outsourcing business is now having six major delivery centres, including four in Vietnam, namely in Hanoi, HCMC, Da Nang, and Can Tho, one in Philippines, and one in Slovakia. »» The Software solutions business Revenue and profit has strongly bounced back. Many major projects have been completed both in domestic and international markets, building up a strong track record for future projects. If Software outsourcing business has its revenue from developed markets, revenue of the Software solutions business has mainly come from the domestic market, and gradually built up revenue from developing markets including Laos, Cambodia, Bangladesh, to name a few. Important highlights in 2015 Revenue and profit has returned to a strong positive growth after 3 years of showing no growth (2012 – 2014) Thanks to continuous efforts in restructuring the business, switching from System integration into developing Software solutions and IT services, the Software solution business has recorded VND1,098 billion in revenue, up 68% year-over-year, and profit before tax of VND107 billion in 2015, up 8,068% against 2014. Revenue of The Software solutions business 68% against 2014 99 Launching the ‘10,000 Bridge Software Engineers’ (10,000 BrSE) program According to an annual survey which has been conducted in the last 10 years by Manpower Group named Talent Shortage Survey, in 2015, there was 83% of surveyed HR leaders in Japan said that they faced difficulties filling jobs, which was the highest rate among 42 surveyed countries. Also in Japan, IT personnel was the third hardest jobs to fill (as compared to the global average, where IT personnel was the ninth hardest jobs to fill in 2015). In such a context, coupling with the Corporation’s own demand for talents, FPT has launched the ‘10,000 BrSE’. In 2015, there were nearly 1,000 bridge software engineers who were trained in Vietnam and Japan under the program. 46 ANNUAL REPORT 2015 www.fpt.com.vn Profit before tax of the Software solutions business 8068% against 2014 Winning the contract of IVAS to the Tax Department of Bangladesh which was worth USD 33.6 million Winning and completing developing markets big projects in System integration and IT services segments In 2015, succeeding against five other international bidders, FPT has won the contract of “Provision, deployment and maintenance of Integrated VAT Administration System (IVAS)” to the Tax Department of Bangladesh which was worth USD33.6 million. In Cambodia, FPT has put the Finance Management Information System project (FMIS) for the Royal Government of Cambodia into operation. In Myanmar, FPT has successfully rolled out the ERP system for the leading paint company in Myanmar United Paint Group (UPG). FPT will focus more on developing solutions, which are more software and service-related, with higher added value, replacing the traditional system integration projects, which involve more of hardware. The performance in 2015 also reflected this direction. Financial results of the System integration segment has decreased and Software solutions and IT services segments increased (accordingly). Specifically, System integration revenue was VND2,530 billion, down 6% year-over-year, and profit before tax was VND96 billion, down 30% versus 2014. The IT services segment recorded revenue of VND873 billion, up 12%, and profit before tax of VND90 billion, up 6% versus 2014. Actively involving in solving social problems with the IT leasing model Important highlights in 2015 Putting into use e-government systems nationwide On the last day of 2014, the Prime Minister had signed the Decision No. 80/2014/QD-TTg governing trial activities that relate to the IT leasing model at organizations that use the State-budget. The decision was effective from February 15, 2015. FPT has become the pioneer enterprise that realized the policy by implementing various projects in 2015, including: 99 The project to deploy the online ticket booking and selling platform for the Vietnam National Railways; 99 The pilot project of deploying the traffic violation surveillance and monitoring system on the Noi Bai-Lao Cai highway; 99 The project of deploying the ‘Online health insurance claiming system’ for Hai Phong. In 2015, FPT has completed three important e-government projects for provinces including Quang Ninh, Binh Duong and Tay Ninh. Currently, the application of IT in public administration in Vietnam is still low as compared to regional countries, paving way for further investment in the future. Completing major ERP projects In 2015, various ERP projects have been handed over to customers such as SAP ERP system for Minh Phu Seafood Corp; SAP ERP and SAP CRM systems in the cloud for FECON; SAP ERP system for Vingroup; SAP ERP for Ca Mau Fertilizer Company. Beside investing in developing core solutions (in the Software solutions segment), the IT services will also be a focus of FPT going forward. Concurrently, the Corporation has proposed to build the Integrated Information System for the National Traffic Safety Committee, in an attempt to open up opportunities to deploy systems for various sectors such as healthcare, social insurance, to name a few. For the domestic market, the Software solutions business and IT services segment will be of FPT’s focus going forward thanks to the ability to make differences as compared to other industry players. BUSINESS PERFORMANCE ANALYSIS 47 FINANCIAL PERFORMANCE ANALYSIS (continued) Telecom sector Revenue Profit before tax Unit: VND in billions Unit: VND in billions 7% 16% 5,484 1,044 +16% +12% BILLION BILLION 93% 84% Digital Content 375 -56% Digital Content 167 +63% Telecom services 5,109 +32% Telecom services 878 +5% Telecom services segment The Telecom services segment has closed the year 2015 with revenue of VND5,109 billion, up 32% yearover-year, and profit before tax of VND878 billion, up 5%. The first phase of the fiber optic swap project has been completed. The pay-TV services, though has just been launched since the late 2014, has delivered strong growth. Business performance Ending 2015, revenue of the Telecom services segment increased by 32% year-over-year, fulfilling 107% of the full year guidance, in which, internet broadband services accounted for 71%, increasing by 31% year-over-year. Besides, other services including leased line, data centers, voice, and especially pay-TV have delivered good growth with revenue was totally VND1,459 billion, up 33% year-over-year. The pay-TV service has surpassed initial customer acquisition target, growing strongly. Earnings before interest, tax, depreciation and amortization (EBITDA) of the Telecom services segment, excluding costs relating to the fiber optic swap project, was VND1,934 billion, up 35.4% year-over-year. Profit before tax was VND878 billion, up 5% year-over-year, fulfilling 104% of the full year guidance. A lower profit before tax growth rate as compared to revenue growth was caused by (1) costs relating to the fibre optic swap project being conducted in Hanoi, HCMC, and the next major cities; and (2) good growth in terms of customer acquisition, in which the proportion of implementing fiber optic cables for new customers increased strongly in 2015, in which customer acquisition costs are mostly booked into expenses during the period, which was contrarily, mostly capitalized with copper cable technology. Revenue of the Telecom services segment 32% versus 2014 48 ANNUAL REPORT 2015 www.fpt.com.vn Profit before tax of the Telecom services segment 5% versus 2014 Highlights in 2015 The segment has completed the fiber optic swap project in Hanoi and HCMC, which helped improve bandwidth and quality of service. In July 2015, FPT has become the first foreign enterprise to having obtained the Network Facility Service (Individual) license by Myanmar’s Ministry of Communications and Information Technology. The pay-TV service, which was launched in the late 2014, has completed the upgrade of version 2.3 with modern useful and convenient features such as: creating personal channel list; picture in picture (PIP); monitoring view time and channels viewed; electronic program guide (EPG). Competitive advantages in terms of technology will be further advanced, in order to create more useful features for users. Digital content segment Consolidating the No. 1 online Vietnamese newspapers with 13.5 billion of page views in 2015; having completed the full year targets with revenue reached VND375 billion, up 15.4% year-over-year, and VND167 billion profit before tax, up 9.8% year-over-year. FPT has stopped the online gaming business and related services (such as telecom top-up card distribution, payment gateway service, etc.) since late 2014, therefore revenue and profit before tax of the Digital content segment in 2015 included Online advertising business only. Excluding the revenue of VND528 billion and loss of VND50 billion of online gaming business and related services in 2014, revenue and profit before tax growth in 2015 was 15.4% and 9.8% year-over-year, respectively. In contrary, including such revenue and loss in 2014 to calculate growth in 2015, revenue of the segment in 2015 decreased by 56%, and profit before tax increased by 63% on a year-over-year basis. Technology product Distribution and Retail sector 31% Revenue Profit before tax Unit: VND in billions Unit: VND in billions 25,213 25% 40% 43% 728 BILLION BILLION +11% +24% 29% 32% Retail 7,842+50% Retail 180+335% IT Product Distribution 7,417 +2% IT Product Distribution 237 +21% Mobile Distribution 9,954 -3% Mobile Distribution 311 -11% BUSINESS PERFORMANCE ANALYSIS 49 FINANCIAL PERFORMANCE ANALYSIS (continued) Technology product Distribution segment Revenue was VND17,371 billion, slightly decreased by 0.8% year-over-year, and profit before tax was VND548 billion, which equals to profit before tax in 2014. Return on equity was consistently high at 46%. Business performance in 2015 The mobile phone market has continued to witness the consumer’s migration from feature phones to smartphones. However, as Apple re-divided the market, revenue from mobile distribution has actually been lower than initial guidance. The hardware consumer market in 2015 saw mild recovery, notably with the return to positive growth, which helped the Corporation’s laptop product line increase by 8.7% year-over-year, and desktop increase by 10.9% year-over-year. Meanwhile, tablets which saw strong growth in prior years, have declined 14.7% in terms of value in 2015. This was because in 2015, the laptop market was introduced with ultra portable models, which competed in terms of screen size with tablets, and laptops that have a detachable keyboard, which competed directly with tablets. Beside the swapping role in terms of growth between laptop and tablets, hard disc drive (HDD) products have faced strong competition. As a result, revenue from distribution of IT products increased by only 1.7% year-over-year. Profit before tax margin in 2015 of the Distribution business was 3.2%, which was 0.1% higher than which in 2014. Return on equity was consistently high at 46%. New steps in 2016 Amid such changes on the mobile handset market, changes should be conducted to maintain growth. In 2016, beside existing activities, FPT will start to distribute to e-commerce channels, and concurrently invest in a professional warranty service chain. These are under-penetrated niche markets, which are expected to have a lot of potential. According to Vietnam E-commerce and Information Technology agency (VECITA)’s 2014 Vietnam E-commerce report, online sales only accounted for 2.12% total retail sales nationwide. Meanwhile, in some developed markets including the US, Korea, Australia, online sales accounted for 6.1%, 12.8% and 6.6% of total retail sales of the respective countries. Besides, the smartphone market has been growing strongly in Vietnam for a number of years, which has incurred demand for warranty services for warranty-expired phones, or demand for phone insurance started to get high. These will be opportunities for FPT’s Distribution segment in 2016. Technology product Distribution segment VND 17,371 billion 50 ANNUAL REPORT 2015 www.fpt.com.vn Technology product Distribution segment VND 548 billion Technology product Distribution segment 46% Technology product Retail segment The Retail segment has had a successful year with the number of opened stores has surpassed the initial target, exceeding both revenue and profit targets, in which profit before tax increased by more than four times as compared to 2014. Achievements in 2015 Ending 2015, FPT’s Retail segment has opened another 89 shops, which was double the initial shop-opening plan, ending having 252 shops that covered all 63 cities and provinces nationwide. The Retail segment has recorded revenue in 2015 of VND7,842 billion, up 50% year-over-year, and profit before tax of VND180 billion, up 335% versus 2014. Revenue from online sales has also been growing strongly, increasing by 75.8% year-over-year, accounting for 7.4% of total Retail revenue. Apart from the continuous expansion, the Retail segment has constantly improved customer service quality by implementing a series of customer care, promotion, and new product experiencing campaigns which are full of creative ideas such as paying water, electricity and petrol bills for customers who bought at FPT’s shops, or computer interactions through gestures and facial emotions, to name a few. As a result, after four years of changing strategy and continuously scaling up, FPT has now owned the second biggest IT product and mobile phone retail chain in the market, having a certain position in the customers’ mind. Total number of shops 252 nationwide Technology product Retail segment 335% Versus 2014 Technology product Retail segment 50% Versus 2014 The Education segment and Others The Education segment Pioneering in highly skilled human resource training and innovating training method By the end of 2015, FPT’s Education segment has had 17,900 students currently studying, in which the number of newly enrolled students across the segment was 7,853 students, up 15.4% year-over-year, in which the University level had its newly enrolled students increased strongly by 32.6% year-over-year. The Education segment has continuously innovated to improve education quality. In the recent reassessment exam of QS, FPT University has become the only Vietnamese university that had five-star, which is the highest ranking, for four criterion including Teaching, Employability, Facilities and Social responsibilities. The university management board is determined in viewing that teaching should tie to the need of enterprises and demand from the high skilled human resource market. In order to scale up and innovate the training methods, the Education segment has introduced FUNiX – the first online university in Vietnam, and opened four more majors at FPT Polytechnic College under the Tourism – Hospitality – Catering category. More branches are also expected to be opened in new provinces in 2016. BUSINESS PERFORMANCE ANALYSIS 51 THE BOD’S REVIEW ON CORPORATE ACTIVITIES AND THE BOM’S PERFORMANCE THE BOD’S REVIEW ON CORPORATE ACTIVITIES Business performance review In 2015, FPT fulfilled its commitments in revenue and profit gained which were earlier approved at the 2015 Annual General Shareholders Meeting (AGM). Specifically, consolidated revenue for the year 2015 was VND40,003 billion, equal to 101% of the plan. Profit before tax were VND2,851 billion, completing 100% of the plan. The result underscores the great efforts of all subsidiaries in a difficult business context in which there were many adverse movements, including: the Distribution segment being affected by partners’ changes in distribution policies; the Telecom services segment being under competitive pressure and the domestic information technology market has not yet recovered as expected. Globalization direction continued to show positive results, mirrored by a 40.9% increase in revenue from overseas markets in 2015. With the expansion of business activities in emerging markets, impressive milestones were reached, including the signing of a USD33.6 million contract to implement the VAT system for the Government of Bangladesh, obtaining the telecommunications license in Myanmar and putting an ERP project into operation for the United Paints Group, a Myanmar-based leading paint corporation, to name a few. Consolidated revenue VND 40,003 billion Consolidated profit before tax 2,851 VND billion Implementation of strategic directions Becoming a global corporation In 2015, globalization direction continued to achieve good results and most of the main targets of the strategic direction for the 2015–2017 period were reached. Details were as follows: • Revenue for globalization grew by 40.9% YoY. • Momentum was created in developing markets. Especially, in Myanmar and Bangladesh, FPT has opened new development directions in Telecommunications and IT solution areas in the following years. • Significant contributions were made in the technology ecosystems of the technology corporations such as Amazon Web Services (AWS) and Microsoft,… being on par with key players from Japan and India like Hitachi, Fujitsu, NEC, Accenture, Tata, and Cognizant. • The number of foreign employees was 1,135, accounting for 4.2% of the total number of employees. • The “10,000 Bridge Software Engineer” program: In 2015, nearly 1,000 participants of the program were trained in Japan and Vietnam. 52 ANNUAL REPORT 2015 www.fpt.com.vn Revenue for globalization 40.9% Versus 2014 Foreign employees 4.2% of the total number of employees Becoming the Number 1 company for S.M.A.C Wishing to pioneer the SMART revolution by applying S.M.A.C in business and management activities, FPT focused on investing in and applying new technologies and applications in the solutions/services provided to customers as well as business operations, accelerating revenue growth. • Enhancing S.M.A.C application in business operation to cut costs and increase revenue such as FPT University’s enrollment; FPT Retail’s sales; FPT Telecom’s internet service provision and the operation of FPT Software’s service delivery system. • Continuously winning a number of S.M.A.C-based service provision contracts with big players in the areas of aviation, broadcasting, energy and automobile in developed countries, particularly in the United States and Japan. FPT focused on investing in and applying new technologies and applications in the solutions/ services provided to customers. • Delivering revenue growth of 74% from providing S.M.A.C-based services and solutions (SMART) to customers globally in 2015. Signing higher value contracts In 2015, FPT strived and won several large-scale and long-term contracts to provide solutions and full-package services. • A record contract of USD33.6 million was signed to provide a VAT Management System in Bangladesh. This is by far the largest turnkey contract in Bangladesh; Contract was signed with a world’s leading customer in the field of broadcasting USD 25 million • A USD25 million contract was signed with a world’s leading customer in the field of broadcasting; • A contract with a new outsourcing client (in the field of logistics) was signed, valued at USD4 million. Sustainable development direction Along with achieving the objectives of business growth, FPT has made positive contributions to the overall development of the economy, society and environment. In 2015, FPT contributed VND6,000 billion to the State budget and created nearly 5,000 new jobs, and actively implemented various social responsibility activities, propagated environmental protection awareness. Contributing to the State budget VND 6,000 billion BUSINESS PERFORMANCE ANALYSIS 53 THE BOD’S REVIEW ON CORPORATE ACTIVITIES AND THE BOM’S PERFORMANCE (continued) Personnel and Organization changes Achieving initial positive results in restructuring FPT IS & FPT Education In 2015, the BOD continued to work closely with the BOM to strictly monitor the activities of FPT IS and FPT Education after the restructuring. Furthermore, they directly join with the managers of these subsidiaries in deploying key projects and major programs during the year. Restructuring activities have improved business results of these two subsidiaries: • FPT IS reported slight revenue growth after a period of showing no growth, having signed several record contracts overseas and won many important projects under the IT leasing model for customers in the Government sector and State-owned enterprises. • FPT Education: after restructuring, the university has delivered a remarkable growth in enrollment with an increase of 32.6% compared to 2014, it continued to reach a higher level in QS assessment system with four criteria being rated 5-star, the highest-rating under QS (one of the prestigious ranking standards for worldwide universities). Approving the new organizational structure of FPT Software The BOD has approved a new organizational structure of FPT Software, to accelerate the progression towards the goal of reaching USD1 billion and 30,000 staff by 2020. Appointing some senior managers to enhance competitiveness and empowering young generation • In April 2015: Appointed Mr. Uwe Schlager to serve as Director of Merger and Acquisitions (M&A) to boost M&A activities of the Corporation - one of the most important directions of FPT’s globalization strategy to quickly heighten FPT’s position. • In April 2015: Appointed Mr. Hoang Viet Ha to serve as the Chief Operating Officer (COO) to improve FPT business efficiency and effectiveness. • In November 2015: Appointed Mr. Le Hong Viet to serve as The Chief Technology Officer (CTO) to promote technology development of the Corporation. THE BOD'S REVIEW ON THE BOM’S PERFORMANCE In 2015, the BOD has closely monitored the CEO and the BOM in implementing the resolutions of the AGM and the BOD Meetings. Monitoring methods • Supervising the completion of important indicators in the year 2015, which the CEO and the BOM had committed. • Requiring the CEO and the BOM to report on business performance at the quarterly BOD meetings. Also, Chairman and some members of the BOD continued to attend the BOM Meetings and directed some important tasks. • Coordinating with the Supervisory Board to oversee those operations of the Corporation for which they can make practical comments to help the CEO and the BOM to fulfill the tasks assigned at the AGM and the BOD meetings. 54 ANNUAL REPORT 2015 www.fpt.com.vn General assessment • The BOD highly appreciated the efforts and the discipline of the CEO and the BOM at different levels in accomplishing 2015’s targets. Therefore, in the difficult business context, FPT completed 2015 business plan as committed and returned to the double-digit profit growth trajectory. • The BOM proposed the appropriate policies to ensure the Corporation’s growth, such as restructuring some subsidiaries and supplementing senior managers at the headquarters and subsidiaries. • The BOM adopted use of BSC to increase corporate governance efficiency and provide important corporate indicators. In addition, thanks to the computerization of this administrative tool, the BOM can always monitor the implementation of important criteria and provide timely reminds as well as come up with solutions when targets are not reached periodically. • During operations, the BOM has always complied with the provisions of law, the Company Charter, the Resolutions of the AGM, the Resolutions of the BOD, and the Decisions of the Chairman. THE BOD’S PLANS AND ORIENTATIONS 2016 is predicted to be an even more difficult year due to macroeconomic situation of domestic and foreign markets. However, there are numerous opportunities for Vietnam enterprises to grow, especially in IT industry for companies like FPT. Therefore, the BOD has decided the 2016 development directions as following: Regarding personnel and organization • Supervising the deployment of the new organizational model at FPT Software. • Strictly monitoring the implementation of the plan of developing the next generation of the Corporation’s top executives. Regarding corporate governance • Further enhancing the corporate governance’s effectiveness in accordance with international standards, focusing on management and risk control in financial management, accounting and auditing, and corporate risk management. • Continuing to improve transparency in the corporate operation, enhancing the role of the independent BOD members. • Strengthening corporate governance training for members of the BOD, the BOM and the Supervisory Board. Regarding sustainable development • Maximizing shareholder benefits and ensuring the sustainable development of the Corporation. • Further improving competitiveness to enable sustainable growth and contribute to the national development. BUSINESS PERFORMANCE ANALYSIS 55 2016 OUTLOOK AND BUSINESS GUIDANCE BUSINESS PROSPECTS AND GUIDANCE Based on market analysis and forecasts and with an aim to maintain and uphold the achievements of 2015, the BOD has approved the guidance for 2016 as follows: Profit before tax Revenue Unit: VND in billions 2015 2016 YoY change Technology 8,605 9,990 16.1% 927 1,210 30.5% Telecom 5,484 6,550 19.4% 1,044 1,042 -0.2% Distribution & Retail 25,213 28,586 13.4% 728 826 13.4% Education & Others 702 670 -4.6% 151 73 -51.7% 40,003 45,796 14.5% 2,851 3,151 10.5% Total 2015 2016 YoY change Technology sector – Changing for growth The Software outsourcing improving profit margins together with remaining high revenue growth of 28 % The Software outsourcing segment has set a challenging target of enhancing productivity plus quality of service and improving profit margins together with remaining high revenue growth of 28% versus 2015. This was specified in the overall guidance of the Technology sector with profit before tax growth rate is set higher than the revenue growth rate. In Software solutions segment, bringing projects to finish in time, or earlier than expected will be the core element to build trust with customers, as a prerequisite to expand business in such potential developing markets. versus 2015 Telecom sector – Investment for growth The Telecom services segment, after completing the fiber optical lastmile swap for customers in Hanoi and Ho Chi Minh City in 2015, will implement similar projects in the next major cities in order to bring the best experience to customers and laying a foundation to provide Internet Protocol Television (IPTV) pay TV service in these cities. FPT will implement similar projects in the next major cities in order to bring the best experience to customers 56 ANNUAL REPORT 2015 www.fpt.com.vn In the Digital content segment, the online newspapers VnExpress will not only strive to serve loyal readers better by further developing the mobile version, but also reach a much wider audience with the launch of an new editions, as well as integration of more useful functions to enhance readers’ experience. Distribution and Retail sector – Innovation for growth The Distribution sector will overcome difficulties to grow amid what have hindered the business segment since the second half of 2015. In order to take advantage of a well-diversified and prestigious product portfolio, the segment will start to distribute to online channels and launch prestigious a smartphone warranty chain nationwide. FPT will continue the expansion of the retail chain nationwide The Retail sector will maintain strong growth in 2015 with ambitious growth targets and a continued expansion of the retail chain nationwide. Education segment – Continuing to innovate the enrollment process and investment in campus construction FPT's Education segment will continue to innovate the student enrolment process, setting a student base growth target In 2015, thanks to an adoption of new methods to enroll students, the number of enrolled students has increased healthily compared to the prior year. Upon that premise, in 2016 FPT’s Education segment will continue to innovate the student enrolment process, setting a student base growth target. Concurrently, FPT University and its subsidiaries will continue the construction of campuses in HCMC and Da Nang which have been started in 2015, and plans to open new branches in other cities besides existing operations in Hanoi, Da Nang and HCMC. INVESTMENT PLANS The fields which are expected to receive the bulk of investment will continue to be Telecom services, Software outsourcing and Education. In the Telecom services segment, investment will be made in telecom infrastructure, as well as pay-TV service. Because the Software outsourcing and Education segments involve a large workforce and a large number of students, investment is made in building software and education campuses in other cities. The investment plan for 2016 is estimated to be as follows: Unit: VND in billions Technology Telecom 2016 945 1,802 Distribution & Retail 127 Education & Others 45 Total capex needed for existing businesses 2,919 BUSINESS PERFORMANCE ANALYSIS 57 04 CORPORATE GOVERNANCE old Certified Partner First G Advanced Consulting Partner p To er rtn a P To p Pa rt r ne Learn and Be Curious Partner Managed Services Partner First Gold Certified Partner Strategic Partner on Cloud Intensive involvement in the global technology value chain: Becoming the partner of major technology companies with the leading role in the game gave FPT the chance to enhance technological capability and most speedily access to global technology trends. rtified Partner Gold Ce First Pla tin um Top Pa rtn er on Consumer Electronic Stores Pa rtn er pr o n sio vi tions solu nd sa ce rvi se of Apple Premium Reseller Apple Authorised Reseller Gold Partner Mobile Development Partner CORPORATE GOVERNANCE OVERALL CORPORATE GOVERNANCE STRUCTURE The Corporation’s governance structure consists of: The Annual General Shareholders’ Meeting (AGM) The AGM has the highest authority in the Corporation. It carries out the functions, rights and duties as stipulated in the Company Charter and relevant laws. The Board of Directors (BOD) The BOD is the highest governing body of the Corporation. It can act on behalf of the Corporation to make decisions and exercise the Corporation’s rights and duties which are not under the authority of the AGM in accordance with the Company Charter and relevant laws. The CEO and the Board of Management (BOM) The CEO is the legal representative of the Corporation. The BOM consists of the CEO and the Executive Vice Presidents. The CEO and the BOM are responsible for directing the daily business activities of the Corporation which are in compliance with the decisions of the AGM, the BOD and the Chairman of the board. The Supervisory Board The Supervisory Board supervises the BOD and the CEO in managing and administering the company. It must account to the AGM for the performance of assigned duties. The Personnel and Remuneration Committee Is a part of the BOD. It directs the building of policy framework and human resource procedures for the Corporation and all of its subsidiaries. It supports the BOD to choose, propose, appoint, dismiss and evaluate the performance of the members of the BOM, representatives and other senior managers of the Corporation and its subsidiaries. 60 ANNUAL REPORT 2015 www.fpt.com.vn The Development Policy Committee Is a part of the BOD. It is responsible for making development proposals to the BOD, building strategies for the BOD, directing and monitoring issues related to the development strategies of the Corporation and its subsidiaries. The Advisory Board Is a part of the BOD. It is responsible for giving advice and providing recommendations to the BOD and the Chairman on issues related to strategy, long-term development, sustainability and other key issues of the Corporation. It helps the Corporation establish, maintain and develop strategic relations with State agencies at the central and local level, local and foreign partners, and it advises and supports the Corporation and its subsidiaries seeing to it that they uphold and develop its corporate values and culture. The Chairman Office Does secretarial work. As a part of the BOD, it is responsible for supporting the BOD and the Chairman to perform their functions and duties. INFORMATION AND ACTIVITIES OF THE BOD BOARD MEMBERS AND STRUCTURE No. Member Position Ownership of voting rights Concurrent posts on the BOD of other companies 1 Mr. Truong Gia Binh Chairman 7.13% • Member of the BOD of FPT Telecom and FPT Education. 2 Mr. Bui Quang Ngoc Vice Chairman 3.72% • Member of the BOD of FPT Telecom and FPT Education. 3 Mr. Do Cao Bao Member 1.18% • Chairman of the BOD of FPT City Da Nang JSC. 4 Mr. Le Song Lai Non-executive member 0.00% • Member of the BOD of Vinamilk, Bao Minh Insurance Corporation and Vietnam National Reinsurance Corporation. 5 Mr. Jean-Charles Bolliol Non-executive member 0.00% • Member of the BOD of Everpia Vietnam JSC and Tri Tin International JSC. 6 Mr. Tomokazu Hamaguchi Independent member 0.00% • Member of the BOD of the IHI Corporation, the JR East Railway Company and Kuraray Co., Ltd. 7 Mr. Dan E Khoo Independent member 0.00% • None (Note: The number of owned shares is referred to in the list of shareholders as of February 24, 2016) ACTIVITIES OF THE BOD Number of BOD meetings No. Board member Position Participation Ratio 1 Mr. Truong Gia Binh Chairman 6/6 100% 2 Mr. Bui Quang Ngoc Vice Chairman 6/6 100% 3 Mr. Do Cao Bao Member 6/6 100% 4 Mr. Le Song Lai Member 6/6 100% 5 Mr. Jean-Charles Belliol Member 6/6 100% 6 Mr. Tomokazu Hamaguchi Member 6/6 100% 7 Mr. Dan E Khoo Member 6/6 100% CORPORATE GOVERNANCE 61 INFORMATION AND ACTIVITIES OF THE BOD (continued) Content and results of the meetings Session Session 1 January 28, 2015 62 Main content Participants • • The BOD: 7/7 members Observers: • 99 The Supervisory Board: • 1/3 • 99 The BOM: 4/4 Reported 2014 business result; Reported 2015 plan and 2015-2017 business plan; Reported 2016-2017 growth direction; Reported 2015–2017 strategy; Reported 2014 Employee Stock Ownership Plan (ESOP) program; • Proposed the record date for shareholders attending the 2015 AGM and the 2015 AGM date. • • • • Reported the program and proposals for FPT’s AGM 2015; Reported the BOD report and 2015 BOD budget plan; Reported 2014 audit financial statements; Reported the plan to allocate profit 2014 and the dividend payment plan for 2015. Session 2 March 19, 2015 The BOD: 7/7 members Observers: 99 The Supervisory: 1/3 99 The BOM: 2/4 Session 3 March 26 – April 6, 2015 Gathering written form • Reported 2014 ESOP program; • Reported the termination proposal of Ms. Chu Thi Thanh Ha from FPT’s Executive Vice President position. Session 4 April 22 – 27, 2015 Gathering written form • Reported the remaining 2014 dividend payment in cash and by shares. Session 5 July 30, 2015 • Reported business result for the first half of 2015 and the plan for the second half of 2015; • Reported proposal to increase charter capital for some The BOD: 7/7 members subsidiaries, including FPT Software, FPT Trading and FPT Observers: Investment; 99 The Supervisory Board: • Reported cash dividend payment plan in advance for the 3/3 first phase of 2015; 99 The BOM: 3/4 • Reported the implementation of the BOD resolutions in the first half of 2015; • Presented on M&A plan. Session 6 November 13, 2015 The BOD: 7/7 members • Reported the business result for the first nine months of 2015 Observers: and the plan to reach the whole-year target; 99 The Supervisory Board: 2/3 • Reported on the implementation of the BOD resolutions in the first nine months of 2015 and other activities. 99 The BOM: 1/4 ANNUAL REPORT 2015 www.fpt.com.vn Resolutions passed by the BOD in 2015 No. 1 Name of Resolution/ Decision 01.01-2015/ NQ-HĐQT-FPT Date Jan 29, 2015 Content • • • • • • Approved 2014 business result; Approved 2015 business plan; Approved 2016-2017 growth direction; Approved 2015–2017 strategy; Approved the record date for shareholders attending AGM and the AGM date; Exercised the 2014 AGM Resolution on issuing shares to employees; Approved 2014 Employee Stock Ownership Plan (ESOP) program. 2 01.03-2015/ NQ-HĐQT-FPT March 19, 2015 • Approved program and proposals for FPT’s AGM 2015 to be submitted to 2015 AGM for approval; • Approved the BOD report and 2015 BOD remuneration budget plan to be submitted to the 2015 AGM for approval; • Approved 2014 audited financial statements to be submitted to the 2015 AGM for approval; • Approved plan to allocate profits from 2014 and the dividend payment plan for 2015 to be submitted to the 2015 AGM for approval. 3 03.04-2015/ NQ-HĐQT-FPT March 31, 2015 • Approved 2014 ESOP program. 4 04.04-2015/ NQ-HĐQT-FPT April 6, 2015 • Approved the termination proposal of Ms. Chu Thi Thanh Ha from FPT’s Executive Vice President position. 5 05.04-2015/ NQ-HĐQT-FPT April 27, 2015 • Approved 2014’s remaining dividend payments in cash; • Approved dividend payment by shares from retained earnings. 6 01.07-2015/ NQ-HĐQT-FPT July 30, 2015 • Approved proposal to increase charter capital for FPT Software, FPT Trading and FPT Investment; • Approved cash dividend payment plan in advance for the first phase of 2015. Activities of non-executive and independent members of the BOD Mr. Jean-Charles Belliol: He actively participated in all regular meetings of the Corporation, such as the weekly briefing of the Corporation, strategic conferences, etc. He usually contributes ideas and recommendations for the operation and strategy of the subsidiaries and the Corporation as a whole. Mr. Jean-Charles Belliol is particularly serious about monitoring the implementation of the Corporation’s business plan. Mr. Tomokazu Hamaguchi: He paid working visits to some subsidiaries such as FPT Telecom, FPT IS and FPT Software to learn more about their activities and provide advices. With his vast experience in NTT Data’s globalization process, he made several valuable recommendations and proposals to FPT’s leaders concerning the implementation of the globalization plan. Especially, Mr. Hamaguchi usually contributes ideas and recommendations on M&A - one direction in FPT’s globalization strategy which it has been pushing into the forefront. Mr. Dan E Khoo: He usually provides advice to FPT about global technology trends which helps FPT define strategic directions and develop the information technology services. In addition, with his management experience in global markets, Mr. Dan E Khoo also makes constructive contributions in the areas of M&A for FPT. The BOD members owning certificates on corporate governance: Mr. Le Song Lai. CORPORATE GOVERNANCE 63 INFORMATION AND ACTIVITIES OF THE BOD (continued) ACTIVITIES OF COMMITTEES UNDER THE BOD Committees under the BOD Personnel and Remuneration Committee Development Policy Committee Advisory Board Chairman’s Office Do Cao Bao Truong Gia Binh Truong Gia Binh Lai Huong Huyen The Personnel and Remuneration Committee Implementing the program to organize and develop the leadership team Organizing, evaluating, alternating and training 16 group-level managers (upper 6th level) and appointing Chief Operating Officers at subsidiaries. Continuing to direct subsidiaries to determine levels and organize the leadership team at units; make the organizing list, implement evaluation, selection and coaching. Completing the evaluation of subsidiary-level leaders/managers for FPT IS and FPT Education under 13 criteria of the Corporation. Implementing the restructuring and enhancing competitiveness following the BOD’s orientation Restructuring FPT IS towards: rebuilding the whole organization model which is more competitive and suitable with strategies of the Corporation; reorganize subsidiaries of FPT IS under business domain. Restructuring FPT Software towards: rebuilding the whole organization model which is more competitive and suitable with S.M.A.C and FPT’s globalization strategy; reorganize foreign affiliates of FPT Software (Japan, America, APAC and Europe), strategic business units under business domain, and strategic customers. Continuing to direct and complete issues and solutions after the Competitiveness enhancement Program for seven FPT subsidiaries. The committee worked with leaders of the subsidiaries to implement these solutions and form a specific action plan in order to reform the subsidiaries’ system to bring forth innovation and enhance competitiveness of the Corporation. Issuing personnel policies for the Corporation Issuing and implementing FPT’s remuneration policy for the whole corporation in 2015. Issuing and amending some policies/regulations: Promotion and dismissal regulations, Regulation on local travel expenses, Regulation on foreign travel expenses, Regulation on the operation of two globalized companies (FPT Myanmar and FPT Asia Pacific), Basic salary scale policy. Directing and supervising the drafting, issuance and application of personnel regulations and policies of subsidiaries in accordance with FPT regulations. Drafting the personnel strategy Directing the development of personnel at different levels for the Corporation under the Balanced Scorecard – BSC model at each subsidiary with detailed action plans and indicators for each period at each subsidiary. Directing the drafting of action plans in 2016 in accordance with personnel strategy. Directing the drafting of job descriptions (MyFPT project) to be implemented at subsidiaries and globalization–related positions. Directing the drafting and implementation of the project to develop core staff members Making a list of the core staff members of FPT and its subsidiaries; directing the training and caring for core staff members. Managing and caring for core staff members through training and skills development programs for each group, drafting specific policies for core staff members. 64 ANNUAL REPORT 2015 www.fpt.com.vn Directing the drafting and implementation of the project to improve FPT’s human resources to meet global standards Directing the drafting of a full Job Description for globalization–related positions and working standards in a global environment; preparing human resources for globalization using domestic and foreign resources; branding FPT in recruitment. Directing the drafting and supervising the implementation of training plans and programs in terms of foreign language and special skills to meet global standards (implemented positively by FPT Software and FPT IS); directing communication and guiding staffs members who work globally in projects such as Global Talk, publishing an online notebook on globalization providing essential information on the nine nations in which FPT staff members are working. Working with the FPT Corporate University to implement training programs appropriate for every FPT staff member; ensuring teaching and studying hour of each employee; putting online training programs such as MOOC into operation. The Development Policy Committee Watching for and estimating economic development trends in domestic and foreign markets to propose long and short-term strategic orientations to the BOD. Supervising and evaluating the quality of implementation policies of the BOD. Supporting to develop strategies of FPT and its subsidiaries. Supervising and reporting on implementation of strategies throughout the whole Corporation. Supporting Chairman and senior staff members organize trips to develop international relationships, participating in such events as the World Economic Forum in Davos, the ASOCIO and meetings of large enterprises in Japan and the US. The Advisory Board In 2015, in addition to regular communications by email and phone, the Advisory Board held quarterly meetings in order to: Giving advices and recommendations to the BOD and the Chairman on strategy-related issues and long-term development orientation of the Corporation. Providing recommendations on critical issues for the Corporation. The Chairman’s Office Assisting the Chairman and the BOD to hold periodic meetings, collect opinions on paper; draft and issue documents of the BOD in accordance with regulations such as Operation regulation, the Company Charter, the Enterprise Law and other legal regulations. Coordinating to hold the AGM in April 2015 and the Advisory Board’s meetings during the year. Providing information to members of the BOD and the Supervisory Board and the Corporation’s shareholders when requested. OVERALL EVALUATION OF THE BOD’S PERFORMANCE In 2015, FPT’s BOD strictly supervised the operation of the BOM to ensure the implementation of strategic goals and plans. Development of strategy continues to be promoted in a way that the whole business will be mobilized to achieve common goals. The strategy building model is implemented at the corporate level to define strategic goals, strategic actions and actions plans that must be implemented immediately. The BOD Chairman directs and supervises the dissemination and implementation of strategic building model in every subsidiary to ensure consistency in direction and performances at all levels. The Corporation continues to improve transparency in corporate governance. The BOD’s independent members are all foreigners who have held leadership positions for years and have highly-regarded reputations in the regional information technology sector. They also have profound experience and an extensive network of contacts which allows them to make a large contribution to FPT’s global strategy in terms of direction and development of new markets in 2015. CORPORATE GOVERNANCE 65 REPORT OF THE SUPERVISORY BOARD THE BOARD MEMBERS AND STRUCTURE No. Member Position Ownership of voting rights 1 Mr. Nguyen Viet Thang Head 0.01% 2 Mr. Nguyen Khai Hoan Member 0.03% 3 Mr. Cao Duy Ha Member 0.00% THE SUPERVISORY BOARD’S ACTIVITIES The FPT Supervisory Board, in the 2012-2017 period, consists of three members elected at the Annual General Shareholder Meeting (AGM) to perform monitoring activities as regulated in the laws and regulations of the Corporation. The Supervisory Board has the following tasks: supervise implementation of the Company Charter and resolutions of the AGM; supervise financial activities; monitor activities of the BOD and the BOM as regulated by law. In 2015, the Supervisory Board continually monitored and recommended administrative changes to be made in corporate operations and it strengthened monitoring procedures and ensured the transparency in the Corporation’s financial activities. Meetings of the Supervisory Board The Supervisory Board met quarterly to report and assess the performance of the Supervisory Board’s members, as well as to review and evaluate the BOM’s quarterly financial statements. In 2015, the Supervisory Board held four meetings with participation of all members. The Supervisory Board regularly communicated by telephone and email to solve unexpected problems and to clarify specialized issues. Details and main contents: Session Participation Main content • Assigned detailed tasks to each member; Session 1 April 03, 2015 3/3 • Approved the Supervisory Board’s 2015 action plan with details regarding its members; • Reviewed and evaluated the Corporation’s first quarter financial statement. Session 2: July 14, 2015 3/3 • Reviewed the Corporation’s second quarter financial report and the implementation of the plan for the first 6 months; Discussed how the Supervisory Board might contribute for the BOD’s meeting on the second quarter of the year; • Reviewed 2014 dividend payments in accordance with the AGM resolution; • Planned to take part in the internal supervisory group along with the Compliance Monitoring Department. 66 ANNUAL REPORT 2015 www.fpt.com.vn Session Participation Main content • Reviewed and discussed the Corporation’s third quarter financial statement and the expected situation to fulfill the Corporation's plan in 2015; Session 3 November 13, 2015 3/3 • Evaluated the safety of the M&A projects which the BOM planned; • Made a plan to supervise bad debt report, in 2015; Reported effectiveness of the M&A project after one year of operation. • Discussed and evaluated the 2015 consolidated financial statement; • Assessed the 2015 business result which the BOM had prepared for the fourth quarter BOD meeting; Session 4 January 26, 2016 3/3 • Evaluated supervision compliance with regulations of members of the BOD, the BOM and the management positions of the Corporation in 2015; • Discussed and assigned preparations for reports on 2015’s activities and 2016’s plan of the Supervisory Board. Working results of the Supervisory Board Monitoring the implementation of the resolutions of the 2015 AGM In 2015, despite economic difficulties, FPT completed almost all the goals approved in the resolutions of the 2015 AGM. • The Corporation completed forming funds as regulated, ensured the full payment obligation to the State budget. • The Corporation paid 2014 dividends of 10% in cash and 15% by stock in accordance with the resolution passed at the 2015 AGM. • 2015 Business results: Revenue reached VND40,003 billion, completed 101% of the 2015 plan and rose by 13.9% against 2014. Profit after tax reached VND2,438 billion, completed 102% of the plan and increased by 17.3% against 2014. This is a very positive result despite the fact that the economy of Vietnam and the world was in turmoil in 2015. • Remuneration paid to the BOD and Supervisory Board: In 2015, the Corporation paid the BOD and the Supervisory Board members in accordance with the regulations and norm that was approved by the 2015 AGM. CORPORATE GOVERNANCE 67 REPORT OF THE SUPERVISORY BOARD (continued) Supervising the Corporation’s operations and finance • Reviewing the Corporation’s quarterly financial statements and collaborating with the independent auditor to evaluate the activities and measures required to prevent risk with respect to the Corporation’s financial activities. • Conducting a risk assessment of the overdue debts of the Corporation and its subsidiaries based on reports provided by these subsidiaries’ Accounting Departments. The Supervisory Board provided recommendations on related governance process to minimize financial risks that have arisen due to the existence of these overdue debts. It is the second consecutive year the Supervisory Board has done these affairs. • Evaluating and monitoring the 2014 dividend payment in cash and by stock as reported above, in accordance with the resolution passed at the 2015 AGM. • Evaluating the effectiveness of the M&A project with RWE IT Slovakia after 18 years of operation. The initial goal of the project has been basically achieved. • Working with the BOD’s Compliance Monitoring Department to evaluate and control some activities of subsidiaries in accordance with the plan. Monitoring members of the BOD and the BOM and management staff In 2015, the BOD’s personnel remained stable with seven members, in which 3/7 members were foreigners. The Supervisory Board acknowledged the efforts made by the BOD in 2015 in closely following up on the Corporation’s activities and development strategy with high responsibility. Monitoring the compliance In 2015, the Supervisory Board did not uncover any unusual matters which affected or violated regulations of the State and the Corporation in activities of members of the BOD, BOM, as well as the Corporation’s managers. Selecting an independent auditor for 2015 The Supervisory Board collaborated with the BOM to evaluate and choose Deloitte Vietnam Company Limited to be the Corporation’s independent financial auditor for 2015. SUMMARY OF THE REMUNERATION AND OPERATING EXPENSES OF THE SUPERVISORY BOARD In 2015, the Supervisory Board’s members attempted to implement their functions and duties. The total remuneration provided in advance to each Supervisory Board member was VND585 million out of a total of VND710 million approved by the 2015 AGM. THE SUPERVISORY BOARD’S 2016 OPERATING PLAN Key activities of the Supervisory Board in 2016: 99 Monitoring compliance with the resolutions of the 2015 AGM Meeting; Reviewing evaluation report of the Independent Auditor and monitoring the implementation of issues raised by the audit. 99 Reviewing and supervising annual financial regulations, rules, operational regulations and policies issued by the BOD and the BOM; At the same time, ensuring legal compliance and assessing impacts on interests of shareholders when implementing these regulations. 99 Strengthening cooperation between the Supervisory Board and Compliance Monitoring Board to assess and timely handle emerging issues; Also, supervising the process after checking/inspection. In 2016, the Supervisory Board expects to cooperate from three to four delegations with Compliance Monitoring Board in periodical or thematic monitoring plans during the year. 68 ANNUAL REPORT 2015 www.fpt.com.vn TRANSACTIONS, REMUNERATION AND OTHER BENEFITS FOR THE BOD, THE SUPERVISORY BOARD AND THE CEO SALARIES, BONUSES, COMPENSATION AND OTHER BENEFITS Pursuant to the 2015 remuneration package approved by the AGM in 2015, the actual remuneration for the BOD, the CEO and the Supervisory Board is as follows: Approved by the AGM Compensation (VND in millions) Bonus (% profit after tax) Salary (VND in millions) Approved by the AGM 2015 2015 Approved by the AGM 2015 The BOD Executive members 10,760 9,200 0.49% 0.44% None None The BOD Independent, Nonexecutive members None None None None 4,920 4,980(*) The SupervisoryBoard members None None None None 710 585 (*): Compensation for non-executive members of the BOD exceeded due to exchange rate increase. The detailed salary, bonus and compensation for all BOD members in 2015 are as follow: Independent, Nonexecutive Salary Bonus Compensation x 43% 57% None Vice Chairman, CEO x 39% 61% None Do Cao Bao Member x 47% 53% None Le Song Lai Member x VND20,000,000 None None 100% Jean-Charles Belliol Member x VND20,000,000 None None 100% Tomokazu Hamaguchi Member x VND187,117,515 None None 100% Dan Khoo x VND187,117,515 None None 100% Members Position Executive Truong Gia Binh Chairman Bui Quang Ngoc Member Monthly compensation The detailed compensation for members of the Supervisory Board in 2015 is as follows: Members Position Compensation (VND) Nguyen Viet Thang Head 252,200,000 Nguyen Khai Hoan Member 166,400,000 Cao Duy Ha Member 166,400,000 CORPORATE GOVERNANCE 69 TRANSACTIONS, REMUNERATION AND OTHER BENEFITS FOR THE BOD, THE SUPERVISORY BOARD AND THE CEO (continued) TRANSACTIONS OF INTERNAL SHAREHOLDERS No. Beginning End number of shares Person/Organization Internal shareholder/ number of shares performing the Major shareholder or Number of Rate Number of Rate transaction related person shares (%) shares (%) Reason for change (shares) 1 SCIC Investment One Member Company Limited Le Song Lai BOD member 318,710 0.09% 18,962 0.005% Sold 299,748 2 Bao Minh Insurance Corporation Le Song Lai BOD member 0 0% 100,000 0.025% Bought 100,000 3 Amersham Industries Limited Related to major shareholder Dragon Capital 6,120,987 1.78% 7,651,391 1.93% Bought 1,530,404 4 Balestrand Limited Related to major shareholder Dragon Capital 613,281 0.18% 705,273 0.18% Bought 91,992 5 Grinling International Limited Related to major shareholder Dragon Capital 697,287 0.20% 801,880 0.20% Bought 104,593 6 Venner Group Limited Related to major shareholder Dragon Capital 708,270 0.21% 814,510 0.21% Bought 106,240 7 Vietnam Enterprise Investments Limited Related to major shareholder Dragon Capital 5,541,909 1.61% 7,273,195 1.83% Bought 1,731,286 8 Wareham Group Limited Related to major shareholder Dragon Capital 5,568,062 1.62% 6,403,271 1.61% Bought 835,209 9 Norges Bank Related to major shareholder Dragon Capital 4,912,296 1.43% 6,069,140 1.53% Bought 1,156,844 10 DC Developing Markets Related to major Strategies Public shareholder Dragon Capital Limited Company 364,463 0.11% 402,402 0.10% Bought 37,939 11 The CH/SE Asia Investment Holdings (Singapore) PTE. LTDC 115,000 0.03% 0 0.00% Sold 115,000 12 All investors related to major shareholder Dragon Capital 7.17% 30,121,062 7.58% Bought 5,479,507 Related to major shareholder Dragon Capital 24,641,555 CONTRACTS OR TRANSACTIONS WITH INTERNAL SHAREHOLDERS In 2015, there were no contracts or transactions that members of the BOD, the Board of Supervisors, and managers or affiliated persons entered into or executed in the year with the Corporation, subsidiaries and other companies in which the Corporation hold control rights. 70 ANNUAL REPORT 2015 www.fpt.com.vn IMPLEMENTATION OF CORPORATE GOVERNANCE REGULATIONS FPT always strives to abide by provisions related to corporate governance in general as well as its own administrative regulations for the listed public joint stock companies, including: • Enterprise Law 2014. • Circular 121/2012/TT-BTC on corporate governance applicable to public companies. • Circular 155/2015/TT-BTC on information disclosure on stock market. In addition, to enhance compliance of laws related to corporate governance, FPT defines these regulations in the following internal documents: • Company Charter. • Regulation on Corporate Governance. In 2015, FPT strived to abide by all essential legal requirements on corporate governance, related to information disclosure and the composition of the BOD, the Supervisory Board and the AGM. The Corporation has always been one of the first listed companies to submit its quarterly financial report and annual Financial Statement (usually 10-15 days prior to the due date). This is highly appreciated by the State Securities Commission of Vietnam (SSC) and Ho Chi Minh City Stock Exchange (HoSE). Besides the legislative regulations, FPT also strived to improve the quality of its corporate governance in accordance with international standards by applying and following closely the criteria of OECD’s Principles of Corporate Governance, including the following key issues: 01 Ensure all shareholders' rights 02 05 Emphasize the responsibilities of the BOD to shareholders 04 Disclosure and transparency of information Equitable treatment of shareholders 03 Ensure the rights and roles of the related parties In addition, in 2015, FPT conducted the following typical corporate governance practices: • Approved the business direction and strategies; • Organized a corporate Strategic Conference and directed the drafting of strategies for all subsidiaries consistent with the general models and goals of the Corporation; • Approved the medium and long-term business plan, the annual business plan. The plans were implemented and controlled by BSC tools throughout the entire corporation during 2015. The presentation of the plan and its approval were carefully carried out from December 2015 to late January 2016. CORPORATE GOVERNANCE 71 RISK MANAGEMENT RISK MANAGEMENT MODEL Risk management is an inseparable part of FPT’s overall strategy of sustainable development. Risks are divided into different groups to evaluate their impact on business goals. This allows FPT to work out procedures to early identify and quantify risk associated with business plans, allowing for the implementation of measures to monitor and eliminate risks. The identified major risk groups are integrated into the contents of the BSC - the planning and governance system applied comprehensively at FPT and its subsidiaries. The risk management mechanism is clearly assigned from the Corporation to subsidiaries to ensure risks are handled by the relevant leaders and individuals with authority. FPT’s risk management mechanism is decentralized and composes a single united system, consistent between the Corporation and its subsidiaries. FPT also builds a mechanism of internal audit, collaborating with the internal audit departments at its subsidiaries to manage the compliance risks in the whole corporation. Functional units performing risk management related activities LEVEL 04 Risk monitoring The BOD Monitors risks at the highest corporate level. Establishes the management strategy and the acceptable level of risk. Independent warranty Internal audit/Compliance monitoring Warrants the thorough compliance of the regulations and risk management procedures. LEVEL 02 Risk management functional unit Builds and develops general risk management frame and supervises the application of that frame. Risk management execution Accepts the risks and manages them on daily basis. Possess the risk management procedures. ANNUAL REPORT 2015 www.fpt.com.vn 03 Risk inspection and report All business units/Functional departments 72 LEVEL LEVEL 01 FPT also established the SMO (Strategic Management Office) in order to monitor and evaluate the KPIs system which includes indicators of risk management throughout the Corporation to ensure prompt identification and monitoring of operation related risks. Risk is handled within a closed process of 5 steps: (1) Risk identification; (2) Risk assessment and analysis; (3) Action plan; (4) Risk treatment; (5) Risk measurement and monitoring. Risk Management model of FPT Corporation RISK IDENTIFICATION RISK MEASUREMENT AND MONITORING RISK MANAGEMENT RISK TREATMENT RISK ASSESSMENT AND ANALYSIS ACTION PLAN MAJOR RISKS AND RISK MANAGEMENT MEASURES Name of risk Risk description Risk management measure Types of strategic risks Risks of strategies, visions Risk of competitiveness decline Risks of strategies and visions can lead to inappropriate investment in research; • Apply BSC to identify the major strategic goals in failure to develop hi-tech products, new order to ensure business activities following the and unique products to better meet orientation and being regularly monitored and consumer demands, specific IT services evaluated to reach the set goals. which can be implemented on mass scale. Risk of falling competitiveness, failing to capture market demand and trend. Most of the Corporation’s business sectors have low entry barriers and they have faced big difficulties as foreign or newly emerging competitorsarrive and seize market share. • Provide overall services which meet international quality standards to comprehensively meet consumer needs. • Continuously improve business models, information system, internal process to optimize operations and expenditures by making use of a modern corporate governance system. • Organize Competitiveness Enhancement Conference to gather employees’ opinions on solutions to innovate the whole corporation in both forms of online and offline. CORPORATE GOVERNANCE 73 RISK MANAGEMENT (continued) Name of risk Risk description Risk management measure Operating risks • Develop highly qualified human resources, organizes and arrange human resources based on the These risks mean the quantity and Corporation’s long-term Risks of human resources quality of personnel fail to keep up • Keep investing in training programs at FPT University. with development needs as well as international standards for effective • Investing in internal training programs in order to improve and make use of high quality and abundant globalisation human resources through activities of FPT Corporate University (FCU). Risks of information security Information is one of the important and • FPT has aggressively adopted methods to avoid loss of data and enhance system safety to ensure valuable assets of an organization or information security of the Corporation. The enterprise. Risk related to information, Corporation annually updates its information security such as information disclosed, altered, processes and applies the latest security standardsand lost or rejected, seriously affects an assigns responsibility to the Corporation’s employees organization’s operations, reputation to avoid information security violations which could and strategy. lead to serious consequences. Financial risks Risk of exchange rate Highly fluctuating exchange rates • Closely monitor those factors that affect exchange have a huge impact on profits earned rates. from business activities. A number of • Implement appropriate exchange rate insurance FPT’s business operations, including measures which include foreign currency futures, distribution, retail, system integration, option. and software outsourcing are potentially influenced by exchange • Implement flexible sales policies based on exchange rate fluctuations. rate fluctuations. Risks in normal business • Create policies to control customer liabilities such as customer credit ratings and a debt Risks in normal business activities management process. include uncontrolled bad debts and high inventories. • Analyze and closely control from the beginning the quantification of demands to purchase inputs. Inefficient investment will cause a Risks arising from negative impact on capital, cash flow investment and business outcomes. • Any investment should be fully evaluated in terms of targeted market size, scalability, competitiveness, financial performance, technological identity and related risks before being approved by the board of investment. Regulatory risk Regulatory risk 74 ANNUAL REPORT 2015 www.fpt.com.vn Business activities that take place • Closely follow the policies and major orientation of the government, actively research and give outside of Vietnam require compliance recommendations to competent authorities to with laws regulating migrant promote the role of IT in boosting economic growth employee activities. In additiones, and improving people’s living standards. cultural differences of a multinational workforce and between company • Research, update and comply with provisions and and its partners are becoming a big respect the cultural and business environment of challenge. related foreign markets. COMPLIANCE AND INTERNAL AUDIT FPT considers compliance and internal audit effective measures to prevent and minimize risk associated with business activities. The assessment made in 2015 included compliance with the law, regulations and internal procedures of FPT and provisions ensuring benefits for employees such as compensation and personnel policies. Along with the internal audit system, the assessment of compliance risk helps FPT ensure its sustainable development strategy to be implemented in all business areas of FPT and throughout the entire system. FPT’s Compliance Monitoring Department Structure FPT’s CEO Head of Compliance Monitoring Department Monitoring Executive Monitoring Executive Monitoring Executive RISK MANAGEMENT RELATED TO SUSTAINABLE DEVELOPMENT Over the years, FPT has focused on implementing risk management related to sustainable development from the perspective of: • Review and manage the risks affecting the sustainable development of FPT. • Assess and manage the risks arising from the social environment affecting FPT and risks from FPT’s operation and business affecting the social environment. • Build and integrate the Corporation’s vision for sustainable development into its business strategy. • Build mechanisms that provide non-financial information and financial statements to enhance the transparency of information provided to stakeholders. Besides, FPT also implemented the Sustainability Report requested by the State Securities Commission. The report is the Corporation’s disclosure and commitments to stakeholders on its activities towards sustainable development. In this report, FPT assessed and disclosed information on its operation efficiency in terms of social and environment, in addition to information on financial efficiency and capital management. The Sustainability Report is the new way to build and quantify the corporate value. CORPORATE GOVERNANCE 75 INVESTOR RELATIONS STOCK INFORMATION Statistics on stock transactions and FPT’s stock movements in 2015 No. Items Amount 1 Total trading sessions 248 sessions 2 Total order-matching volume 3 Total order-matching value 4 Average order-matching volume per session 5 Highest order-matching volume in 52 weeks (dated June 26, 2015) 6 Lowest order-matching volume in 52 weeks (dated September 9, 2015) 7 Highest price in 52 weeks (dated November 13, 2015) 182,859,290 shares VND8,867 trillion 737,336 shares 4,210,260 shares 91,140 shares VND54,500/share *Share price using closing price, retroactively adjusted for stock dividend of 15% FPT VNIndex 03/12/2015 03/11/2015 03/10/2015 03/09/2015 03/08/2015 03/07/2015 03/06/2015 03/05/2015 03/04/2015 03/03/2015 31/01/2015 31/12/2014 Return rate of FPT stock in 2015 in comparison with December 31, 2014 VN30 The 8th consecutive year 10 TOP ANNUAL REPORT 76 ANNUAL REPORT 2015 www.fpt.com.vn Statistics on transactions by foreign investors in 2015 The foreign ownership rate in FPT always reached the legal ceiling of 49% in 2015, the number of foreign transactions was 202 with total sales volume of 642,970 shares and a total amount purchased of 524,250 shares. The volume of shares that foreign investors were allowed to buy as December 31, 2015 was 3. Dividend payment According to a rating provided by Vietstock, FPT ranked among Vietnam’s top 20 cash dividend payers in 2015. Cash dividend Unit: VND in billions 2011 432 Cash dividend in 2015 2012 548 VND 2013 810 2014 676 2015 779 779 billion Note: Cash dividends are made at the rate approved by the AGM for respective year. Therefore, it is not the same as “paid dividend for shareholders” in the Cash flow statement, because this number includes in advance dividend payment of current year and dividend payment of the previous year (if any). In 2015, FPT dividend payments were as follows: • Paid 2014’s remaining cash dividend to shareholders at the rate of 10% of par value on June 12, 2015; • Paid 2014’s stock dividend to shareholders at the rate of 15% on June 1, 2015. New shares were transacted officially on July 21, 2015; • Paid in advance cash dividend of 2015 to shareholders at the rate of 10% of par value on September 9, 2015. Additional share issuance In 2015, FPT issued additionally 1,719,317 shares to employees with contributions in 2014. These shares are restricted to transfer for 3 years from the date of issue. The date of transaction is expected to be April 23, 2018. The Corporation’s charter capital increased in two phases in 2015, in which, the charter capital rose to VND3,456,959,170,000 in the first phase because the Corporation had paid ESOP shares; and to VND3,975,316,400,000 in the second phase because the Corporation had paid stock dividend to shareholders in 2014 in accordance with the Resolution of the 2015 AGM. Transaction of treasury shares In 2015, the Corporation did not make any purchase of share under the scheme of repurchase preferential shares from staff leaving the Corporation, therefore the treasury shares remained unchanged compared to the beginning of the year with 82,376 shares. CORPORATE GOVERNANCE 77 INVESTOR RELATIONS (continued) SHAREHOLDERS’ STATISTICS (Abstracted from list of shareholders as of February 24, 2016) Ownership by type of shares Type of shares Number of share Common shares 397,449,264 99.98% 10,000 1:1 82,376 0.02% 10,000 1:0 397,531,640 100.00% Preferential staff shares Total Percentage (%) Par value (VND) Voting right Ownership by number of shares owned Number of shareholders Percentage (%) Number of shares Percentage (%) 11,629 66.88% 2,101,599 0.53% 1,000-10,000 4,556 26.20% 14,360,317 3.61% 10,001-1,000,000 1,151 6.62% 107,582,240 27.07% 52 0.30% 273,405,108 68.79% 17,388 100.00% 397,449,264 100.00% Number of shares 1-999 More than 1,000,001 Total Ownership by shareholding groups Type State (SCIC) Internal shareholders - The BOD, the BOM, the Supervisory Board and Chief Accountant - Staff External shareholders (individual investors) External shareholders (institutional investors) Total Number of shareholders Percentage (%) Number of shares Percentage (%) 1 0.01% 23,919,712 6.02% 2,003 11.52% 92,016,343 23.15% 9 0.05% 50,108,603 12.61% 1,994 11.47% 41,907,740 10.54% 15,087 86.77% 61,922,571 15.58% 297 1.71% 219,590,638 55.25% 17,388 100.00% 397,449,264 100.00% Number of shareholders Percentage (%) Number of shares Percentage (%) 16,143 92.84% 202,669,448 50.99% 15,990 91.96% 150,359,306 37.83% 153 0.88% 52,310,142 13.16% 1,245 7.16% 194,779,816 49.01% 1,100 6.33% 3,579,608 0.90% 145 0.83% 191,200,208 48.11% 17,388 100.00% 397,449,264 100.00% Ownership by geography Location Vietnam - Individual investors - Institutional investors Abroad - Individual investors - Institutional investors Total 78 ANNUAL REPORT 2015 www.fpt.com.vn Top 10 shareholders Top 10 shareholders Shares Percentage (%) Truong Gia Binh 28,336,410 7.13% State Capital Investment Corporation (SCIC) 23,919,712 6.02% Red River Holdings 22,646,457 5.70% Bui Quang Ngoc 14,784,035 3.72% Cashew Investments Pte. Ltd 14,181,548 3.57% Government of Singapore 9,000,000 2.26% The Caravel Fund (International) Ltd 8,511,994 2.14% Vietnam Equity Holding 8,397,256 2.11% Vietnam Enterprise Investments Limited 8,174,792 2.06% Amersham Industries Limited 8,080,638 2.03% ACTIVITIES WITH SHAREHOLDERS AND INVESTORS As parts of efforts to improve the professionalism of investor-relations in 2015, FPT’s Department of Investor Relations (IR) maintained and promoted activities carried out in previous years. In addition, The IR department has strived to maintain a two-way communication channel between the Corporation and investors, in order to satisfactorily answer questions about strategy and business performance to help investors make informed decisions. These efforts by the IR Department were reflected in many of FPT’s monthly company share market analysis reports. In 2015, a total of 12 companies issue analyst reports on FPT’s stock. Some outstanding activities of IR in 2015: • VietCapital Securities Company’s Vietnam Access Day Workshop held in Ho Chi Minh City in March, 2015; • Announcing business results on a monthly basis to the State Securities Commission, Ho Chi Minh City Stock Exchange and mass media; • Providing monthly reports to investors; • Organising quarterly analyst meetings with changes in the organizational activities; • Assuring updated and accurate information being informed via the investor relations section on the Corporation’s website; • Fully complying with regulatory requirements on information disclosure; • Conducting 69 meetings and talking to 129 offshore investment funds (excluding foreign investment funds with offices in Vietnam). In addition, the Corporation leaders also participated in some workshops held by investment funds and large stock companies: • CLSA Workshop in Thailand in March, 2015; • Maybank Kim Eng Securities Company’s Invest ASEAN Workshop held in Ho Chi Minh City in May, 2015; • Vietnam Corporate Day Workshop held by HoSE and Daiwa in Singapore in August , 2015. The Investor Relations Department has set the following goals for 2016: • Further promoting activities to provide more accurate information to investors through quarterly published business results and monthly newsletter; • Improving the investor relations section on the Corporation’s website to help investor’s more easily access to information; • Maintaining communication channels with investors and ensuring accurate and rapid responses. CORPORATE GOVERNANCE 79 05 CyRadar SUSTAINABILITY REPORT Sendo.vn ANTS Advertising service e.Mobiz FPT PlayHD RESERVING 5% PROFIT BEFORE TAX FOR R & D REVIEWING AND RANKING TECHNOLOGY EXPERTS Investment to develop technological resources: FPT built the necessary foundation to promote learning and continuous innovation to create new values for customers. Creative ideas Citus Cloud Citus Cobol 10,617 engineers, technology experts ESTABLISHING FPT VENTURE ORGANIZING S.M.A.C CHALLENGE CONTEST THE CEO'S MESSAGE "After more than 27 years of development, we understand that enterprises can develop sustainably, ensure the highest interests of stakeholders only when achieving steady growth in revenue and profit, associated with the development of economy, society and environment." Dear Valued Shareholders and Stakeholders, Since the Corporation’s establishment, sustainable development orientation has been emphasized through our vision and mission, which is "striving to become a company guided by technological innovations, committed to the highest level of customer satisfaction, contributing to the nation’s prosperity". After more than 27 years of development, we understand that enterprises can develop sustainably, ensure the highest interests of stakeholders only when achieving steady growth in revenue and profit, associated with the development of economy, society and environment. Therefore, since 2010, FPT has launched sustainabilityrelated activities in the Corporation’s development strategy in parallel with other business activities. The sustainable development strategy of FPT clearly identified the economic, social and environmental development orientations including: sustainable growth in revenue and profit; development of human resources and community activities; environmental protection. These are also the important contents mentioned in the Sustainability report of the Corporation during the past years. In 2015, in the context of macroeconomic difficulties, 82 ANNUAL REPORT 2015 www.fpt.com.vn FPT returned to double-digit growth trajectory in both revenue and profit, workforce size increased to nearly 27,000 people. Besides the growth in revenue and profit, FPT has made efforts to contribute to the development of Vietnam’s environment and society, especially the implementation of education support programs, creating the best conditions for the development of the young generation in the future. In 2015, FPT spent nearly VND33.6 billion on social responsibility activities. FPT desires to continually contribute to the overall development of the society and ensure the highest benefits for the stakeholders by its own core technology values and sustainable development of the Corporation. Simultaneously, we also expect the social activities to connect 27,000 FPT employees to work together for the common development of the community and promote the sustainable development of the Corporation. CEO of FPT Bui Quang Ngoc OVERVIEW GOAL OF FORMULATION AND METHOD OF DEVELOPING THE REPORT CONTENT Goal of formulation FPT’s Sustainability Report is included in its Annual Report to help investors, shareholders and other stakeholders to access information on FPT’s development strategy and business operations in terms of sustainable development. The report will summarize and assess the sustainability activities of the Corporation. Method of developing the report content This report was developed based on the Global Reporting Initiative - GRI version G4 guidelines choosing the ‘Core’ option. Based on the vision, development orientation and business strategy of the Corporation, the report presents FPT’s material aspects which have significant impacts on economic, social and environmental issues. GENERAL INFORMATION Reporting period The report covered the 2015 fiscal year from January 1, 2015 to December 31, 2015. FPT has been publishing the Sustainability report annually together with the Annual Report since 2013. Scope of the report This report summarizes activities of FPT and its subsidiaries in the field of ICT within Vietnam and countries where FPT is operating. Contact The report was prepared by the FPT Corporation’s Corporate Communications Department. Please contact Ms. Bui Nguyen Phuong Chau below if you have any comments or questions: Ms. Bui Nguyen Phuong Chau Head of FPT Corporation’s Corporate Communications Department, Address: FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +844 7300 7300; Email: [email protected]. FPT report’s assurance FPT referenced to and applied local and global standards to disclose information and data in the report. In addition, some data on the activities of FPT is ensured its accuracy, reliability and integrity by a third party. The following is some of the data assured by the third party: • Financial information audited by Deloitte. • Some important ICT certificates such as the CMMi, ISO, Tier3 were certified by SEI (the Software Engineering Institute of America), ISO (International Organization for Standardization), and Uptime Institute, respectively. Corporate information Operating sectors: FPT operates in some most key IT and telecommunications fields, including software development, systems integration, IT services, telecommunications, technology product distribution and retail, and high-quality IT human resource training. Scale: FPT has nearly 27,000 employees working in 19 countries worldwide, including Vietnam, the US, Japan, Singapore, Germany, the UK, France, Slovakia, Malaysia, Thailand, the Philippines, Bangladesh, Indonesia, Laos, Cambodia, Myanmar, Australia, the Netherlands and Kuwait. SUSTAINABILITY REPORT 83 OVERVIEW (continued) Member of the prestigious associations: • Member of the Vietnam Software and IT Services Association (VINASA); • Member of the Vietnam Association for Information Processing (VAIP); • Member of the SmartTV Alliance; • Member of the National Council for Sustainable Development and Competitiveness Improvement. IMPACTS OF FPT’S ACTIVITIES ON SUSTAINABILITY FACTORS The assessment of impact of FPT’s activities on economic, social and environmental factors will help FPT define its role, responsibilities and necessary activities to ensure its sustainability and contribution to the sustainable development of the country. Economic impacts Contributing to the overall economic development by maintaining stable revenue and profit growth, being among top contributors to the State budget. Contributing to the modernization of administration of government bodies, and enhancing competitiveness of enterprises and business sectors by researching, developing, and providing advanced IT solutions. Being a pioneer in new technology trends, which helps enhance the competiveness and position of Vietnamese IT industry on the global arena. Social impacts Creating jobs which offer stable income for employees: FPT has nearly 27,000 employees working 84 ANNUAL REPORT 2015 www.fpt.com.vn in 19 countries. In the recent five years, FPT has recruited nearly 4,000 employees annually, creating new jobs across the 63 cities and provinces nationwide, and offering stable income for thousands of people, which contributed to the stability of the society. Training high-skill workforce for the society: FPT University is currently training 17,900 students of international standards. Besides, FPT also designed inhouse training curricula for all the employees in order to have a professional and skilled workforce. Promoting the application of IT in solving social problems: FPT has been actively taking part in major projects in developing smart transportation, smart healthcare, smart education, etc to offer practical benefits to people. Supporting social development: Considering human as the heart of FPT’s operation, FPT invests in education, in the youth and considers this as an investment for the future. Environmental impacts IT and telecommunications are environment-friendly business segments. Therefore, FPT’s environmental impacts mostly come from water drainage and energy consumption in operating its office buildings, shops, and depend on its employees’ awareness in environmental protection. Accordingly, FPT ascertains that it is foremost essential to comply with water drainage and energy consumption regulations. FPT also cares about applying green architectures and technological solutions to minimize the energy consumption in operating office buildings and shops nationwide. Besides, FPT also promulgates to raise employee awareness in environmental protection. STRATEGIC ORIENTATION FOR THE 2015 – 2018 PERIOD Sustainable development model PROFIT Economic development and competitiveness enhancement 3 FACTORS for sustainable development PEOPLE Development of human resources and community activities PLANET Environmental protection Sustainable development orientation and strategy Sustainable development is one of the most important parts in the strategy that organizations and enterprises are pursuing globally. FPT is aware of the importance of this strategy and strives to combine the implementation of economic, environmental and social objectives to ensure a balance of interests for all parties involved in current and future operations. FPT also ascertains that the Corporation’s sustainable development objectives can only be achieved in accordance with the accomplishment of economic targets. The business needs to grow in order to offer sustainable benefits to customers, shareholders, employees and the society. SUSTAINABILITY REPORT 85 OVERVIEW (continued) Main goals of FPT’s sustainable development strategy: Goals Sustainable growth in revenue and profit Content of Goals Solutions • Continuously expanding geographical coverage and offering new products/services; • Sustainable growth in revenue • Continuously and comprehensively improving service and product quality; from traditional business segments. • Improving marketing and sales activities’ effectiveness; • Building and developing relationships with strategic partners and customers. • Rapidly increasing overseas revenue; • Rapidly increasing revenue from S.M.A.C/Smart services/ IoT; • Increasing revenue from newly developed and high-valued solutions/services. • • • • Participating in leading global IT giants’ ecosystems; Enhancing competitiveness in the global arena; Advancing R&D capabilities for S.M.A.C/IoT; Developing human resources in management, business consulting and technology consistent with the globalization and S.M.A.C/IoT-enabled strategy; • Conducting M&A. • Building the best working environment to enable employees to expand personal capabilities and encourage long-term Development of loyalty and contribution to the Corporation; • Consistently being featured human resources among the most preferred • Working out policies to identify, attract, nurture, reasonably and community treat and put talented people into the right work; employers in the IT sector. activities • Maintaining and promoting FPT’s core values of ‘Respect – Innovation – Team spirit – Objectivity – Exemplarity – Wisdom’. • Building FPT to become a learning organization and • Providing offline and online training courses for employees; upgrading human resources in accordance with the need • Organizing the recruitment in accordance with the need for business development and the strategic orientation of for business development and globalization and S.M.A.C/IoT. the strategic orientation of globalization and S.M.A.C/IoT. Environmental protection 86 ANNUAL REPORT 2015 www.fpt.com.vn • Developing technologies for the community in order to nurture and spread the seeds of humanity to the society. • Regularly organizing technological contest for students; • Supporting educational programs through technology application; • Granting scholarships to technologically talented young people; • Building a humanitarian and social responsible culture, encouraging the participation of FPT’s employees in social activities. • Complying with environmental protection regulations; • Raising awareness of environmental protection and energy conservation; • Greening the business and lifestyle. • Fully complying with environmental protection regulations; • Using energy and natural resources rationally, increasing the use of recycled products and green equipment; • Promoting technology application to minimize the use of natural resources; • Propagating the awareness of environmental protection inside and outside the Corporation. Spending VND33.6 billion on community activities Contributing FPT's VND6,000 billion contributions the State budget to the community in 2015 Creating nearly 5,000 jobs Benefiting more than 20 million people SUSTAINABILITY REPORT 87 STAKEHOLDER ENGAGEMENT FPT defines stakeholders as those who influence or are influenced to some extent by the business activities of the Corporation, including customers; shareholders and investors; employees; partners and suppliers; the community; the Vietnamese Government, ministries and authorities and the press. Feedbacks from stakeholders is an important factor in defining the mindset and FPT’s ways of managing and operating business activities. Customers Employees Press Partners and Suppliers Community Vietnamese Government Shareholders and Investors In 2015, FPT has reinforced relationships with stakeholders by strengthening and proactively meeting, sharing information through channels such as meetings, seminars, conferences, newsletters, websites, etc. Objects 88 Interactive channels Customers • • • • • • Face to face meetings; Customer care centers and hotlines for units in-charge; Social networks such as Facebook and forums; Websites of FPT and subsidiaries; Exhibitions, fairs, workshops, etc; Customer newsletters. Shareholders and investors • • • • Quarterly meetings and on request; AGM; Investors’ monthly bulletins; FPT website. ANNUAL REPORT 2015 www.fpt.com.vn Objects Interactive channels Employees • • • • The ‘Chungta.vn’ internal news portal and other publications; Social networks such as Facebook; Yammer; Internal training courses; Internal sports, performances, sum-up, etc. activities. Suppliers • Face-to-face meetings; • Newsletters for partners. Community • Organizing programs to seek and incubate talented young people; • Organizing philanthropic and environmental protection programs; • Implementing IT application programs to serve the community. Vietnamese Government, ministries and authorities • Participating in IT conferences and workshops held by the Government and governmental agencies; • Joining competitiveness enhancement and specialized seminars organized by ministries and government agencies; • Participating in organizations and associations. Press • • • • • Press conferences; Interviews and periodic press releases; FPT website; Social networks such as Facebook, Youtube; FPT News bulletin. STAKEHOLDERS ENGAGEMENTS Customers FPT makes a significant effort to satisfy customers by attempting to understand their insights and meet their demands with constantly enhanced dedication and capabilities. Goals • Delivering customers; FPT’s actions commitments with • Clearly and precisely defining customers’ requirements in product specifications, communication, branding and technology; • Delivering quality products and services • Defining and managing market information in order to evaluate the in a timely manner, with a dedicated Corporation’s strengths, weaknesses and competitive advantages; pre-sales and after sales support; • Studying and thoroughly understanding customers, building • Providing products and services with and maintaining a customer database, fully communicating with advanced technology and dedicated, customers about products/services-related issues; professional and ethical manner; • Establishing and applying written codes of conduct in customer • Improving FPT’s capabilities to provide liaison and treatment; products and services to the market • Evaluating customers’ satisfaction in order to find ways to improve and potential customers. their satisfactory; • Researching and developing new products and technologies. SUSTAINABILITY REPORT 89 STAKEHOLDER ENGAGEMENT (continued) Shareholders and Investors FPT makes a great effort to act in the best and sustainable interest of shareholders. Goals FPT’s actions • Achieving high and sustainable • Focusing on core business areas, paying special attention to high- investment effectiveness; • Building trust with shareholders; tech sectors creating high added values and potentially increasing shareholders’ value and maintaining sustainable growth; • Establishing and applying internal control mechanisms and policies to internal control prevent and reduce interal and external risks in all corporate activities; mechanisms to protect the interests of shareholders. • Fully, timely and transparently communicating with and listening to feedbacks from shareholders. • Implementing Employees FPT attempts to build a strong workforce, meeting the development demands of the Corporation, preserve and promote the Corporation’s core values, create opportunities for each employees to prove their abilities and succeed, ensure both material and mental lives for employees. Goals FPT’s actions • Building and developing strong • Searching, selecting and using leaders appropriately with their capabilities; leadership at all levels; creating conditions and opportunities for • Continuously creating opportunities and challenges, ensuring leaders to promote their highest collaborative, equal and creativity-encouraging environment; capabilities. • Regularly assessing leaders’ performance and work effficiency. Drafting and applying reasonable policies to encourage leaders; • Implementing leadership personel arrangement to ensure balanced leadership and management at all levels. Developing and continuously maintaining training programs for the next generation of leadership. • Building and developing a strong • Creating and implementing human resource development plans in line with the Corporation’s objectives and development strategies; workforce to meet the development recruiting high quality human resources to meet the Corporation’s demands of the Corporation; standards; ensuring both material and mental lives for employees. • Drafting and applying reasonable policies to encourage employees; • Promoting training activities for employees; • Periodically surveying, collecting employees’ opinions on the Corporation to provide appropriate actions; • Applying insurance and welfare policies in accordance with the corporate union’s regulations. 90 ANNUAL REPORT 2015 www.fpt.com.vn Goals FPT’s actions • Creating an ideal • Ensuring safety and security requirements in working environment as stipulated by the Ministry of Labour, Invalids and Social Affairs and FPT's own scheme of insurance work environment; for employees (FPT Care); maintaining and promoting the • Evaluating the satisfaction of employees towards work and personal development Corporation’s core to provide appropriate actions; values. • Building and developing the culture and core values of the Corporation; • Implementing internal communication activities to enhance employees’ understanding of development strategy, culture and values of the Corporation, maintaining employees’ pride and loyalty to the Corporation. Partners, suppliers FPT attempts to establish relationship with partners basing on a deep mutual understanding, maximizing cooperation and creating a long-term attachment to succeed together and develop sustainably. Goals FPT’s actions • Establishing sustainable • Building and implementing standards on how to work with and behave towards relationship with partners; partners; • Selecting and sorting partners basing on basic criteria: technology, market share, • Deeply understanding brand and collaboration; strengths of each • Building long-term alliances with partners on the basis of business sectors, partner to build powerful geographic conditions or market/customer segments; alliances for mutual • Fulfilling commitments with partners; benefits and success; • Establishing two-way communications between FPT’s subsidiaries and partners, • Working with partners cooperating with partners to solve emerging issues at the fastest; to expand business areas and develop new • Regularly evaluating the capabilities of partners in collaborating, providing products/services and meeting demands. products and services. Community FPT attempts to contribute to the community, which is considered the foundation for the sustainable development of the Corporation. Goals FPT’s actions to • Fullly complying with legal regulations; the • Offering scholarships and implementing talent support programs; • Developing programmes to apply IT in education and social activities in order to disseminate knowledge and new technologies to the community; • Improving the corporate • Organizing FPT’s Community Day (March 13) so that all FPT staff can make practical image and building the contributions to society; trust of the community • Establishing the “FPT for the Community” fund to actively and timely support in the Corporation. colleagues and people in difficult situations; • Promoting the Corporation’s volunteer programmes such as establishing libraries, offering scholarships to poor students, giving gifts to child patients, blood donation, etc. • Contributing and benefiting community; SUSTAINABILITY REPORT 91 STAKEHOLDER ENGAGEMENT (continued) Government, Ministries and Authorities FPT actively coordinates with enforcement agencies to carry out policies and regulations of the Government and the State bodies for the sustainable development of the Corporation and the national prosperity. Goals FPT’s actions Accomplishing obligations to the • Fulfilling corporate obligations such as paying taxes, social insurance, State. etc. Following regulations on information • Disclosing information fully and timely as regulated; disclosure for listed companies. • Applying the State Securities Commission’s information disclosure regulations via Information Disclosure System (IDS), participating in training courses as required. Strengthening relationships with • Joining IT associations such as the Vietnam Software and IT Service Association (VINASA), the Safety Information Association, the Vietnam the Government, ministries and Association for Information Processing, etc; authorities. • Actively participating in and contributing ideas to related documents as required; • Actively participating in programs to promote foreign trade, investment in overseas and domestic markets held by the Government, ministries and authorities; • Supporting the development of other enterprises in the IT industry. Press and Media FPT provides information on activities of FPT and its subsidiaries timely and transparently to the press and media. Goals FPT’s actions Providing up-to-date information • Actively and regularly providing information to media through FPT about activities of FPT in particular and bulletins, press releases, press conferences and articles; of ICT industry in general. • Regularly and timely providing answers to inquiries from the press; • Providing media with analysis and evaluation on development trends of domestic ICT industry as well as forecast on global trends. 92 ANNUAL REPORT 2015 www.fpt.com.vn IDENTIFICATION OF MATERIAL ASPECTS PRINCIPLES AND PROCESSES TO IDENTIFY MATERIAL ASPECTS Principles Basing on the context of the domestic and global IT market, as well as stakeholders' feedbacks and concerns, the material aspects were evaluated and identified accordingly to the relationship between the economic, social and environmental factors and the Corporation's business activities. Process The process of evaluation and identification of material aspects includes: STEP 1 On the basis of performance evaluation and development trend of the industry, FPT offers the major aspects having significant impact on operating businesses of the Corporation and interests of stakeholders. STEP 2 Analyzing and determining the level of interest of parties involved in these aspects. STEP 3 Identifying material aspects in relations between o p e r a t i n g businesses of the Corporation and the impacts of these activities on economy, society, environment. STEP 4 STEP 5 Evaluating by the leaders and the internally relevant units to ensure the accuracy and truthfulness of these aspects. Selecting material aspects for inclusion in the report. LIST OF MATERIAL ASPECTS AND ASSESSMENT OF THEIR IMPACTS ON STAKEHOLDERS List of material aspects in relation to economic, social and environmental issues Material aspects Main content Ensuring stable economic growth Orientation and solutions to ensure stable economic growth Investing in R&D R&D orientation and activities Developing high quality human resources Human resources general information, orientation and developing policies Applying advanced corporate governance procedures Corporate governance model and activities Investing in overall development of the society Orientation and activities related to investing in overall development of the society Engaging environmental protection activities Orientation, activities and innovative ideas related to environmental protection SUSTAINABILITY REPORT 93 IDENTIFICATION OF MATERIAL ASPECTS (continued) Matrix of material aspects Ensuring fast and stable economic growth Developing high quality human resources Engaging environmental protection activities Investing in R&D Investing in overall development of the society Applying advanced corporate governance procedures ANALYSIS OF MATERIAL ASPECTS Ensuring stable economic growth FPT understands that only by reaching economic targets the Corporation can develop sustainably and ensure the interests of the stakeholders. FPT determines to ensure the following material aspects: • Continuously seeking and expanding the domestic and international geographical coverage, creating the Corporation’s drivers for growth, while improving customer service quality; • Continuously searching for suitable business models that benefit customers and society, and create new revenue streams for the Corporation; • Continuously researching, offering new technology solutions of high added values, and improving the quality of products/services offered to customers. 94 ANNUAL REPORT 2015 www.fpt.com.vn Results achieved in 2015 Revenue and profit before tax returned to doubledigit growth track In 2015, revenue of the Corporation reached VND40,003 billion, up 13.9% compared to 2014, profit reached VND2,851 billion, up 15.9% over the same period. Particularly, revenue from overseas markets grew 40.9%, equivalent to VND4,851 billion. Contributions to the development of Vietnam's economy • Contributing to the State budget Unit: VND in billions YoY change 2013 4,043 8.8% 2014 4,913 21.5% 2015 6,000 22.1% • Ranking 36th in the list of 1,000 largest corporate income tax payers in Vietnam (V1000) in 2015. • Becoming key partner of large technology companies such as Microsoft, Amazon Web Services, etc. • Contributing to enhance industries’ competitiveness and solve social issues. Specifically: • Providing services/solutions to 400 corporations/ large companies in the areas of technology, aviation, electronics, banking and finance, medical devices, etc. worldwide. 99 E-Government: The Electronic Government Information System (FPT.eGov) developed by FPT has been deployed in 539 governmental agencies in 22 provinces and cities nationwide. 99 Public finance: FPT served as the general contractor of the project "IT applications for managing personal income tax", allowing the management of 20 million taxpayers, with 7,000 users and 800 deployment points in 63 provinces and cities. 99 Transportation: FPT cooperated with the Vietnam National Railways Corporation to develop the E-ticket system, enabling people to buy train tickets more conveniently and helping minimize negative issues in ticket sales. Besides, FPT also implemented a pilot project to install a traffic violation surveillance and monitoring system on the Noi Bai-Lao Cai highway, helping lower the incidence of traffic law violations. 99 Medical: The Hospital Management System (FPT. eHospital) has been deployed in 100 hospitals and clinics across the country, helping reduce time for registering, treating and other administration procedures for patients. FPT also put into operation the first electronic health insurance claim system (FPT.eClaim) in Hai Phong, connecting information from 100% health facilitites in communes, districts and provinces; performing settlement for 700,000 records (from April to August, 2015). 99 Customs: FPT developed and implemented an electronic customs clearance system (FPT. eCustoms) which has assisted 34 customs departments, 300 customs branches and 6,000 import-export enterprises, shortening customs clearance document handling time to 1-3 seconds. 99 Education: FPT pioneers in providing training and practices closely related to practical work. Currently, there are about 17,900 students and trainees attending training programs at FPT University, contributing to provide high-quality human resources for the country’s development. Contributions to the IT industry Succeeding in software outsourcing, contributing to put Vietnam on the global digital map through: • Being listed on The Global Outsourcing 100 by the International Association of Outsourcing Professionals (IAOP) for three consecutive years (2014-2016). Positively contributing to the development of the Internet in Vietnam by being one of the first internet service providers; being member of international submarine communications cable system; owning large telecommunications infrastructure with total length of over 9,200km. Pioneering in R&D of services based on new technology trends of S.M.A.C/IoT. FPT is currently the S.M.A.C development partners for many large corporations worldwide. Investing in R&D Operating in such rapidly developing and changing industry as ICT, FPT identifies investment in R&D is one of the most important factors that help the Corporation catch up with new technology trends to meet customer demands. Accordingly, FPT’s focus will be towards: • Pioneering in the digital world 99 Researching and developing smart services and solutions based on the latest technologies; 99 Creating new business models based on S.M.A.C and IoT technologies; 99 Developing an ideal environment for boosting creative technology initiatives. • Promoting the applications of Big Data expand operations and business in subsidiaries. • Enhancing the competency and quality of technology experts through advancing the technology seminars; researching and building professional training programs. • Developing a community for technology professionals in FPT and Vietnam through different channels such as online, offline, sharing knowledge, new technologies and technological platforms (‘Open FPT’ project). SUSTAINABILITY REPORT 95 IDENTIFICATION OF MATERIAL ASPECTS (continued) Results and highlights in 2015 Investing in R&D Since 2012, FPT’s BOD has set aside 5% of annual profit before tax for R&D. Each subsidiary also sets aside part of their budget for R&D. Establishing FPT Ventures • Successfully incubated and spun-off ANTS, opening new business line in advertising using Big Data technology. Building and developing partnerships with leading technology firms FPT Ventures operates as a start up incubator by providing finance and resources as well as technology and management skills. Until now FPT Ventures has received approximately 350 applications and is selecting the appropriate ones for investment. • Became strategic Cloud partner of AWS and Microsoft in Japan. Ranking corporate level technology officers • Attended and presented at international seminars on science and technology such as Gartner, AWS, re:Invent, etc. 2015 is the third year that FPT implements the ranking for technology officers. The technology offices are ranked according to 09 criteria: education (diploma, certificates in technology); foreign languages; work experience in the global technology sector; work experience at technology positions; level of importance for the organization; impact sales; the degree of influence to other technology staff; understanding of the IT industry; ability to work with customers and partners. Up to now, FPT has honored 113 corporate level technology officers. Experimenting Rogo project Rogo is an IoT prototype based on S.M.A.C technology. Rogo is expected to become a controlling hub, connecting smart devices in the family. In 2016, products will be launched for trial in Vietnamese market. Applying and incubating some products/projects related to new technology trends • Applied technology related to Big Data for core products of FPT such as automation of audience recommendation of VnExpress online news, personalization of FPT Play. • Launched advanced threat detection system named CyRadar, which was listed in top 10 potential startups in Asia by Echelon (e27.co), a leading entrepreneurship and technology forum of Asia. CyRadar was also recognized as a high-quality information security 96 product in 2015 by the Vietnam Information Security Association. ANNUAL REPORT 2015 www.fpt.com.vn • Became one of the first partner of GE in executing Industrial IoT. Training to enhance capabilities of technology employees • Organized a series of 50 technology seminars with topics related to implementing Cloud, Security, Data Analytics, IoT, etc projects. • Implemented Solution Architect training programs, offered advanced certificates. Developing high quality human resources FPT pays close attention to compensation and promotion policies, attracting talents and building a dynamic and creative work environment to enable them to reach their full potential in terms of career and personal life. In 2015, FPT recruited nearly 5,000 new staff, resulting in an increase of 21.8% of the total number of employees, and spent VND71.4 billion on internal training. General information of human resources By the end of December 2015, FPT employed 26,818 people, an increase of 21.8% compared to 2014, while the total number of technology experts, engineers and developers reached 10,617 people, an increase of 24.4% over the same period of 2014. Number of employees in the last five years and the growth rate Unit: employee Growth rate 2011 12,969 5.4% 2012 14,912 14.9% 2013 17,417 16.8% 2014 22,016 26.3% 2015 26,818 21.8% Human resource structure by gender in 2015 Total (employees) Below 25 years old Human resource structure by function in 2015 Unit: employees 9.2% Management 2,468 27.3% 29.4% 10.1% 23.9% Technology 7,895 Sales 6,421 Technique 2,722 Support 7,312 Human resource structure by gender in 2015 Total (employees) % of total % of total 8,853 33 25-30 years old 11,375 42.4 Female 16,793 62.6 31-40 years old 5,940 22.1 Male 10,025 37.4 41-50 years old 517 2 Above 50 years old 133 0.5 Total 26,818 Human resource structure by geography in 2015 Human resource structure by education in 2015 Total (employees) % of total Post-graduate 1,069 4.0 Undergraduate 16,337 60.9 9,412 35.1 Secondary education Unit: employees 4.5% 44.9% 37.4% North 12,056 Central 3,538 South 10,027 Overseas 1,197 13.2% Policies for employees FPT’s greatest asset is its human, therefore we have always had specific policies to recognize and realize the employees’ efforts and contributions to the Corporation's sustainable growth. • Compensation policies: FPT pays close attention to compensation and promotion policies, taking good care of its employees to enable them to reach their full potential in terms of career and personal life. FPT’s compensation policy is built based on the following criteria: 99 Equality to the work and value contributed to FPT; 99 Competitiveness by markets; 99 Encouragement to increase work quality and productivity; 99 Fairness and transparency;. FPT’s compensation structure consists of 4 components, which are: 99 Salary: 12 months of base salary; 99 A 13th-month salary paid on FPT’s Anniversary and on occasion of the New Year; 99 Allowances: travelling, mobile phone top-up, plurality allowance; 99 Bonus based on employee's performance and work achievements; 99 Welfare: social insurance, health insurance, unemployment insurance, etc. SUSTAINABILITY REPORT 97 IDENTIFICATION OF MATERIAL ASPECTS (continued) • Training policies: As technology requires constant change and innovation, FPT has built up generations of employees who increasingly learn and strive to help FPT succeed. 2015's achievements: 99 Spending VND71.4 billion on training programs and activities with 195,240 trainees. 99 Establishing the FPT Corporate University (FCU) on the basis of former FPT Leadership Institutes (FLI), with the intention of making FPT become a learning organization. In 2015, FCU held more than 220 courses such as MiniMBA, core staff and vertical training, etc., attracting over 7,000 attendees. Also, it successfully organized ten "72 hours of experience" programs for nearly 700 FPT's new members nationwide. 99 Issuing International Training Regulation in the Corporation and its subsidiaries. Accordingly, FPT staff at level 3 or above must participate in an annual training program provided by FCU or complete at least one online course on MOOC (Massive Open Online Course). By the end of 2015, 73% of the required employees completed at least one MOOC. Nearly 50% of the staff at level 5 or above provided lectures, which totalled 12,488 hours. Criteria Training budget Compared to 2014 VND71.4 billion 52.8% 195,240 times 149.2% Training hours 1,246,175 hours 466.0% Training costs per staff member VND3.1 million/ person 47.6% Training times per staff member 8.5 times/ person 136.2% Training hours per staff member 54.3 hours/ person 443.0% Number of certificates issued to FPT staff members 3,000 certificates 50.0% Participation 98 2015 ANNUAL REPORT 2015 www.fpt.com.vn Key FPT training programs: New staff training; technology staff training; professional training; future workforce training. • Welfare policies: FPT’s policies are specifically designed to enable employees to benefit from productivity and creativity gained through increased health and fitness: 99 Coordinating with prestigious hospitals and clinics to provide free annual medical check-up once a year to all employees; 99 Coordinating with insurance companies to provide insurance benefits to employees and their dependents (FPT Care) to reduce economic concern and provide good quality healthcare coverage for employees in case of accident, illness or disease, with the total value of more than VND20 billion; 99 Encouraging employees to improve their health by taking part in sport activities at sport clubs, and by building gyms and swimming pools in the campuses; 99 Annual summer holiday paid by the Corporation. Attracting and developing talented people FPT accepts everyone as they are, with their strengths and weaknesses, and their good and bad points, as well as provides the best conditions for each member to be themselves and fulfil their ambitions. • "Trang FPT”: "Trang FPT" is an annual competition that has been held since 2003 to seek and develop new talented people within the Corporation. Many winners at "Trang FPT" have been appointed to the senior management positions such as Vice Executive President of FPT Corporation, CEO of FPT IS, CEO of FPT Software, etc. • Talent internship program: implemented since 2003 with the purpose to recruit top students in economics and technology for potential management positions; • Personnel arrangment: aimed at building a team of young, trained and experienced staff who deeply understand FPT's business operations and core values to be ready to assume leadership and senior management positions in the Corporation and its subsidiaries. Creating specific corporate culture FPT’s commitment in human resource usage FPT is one of a few Vietnamese companies building and maintaining specific corporate cultural values which became its unique advantage to attract talents, as well as created a linkage among its employees and between employees and the Corporation. The goal of human resource development in FPT FPT culture in general is the summary of codes of conduct in its business activities as well as in other activities to support the employees' lives. Code of conduct and code of ethics in FPT: “Respect Innovation – Team spirit – Objectivity – Exemplarity – Wisdom”. Accordingly, every FPT employee needs to have spirits of “Respect – Innovation – Team spirit” • RESPECT – The spirit of Respect means “respecting individuals”, including Frankness, Listening and Tolerance. In FPT, employees can speak directly to managers, regardless of positions and relationships. • INNOVATION – The spirit of Innovation includes Learning, Innovation and STCo (typical humor of FPT’s people). • TEAM SPIRIT – The Team spirit in FPT includes Concensus, Unity and Sincerity. FPT leaders must possess three core values: “Objectivity - Exemplarity - Wisdom” • OBJECTIVITY – Objectivity is the most important virtue of leaders which helps gain the trust of employees and inspire them to work with increased dedication instead of flattering the leaders. • EXEMPLARITY – Leaders must be the ones who most clearly reflect the FPT’s spirits of “Respect – Innovation – Team spirit”. • Developing a workforce with professional qualifications, skills, and globally working capabability; • Developing a team of engineers and technology experts ready to access the latest technology trends and capable of working with large foreign technology partners. FPT's commitment as an employer • Strictly comlying with the provisions of the Labor Laws and the terms of the Collective Labor Agreement; • Ensuring the right of employees to freely participate in Trade union and create favorable conditions in which the Trade union can operate as per the Trade Union Act and the Labor Laws; • Signing labor contracts with employees as stipulated by the provisions of the Labor Laws and the guiding documents of the State and the internal regulations of the Corporation; • Arranging for employees to work accordingly to their qualifications, expertise, capabilities, health, job position and gender; • Recruiting in accordance with procedures posted publicly on the Corporation's website. Accordingly, candidates do not have to pay for the public examination and selections are based on personal capabilities; • Creating an innovative work environment. FPT focuses on developing facilities and building a modern naturefriendly work environment. Offices that have been built in campus model are F-Ville (Hoa Lac Hi-Tech Park, Hanoi), F-Town (Saigon Hi-Tech Park in District 9, Ho Chi Minh City) and the FPT Complex (Da Nang Hi-Tech Park). • WISDOM – Leaders must be visionary and decisive. Besides, FPT also focused much on deploying cultural activities, ensuring a rich mental life for employees, giving them excitement and enthusiasm in their work through annual events such as FPT Community Day (March 13); FPT's Anniversary (September 13); FPT Arts Day (May 19); Towards the Origins Day (March 10 in lunar calendar); Parents Day (November 19); FPT Village Festival (December 22 in lunar calendar), etc. SUSTAINABILITY REPORT 99 IDENTIFICATION OF MATERIAL ASPECTS (continued) Applying advanced management procedures toward sustainable development FPT defines corporate governance as one of the most important elements to ensure efficient growth and sustainable development. Besides building a strong management system on the basis of compliance with the legal provisions and the application of advanced management models in the world, FPT also issued a system of internal regulations in order to create a unified management mechanism. Management model THE BOARD OF DIRECTORS Approving and issuing sustainable development policies THE BOARD OF MANAGEMENT Ensuring the implementation of sustainable development policies CORPORATE BUSINESS ADMINISTRATION DEPARTMENTS Implementing and realising sustainable development ideas according to the orientation of the BOM SUBSIDIARIES Implementing sustainable development programmes in subsidiaries 100 ANNUAL REPORT 2015 www.fpt.com.vn Roles, activities The BOD The CEO and the BOM Persons/units in charge • Approving and issuing sustainable development strategies and orientation for the Corporation. • Working out specific sustainable • The BOD • The CEO and Director of development goals for each department and subsidiary; Corporate Social Responsibility • Directing the implementation of sustainability related tasks; • Supervising the results of the implementation of the sustainable development policies of departments and subsidiaries. Corporate business administration departments • Implementing sustainability activities at Internal Control • Independently and objectively evaluating the Department and other corporate business administration departments • Advising and supporting the implementation of sustainable development goals at subsidiaries. risk management and corporate governance system in operating fields; • Providing periodic and irregular reports when problems arise in implementing sustainability activities. Subsidiaries • Corporate Communications corporate level; • Implementing sustainability activities as • BSC management team; • Corporate Quality Assurance Department; • Corporate Communications Department. • Division in charge of planned; • Reporting on the sustainability activities of sustainable development in subsidiaries. subsidiaries to the BOM. Sustainability-related risk management Over the years, FPT Corporation has attached special importance to the implementation of sustainability-related risk management based on: • Assessing and managing risks to the sustainable development of the corporate system; • Assessing and managing risks of social environment to FPT and risks of FPT's business activities to the environment; • Developing and integrating a vision of sustainability into FPT’s business strategy; • Developing mechanisms to provide non-financial information and financial statements in order to provide greater transparency to stakeholders. In addition, FPT Corporation has created Sustainability Report at the request of the Vietnam State Securities Commission. The Sustainability Report includes FPT’s commitment to carry out activities towards sustainability. In this report, the Corporation provides evaluation of and information about its performance regarding to the environment and society along with information on the efficiency of its financial activities and capital governance. The Sustainability Report is presented as a new way to build and quantify the value of the business. SUSTAINABILITY REPORT 101 IDENTIFICATION OF MATERIAL ASPECTS (continued) Attaching concern for the environment, society and governance (ESG) to the value chain of FPT Sustainability has always been integrated into FPT’s development strategy and business activities and is considered in three aspects: economy, society and environment. Model of inputs, outputs and impacts of corporate operations on stakeholders, environment and society. 01 SHAREHOLDERS CUSTOMERS 02 Strategic and planning management 03 R&D management 04 Sales and marketing management 05 Products and services purchasing management 06 Products and services provision management Customer services management SHAREHOLDERS CUSTOMERS 07 Organizational management 08 Financial management LEADERSHIP LEADERSHIP 09 Human resource management 10 IT management EMPLOYEES EMPLOYEES 11 Asset management and Governance administration 12 Public relations and communications management PARTNERS PARTNERS 13 Cultural management 14 Quality and process management COMMUNITY In order to ensure the Corporation's sustainable development, thereby ensuring benefit to shareholders, customers and employees, FPT focuses on the core business sectors of Information Technology and Communications, aiming to become the Vietnam’s leading global technology Corporation, especially in new technology trends. 102 ANNUAL REPORT 2015 www.fpt.com.vn COMMUNITY Corporate governance enhancement FPT leaders believe that continually improving the effectiveness of corporate governance and production management is the most effective way to ensure customer satisfaction, improve competitiveness and secure sustainable benefit for the Corporation’s shareholders. Implementing BSC to build a modern strategic management system. BSC is considered to be one of the 10 most effective administrative tools in the world which has been applied in most major corporations worldwide. FPT has successfully built a management team for its strategic implementation in all subsidiaries. In 2014, BSC was deployed in every business unit and functional departments of the whole corporation. Implementing a new compensation structure based on international standardized human resource management model to enhance transparency; encourage employees at work; increase motivation for strategic directions of the Corporation; create more favourable conditions for FPT to expand staff overseas and promote the globalization strategy. Besides, FPT has constantly improved its business activities, applied international standard criteria and management models in order to bring satisfaction to its customers and optimize costs. FPT was the first IT corporation in Southeast Asia receiving ISO 9001 certificate, which was applied to the whole corporation. In addition, FPT also won many international standard certificates in its operation sectors. Operating sectors Technology (Software development, System integration, IT services) Certificates • CMMi5: Certificate for software development processes. • ISO 27001: Standard for information security management system. • ISO 20000: Standard for IT service management system. • ISO 50001:2011: International standard for energy management system. Telecommunications • Uptime Tier III: International certificate for data center. • ISO 27001: Standard for information security management system. Distribution, retail and manufacturing of technology devices Education • ISO 14001: Standard for environmental management in production/ business activities. • ISO 17025: General requirements for the competence of testing and calibration laboratories. • Rated 3-star by QS, a leading international university rankings. SUSTAINABILITY REPORT 103 IDENTIFICATION OF MATERIAL ASPECTS (continued) Investing in overall social development As people are the core strength of FPT, we focus on investment in education and young generation, considering it the investment for future. It is believed that with technology advantages, numerous intellectuals and a creative work environment, FPT will create common values for the Corporation and the community via its contributions to the human resources development. We also desire to develop a team of FPT employees with compassionate hearts and responsibilities to society. The Corporation also calls for contribution of its employees to its own social activities. In 2015, FPT and its employees spent VND33.6 billion on social activities, including: • The Corporation’s budget: nearly VND30 billion • FPT staff’s contribution: VND3.6 billion Main activities: Investing in education and young generation FPT invested VND30.8 billion in education and young generation, benefiting over 20 million students in Vietnam through a number of programs as follows: Some typical programs • The FPT Centre for Young Talents was established with the purpose of gathering young talents in the country, providing them with conditions to develop comprehensively and helping them become successful people in society, contributing to national prosperity. In 2015, FYT recruited 26 members including 03 international awards winners and 16 national awards winners. After 16 years of operations, FYT gathered nearly 393 talented students, more than 200 of whom are living and working abroad, and many having become successful, including Dam Quang Minh, Rector of FPT University; Vuong Vu Thang, CEO of the Vietnam Communications Corporation; Vuong Quang Khai, Vice President of the VinaGame Corporation and Nguyen Hoa Binh, CEO of PeaceSoft. • The Nguyen Van Dao Scholarship aims to offer the best study conditions and development opportunities to talented young students and students from poor families. In 2015, FPT provided 682 scholarships worth over VND20 billion. From 2010 to present, 1,149 scholarships worth nearly VND88 billion have been given. • ViOlympic Internet-based math contest was held to promote the application of IT in teaching and learning, create a more engaging environment for students to learn math and practice English, enabling students to use the Internet as a method of learning. In 2015, the contest attracted 20 million participants (an increase of nearly 2 million compared with 2014) with an average of 90,000-100,000 new members registering everyday, involving students from thousands of schools in 63 cities and provinces. 104 ANNUAL REPORT 2015 www.fpt.com.vn SUSTAINABILITY REPORT 105 Alice & Scratch aims to create a new playground in programming for students. Besides, the competition is also designed to popularize Alice programming language to secondary and high schools, eliminate the perception that programming is hard and develop the thinking that "anyone can learn how to program." “Inspiring a Dream” program with 153 computers and 41 bookcases. S.M.A.C Challenge contests for students; National Mechanics Olympic, Breaking the Limit; the Young IT contest; the 24th IT Contest for Students in Vietnam Primary to high school students Implementing programs applying technology in training Providing books, Primary to bookcases, high school computers, etc. students Honoring and encouraging Pupils/ students who students have IT capability 2 3 4 Primary to high school students Students Offering scholarships Total 20,059,915 1,446 15,000 42,514 20,000,000 200 Scholarships for children who were exposed to Dioxin Violympic - an internet-based math competition in Vietnamese and English helps students improve their knowledge of mathematics and English, access modern computing and a new method to apply IT in teaching and learning. 682 73 No. of beneficiaries/ participants The Nguyen Van Dao Scholarship FPT Center for Young Talents (FYT) Specific programs 1 Targets Programs No. 28,812,543,389 849,753,000 380,910,689 702,000,000 6,370,000,000 20,046,679,700 463,200,000 The Corporation’s budget Investing in education and young generation 1,991,420,863 1,751,420,863 240,000,000 FPT staff’s contribution 30,803,964,252 849,753,000 2,132,331,552 702,000,000 6,370,000,000 240,000,000 20,046,679,700 463,200,000 Total cost (VND) IDENTIFICATION OF MATERIAL ASPECTS (continued) In 2015, more than 20,000 employees donated one day’s salary to the fund, raising VND4.95 billion. Nearly 6,500 FPT staff members directly participated in community programs. Engaging environmental protection activities Humanitarian and social activities Results achieved in 2015: With its green business orientation, FPT has focused on environmental protection and resource-saving issues through specific solutions: FPT is the first private enterprise in Vietnam to hold FPT’s Community Day - March 13 for all employees in the Corporation to take part in social activities. On this day, FPT encourages all its employees to contribute their one day’s salary for “FPT for the Community” fund to timely assist community and colleagues in difficulties. In 2015, FPT and staff spent nearly VND2.8 billion on 71 community programs such as taking care of the sick, giving gifts to families and children in difficult circumstances, helping those who suffered due to natural calamity; giving 10,000 helmets to local people and students; organizing 15 blood donation drives collecting 2,718 units of blood. Some specific programs and achievements: • FPT Community Day (March 13): On this day, FPT employees take part in community activities across the country such as blood donation, tree planting, scholarship awarding, gifting to people in difficulties, etc. FPT Community Day 2015 attracted 4,900 employees participating in 59 cities and provinces; donating 625 units of blood; giving 2,572 gifts and 50 scholarships; planting 133 trees. • FPT for the Community Fund: Since 2013, FPT has called for each staff to donate one day’s salary to the “FPT for the Community” fund. The fund has no legal status, operating on FPT staff’s voluntary contributions. It shows social responsibility and the spirit “mutual affection, mutual love” of FPT employees. In 2015, more than 20,000 employees donated one day’s salary to the fund, raising VND4.95 billion. Nearly 6,500 FPT staff members directly participated in community programs. 106 ANNUAL REPORT 2015 www.fpt.com.vn Constructing environment-friendly offices With the office systems across the country, FPT is always conscious that green office model not only helps the Corporation achieve energy usage efficiency and reduce operating costs, but also enhances environmental protection awareness among its employees. Accordingly, during the construction, FPT always carries out environmental impacts assessment and complies with environmental protection regulations. Besides, in the design process, FPT always gives priority to apply new technologies and environment-friendly materials as well as utilizes natural energy sources to minimize environmental impacts and energy consumption. • FPT Complex (Da Nang) achieved the EDGE (Excellence in Design for Greater Efficiencies) standard by the Ministry of Construction and the World Bank, after reaching minimum savings of 20% in energy, water, and construction materials. • The Administrative Building of FPT University (Hoa Lac Hi-tech Park) won the Future Projects Education category at the 2014 World Architecture Festival (WAF) and the first prize in terms of the use of green and energy saving materials at the Green Architecture Awards 2014 hosted by Vietnam Architects’ Association. • FPT’s offices were built on environment-friendly campus model (office complex integrated with amusement parks, trees, landscape, etc.), including F-Ville (Hoa Lac Hi-tech Park, Hanoi); F-Town (Saigon Hi-tech Park, District 9, Ho Chi Minh City). Applying technologies to reduce energy consumption FPT always attachs importance of technology application to reduce energy consumption: • Implementing Panasonic energy saving solutions at FPT University which resulted in a 341,200kWh electricity use reduction, saving VND500 million and a 192.2 ton CO2 emission decrease annually. • Implementing the Green IT project to reduce greenhouse gas emissions and lower electricity consumption by 255,000kWh at FPT’s data centers, saving VND300 million annually. • FPT’s 240,000 unit per year computer production factory received ISO 14000 certificate on environmental management in 2004, after two years of establishment. Raising environmental protection awareness among employees FPT regularly implements programs to raise and promulgate environmental protection awareness among employees: • Collaborating with international and domestic organizations to raise awareness of environmental protection and energy saving for all FPT employees. • Adjusting the electricity use at office buildings. • Encouraging the staff to use stairs and restrict elevator usage. • Establishing a bicycle club and encouraging staff members to cycle to work. • Supporting and responding to the Earth Hour campaign. SUSTAINABILITY REPORT 107 REFERENCES TO GRI’S GUIDANCE General standard disclosures Description Report content Page Strategy and analysis G4-1 Statement from the most senior decisionmaker of the organization G4-2 Description of key impacts, risks, and opportunities The CEO's message 82 Impact of FPT’s activities on sustainability factors 84 101 Sustainability-related risk management Reference: FPT’s 2015 Annual Report (Risk management) Organizational profile Overview of Sustainability Report 83 Corporate information Reference: FPT’s 2015 Annual Report (Business sectors) 83 16 Contact Reference: FPT’s 2015 Annual Report (General information) 83 14 G4-3 Name of the organization G4-4 The primary brands, products, and services G4-5 Location of organization’s headquarters G4-6 Number of countries where the organization Corporate information operates, and names of countries that the Reference: FPT’s 2015 Annual Report (Geographical organization has significant operations coverage) G4-7 Nature of ownership and legal form G4-8 Markets served Corporate information Reference: FPT’s 2015 Annual Report (Geographical coverage) 83 22 G4-9 Scale of the reporting organization Reference: FPT’s 2015 Annual Report (Organizational structure) 23-25 G4-10 Total workforce Human resource development G4-11 Percentage of total employees covered by FPT’s commitment in human resource usage collective bargaining agreements G4-12 Describe the organization's supply chain G4-13 Significant changes during the reporting period regarding the organization’s size, There are no significant changes structure, ownership, or its Supply Chain G4-14 Explanation of whether and how the Applying advanced management procedures towards precautionary approach or principle is sustainable development addressed by the organization Reference: FPT’s 2015 Annual Report (Risk management) G4-15 Externally developed economic, environmental, and social charters, Corporate governance enhancement principles, or other initiatives to which the organization subscribes or endorses 103 G4-16 Memberships in associations 84 Contact Reference: FPT’s 2015 Annual Report (Business sectors, subsidiaries and associates) Attaching concern for the environment, society and governance (ESG) to the value chain of FPT Member of prestigious organizations and associations 83 22 83 16 & 24 96 99 102 100 Identified Material Aspects and Boundaries 108 G4-17 Operational structure of the organization, Reference: FPT’s 2015 Annual Report (Organizational including main divisions, operating structure) companies, subsidiaries, and joint venture G4-18 Process for defining the report content and the Aspect Boundaries Explain how the organization has implemented the Reporting Principles for defining report content ANNUAL REPORT 2015 www.fpt.com.vn Overview of Sustainability Report 23-25 83 General standard disclosures Description Report content Page List all the Material aspects identified in the Material Aspets Identification process for defining report content 93 G4-20; G4-21 For each Material Aspect, report the Aspect Boundary within and outside the Overview of Sustainability Report organization 83 G4-22 Explanation of the effect of any restatements of information provided in previous reports, There are no significant changes and the reasons for such restatements G4-19 Goal of formulation and method of determining the content of the report G4-23 Significant changes from previous reporting The report’s general information in accordance with GRI4 periods in the Scope and Aspect Boundaries standards. 83 83 & 108 93 Principles and processes to identify material aspects Stakeholder Engagement G4-24 List of stakeholder groups engaged by the Stakeholder engagement organization 88 G4-25 Basis for identification and selection of Stakeholder engagement stakeholders with whom to engage 88 G4-26 Organization's approaches to stakeholder Stakeholder engagement engagement 88 G4-27 Key topics and concerns that have been raised through stakeholder engagement, Stakeholder engagement and how the organization has responded to those key topics and concerns. 88 G4-28 Reporting period General information about the report 83 G4-29 Date of most recent previous report General information about the report 83 G4-30 Reporting cycle General information about the report 83 G4-31 Contact point for questions regarding the General information about the report report or its contents 83 G4-32 Report the 'in accordance' option the Goal of formulation and method of determining the organization has chosen. content of the report 83 G4-33 Policy and current practice with regard to The report's assurance seeking external assurance for the report 83 Report Profile Governance G4-34 Governance structure of the organization Applying advanced corporate governance procedures towards sustainable development Reference: FPT’s 2015 Annual Report ( Corporate Governance) G4-35; G4-41 Corporate governance model Applying advanced corporate governance procedures towards sustainable development 100 100 Ethics and Integrity G4-56 Describe the organization’s values, principles, standards and norms of behavior Building unique corporate culture such as codes of conduct and codes of ethics 99 SUSTAINABILITY REPORT 109 06 TEC HN O AUDITED CONSOLIDATED FINANCIAL STATEMENTS ON I T A NT E I R O Y G LO Create new business models based on S.M.A.C and IoT TE C HN O LO GY O RIE N TATION smart solutions and services based on new technologies LOGY ORIENTATION HNO TEC N Research and develop of Pioneering in the digital world: With the desire to bring new values to customers and sustainable growth for the corporation, FPT will pioneer in changing the corporate governance model in the digital form and promote researching and development of smart solutions and services based on new technologies. Build an environment for creative technology ideas development FPT CORPORATION AUDITED CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2015 TABLE OF CONTENTS CONTENTS STATEMENT OF THE BOARD OF MANAGEMENT INDEPENDENT AUDITORS’ REPORT CONSOLIDATED BALANCE SHEET CONSOLIDATED INCOME STATEMENT 112 PAGE(S) 113 - 114 115 116 - 119 120 CONSOLIDATED CASH FLOW STATEMENT 121 - 122 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 123 - 165 ANNUAL REPORT 2015 www.fpt.com.vn STATEMENT OF THE BOARD OF MANAGEMENT The Board of Management of FPT Corporation and its subsidiaries (herein collectively called the “Corporation”) presents this report together with the Corporation’s consolidated financial statements for the year ended 31 December 2015. THE BOARDS OF DIRECTORS AND MANAGEMENT The members of the Boards of Directors and Management of the Corporation who held office during the year and to the date of this report are as follows: Board of Directors Mr. Truong Gia Binh Chairman Mr. Bui Quang Ngoc Vice Chairman Mr. Do Cao Bao Member Mr. Le Song Lai Member Mr. Jean Charles Belliol Member Mr. Tomokazu Hamaguchi Member Mr. Dan E Khoo Member Board of Management Mr. Bui Quang Ngoc Executive President Mr. Nguyen The Phuong Executive Vice President Mr. Nguyen Khac Thanh Executive Vice President Mr. Duong Dung Trieu Executive Vice President Ms. Chu Thi Thanh Ha Executive Vice President (resigned on 31 March 2015) BOARD OF MANAGEMENT’ STATEMENT OF RESPONSIBILITY The Board of Management of the Corporation is responsible for preparing the consolidated financial statements, which give a true and fair view of the financial position of the Corporation and of its results and cash flows for the year in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. In preparing these consolidated financial statements, the Board of Management is required to: • • • • • Select suitable accounting policies and then apply them consistently; Make judgments and estimates that are reasonable and prudent; State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Corporation will continue in business; and Design and implement an effective internal control system for the purpose of properly preparing and presenting the consolidated financial statements so as to minimize errors and frauds. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 113 STATEMENT OF THE BOARD OF MANAGEMENT (Continued) The Board of Management of the Corporation is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Corporation and that the consolidated financial statements comply with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. The Board of Management is also responsible for safeguarding the assets of the Corporation and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. The Board of Management confirms that the Corporation has complied with the above requirements in preparing these consolidated financial statements. For and on behalf of the Board of Management, Nguyen The Phuong Executive Vice President Power of Attorney No. 94.3-2013/QD-FPT-TGD dated 5 August 2013 03 March 2016 114 ANNUAL REPORT 2015 www.fpt.com.vn No: 379/VN1A-HN-BC INDEPENDENT AUDITORS’ REPORT To: The Shareholders The Boards of Directors and Management FPT Corporation We have audited the accompanying consolidated financial statements of FPT Corporation and its subsidiaries (herein collectively called as the “Corporation”), prepared on 03 March 2016 as set out from page 116 to page 165, which comprise the consolidated balance sheet as at 31 December 2015, and the consolidated statement of income and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Corporation’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at 31 December 2015, and its financial performance and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. Tran Thi Thuy Ngoc Deputy General Director Audit Practising Registration Certificate No. 0031-2013-001-1 For and on behalf of DELOITTE VIETNAM COMPANY LIMITED 03 March 2016 Hanoi, S.R. Vietnam Do Hong Duong Auditor Audit Practising Registration Certificate No. 2393-2015-001-1 AUDITED CONSOLIDATED FINANCIAL STATEMENTS 115 CONSOLIDATED BALANCE SHEET FORM B 01-DN/HN As at 31 December 2015 Unit: VND ASSETS Notes 31/12/2015 31/12/2014 18,959,009,136,105 16,709,157,051,316 3,584,709,151,769 4,336,282,447,769 A. CURRENT ASSETS 100 I. Cash and cash equivalents 110 1. Cash 111 1,879,397,318,868 2,072,206,319,316 2. Cash equivalents 112 1,705,311,832,901 2,264,076,128,453 Short-term financial investments 120 2,617,441,917,720 1,428,479,061,776 1. Held-to-maturity investments 123 2,617,441,917,720 1,428,479,061,776 Short-term receivables 130 5,534,209,011,621 4,823,596,166,951 1. Short-term trade receivables 131 4,477,122,078,998 3,919,542,671,301 2. Short-term advances to suppliers 132 346,030,178,124 399,989,196,061 3. Receivables from contracts under percentage of completion method 134 8 516,837,479,455 366,338,086,216 4. Other short-term receivables 136 9 476,421,501,226 380,809,281,784 5. Provision for short-term doubtful debts 137 (282,202,226,182) (243,083,068,411) Inventories 140 5,268,099,617,220 4,572,636,184,140 1. Inventories 141 11 5,332,031,654,362 4,652,333,244,983 2. Provision for devaluation of inventories 149 11 (63,932,037,142) (79,697,060,843) Other short-term assets 150 1,954,549,437,775 1,548,163,190,680 1. Short-term prepayments 151 829,521,434,436 592,794,479,662 2. Value added tax deductibles 152 1,106,181,985,080 921,625,024,678 3. Taxes and other receivables from the State budget 153 18,846,018,259 33,743,686,340 II. III. IV. V. 116 Codes 6 7 12 13 ANNUAL REPORT 2015 www.fpt.com.vn The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN As at 31 December 2015 Unit: VND ASSETS Codes Notes 31/12/2015 31/12/2014 B. NON-CURRENT ASSETS 200 7,086,579,408,323 5,949,186,899,417 I. Long-term receivables 210 348,638,580,505 318,095,904,998 1. Long-term trade receivables 211 242,327,520,000 242,327,520,000 2. Other long-term receivables 216 160,161,888,733 128,140,867,635 3. Provision for long-term doubtful debts 219 (53,850,828,228) (52,372,482,637) Fixed assets 220 4,292,253,138,079 3,300,546,513,939 1. Tangible fixed assets 221 3,971,402,119,342 2,998,002,341,729 II. 222 6,937,072,376,415 5,352,532,953,679 - Accumulated depreciation 223 (2,965,670,257,073) (2,354,530,611,950) 224 1,737,003,927 740,441,475 - Cost 225 2,400,601,505 958,946,192 - Accumulated depreciation 226 (663,597,578) (218,504,717) 319,114,014,810 301,803,730,735 3. Intangible assets IV. V. 14 - Cost 2. Finance lease assets III. 9 227 15 - Cost 228 610,345,105,736 529,387,560,020 - Accumulated amortisation 229 (291,231,090,926) (227,583,829,285) Long-term assets in progress 240 692,575,366,258 537,241,674,698 1. Long-term work in progress 241 13,400,125,582 - 2. Long-term construction in progress 242 679,175,240,676 537,241,674,698 Long-term financial investments 250 727,905,697,262 809,516,549,586 1. Investments in joint-ventures, associates 252 18 271,434,002,318 251,078,173,392 2. Equity investments in other entities 253 7 632,649,372,195 725,588,838,379 3. Provision for impairment of long-term financial investments 254 (176,177,677,251) (167,150,462,185) Other long-term assets 260 1,025,206,626,219 983,786,256,196 1. Long-term prepayments 261 12 808,536,902,438 518,808,795,715 2. Deferred tax assets 262 19 216,669,723,781 131,807,015,837 3. Goodwill 269 26 - 333,170,444,644 26,045,588,544,428 22,658,343,950,733 TOTAL ASSET (270 = 100 + 200) 270 16 The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements AUDITED CONSOLIDATED FINANCIAL STATEMENTS 117 CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN As at 31 December 2015 Unit: VND RESOURCES Notes 31/12/2015 31/12/2014 C. LIABILITIES 300 15,863,302,791,405 13,400,525,192,639 I. Current liabilities 310 14,967,554,324,100 12,969,956,085,573 1. Short-term trade payables 311 2,815,055,125,562 3,018,857,084,191 2. Short-term advances from customers 312 296,629,535,411 347,339,275,912 3. Taxes and amounts payable to the State budget 313 318,469,453,775 250,837,100,459 4. Payables to employees 314 694,086,202,995 726,051,812,032 5. Short-term accrued expenses 315 518,769,375,019 345,478,484,975 6. Payables relating to contracts under percentage of completion method 317 12,916,413,403 15,756,096,426 7. Short-term unearned revenue 318 21 1,491,947,971,642 961,651,628,795 8. Other current payables 319 22 302,282,737,618 347,704,447,655 9. Short-term loans and obligations under finance leases 320 23 8,191,325,008,702 6,722,412,217,259 10. Short-term provisions 321 24 16,952,179,257 24,651,664,341 11. Bonus and welfare funds 322 309,120,320,716 209,216,273,528 Long-term liabilities 330 895,748,467,305 430,569,107,066 1. Long-term advances from customers 332 54,207,388,091 54,437,517,680 2. Long-term unearned revenue 336 21 34,976,753,365 24,528,504,548 3. Other long-term payables 337 22 185,412,671,965 198,449,132,073 4. Long-term loans and obligations under finance leases 338 25 614,354,593,251 142,418,459,294 5. Deferred tax liabilities 341 - 2,929,410,611 6. Long-term provisions 342 6,604,964,350 7,613,986,577 7. Scientific and technological development fund 343 192,096,283 192,096,283 II. 118 Codes 13 20 24 ANNUAL REPORT 2015 www.fpt.com.vn The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN As at 31 December 2015 Unit: VND RESOURCES Codes Notes 31/12/2015 31/12/2014 D. EQUITY 400 10,182,285,753,023 9,257,818,758,094 I. Owner’s equity 410 10,179,535,753,023 9,255,068,758,094 1. Owner’s contributed capital 411 3,975,316,400,000 3,439,766,000,000 - Ordinary shares carrying voting rights 411a 3,975,316,400,000 3,439,766,000,000 2. Share premium 412 26 49,465,703,201 49,465,703,201 3. Treasury shares 415 26 (823,760,000) (823,760,000) 4. Foreign exchange reserve 417 26 (6,549,325,268) (12,569,673,745) 5. Investment and development fund 418 26 79,036,549,084 79,400,040,851 6. Other reserves 420 26 87,227,790,014 87,203,093,024 7. Retained earnings 421 26 4,394,554,749,025 4,268,153,638,489 - Retained earnings accumulated to the prior year end 421a 3,051,113,855,690 3,138,836,839,165 - Retained earnings accumulated of the current year 421b 1,343,440,893,335 1,129,316,799,324 8. Non-controlling interests 429 1,601,307,646,967 1,344,473,716,274 Other resources and funds 430 2,750,000,000 2,750,000,000 1. Non-business expenditure fund 431 2,750,000,000 2,750,000,000 440 26,045,588,544,428 22,658,343,950,733 II. TOTAL RESOURCES (440=300+400) Nguyen Tien Hao Preparer 26 Hoang Huu Chien Chief Accountant Nguyen The Phuong Executive Vice President 03 March 2016 The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements AUDITED CONSOLIDATED FINANCIAL STATEMENTS 119 CONSOLIDATED INCOME STATEMENT FORM B 02-DN/HN For the year ended 31 December 2015 Unit: VND 2015 2014 (Restated) 27 38,707,143,264,487 32,873,026,689,955 02 27 747,444,508,465 228,370,331,060 3. Net revenue from goods sold and services rendered (10=01-02) 10 27 37,959,698,756,022 32,644,656,358,895 4. Cost of sales 11 28 30,465,878,878,610 26,456,135,040,231 5. Gross profit from goods sold and services rendered (20=10-11) 20 7,493,819,877,412 6,188,521,318,664 6. Financial income 21 30 452,546,690,212 367,644,565,708 7. Financial expenses 22 31 620,411,567,508 354,076,323,129 - In which: Interest expense 23 262,502,327,611 166,165,287,204 8. Share of net profit from associates 24 34,474,687,218 40,858,599,445 9. Selling expenses 25 2,226,870,805,958 1,617,818,952,335 10. General and administration expenses 26 2,331,789,496,610 2,236,033,596,342 11. Operating profit (30=20+(21-22)+24-(25+26)) 30 2,801,769,384,766 2,389,095,612,011 12. Other income 31 146,796,066,673 166,755,638,459 13. Other expenses 32 97,416,623,718 96,627,048,433 14. Profit from other activities (40=31-32) 40 49,379,442,955 70,128,590,026 15. Accounting profit before tax 50 2,851,148,827,721 2,459,224,202,037 16. Current corporate income tax expense 51 33 497,001,075,715 399,000,144,668 17. Deferred corporate tax (income) 52 33 (83,937,013,159) (18,900,741,566) 18. Net profit after corporate income tax (60=50-51-52) 60 2,438,084,765,165 2,079,124,798,935 18.1. Equity holders of the Holding Company 61 1,930,895,920,629 1,632,085,087,193 18.2. Non-controlling interests 62 507,188,844,536 447,039,711,742 19. Basic earnings per share (restated, see more detail in Note 34) 70 4,386 3,723 20. Diluted earnings per share 71 4,386 3,723 ITEMS Codes Notes 1.Gross revenue from goods sold and services rendered 01 2. Deductions Nguyen Tien Hao Preparer Hoang Huu Chien Chief Accountant 32 34 Nguyen The Phuong Executive Vice President 03 March 2016 120 ANNUAL REPORT 2015 www.fpt.com.vn The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements CONSOLIDATED CASH FLOW STATEMENT FORM B 03-DN/HN For the year ended 31 December 2015 Unit: VND ITEMS Codes 2015 2014 01 2,851,148,827,721 2,459,224,202,037 - Depreciation and amortisation of fixed assets 02 732,880,119,304 547,273,646,085 - Provisions 03 94,014,920,103 85,434,608,560 - Foreign exchange (gain)/ loss arising from translating foreign currency items 04 (3,154,674,532) (16,872,163,837) - (Gain) from investing activities 05 (318,812,983,950) (405,697,530,891) - Interest expense 06 262,502,327,611 166,165,287,204 08 3,618,578,536,257 2,835,528,049,158 - Changes in receivables 09 (863,521,059,691) (680,600,489,029) - Changes in inventories 10 (693,098,534,961) (1,311,691,368,768) - Changes in payables (excluding accrued loan interest and corporate income tax payable) 11 395,158,777,335 1,085,838,052,344 - Changes in prepaid expenses 12 (526,455,061,497) (107,329,691,370) - Interest paid 14 (211,922,502,790) (202,542,537,509) - Corporate income tax paid 15 (438,294,708,886) (401,600,073,578) - Other cash outflows 17 (124,560,415,953) (66,562,113,848) 20 1,155,885,029,814 1,151,039,827,400 1. Acquisition and construction of fixed assets and other long-term assets 21 (2,090,200,759,463) (1,440,556,923,125) 2. Proceeds from sale, disposal of fixed assets and other long-term assets 22 115,905,779,112 23,157,827,856 3. Cash outflow for lending, buying debt instruments of other entities 23 (1,218,529,160,271) (38,195,216,179) 4. Cash recovered from investments in other entities 26 65,345,000,000 - 5. Interest earned, dividends and profits received 27 226,569,380,961 189,684,494,595 - (203,239,205,312) (2,900,909,759,661) (1,469,149,022,165) I. CASH FLOWS FROM OPERATING ACTIVITIES 1. Profit before tax 2. Adjustments for: 3. Operating profit before movements in working capital Net cash generated by operating activities II. CASH FLOWS FROM INVESTING ACTIVITIES 6. Payment for aquisition of non-controlling interests Net cash used in investing activities 30 The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements AUDITED CONSOLIDATED FINANCIAL STATEMENTS 121 CONSOLIDATED CASH FLOW STATEMENT (Continued) FORM B 03-DN/HN For the year ended 31 December 2015 Unit: VND ITEMS Codes 2015 2014 III. CASH FLOWS FROM FINANCING ACTIVITIES 1. Proceeds from share issue and owners’ contributed capital 31 30,953,970,000 16,388,910,000 2. Capital withdrawals, buy-back of issued shares 32 (4,349,500,000) - 3. Proceeds from borrowings 33 23,921,460,737,848 23,817,428,762,280 4. Repayment of borrowings 34 (21,980,611,812,448) (21,174,638,669,986) 5. Dividends and profits paid 36 (974,001,961,553) (755,758,503,775) Net cash generated by financing activities 40 993,451,433,847 1,903,420,498,519 Net increase/(decrease) in cash (50=20+30+40) 50 (751,573,296,000) 1,585,311,303,754 Cash and cash equivalents at the beginning of the year 60 4,336,282,447,769 2,750,971,144,015 Cash and cash equivalents at the end of the year (70=50+60) 70 3,584,709,151,769 4,336,282,447,769 Nguyen Tien Hao Preparer Hoang Huu Chien Chief Accountant Nguyen The Phuong Executive Vice President 03 March 2016 122 ANNUAL REPORT 2015 www.fpt.com.vn The notes set out on pages 123 to 165 are an integral part of these consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 1. GENERAL INFORMATION Structure of ownership FPT Corporation (the “Company”) was incorporated as a State-owned company in Vietnam and subsequently equitised in accordance with Decision No. 178/QD-TTg, following which the Company officially operated as a joint stock company. FPT Corporation was established under Business Registration Certificate No. 0103001041 issued for the first time by Hanoi Department of Planning and Investment dated 13 May 2002 and its amendments. According to the amended Business Registration Certificate dated 19 December 2008, the Corporation changed its name from the Corporation for Financing and Promoting Technology to FPT Corporation. According to the latest amended Business Registration Certificate dated 26 June 2015, the Corporation’s charter capital is VND3,975,316,400,000. Since December 2006, the Corporation’s shares have been listed on Ho Chi Minh City Stock Exchange. The total number of the Corporation’s employees as at 31 December 2015 was 26,818 (31 December 2014: 22,016). Operating industry and principal activities The principal activities of the Corporation are to provide IT and telecommunication products and services. The main products and services provided are (i) software development including software outsourcing; software solutions, software services and ERP services; (ii) system integration; (iii) informatics services including system management, BPO service, Data Center service etc.; (iv) telecommunication services including internet services and value added services; (v) digital content service including online advertising, AdNetwork etc.; (vi) college, university and postgraduate training services; (vii) production, distribution and retails of IT and telecommunication products. Normal production and business cycle The Company’s normal production and business cycle is carried out for a time period of 12 months or less except some system integration projects are carried out for a time period of more than 12 months. The Company’s structure As at 31 December 2015, FPT Corporation had 9 subsidiaries, as follows: • FPT Information System Corporation; • FPT Trading Company Limited; • FPT Telecom Joint Stock Company; • FPT Software Company Limited; • FPT Education Company Limited; • FPT Online Service Joint Stock Company; • FPT Investment Company Limited; • FPT Digital Retail Joint Stock Company; • FPT Media Company Limited. and 2 associates: • FPT Fund Management Joint Stock Company; • FPT Securities Joint Stock Company. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 123 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 1. GENERAL INFORMATION (Continued) Disclosure of information comparability in the financial statements As stated in Note 3, since 01 January 2015, the Corporation has adopted Circular No. 200/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 200”) guiding the accounting regime for enterprises and Circular No. 202/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 202”) guiding the preparation and presentation of consolidated financial statements. Circular 200 supersedes the regulations for accounting regime promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance. Circular 202 supersedes section XIII in Circular No. 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance guiding the preparation and presentation of consolidated financial statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries”. However, the adoption of such circulars does not have significant impact on the comparability of the figures in the Company’s consolidated financial statements. 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR Accounting convention The accompanying consolidated financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention and in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. The accompanying consolidated financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam. Financial year The Corporation’s financial year begins on 01 January and ends on 31 December. 3. ADOPTION OF NEW ACCOUNTING GUIDANCE On 22 December 2014, the Ministry of Finance issued Circular No. 200/2014/TT-BTC (“Circular 200”) guiding the accounting regime for enterprises and Circular No. 202/2014/TT-BTC (Circular 202) guiding the preparation and presentation of consolidated financial statements. These circulars are effective for financial years beginning on or after 01 January 2015. Circular 200 supersedes the regulations for accounting regime promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/ TT-BTC dated 31 December 2009 issued by the Ministry of Finance. Circular 202 will supersede section XIII in Circular No. 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance guiding the preparation and presentation of consolidated financial statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries”. The Board of Management has adopted Circular 200 and Circular 202 in the preparation and presentation of the consolidated financial statements for the year ended 31 December 2015. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the Company in the preparation of these financial statements, are as follows: Estimates The preparation of the consolidated financial statements in conformity with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting requires management 124 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Estimates (Continued) to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the financial year. Although these accounting estimates are based on the management’s best knowledge, actual results may differ from those estimates. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Company. Intragroup transactions and balances are eliminated in full on consolidation. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the parent’s ownership interests in them. Non-controlling interests consist of the amount of those non-controlling interests at the date of the original business combination and the non-controlling interests’ share of changes in equity since the date of the combination. Losses in subsidiaries are respectively attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Business combinations On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognized as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired is credited to consolidated profit and loss in the period of acquisition. The interest of minority shareholders is initially measured at the minority’s proportion of the net fair value of the assets, liabilities, and contingent liabilities recognized. Investments in associates An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies. The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Interests in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Company’s share of the net assets of the associate. Losses of an associate in excess of the Company's interest in that associate (which includes any long-term interests that, in substance, form part of the Company's net investment in the associate) are not recognized. Where a group entity transacts with an associate of the Company, unrealised profits and losses are eliminated to the extent of the Company’s interest in the relevant associate. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 125 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Goodwill Goodwill represents the excess of the cost of acquisition over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary at the date of acquisition. After acquisition date, if the Parent continues making investment in the subsidiary, it should determine the cost of additional investment and corresponding increase in ownership of the carrying value of the acquired net asset of the subsidiary (not applying fair value as on acquisition date). The difference between the cost of additional investment and the carrying value of the acquired net asset should be recorded directly into retained earnings (similar to transactions among internal shareholders). Goodwill arising on the acquisition date is presented separately as an intangible asset in the consolidated balance sheet and is amortised on the straight-line basis in the consolidated income statement according to current regulation. In case where the amount of goodwill impairment loss in the period is more than the annual amortised amount on the straight-line basis, the loss amount shall be recognised. On disposal of a subsidiary, the attributable amount of unmortised goodwill is reduced corresponding to the disposed share proportion and included in retained earnings in case where the Parent remains its control of the subsidiary, or reduced in full and included in the determination of the profit or loss in case where the Parent loses the control. Financial instruments Initial recognition Financial assets At the date of initial recognition, financial assets are recognized at cost plus transaction costs that are directly attributable to the acquisition of the financial assets. Financial assets of the Corporation comprise cash and cash equivalents, trade and other receivables, short-term and long-term investments. Financial liabilities At the date of initial recognition, financial liabilities are recognized at cost. Financial liabilities of the Corporation comprise trade and other payables, accruals, borrowings, obligations under finance leases and accrued expenses. Subsequent measurement after initial recognition Currently, there are no requirements for the subsequent measurement of the financial instruments after initial recognition. Cash and cash equivalents Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. 126 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Financial investments Held-to-maturity investments Held-to-maturity investments comprise investments that the Corporation has the positive intent or ability to hold to maturity, including term deposits (commercial bills), bonds, preference shares which the issuer shall redeem at a certain date in the future, loans held to maturity to earn periodic interest and other held-to-maturity investments. Held-to-maturity investments are recognised on a trade date basis and are initially measured at acquisition price plus directly attributable transaction costs. Post-acquisition interest income from held-to-maturity investments is recognised in the income statement on accrual basis. Pre-acquisition interest is deducted from the cost of such investments at the acquisition date. Held-to-maturity investments are measured at cost less provision for doubtful debts. Provision for doubtful debts relating to held-to-maturity investments is made in accordance with prevailing accounting regulations. Equity investments in other entities Equity investments in other entities represent the Corporation’s investments in ordinary shares of the entities over which the Company has no control, joint control, or significant influence. Equity investments in other entities are carried at cost less provision for impairment. Provisions for impairment of long-term financial investments Provisions for impairment of long-term financial investments in subsidiaries, joint ventures and associates are made in accordance with Circular No. 228/2009/TT-BTC dated 07 December 2009 issued by the Ministry of Finance on “Guiding the appropriation and use of provisions for devaluation of inventories, loss of financial investments, bad debts and warranty for products, goods and construction works at enterprises”, Circular No. 89/2013/TT-BTC dated 28 June 2013 by the Ministry of Finance amending and supplementing Circular No. 228/2009/TT-BTC and prevailing accounting regulations. In some cases, according to the estimate of the Board of Management, the Corporation prudently makes more provision for impairment of long-term financial investments than required as per the prevailing accounting regulations. Receivables Receivables represent the amounts recoverable from customers or other debtors and are stated at book value less provision for doubtful debts. Provision for doubtful debts is made for receivables that are overdue for six months or more, or when the debtor is in dissolution, in bankruptcy, or is experiencing similar difficulties and so may be unable to repay the debt. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 127 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Inventories Inventories are stated at the lower of cost and net realizable value. Cost comprises direct materials and where applicable, direct labor costs, and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost of inventories within the Corporation is calculated using the first in first out (FIFO) method and inventory recording method is the perpetual method. Net realizable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. The evaluation of necessary provision for inventory obsolescence follows current prevailing accounting regulations which allow provisions to be made for obsolete, damaged, or sub-standard inventories and for those which have costs higher than net realisable values as at the balance sheet date. Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less accumulated depreciation. The costs of purchased tangible fixed assets comprise their purchase prices and any directly attributable costs of bringing the assets to their working condition and location for their intended use. The costs of self-constructed or manufactured assets are the actual construction or manufacturing cost plus installation and test running costs. Tangible fixed assets are depreciated using the straight-line method over their following estimated useful lives: 2015 (Years) Buildings and structures 5 - 25 Machinery and equipment 3 - 25 Motor vehicles 3 - 10 Office equipment 3-8 Other assets 3-5 Finance lease assets and depreciation Finance lease assets acquired from finance lease transactions, whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Assets held under finance leases are recognized as assets of the Corporation at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Corporation’s general policy on borrowing costs. 128 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Intangible assets and amortisation (i) Land use rights Intangible assets represent land use rights that are stated at cost less accumulated amortisation. Definite land use rights are amortised using the straight-line method over the duration of the right to use the land. Indefinite land use rights are not amortised. (ii) License, copyright and patent Purchase price of license is accounted for as intangible asset. License is amortised to the consolidated income statement on straight-line basis over a period of 3 to 5 years. The right to operate the high-speed internet line of Asia America Gateway (“AAG”) project is amortised over 15 years of the operation right. Purchase prices of copyright and patent are capitalized and accounted for as intangible asset. Copyright and patent are amortised to the consolidated income statement on straight-line basis over a period of 3 to 5 years. (iii)Trademark Purchase prices of trademark and brand name are recorded as intangible asset. Trademark and brand name are amortised to the consolidated income statement on straight-line basis over their estimated useful lives. (iv) Computer software Purchase price of new computer software, which is not an integral part of related hardware is capitalized and accounted for as intangible asset. Computer software is amortised to the consolidated income statement on straight-line basis over a period of 3 to 5 years. Construction in progress Properties in the course of construction for production, rental, or administrative purposes, or for the purposes not yet determined, are carried at cost. Cost includes professional fees, and for qualifying assets, borrowing costs dealt with in accordance with the Corporation’s accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Long-term prepayments Long-term prepayments comprise prepaid land rental and its attributable cost and office rental. Prepaid land rentals are charged to the consolidated income statement using the straight-line method over the lease term. Tools and supplies issued for consumption, small devices and office refurbishment are stated at cost and expensed in accordance with the prevailing regulations. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 129 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Payable provisions Payable provisions are made when the Corporation has a present obligation as a result of a past event, and it is probable that the Corporation will be required to settle that obligation. Provisions are measured at the management’s best estimate of the expenditure required to settle the obligation as at the balance sheet date. Provision for warranties The provision for warranties relates mainly to goods sold and services rendered. The provision is based on estimates derived from historical warranty data associated with similar products and services. Provision for guarantees on student loans The provision for guarantees on student loans relates to guarantees made by FPT University to Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) - Ha Thanh Branch and Tien Phong Commercial Joint Stock Bank with regard to loans granted by the banks to selected students of FPT University, under FPT Education Company Limited - a subsidiary of the Company. Bonus and welfare funds The Corporation distributes up to 10% of net profit after tax of subsidiaries to bonus and welfare funds. Revenue recognition Revenue is recognized when the outcome of such transactions can be measured reliably and it is probable that the economic benefits associated with the transactions will flow to the Corporation. Revenue from the sale of goods Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied: (a) the Corporation has transferred to the buyer significant risks and rewards of ownership of the goods; (b) the Corporation retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; (c) the amount of revenue can be measured reliably; (d) it is probable that the economic benefits associated with the transaction will flow to the Corporation; and (e) the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from services Revenue of a transaction involving the rendering of services is recognised when the outcome of such transactions can be measured reliably. Where a transaction involving the rendering of services is attributable to several periods, revenue is recognised in each period by reference to the percentage of completion of the transaction at the consolidated balance sheet date of that year. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied: 130 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) (a) the amount of revenue can be measured reliably; (b) it is probable that the economic benefits associated with the transaction will flow to the Corporation; (c) the percentage of completion of the transaction at the balance sheet date can be measured reliably; and (d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. Revenue from software development, system intergration and informatics services Revenue of a transaction involving the rendering of service is recognised in the consolidated income statement by reference to the percentage of completion of transaction at the year end. The percentage of completion is assessed by performance or the percentage of the incurred expense of the completed work over the total contract cost estimate. Revenue is not recognised if there is material unreliable element related to recovery of receivables. Revenue from processing services Revenue from processing services is recognised in the consolidated income statement when the goods have been processed and accepted by the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the receivables due. Revenue from telecommunication services Revenue from telecommunication services is recognised on pro-rata basis over the period during which the services were actually provided to customers. Revenue from the sale of telephone, internet, and online game prepaid cards is recognised in the consolidated income statement based on the time units actually consumed by users. Subsequently, any unutilized credits are recognised as income upon the expiration of the period of use in accordance with the published expiration policy. Amounts received upon the sale of prepaid cards, but prior to usage or expiration of the value sold, are shown as advance from customers in the consolidated balance sheet. Revenue from online advertising services Revenue from online advertising services is recognised on pro-rata basis over the display period specified in the contract. Revenue from tuition and fees Revenue is recognised in the year when services are rendered. Tuition and fees collected in advance from the students are recorded as unearned revenue on the consolidated balance sheet and released to the consolidated income statement in the year in which the semester falls. Tuition and fee payment Tuition and fees are fully payable in advance prior to the beginning of each semester. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 131 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) Enrolment fee or application fee A one-time fixed application fee is charged per student and collected with applications for enrolment. Proceeds from the application fees are used to defray the costs associated with all procedures relating to processing each student’s enrolment, including the administration of applicable assessment evaluation of prior school records and appropriate placement for the student. The application fee is not refundable. Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable interest rate. Dividend income from investments is recognised when the Corporation’s right to receive payment has been established. Foreign currencies The Corporation applies the method of recording foreign exchange differences in accordance with Circular No. 200/2014/TT-BTC dated 22 December 2014 Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates”. Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. The balances of monetary items denominated in foreign currencies as at the balance sheet date are retranslated at the exchange rates on the same date. Exchange differences arising from the translation of these accounts are recognised in the consolidated income statement. Unrealised exchange gains as at the balance sheet date are not treated as part of distributable profit to shareholders. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Financial statements of foreign operations For the purpose of presenting consolidated financial statements, the assets and liabilities of the foreign operations (including comparative figures) are expressed in reporting currency using exchange rates prevailing on the balance sheet date. Income and expense items (including comparative figures) are translated at the average exchange rates for the year, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Corporation’s foreign exchange reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of. Borrowing costs Borrowing costs are recognised in the income statement in the year when incurred unless they are capitalised in accordance with Vietnamese Accounting Standard No. 16 “Borrowing costs”. Accordingly, borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets. For specific borrowings for the purpose of construction of fixed assets and investment properties, borrowing costs are capitalised even when the construction period is under 12 months. 132 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings per share The Corporation presents basic (EPS) and diluted earnings per share (Diluted EPS) for its ordinary shares. Basic EPS is calculated by having the profit or loss attributable to the ordinary shareholders of the Corporation divided by the weighted average number of outstanding ordinary shares during the year. Diluted EPS is determined by adjusting the profit or loss attributable to the ordinary shareholders and the weighted average number of ordinary shares outstanding taking into consideration the effect of all dilutive potential ordinary shares, which comprise convertible bonds and share options. Related parties Related parties include associates and key management personnel of the Corporation. Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years (including loss carried forward, if any) and it further excludes items that are never taxable or deductible. Deferred tax is recognised on significant differences between carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using balance sheet liability method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Corporation intends to settle its current tax assets and liabilities on a net basis. The determination of the tax currently payable is based on the current interpretation of tax regulations. However, these regulations are subject to periodic variation and their ultimate determination depends on the results of the tax authorities’ examinations. Other taxes are paid in accordance with the prevailing tax laws in Vietnam. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 133 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 5. SEGMENT REPORTING A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business segments. The Corporation has two major segments under the management of FPT Corporation (the “Company”) as follows: Information Technology and Telecommunication • Telecommunication: providing internet services to individuals and households, internet services to enterprises such as providing internet leased line service, domestic and international telecommunication, domain, hosting, Web Portal services, IPTV etc.; • Digital content: providing online services for enterprises and individual customers, including online newspapers (such as VnExpress.net, Ngoisao.net, iOne.net, PCWorld.com.vn, Gamethu.vn etc.); online advertising, AdNetwork, online music, e-payment etc.; • Software development: software production, software development, programming and maintenance services, quality assurance testing, ERP implementation and management services; • System integration: supplying IT equipment, providing application software solution, providing information system integration services for offices, enterprises and organizations in such fields as banking, finance, telecommunication, public health, public utilities and for the Government etc.; • Informatics services: providing business process outsourcing (BPO) service, e-connection services between civils, enterprises and the Government, cloud computing, digital signature authentication, confidentiality, maintenance services for IT, telecommunication and network equipment; • Manufacture, distribution and retails of technology products: producing technology products and distributing IT products including IT hardware, application software for mobile phones via chains of retail IT product shops/showrooms. Investment and education: including the following main activities: • Providing training services in IT, business management majors at high education, university, and postgraduate levels; • Managing investments in associates operating in the finance field; • Managing and developing real estate projects relating to the Corporation’s infrastructure needs. 134 ANNUAL REPORT 2015 www.fpt.com.vn AUDITED CONSOLIDATED FINANCIAL STATEMENTS 135 12,114 242,497 694,502 166,940 150,160 (15,598) (9,019) (298,391) 448,551 - 448,551 Digital content 514,249 2,417,866 3,816,502 741,346 773,627 (299,842) (97,862) (4,485,903) 5,259,530 74,159 5,185,371 Software development 82,858 1,492,760 2,169,229 96,306 160,138 (36,225) (25,084) (2,369,703) 2,529,841 111,983 2,417,858 28,589 515,062 748,470 89,663 55,254 (12,499) (8,655) (817,642) 872,896 38,638 834,258 System Informatics integration services Informatics and Telecommunication 333,461 1,642,669 4,866,102 1,885,196 36,415 (104,574) (45,712) (863,513) 899,928 168,583 731,345 Education and investment 97,486 7,026,508 8,500,116 728,176 859,578 (61,216) (7,837) (24,777,779) 25,637,357 2,399,372 23,237,985 Manufacture, distribution and retails of technology products Segment expenses include cost of sales, selling and administration expenses (not included financial expenses and other expenses). Segment result as segment revenue less segment expenses. 1,835,357 Total expenses for buying fixed assets (i) (ii) 4,955,895 877,505 Segment profit before tax Segment liabilities 889,476 Segment result (ii) 7,260,414 (63,753) Allocation of long-term prepaid expenses Segment assets (543,002) (4,229,600) 5,119,076 14,745 5,104,331 Telecommunication Depreciation and amortisation In which Directly attributable expenses Segment expenses (i) Total segment revenue Inter segment revenue External revenue Segment revenue Items Year 2015 5. SEGMENT REPORTING (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) - (2,429,954) (2,009,746) (1,733,983) 10,512 - 4,291 2,817,992 (2,807,480) (2,807,480) - Elimination 2,904,114 15,863,303 26,045,589 2,851,149 2,935,160 (593,707) (732,880) (35,024,539) 37,959,699 - 37,959,699 Total Unit: VND million FORM B 09-DN/HN 136 ANNUAL REPORT 2015 www.fpt.com.vn (395,850) (116,680) 809,027 833,809 8,803,915 6,308,059 1,087,160 Allocation of long-term prepaid expenses Segment result Segment profit before tax Segment assets Segment liabilities Total expenses for buying fixed assets (3,066,834) 3,875,861 5,959 3,869,902 Telecommunication Depreciation and amortisation In which: Directly attributable expenses Segment expenses Total segment revenue Inter segment revenue External revenue Segment revenue Items Year 2014 5. SEGMENT REPORTING (Continued) 28,573 545,401 937,495 102,223 92,992 (43,732) (12,625) (853,413) 946,405 - 946,405 Digital content 486,089 1,534,916 2,849,138 518,825 544,672 (222,659) (64,864) (3,035,960) 3,580,632 72,991 3,507,641 Software development 86,575 1,891,701 2,677,263 136,682 129,686 (48,043) (27,048) (2,788,836) 2,918,522 211,642 2,706,880 System integration 23,144 505,716 715,724 84,496 34,669 (12,843) (7,231) (745,551) 780,220 56,579 723,641 Informatics services 172,458 1,542,253 4,113,872 2,019,821 74,313 (36,992) (38,862) (700,838) 775,151 165,048 610,103 101,342 6,950,611 8,294,629 589,148 590,953 (59,812) (5,099) (22,260,244) 22,851,197 2,571,113 20,280,084 Manufacture, Education distribution and and inretails of technolvestment ogy products Informatics and Telecommunication These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 6,852 (5,878,132) (5,733,692) (1,825,780) 58,356 - 4,305 3,141,688 (3,083,332) (3,083,332) - Elimination 1,992,193 13,400,525 22,658,344 2,459,224 2,334,668 (540,761) (547,274) (30,309,988) 32,644,656 - 32,644,656 Total Unit: VND million FORM B 09-DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 6. CASH AND CASH EQUIVALENTS Unit: VND 31/12/2015 31/12/2014 217,540,867,601 25,340,467,183 Cash in bank 1,661,856,451,267 2,046,865,852,133 Cash equivalents 1,705,311,832,901 2,264,076,128,453 3,584,709,151,769 4,336,282,447,769 Cash on hand 7. FINANCIAL INVESTMENTS Unit: VND 31/12/2014 31/12/2015 a. Held-to-maturity investments - Term deposit - Other short-term investment Cost Carrying amount Cost Carrying amount 2,646,233,222,047 2,617,441,917,720 1,428,479,061,776 1,428,479,061,776 2,517,867,140,271 2,517,867,140,271 1,299,337,980,000 1,299,337,980,000 128,366,081,776 99,574,777,449 129,141,081,776 129,141,081,776 Unit: VND 31/12/2014 31/12/2015 Cost Provision Cost Provision b. Long-term financial investments b1) Investments in jointventures, associates 137,500,000,000 - 137,500,000,000 - 27,500,000,000 - 27,500,000,000 - - FPT Security Joint Stock Company 110,000,000,000 - 110,000,000,000 - b2) Equity investments in other entities 632,649,372,195 (176,177,677,251) 725,588,838,379 (167,150,462,185) - Vietnam Japan Investment Fund 44,870,000,000 (8,132,510,645) 44,870,000,000 (13,863,410,019) - Vietnam Investment Fund 10,650,000,000 - 21,300,000,000 - 577,129,372,195 (168,045,166,606) 659,418,838,379 (153,287,052,166) - FPT Capital Management Joint Stock Company - Other investments In accordance with Circular No. 200/2014/TT-BTC dated 22 December 2014, the fair value of investments in jointventures, associates and investments in other entities as at 31 December 2015 should be presented. However, due to investments in joint-ventures, associates and investments in other entities were not listed and does not have any guidelines for determination of fair value for unlisted investments, the Corporation has not yet presented the fair value of these investments. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 137 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 8. RECEIVABLES FROM CONTRACTS UNDER PERCENTAGE OF COMPLETION METHOD Unit: VND Recognised revenue to date under percentage of completion method Less: progress billings and advances from customers 9. 31/12/2015 31/12/2014 1,983,467,611,881 1,575,886,912,803 (1,466,630,132,426) (1,209,548,826,587) 516,837,479,455 366,338,086,216 OTHER RECEIVABLES Unit: VND 31/12/2015 31/12/2014 Receivable related to maintenance services 119,119,747,291 92,294,878,439 Receivable related to support from suppliers 183,064,955,871 67,766,893,841 Deposits and mortgages 82,961,439,470 17,841,043,789 Other receivables 91,275,358,594 202,906,465,715 476,421,501,226 380,809,281,784 Deposits and mortgages 95,148,463,192 68,505,297,758 Other receivables 65,013,425,541 59,635,569,877 160,161,888,733 128,140,867,635 a. Current b. Non-current 10. BAD DEBTS Unit: VND 31/12/2014 31/12/2015 Cost Total amount of receivables past due or not past due but impaired 138 ANNUAL REPORT 2015 www.fpt.com.vn 392,429,395,668 Recoverable amount 56,376,341,258 Cost 348,600,694,349 Recoverable amount 53,145,143,301 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 11.INVENTORIES Unit: VND 31/12/2014 31/12/2015 Cost Provision Cost Provision Goods in transit 463,819,057,341 - 236,143,261,376 - Tools and supplies 107,035,823,637 - 47,795,028,308 - Work in progress 891,024,964,660 - 923,735,613,682 - 3,870,151,808,724 (63,932,037,142) 3,444,659,341,617 (79,697,060,843) (63,932,037,142) 4,652,333,244,983 (79,697,060,843) Merchandise Total 5,332,031,654,362 12.PREPAYMENTS Unit: VND 31/12/2015 31/12/2014 Expenditure for transferring to optical fiber system 286,575,813,914 230,952,022,561 Other current prepayments 542,945,620,522 361,842,457,101 829,521,434,436 592,794,479,662 PayTV installation cost 231,193,175,317 - Initial set-up for shops 138,602,169,735 107,326,688,302 Electronic equiment and computer system 92,667,879,184 83,185,177,138 Prepayments for integration systems contracts 83,124,925,964 60,151,963,706 262,948,752,238 268,144,966,569 808,536,902,438 518,808,795,715 a) Current b) Non-current Other non-current prepayments AUDITED CONSOLIDATED FINANCIAL STATEMENTS 139 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 13. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET Movement of taxes and other receivables from/payables to the State budget: Unit: VND 31/12/2014 Amount payable Amount paid and deducted 31/12/2015 Value added tax 84,277,382,292 5,225,221,438,017 5,192,224,451,737 117,274,368,572 - Output value added tax 83,540,166,906 3,330,731,528,402 3,297,702,594,312 116,569,100,996 - Value added tax on imports 737,215,386 1,894,489,909,615 1,894,521,857,425 705,267,576 Import duties 277,672,080 23,163,378,562 23,393,631,436 47,419,206 109,546,113,726 487,718,512,520 438,294,708,886 158,969,917,360 15,612,336,370 219,834,007,962 219,908,092,784 15,538,251,548 6,553,617,502 39,455,463,845 39,379,027,812 6,630,053,535 826,292,149 4,202,121,178 3,864,988,032 1,163,425,295 217,093,414,119 5,999,594,922,084 5,917,064,900,687 299,623,435,516 Items Corporate income tax Personal income tax Foreign contractor withholding tax Other taxes and fees Total In which: 140 - Taxes and other receivables from the State budget 33,743,686,340 18,846,018,259 - Taxes and amounts payable to the State budget 250,837,100,459 318,469,453,775 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 13. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET (Continued) The balance of taxes and other receivables from/payables to the State budget in detail: - Taxes and other receivables from the State budget Unit: VND 31/12/2015 31/12/2014 953,442,792 1,775,552,997 34,802,629 34,802,629 16,955,759,914 31,338,876,708 Personal income tax 370,544,381 204,482,824 Other taxes and fees 531,468,543 389,971,182 18,846,018,259 33,743,686,340 Value added tax Import duties Corporate income tax Total - Taxes and amounts payable to the State budget Unit: VND 31/12/2015 31/12/2014 118,227,811,364 86,052,935,289 82,221,835 312,474,709 175,925,677,274 140,884,990,434 15,908,795,929 15,816,819,194 Foreign contractor withholding tax 6,630,053,535 6,553,617,502 Other taxes and fees 1,694,893,838 1,216,263,331 318,469,453,775 250,837,100,459 Value added tax Import duties Corporate income tax Personal income tax Total AUDITED CONSOLIDATED FINANCIAL STATEMENTS 141 142 ANNUAL REPORT 2015 www.fpt.com.vn 930,452,626,728 As at 31/12/2014 1,785,363,343,240 2,708,178,878,194 2,013,495,514,343 (383,218,640) (5,128,701,697) 492,377,649,500 1,526,629,785,180 4,721,674,392,537 (73,359,958) (6,826,725,230) 10,751,267,443 1,405,830,081,862 3,311,993,128,420 Machinery, equipment 42,286,258,674 40,005,686,543 43,280,872,171 - (1,589,838,906) 5,847,004,063 39,023,707,014 83,286,558,714 - (1,645,182,175) - 3,621,775,201 81,309,965,688 215,653,229,730 210,400,732,365 696,871,417,256 (3,635,616,674) (15,437,252,721) 92,692,237,710 623,252,048,941 907,272,149,621 (655,301,888) (19,120,523,968) - 88,142,696,806 838,905,278,671 Motor vehicles Office equipment 24,246,883,357 64,896,850,979 31,776,319,430 10,183,257 (741,616,791) 19,512,506,686 12,995,246,278 96,673,170,409 - (1,793,659,632) - 61,224,700,406 37,242,129,635 Others 2,998,002,341,729 3,971,402,119,342 2,965,670,257,073 (4,008,652,057) (51,556,430,836) 666,704,728,016 2,354,530,611,950 6,937,072,376,415 (1,026,220,846) (148,844,141,369) 172,913,328,757 1,561,496,456,194 5,352,532,953,679 Total Unit: VND FORM B 09-DN/HN As at 31 December 2015, the cost of the Corporation’s assets including machinery and equipment, motor vehicles and office equipment which had been fully depreciated but are still in use was approximately VND947,480 million (as at 31 December 2014: VND849,055 million). 947,919,971,261 180,246,133,873 - As at 31/12/2015 NET BOOK VALUE As at 31/12/2015 Other increases/(decreases) (28,659,020,721) 56,275,330,057 Charge for the year Disposals 152,629,824,537 1,128,166,105,134 (297,559,000) (119,458,050,364) 162,162,061,314 2,677,201,919 1,083,082,451,265 As at 01/01/2015 ACCUMULATED DEPRECIATION As at 31/12/2015 Other increases/(decreases) Disposals Transfer from construction in progress Purchases As at 01/01/2015 COST Buildings, structures 14. INCREASE, DECREASE IN TANGIBLE FIXED ASSETS These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) AUDITED CONSOLIDATED FINANCIAL STATEMENTS 143 As at 31/12/2014 As at 31/12/2015 NET BOOK VALUE 55,356,387,797 45,575,082,798 3,682,067,852 - Other increases/(decreases) As at 31/12/2015 - 666,968,999 Charge for the year Disposals 3,015,098,853 49,257,150,650 - As at 01/01/2015 ACCUMULATED AMORTISATION As at 31/12/2015 Other increases/(decreases) (9,114,336,000) - Transferred from construction in progress Disposals - 58,371,486,650 Land use rights Purchases As at 01/01/2015 COST 15. INCREASE, DECREASE IN INTANGIBLE ASSETS 71,196,294,687 97,925,214,850 177,796,687,553 6,553,941,911 (2,274,943,799) 35,804,878,071 137,712,811,370 275,721,902,403 310,804,373 (2,414,618,577) 38,810,225,916 30,106,384,634 208,909,106,057 Computer software These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 175,251,048,251 175,613,717,162 109,752,335,521 (6,324,028,216) (38,006,682) 29,258,451,357 86,855,919,062 285,366,052,683 (2,979,947,777) (347,593,770) 12,684,097,922 13,902,528,995 262,106,967,313 Copyright, license and patent 301,803,730,735 319,114,014,810 291,231,090,926 229,913,695 (2,312,950,481) 65,730,298,427 227,583,829,285 610,345,105,736 (2,669,143,404) (11,876,548,347) 51,494,323,838 44,008,913,629 529,387,560,020 Total Unit: VND FORM B 09-DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 16. CONSTRUCTION IN PROGRESS Unit: VND Opening balance Additions Transferred to fixed assets Other decrease Closing balance 2015 2014 537,241,674,698 539,102,696,805 385,429,374,070 220,415,696,445 (224,407,652,595) (209,424,546,745) (19,088,155,497) (12,852,171,807) 679,175,240,676 537,241,674,698 Details by project are as follows: Unit: VND 31/12/2015 31/12/2014 679,175,240,676 537,241,674,698 158,813,175,651 155,652,668,002 92,999,271,455 92,999,271,455 137,777,321,581 5,970,130,972 - 101,233,104,567 289,585,471,989 181,386,499,702 679,175,240,676 537,241,674,698 Long-term construction in progress Construction in progress In which: - Asia Pacific Gateway Cable Network - Nam An Khanh project - FPT office project in Da Nang - F-Town 2 project - Other constructions During the year, total borrowing costs capitalized into the cost of construction in progress was VND3,441 million (2014: VND6,515 million). 17. INVESTMENTS IN SUBSIDIARIES Details of the Corporation’s subsidiaries as at 31 December 2015 are as follows: Place of incorporation and operation FPT Information System Coporation Floor 22, Keangnam Landmark 72, E6 Pham Hung, Me Tri, Tu Liem, Hanoi 100% 100% Providing application software solution, ERP service, IT service and integrated system service Floor 6-12 FPT Cau Giay Building, Duy Tan Street, Cau Giay District, Hanoi 100% 100% Providing software services and products FPT Software Company Limited 144 Proportion Proportion of of Principal activities ownership voting right Name of subsidiary ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 17. INVESTMENTS IN SUBSIDIARIES (Continued) Proportion Proportion of of Principal activities ownership voting right Name of subsidiary Place of incorporation and operation FPT Trading Company Limited FPT Cau Giay Builing, Duy Tan Street, Cau Giay District, Hanoi 100% 100% Producing technology products and distributing IT devices and mobile phones; and manufacturing computers FPT Telecom Joint Stock Company (i) Floor 2, FPT Cau Giay Building, Duy Tan Street, Cau Giay District, Hanoi 45.64% 45.64% Providing ADSL services, fixed line internet services, online advertising and other online services FPT Education Company Limited FPT Cau Giay Builing, Duy Tan Street, Cau Giay District, Hanoi 100% 100% FPT Online Service Joint Stock Company No. 408 Dien Bien Phu Street, Ward 11, District 10, Hochiminh City 51.95% 84.08% FPT Investment Company Limited Floor 13, FPT Cau Giay Building, Duy Tan Street, Cau Giay District, Hanoi FPT Digital Retail Joint Stock Company No. 261 - 263 Khanh Hoi, Ward 5, District 4, Hochiminh City FPT Media Company Limited (ii) FPT Cau Giay Builing, Duy Tan Street, Cau Giay District, Hanoi 100% 100% 85.00% 85.00% 100% 100% Providing training and technology services Providing online services Providing financial services activities (investment consulting service, excluding legal and financial consulting services) Retails of computers, peripheral devices, software and telecommunication equipment; telecom service agent Producing news and entertainment shows; providing telecom and advertising services (i) As at 31 December 2015, FPT Corporation holds 45.64% ownership interest (31 December 2014: 45.64%) and 45.64% of voting rights (31 December 2014): 45.64% at FPT Telecom Joint Stock Company. However, the Corporation has the power to cast the majority of votes at meetings of the Board of Directors of FPT Telecom Joint Stock Company and thus, the Corporation has the power to control the financial and operating policies of FPT Telecom Joint Stock Company. Therefore, the Corporation has control over FPT Telecom Joint Stock Company, and thus, the financial statements of FPT Telecom Joint Stock Company are incorporated in the Corporation’s consolidated financial statements. (ii) On 08 August 2011, Executive President of FPT Corporation issued Decision No. 79.1-2011/QD-FPT TGD on temporarily narrowing the business activities of FPT Media Company Limited. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 145 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 18. INVESTMENTS IN ASSOCIATES Unit: VND 2015 Opening balance 2014 251,078,173,392 225,525,036,285 Share of net profit after corporate income tax of associates 27,689,161,926 32,886,470,107 Dividends received (7,333,333,000) (7,333,333,000) 271,434,002,318 251,078,173,392 Closing balance Details of the Corporation’s associates as at 31 December 2015 in which the Corporation accounted for using the equity method of accounting in its consolidated financial statements are as follows: Name of associate Proportion of ownership and voting right Place of incorporation and operation Principal activities FPT Securities Joint Stock Company Floor 2, 71 Nguyen Chi Thanh Street, Dong Da District, Hanoi 20% Securities trading, brokerage, investment advisory and securities depository services FPT Fund Management Joint Stock Company Floor 9, TTC Building, Lot B1A, Dich Vong Hau Ward, Pham Hung Street, Cau Giay District, Hanoi 25% Portfolio and fund management and other services 19. DEFERRED TAX ASSETS Unit: VND As at 01/01/2015 Transferred to the consolidated income statement of the year Other increase As at 31/12/2015 146 ANNUAL REPORT 2015 www.fpt.com.vn Fixed assets Provisions Revenue Total 20,456,079,360 7,644,891,746 103,706,044,731 131,807,015,837 (944,111,590) (1,202,071,413) 83,153,785,552 81,007,602,549 - - 3,855,105,395 3,855,105,395 19,511,967,770 6,442,820,333 190,714,935,678 216,669,723,781 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 20. SHORT-TERM ACCRUED EXPENSES Unit: VND 31/12/2015 31/12/2014 Accrued expenses for system integration projects 242,366,174,929 155,168,156,355 Others 276,403,200,090 190,310,328,620 518,769,375,019 345,478,484,975 21. UNEARNED REVENUE Unit: VND 31/12/2015 31/12/2014 Unearned revenue related to telecom service 1,141,049,275,657 658,488,407,066 Unearned revenue related to tuition and fees 104,112,569,879 106,146,332,360 Other unearned revenues 246,786,126,106 197,016,889,369 1,491,947,971,642 961,651,628,795 Unearned revenue related to telecom service 15,488,875,267 13,267,875,144 Other unearned revenues 19,487,878,098 11,260,629,404 34,976,753,365 24,528,504,548 a) Current b) Non-current 22. OTHER PAYABLES Unit: VND 31/12/2015 31/12/2014 Trade union fee 35,250,149,382 27,385,555,008 Social, health and unemployment insurance 33,690,405,484 18,094,301,731 127,756,116,846 77,626,861,282 4,901,045,648 5,001,985,839 Marketing support fee received in advance from suppliers 34,293,441,263 51,954,456,378 Other current payables 66,391,578,995 167,641,287,417 302,282,737,618 347,704,447,655 Long-term deposits received 20,051,178,357 17,487,587,117 Other non-current payables 165,361,493,608 180,961,544,956 185,412,671,965 198,449,132,073 a) Current Short-term deposits received Dividends payable b) Non-current AUDITED CONSOLIDATED FINANCIAL STATEMENTS 147 148 ANNUAL REPORT 2015 www.fpt.com.vn 6,722,412,217,259 6,722,412,217,259 230,390,476 113,838,052,738 114,068,443,214 6,608,343,774,045 Amount able to be paid off 23,442,115,614,198 517,406,595 157,608,397,509 158,125,804,104 23,283,989,810,094 Increase Decrease 21,973,202,822,755 230,390,476 113,838,052,738 114,068,443,214 21,859,134,379,541 In the year 8,191,325,008,702 517,406,595 157,608,397,509 158,125,804,104 8,033,199,204,598 Amount 8,191,325,008,702 517,406,595 157,608,397,509 158,125,804,104 8,033,199,204,598 Amount able to be paid off 31/12/2015 Unit: VND FORM B 09-DN/HN (i) Most of short-term loans from banks and business entities are unsecured. These loans can be withdrawn in either Vietnam Dong or United States Dollar. Interest rate is determined as per each specific withdrawal. Total 230,390,476 113,838,052,738 - Current portion of long-term loans (see detail in Note 25) - Current portion of long-term obligations under finance leases 114,068,443,214 6,608,343,774,045 Amount Current portion of long-term loans and liabilities Short-term loans from banks and business entities (i) Item 31/12/2014 23. SHORT-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASE These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 24.PROVISIONS Unit: VND Short-term provisions for warranties Long-term provisions for warranties Long-term provisions for guarantees on student loans Total 24,651,664,341 7,601,081,577 12,905,000 32,265,650,918 Additional provision in the year 30,509,844,819 7,311,247,649 - 37,821,092,468 Reversal of provisions (4,100,648,509) (2,356,522,910) - (6,457,171,419) Utilisation of provisions (34,108,681,394) (5,963,746,966) - (40,072,428,360) As at 31/12/2015 16,952,179,257 6,592,059,350 12,905,000 23,557,143,607 As at 01/01/2015 Warranties The provision for warranties relates mainly to goods sold and services rendered. The provision is based on estimates derived from historical warranty data associated with similar products and services. Guarantees on student loans The provision for guarantees on student loans is made based on credit rating of the outstanding balance of loans granted by Joint Stock Commercial Bank for Investment and Development of Vietnam - Ha Thanh Branch and Tien Phong Commercial Joint Stock Bank to selected students of FPT University under FPT Education Company Limited - a subsidiary of the Company, and guaranteed by FPT University. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 149 150 ANNUAL REPORT 2015 www.fpt.com.vn 114,068,443,214 142,418,459,294 - Amount due for settlement after 12 months 256,486,902,508 948,698,669 255,538,203,839 Amount - Amount due for settlement within 12 months Of which: Total Long-term obligations under finance leases Long-term loans Item 256,486,902,508 948,698,669 255,538,203,839 Amount able to be paid off 31/12/2014 25. LONG-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASE 637,470,927,754 1,302,483,604 636,168,444,150 Increase 121,477,432,907 230,390,472 121,247,042,435 Decrease In the year These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 614,354,593,251 158,125,804,104 772,480,397,355 2,020,791,801 770,459,605,554 Amount 772,480,397,355 2,020,791,801 770,459,605,554 Amount able to be paid off 31/12/2015 Unit: VND FORM B 09-DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 25. LONG-TERM LOANS AND OBLIGATIONS UNDER FINANCE LEASE (Continued) Unit: VND 31/12/2015 31/12/2014 770,459,605,554 255,538,203,839 - 3 year-term 33,942,829,692 88,861,999,162 - 4 year-term 553,729,286,688 54,705,000,000 - 5 year-term 182,787,489,174 111,971,204,677 2,020,791,801 948,698,669 772,480,397,355 256,486,902,508 - Amount due for settlement within 12 months 158,125,804,104 114,068,443,214 - Amount due for settlement after 12 months 614,354,593,251 142,418,459,294 Long-term loans Long-term obligations under finance leases Total Of which: Long-term loans are repayable as follows: Unit: VND 31/12/2015 31/12/2014 On demand or within one year 157,608,397,509 113,838,052,738 In the second year 250,434,604,057 76,178,575,356 In the third to fifth year inclusive 362,416,603,988 65,521,575,745 - - 770,459,605,554 255,538,203,839 157,608,397,509 113,838,052,738 612,851,208,045 141,700,151,101 After five years Less: Amount due for settlement within 12 months (shown under current liabilities) Amount due for settlement after 12 months AUDITED CONSOLIDATED FINANCIAL STATEMENTS 151 152 ANNUAL REPORT 2015 www.fpt.com.vn - 3,975,316,400,000 49,465,703,201 - - - - - Investment and development fund (16,872,163,837) - - - - 733,101,976 - - - - 4,302,490,092 78,666,938,875 Foreign exchange reserve (823,760,000) - - - - - (363,491,767) - - - - - (6,549,325,268) 79,036,549,084 6,020,348,477 - - - - - (823,760,000) (12,569,673,745) 79,400,040,851 - - - - - (823,760,000) Treasury shares 87,227,790,014 24,696,990 - - - - - 87,203,093,024 (27,740,764,485) - - - - 114,943,857,509 Other reserves 4,394,554,749,025 (353,069,038,799) (743,062,805,000) (518,357,230,000) (190,005,736,294) 1,930,895,920,629 - 4,268,153,638,489 31,922,472,870 (756,573,292,500) (687,748,450,000) (158,874,063,869) 1,632,085,087,193 4,207,341,884,795 Retained earnings 8,578,228,106,056 (347,387,485,099) (743,062,805,000) - (190,005,736,294) 1,930,895,920,629 17,193,170,000 7,910,595,041,820 (11,957,353,476) (756,573,292,500) - (158,874,063,869) 1,632,085,087,193 7,205,914,664,472 Total Unit: VND FORM B 09-DN/HN (i) In the year, the Corporation issued 51,835,723 shares for dividend payment of 2014 according to the Company’s Shareholders’ Annual General Meeting of 2015. As at 31/12/2015 Other movements (ii) Dividends declared 518,357,230,000 - Transferred to bonus and welfare funds Stock dividends declared (i) - 17,193,170,000 Profit for the year Shares issued 3,439,766,000,000 49,465,703,201 As at 01/01/2015 - - Other movements - - - 687,748,450,000 - Dividends declared Stock dividends declared - Transferred to bonus and welfare funds - - Profit for the year Share premium 2,752,017,550,000 49,465,703,201 Charter capital As at 01/01/2014 Changes in equity 26. SHAREHOLDERS’ EQUITY These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 26. SHAREHOLDERS’ EQUITY (Continued) (ii) Other movements comprise of the write-off of goodwill arising from business combination at the value of VND333,170,444,644 which was recorded as at 31 December 2014. This goodwill resulted from investment transactions which increased FPT’s ownership at some subsidiaries several years ago. In nature, these investments did not constitute FPT’s control right over subsidiaries; thus, they did not constitute business combination transaction as defined by Circular 202/TT-BTC (“Circular 202”) dated 22 December 2014 guiding the preparation and presentation of consolidated financial statements, effective for financial years starting on or after 01 January 2015. Accordingly, these transactions did not create goodwill as an asset from business combination. Instead, the excess of additional acquisition costs over carrying value of attributable net assets of the subsidiaries should be directly debited to retained earnings as an equity transaction. As such, to record the transactions’ nature more accurately and comply with Circular 202, the Corporation’s Board of Management prudently considered that this goodwill had not met the criteria for asset recognition and decided to derecognize it. Dividends On 03 April 2015, at the Company’s Shareholders’ Annual General Meeting, shareholders approved the plan of stock dividend payment of 2014 at the pay-out ratio of 15% (03 new shares for every 20 shares held) and second cash dividend payment of 2014 at the pay-out ratio of 10% of par value (VND1,000/share) and approved the plan of 2015 cash dividend advance of 20% of par value (VND2,000/share). According to Resolutions of Board of Director No. 01.07-2015/NQ-HDQT-FPT dated 30 July 2015, the Company made cash dividend advance of 2015 at the pay-out ratio of 10% of par value (VND1,000/share). The cash dividend pay-out ratio of the whole year 2015 will be decided by the Company’s Shareholders’ Annual General Meeting in 2016. Number of outstanding shares 31/12/2015 31/12/2014 Number of shares Number of shares Authorised share capital 397,531,640 343,976,600 Issued share capital 397,531,640 343,976,600 397,531,640 342,203,103 In which shares subject to restriction in ownership transfer 4,004,296 1,773,497 Treasury shares (82,376) (82,376) (82,376) (82,376) 397,449,264 343,894,224 397,449,264 342,203,103 3,921,920 1,691,121 Ordinary shares In which shares subject to restriction in ownership transfer Outstanding shares in circulation Ordinary shares In which shares subject to restriction in ownership transfer All ordinary shares have a par value of VND10,000. Each share is entitled to one vote at shareholders’ meetings of the Company. Shareholders are entitled to receive dividends as declared at each point of 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 re-issued. Shares subject to restriction in ownership transfer have a par value of VND10,000. These shares are subject to restrictions according to which shareowners are not allowed to resell their shares within specified term from the date of issuance. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 153 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 27.REVENUE Unit: VND 2015 2014 38,707,143,264,487 32,873,026,689,955 - Sales of finished goods, merchandise 26,583,173,024,305 23,137,125,190,058 - Sales of services 12,123,970,240,182 9,735,901,499,897 747,444,508,465 228,370,331,060 - Sales rebates 244,882,812 664,616,103 - Sales returns 747,199,625,653 227,705,714,957 37,959,698,756,022 32,644,656,358,895 Sales of merchandise and services In which: Deductions Net sales Net sales represent the Corporation’s sales to external parties. For management purpose, the Corporation maintains data of business revenue that comprises the Corporation’s sales to external parties and sales to entities within the Corporation made on the commercial basis. The sales to entities within the Corporation were eliminated on consolidation. An analysis of the composition of the Corporation’s revenue is as follows: Unit: VND Net sales to external parties Net sales to entities within the Corporation Total business revenue 2015 2014 37,959,698,756,022 32,644,656,358,895 2,043,363,930,736 2,485,838,459,847 40,003,062,686,758 35,130,494,818,742 28. COST OF SALES Unit: VND Cost of finished products, goods sold Cost of services rendered (Reversal)/Provision for devaluation of inventories 154 ANNUAL REPORT 2015 www.fpt.com.vn 2015 2014 25,605,786,214,688 20,789,250,295,141 4,875,857,687,623 5,612,112,315,676 (15,765,023,701) 54,772,429,414 30,465,878,878,610 26,456,135,040,231 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 29. PRODUCTION COST BY NATURE Unit: VND 2015 2014 21,059,900,444,318 18,132,407,613,139 Raw materials 3,159,346,972,946 3,356,674,095,833 Labour 4,722,452,975,719 3,091,000,395,774 Depreciation and amortisation 1,326,587,798,427 1,088,035,837,975 Out-sourced services 4,016,977,543,294 4,601,546,584,762 653,079,815,673 453,996,798,691 34,938,345,550,377 30,723,661,326,174 Cost of goods purchased Other monetary expenses 30. FINANCIAL INCOME Unit: VND 2015 2014 Interest from bank deposits and loans 182,528,342,673 169,341,885,541 Foreign exchange gain 164,042,301,703 111,798,087,890 Other financial income 105,976,045,836 86,504,592,277 452,546,690,212 367,644,565,708 31. FINANCIAL EXPENSES Unit: VND 2015 2014 Interest expense 262,502,327,611 166,165,287,204 Foreign exchange loss 247,952,957,200 113,278,556,862 Other financial expenses 109,956,282,697 74,632,479,063 620,411,567,508 354,076,323,129 32. OTHER INCOME Unit: VND Proceeds from disposals of fixed assets Bonuses, commission and compensation received Others 2015 2014 9,998,167,634 11,612,286,435 719,417,204 24,480,366,116 136,078,481,835 130,662,985,908 146,796,066,673 166,755,638,459 AUDITED CONSOLIDATED FINANCIAL STATEMENTS 155 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 33. CORPORATE INCOME TAX EXPENSES Unit: VND 2015 2014 497,887,752,934 396,507,865,288 (886,677,219) 2,492,279,380 497,001,075,715 399,000,144,668 Current corporate income tax expenses - Corporate income tax based on taxable profit in the current year - Adjustments for corporate income tax expenses in previous years to the current year Total corporate income tax expenses Unit: VND 2015 2014 102,218,868,499 82,902,012,067 - Deferred corporate income tax incomes arising from deductible temporary differences (187,099,993,248) (102,746,865,223) - Deferred corporate income tax expenses arising from unrealised profit in the year 944,111,590 944,111,590 (83,937,013,159) (18,900,741,566) Deferred corporate income tax income - Deferred corporate income tax expenses arising from taxable temporary differences Total deferred corporate income tax expenses Under its Business Registration Certificate and prevailing tax regulations, the Corporation is obligated to pay CIT at the rate of 10% of taxable income on software production and service, 10% of taxable income on IT training education and 22% of taxable income on goods sold and the other services rendered. Tax rates applicable to subsidiaries of FPT Corporation are in accordance with the prevailing tax regulations. 34. BASIC EARNINGS PER SHARE In the year ended 31 December 2015, FPT Corporation paid dividend in shares, which led to a retrospective adjustment to the weighted average number of outstanding ordinary shares of the year ended 31 December 2014. Besides, Circular 200 guided calculation of basic earnings per share which considered effect of transferring Bonus and Welfare funds. Accordingly, basic earnings per share of 2015 and 2014 are disclosed as follows: 156 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 34. BASIC EARNINGS PER SHARE (Continued) Unit: VND Accounting profit after corporate income tax Weighted average number of outstanding ordinary shares Transferring bonus and welfare fund 2015 2014 (Restated and reclassfied) 1,930,895,920,629 1,632,085,087,193 396,876,158 395,729,947 190,005,736,294 158,874,063,870 As stated in the consolidated financial statements for the year ended 31 December 2014 4,746 Effect of stock dividends issued in the year Basic earnings per share according to Decision 15/2006 (622) 4,865 4,124 Effect of transferring bonus and welfare fund according to Circular 200 (479) (401) Basic earnings per share included effect of transferring bonus and welfare fund according to Circular 200 4,386 3,723 35. FINANCIAL INSTRUMENTS Capital risk management The Corporation manages its capital to ensure that the Company will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The capital structure of the Corporation consists of net debt (borrowings disclosed in Notes 23 and 25, offset by cash and cash equivalents) and shareholders’ equity (comprising capital, reserves and retained earnings). Gearing ratio Unit: VND 31/12/2015 31/12/2014 Borrowings 8,805,679,601,953 6,864,830,676,553 Less: Cash and term deposits with terms within 12 months 6,102,576,292,040 5,635,620,427,769 Net debt 2,703,103,309,913 1,229,210,248,784 10,182,285,753,023 9,257,818,758,094 0.27 0.13 Equity Net debt to equity ratio Significant accounting policies Details of the significant accounting policies and methods adopted by the Corporation (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in Note 4. Financial risk management objectives The Corporation has set up risk management system to identify and assess the risks exposed the Corporation and designed control policies and procedures to manage those risks at an acceptable level. Risk management system is reviewed on a regular basis to reflect changes in market conditions and the Corporation’s operations. Financial risks include market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 157 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 35. FINANCIAL INSTRUMENTS (Continued) Market risk The Corporation’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and prices. Foreign currency risk management Certain business operations of the Corporation are exposed to risk of foreign exchange rate fluctuation such as distribution, retail, system integration and software export. Despite the fact that for IT products, foreign exchange rate fluctuation is reflected into selling price, the Corporation still proactively hedges and mitigates unidentified risks by closely monitoring principal factors affecting exchange rates as well as taking into account assessments by big financial institutions, taking appropriate hedging measures such as forward contracts, option contracts and other natural hedging measures such as fixing selling exchange rates, advance payment and others. The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are as follows: Unit: VND Assets Liabilities United States Dollar (USD) Euro (EUR) Japanese Yen (JPY) Singapore Dollar (SGD) 31/12/2015 31/12/2014 31/12/2015 31/12/2014 2,339,124,953,902 4,290,685,240,231 789,662,100,983 751,947,302,995 38,814,271,024 14,677,423,763 150,543,970,827 89,076,621,466 193,303,306,462 111,559,790,890 534,644,564,219 499,367,733,911 64,481,616,969 39,420,153,290 141,440,485,866 89,656,703,727 Foreign currency sensitivity analysis The Company is mainly exposed to United States Dollar, Euro, Japanese Yen and Singapore Dollar. The following table details the Company's sensitivity to a 5% increase and decrease in Vietnam Dong against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. For a 5% increase/decrease in the following foreign currencies against Vietnam Dong, the profit before tax in the year would decrease/increase by the following amount: Unit: VND United States Dollar (USD) Euro (EUR) Japanese Yen (JPY) Singapore Dollar (SGD) 2015 2014 (77,473,142,646) (176,936,896,862) 5,586,484,990 3,719,959,885 17,067,062,888 19,390,397,151 3,847,943,445 2,511,827,522 Interest rate risk management The Corporation has significant interest rate risk arising from interest bearing loans which are arranged. The Corporation is exposed to interest rate risk as the Corporation borrows funds in VND and foreign currencies at fixed rates and floating rates. To minimize risks, through analysis and projection, the Corporation has selected appropriate time and terms in the year to make appropriate decisions on maintaining borrowings as well as debt structure between VND and foreign currencies at fixed interest rates. 158 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 35. FINANCIAL INSTRUMENTS (Continued) Market risk (Continued) Share price risk management Shares held by the Corporation are affected by market risks arising from the uncertainty about future prices of such shares. The Corporation manages this risk exposure by setting up investment limits. The Corporation’s Board of Directors also assesses and approves decisions on share investments such as operating industry, investees, etc. The Corporation assesses the share price risk is immaterial. The Corporation is also exposed to equity price risks arising from investments in subsidiaries and associates. The Corporation’s Board of Directors assesses and approves decisions on investments in subsidiaries and associates such as operating industry, investees, etc. Investments in subsidiaries and associates are held for long-term strategic investments rather than trading purposes. The Corporation does not have intention to trade these investments in the foreseeable future. Commodity price risk management The Corporation purchases materials, commodities from local and foreign suppliers for business purpose. Therefore, the Corporation is exposed to the risk of changes in selling prices of materials, commodities. For risk mitigation, the Corporation pays due attention to inventory count, ensuring tight and effective management of inventories from importing stage by evaluating market demand, monitoring inventories on a daily basis to take proper and timely action on the slow-moving goods. Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Corporation. The Corporation has set up a constantly and systematically updated internal rating system in place for assessing and rating customers’ financial capability over time, taking into account the ratings and assessments by intermediary financial organizations as basis for sales on credit to customers. In addition, guarantees are required for most of the Corporation’s customers who are granted with sales on credit. The Corporation monitors its liabilities on an on-going basis, including analysis of aging report and recovery dates, customer updates and assessment etc. to take proper actions. The Corporation also buys insurance for its receivables to mitigate unpredictable risks at reasonable cost. Liquidity risk management The purpose of liquidity risk management is to ensure the availability of funds to meet present and future financial obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in any period is kept to manageable levels relative to the amount of funds that the Corporation believes can generate within that period. The Corporation’s policy is to regularly monitor current and expected liquidity requirements to ensure that the Corporation maintains sufficient reserves of cash, borrowings and adequate committed funding from its shareholders to meet its liquidity requirements in the short and longer term. The Corporation has been able to optimize its payments and made use of credit from customers and counterparties via the central account. The following table details the Corporation’s remaining contractual maturity for its non-derivative financial assets and financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial assets and undiscounted cash flows of financial liabilities based on the earliest date on which the Corporation can be required to pay. The inclusion of information on non-derivative financial assets is necessary in order to understand the Corporation’s liquidity risk management as the liquidity is managed on a net asset and liability basis. AUDITED CONSOLIDATED FINANCIAL STATEMENTS 159 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 35. FINANCIAL INSTRUMENTS (Continued) Liquidity risk management (Continued) Unit: VND Less than 1 year From 1 - 5 years Total Cash and cash equivalents 3,584,709,151,769 - 3,584,709,151,769 Trade and other receivables 5,154,274,387,534 348,027,975,696 5,502,302,363,230 Held-to-maturity investments 2,617,441,917,720 - 2,617,441,917,720 - 456,471,694,944 456,471,694,944 11,356,425,457,023 804,499,670,640 12,160,925,127,663 31/12/2015 Equity investments in other entities Total Unit: VND Less than 1 year From 1 - 5 years Total Loans and obligations under finance leases 8,191,325,008,702 614,354,593,251 8,805,679,601,953 Trade and other payables 3,592,134,230,345 27,232,837,622 3,619,367,067,967 518,769,375,019 - 518,769,375,019 12,302,228,614,066 641,587,430,873 12,943,816,044,939 (945,803,157,043) 162,912,239,767 (782,890,917,276) 31/12/2015 Accruals Total Net liquidity gap Unit: VND Less than 1 year From 1 - 5 years Total Cash and cash equivalents 4,336,282,447,769 - 4,336,282,447,769 Trade and other receivables 4,405,162,382,252 318,045,904,998 4,723,208,287,250 Held-to-maturity investments 1,428,479,061,776 - 1,428,479,061,776 - 558,438,376,194 558,438,376,194 10,169,923,891,797 876,484,281,192 11,046,408,172,989 31/12/2014 Equity investments in other entities Total Unit: VND Less than 1 year From 1 - 5 years Total Loans and obligations under finance leases 6,722,412,217,259 142,418,459,294 6,864,830,676,553 Trade and other payables 3,701,965,935,010 25,406,771,130 3,727,372,706,140 345,478,484,975 - 345,478,484,975 10,769,856,637,244 167,825,230,424 10,937,681,867,668 (599,932,745,447) 708,659,050,768 108,726,305,321 31/12/2014 Accruals Total Net liquidity gap The management assessed the liquidity risk at acceptable level. The management believes that the Corporation will be able to generate sufficient funds to meet its financial obligations as and when they fall due. 160 ANNUAL REPORT 2015 www.fpt.com.vn NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 36. RELATED PARTY TRANSACTIONS AND BALANCES List of related parties: Related party Relationship FPT Fund Management Joint Stock Company Associate FPT Securities Joint Stock Company Associate During the year, the Corporation entered into the following significant transactions with its related parties: Unit: VND 2015 2014 7,333,333,000 7,333,333,000 Dividends received in cash FPT Securities Joint Stock Company As at the balance sheet date, the Corporation had significant outstanding balances with its related parties, as follows: Unit: VND 31/12/2015 31/12/2014 134,366,081,776 214,766,081,776 27,500,000,000 27,500,000,000 110,000,000,000 110,000,000,000 Entrusted investments and loans to FPT Fund Management Joint Stock Company Capital contribution FPT Fund Management Joint Stock Company FPT Securities Joint Stock Company 37. SUBSEQUENT EVENTS According to the Resolution of the Corporation’s Board of Directors No. 01.01 – 2016/NQ-HDQT-FPT dated on 28 January 2016, Mr. Do Cao Bao was appointed as Executive Vice President of FPT Corporation from 15 March 2016. 38. OPERATING LEASE COMMITMENTS Unit: VND 2015 2014 Within one year 226,161,733,224 159,625,884,014 From the second to fifth year inclusive 347,214,773,635 381,010,195,106 After five years 168,642,274,373 77,875,506,660 742,018,781,232 618,511,585,780 AUDITED CONSOLIDATED FINANCIAL STATEMENTS 161 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements FORM B 09-DN/HN 39. CAPITAL COMMITMENTS As at 31 December 2015, the Corporation had approved the following projects: 162 • The plan of investment in FPT Digital Retail Joint Stock Company (FRT) with the total amount of VND250 billion. As at 31 December 2015, the Company had contributed VND170 billion in FRT. • The plan of construction of FPT office - Phase 1 in Da Nang with the total project investment capital of VND495,953,272,931. • The commitment to invest in Asia - Pacific Gateway Cable Network (“APG Project”) through the business cooperation contract with Viettel Group (representated by Viettel Telecom - a member of Viettel Group) and CMC Telecommunication Infrastructure Joint Stock Company. This is the project to build submarine cable network connecting countries in Asia (including Vietnam, Japan, Hong Kong, China, Singapore, Malaysia, Taiwan, South Korea and Thailand). Viettel Telecom acts as a representative for other three entities to participate in this project. Accordingly, the Corporation commits to contributing the total estimated amount of USD10 million equivalent to 25% the total capital of Viettel Telecom contribution as representative in this project. Capital contributions will be made according to the progress of the project and Viettel Telecom’s notification. As at 31 December 2015, the actual contribution of the Corporation to this project was USD7,511,837 equivalent to VND158,813,175,651. • The Corporation is carrying out the construction of FPT Software Park - 2nd Phase located at Lot 3, Hoa Lac Hi-tech Park with the total estimated investment capital of approximately VND271,148,000,000 (including 10% VAT) under Decisions No. 26-2014/QD-FPT-TGD dated 29 April 2014 and No. 4424/2014/QD/FSOFTFID by the Chairman of FPT Software Company Limited dated 07 November 2014. As at 31 December 2015, the Corporation had recorded construction in progress with a carrying value of approximately VND52,637,529,278 (31 December 2014: VND6,709,617,336). • On 25 February 2015, the Corporation entered into a comprehensive cooperation agreement with the Tien Phong Commercial Joint Stock Bank for supporting students who joined the training courses under the 10,000 Bridge Software Engineer program which is held for the period from 2015 - 2020. In this program, approximately 5,000 students will be trained in Japan within 6 -12 months and 5,000 students trained in Vietnam. The students who participate in this training course in Japan will be rewarded financial guarantee by the Corporation equivalent to 90% of their total credit obligations arising at the Bank, with a maximum credit limit of VND400 million. The agreement will come into effect from the date of signing until mutually terminated by both parties. As at 31 December 2015, the number of students participating in the program in Japan are about 256 people, and the total estimated guarantee amount is VND53,289,180,000, respectively. ANNUAL REPORT 2015 www.fpt.com.vn AUDITED CONSOLIDATED FINANCIAL STATEMENTS 163 FORM B 09-DN/HN Provision for short-term doubtful debts Short-term prepayments Other short-term assets Long-term trade receivables Other long-term receivables Provision for long-term doubtful debts Other long-term investments Provision for impairment of long-term financial investments Long-term prepayments 6. 7. 8. 9. 10. 11. 12. 13. 16. 15. 14. Other long-term assets Advances to suppliers Receivables from contracts under (percentage) of completion method Other receivables 4. 5. Trade accounts receivables 3. No corresponding item Short-term investments Provision for impairment of short-term investments 1. 2. Assets I. CONSOLIDATED BALANCE SHEET Item 268 71,299,080,943 523,437,534,683 (157,744,965,065) 259 261 703,175,738,859 - - - 31,785,859,896 592,435,044,749 (295,455,551,048) 258 219 218 211 158 151 139 401,395,904,525 522,982,860,079 134 135 400,189,196,061 132 4,005,225,417,438 (9,405,497,120) 129 131 1,450,892,161,296 31/12/2014 VND 121 Codes According to Decision 15/2006/QD-BTC 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. I. Item Other long-term assets Equity investments in other entities Provision for impairment of long-term financial investments Long-term prepayments Provision for long-term doubtful debts Other long-term receivables Long-term trade receivables Other short-term assets Short-term prepayments Provision for short-term doubtful debts Short-term advances to suppliers Receivables from contracts under percentage of completion method Other short-term receivables Short-term trade receivables Held-to-maturity investments No corresponding item No corresponding item Assets 268 - 518,808,795,715 (167,150,462,185) 254 261 725,588,838,379 (52,372,482,637) 128,140,867,635 242,327,520,000 - 592,794,479,662 (243,083,068,411) 253 219 216 211 155 151 137 380,809,281,784 366,338,086,216 134 136 399,989,196,061 3,919,542,671,301 1,428,479,061,776 31/12/2014 VND 132 131 123 Codes According to Circular 200/2014/TT-BTC Reclassified Reclassified Reclassified Reclassified and changed name Reclassified and changed name Reclassified and changed name Reclassified Reclassified Reclassified Reclassified Reclassified and changed name Reclassified Reclassified and changed name Reclassified Reclassified and changed name Reclassified Reclassified Change As described in Note 03, from 01 January 2015, the Corporation has adopted Circular No. 200/2014/TT-BTC issued by the Ministry of Finance dated 22 December 2014 ("Circular 200"), provides guidance on the accounting for the business. Accordingly, some comparative figures (figures at 31 December 2014) on the consolidated balance sheet, consolidated income statement and consolidated cash flow statement have been reclassified to conform with the data of this year, as follows: The comparative figures of the consolidated financial statements for the financial year ended as at 31 December 2015 are the figures of the audited consolidated financial statements for the year ended 31 December 2014. 40. COMPARATIVE FIGURES These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 164 ANNUAL REPORT 2015 www.fpt.com.vn Short-term provisions Charter capital Financial reserve fund 11. 12. No corresponding item Long-term provisions 10. 418 411 337 87,203,093,024 3,439,766,000,000 12,905,000 142,418,459,294 14. 13. 12. 11. Other reserves No corresponding item Owner’s contributed capital Long-term provisions 420 411 342 332 318 321 319 338 334 986,180,133,343 7. Other current payables 315 Long-term loans and obligations under finance leases Long-term loans and liabilities 9. 338 32,252,745,918 6. Short-term accrued expenses 314 336 Unearned revenue 8. 320 177,252,587,439 5. Payables to employees 312 Long-term unearned revenue Short-term provisions 7. 319 517,896,927,838 4. Short-term advances from customers 311 10. Other current payables 6. 316 647,441,848,103 3. Short-term trade payables 320 No corresponding item Accrued expenses 5. 315 478,420,174,874 2. Short-term loans and obligations under finance leases Long-term advances from customers Payables to employees 4. 313 3,018,857,084,191 1. Resource Codes 9. Advances from customers 3. 312 6,722,412,217,259 II. Item No corresponding item Trade accounts payables 2. 311 31/12/2014 VND Short-term unearned revenue Short-term loans 1. Codes 31/12/2014 VND 87,203,093,024 3,439,766,000,000 7,613,986,577 142,418,459,294 24,528,504,548 54,437,517,680 961,651,628,795 24,651,664,341 347,704,447,655 345,478,484,975 726,051,812,032 347,339,275,912 3,018,857,084,191 6,722,412,217,259 According to Circular 200/2014/TT-BTC 8. Resource II. CONSOLIDATED BALANCE SHEET(Continued) Item According to Decision 15/2006/QD-BTC 40. COMPARATIVE FIGURES (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Reclassified Reclassified Changed name Reclassified Changed name Reclassified Reclassified Reclassified and changed name Reclassified Reclassified Reclassified and changed name Reclassified Reclassified and changed name Changed name Changed name Change FORM B 09-DN/HN AUDITED CONSOLIDATED FINANCIAL STATEMENTS 165 Selling expenses Other income Other expenses Basic earnings per share 2. 3. 4. 5. (Gain) from investing activities 2. 03 March 2016 Nguyen Tien Hao Preparer Share of profit from associates 1. CONSOLIDATED CASH FLOW STATEMENT Cost of sales 1. CONSOLIDATED INCOME STATEMENT Item 05 70 32 31 25 11 Codes 2014 VND 1. 5. 4. 3. 2. 1. Item (Gain) from investing activities No corresponding item Basic earnings per share Other expenses Other income Selling expenses 05 70 32 31 25 11 Codes 2014 VND Reclassified Reclassified Restated Restated Restated Restated Restated Change FORM B 09-DN/HN Nguyen The Phuong Executive Vice President (405,697,530,891) 3,723 96,627,048,433 166,755,638,459 1,617,818,952,335 26,456,135,040,231 According to Circular 200/2014/TT-BTC Cost of sales Hoang Huu Chien Chief Accountant (372,811,060,784) (32,886,470,107) 4,746 123,533,340,100 193,661,930,126 1,702,757,995,648 26,371,195,996,918 According to Decision 15/2006/QD-BTC 40. COMPARATIVE FIGURES (Continued) These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) COMPANY DIRECTORY FPT CORPORATION Head office: FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +84 4 7300 7300 Fax: +84 4 3768 7410 Website: : http:// www.fpt.com.vn Da Nang Representative Office Address: 173 Nguyen Chi Thanh, Hai Chau District, Da Nang City Tel: +84 903 441 333 Ho Chi Minh City Branch Address: Floor 3-4, FPT Tan Thuan Building, Lot L29B-31B-33B, Tan Thuan Street, Tan Thuan Dong Ward, District 7, Ho Chi Minh City (HCMC) Tel: +84 8 7300 7300 Fax: +84 8 7300 7388 Can Tho Representative Office Address: 69 Hung Vuong, Thoi Binh Ward, Ninh Kieu District, Can Tho City Tel: +84 0710 3752666 Fax: +84 0710 752555 SUBSIDIARIES FPT Information System Addrees: Floor 22, Keangnam Building, Pham Hung Road, Nam Tu Liem District, Hanoi Tel: +84 4 3562 6000 Fax: +84 4 3562 4850 Website: http://www.fis.com.vn/ Charter capital: VND850,000,000,000 FPT Education Address: FPT University, Education and Training Zone – Hoa Lac Hi-tech Park, Km29, Thanglong Freeway, Thach That District, Hanoi Tel: +84 4 6291 4068 Fax: +84 4 3768 7718 Website: http://www.fpt.edu.vn Charter capital: VND250,000,000,000 FPT Trading Address: Floor 2, Zodiac Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +84 4 7300 6666 Fax: +84 4 3795 9050 Website: http://phanphoi.fpt.com.vn/ Charter capital: VND680,000,000,000 FPT Online Address: Floor 2, FPT Tan Thuan Building, Lot L29B-31B-33B, Tan Thuan Street, Tan Thuan Dong Ward, District 7, Ho Chi Minh City (HCMC) Tel: +84 87300 9999 Fax: +84 8 7300 9998 Website: http://www.fptonline.net Charter capital: VND140,853,360,000 FPT Software Address: Floor 6, FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +84 4 3768 9048 Fax: +84 4 3768 9049 Website: http://www.fpt-software.com Charter capital: VND700,000,000,000 FPT Retail Address: 261-263 Khanh Hoi, Ward 5, District 4, Ho Chi Minh City Tel: + 84 8 3834 5837 Fax: + 84 8 3834 5839 Website: http://fptshop.com.vn Charter capital: VND200,000,000,000 FPT Telecom Address: Floor 5, PVI Building, No.1 Pham Van Bach Street, Cau Giay District, Hanoi Tel: +84 4 7300 2222 Fax: +84 4 3795 0047 Website: http://www.fpt.vn Charter capital: VND1,246,198,090,000 FPT Investment Address: FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +84 4 7300 7300 Fax: +84 4 3768 7410 Website: http://www.fpt.com.vn Charter capital: VND800,000,000,000 FPT GLOBAL JAPAN Head office Address: 6th Floor, CROSS PLACE Building, Hamamatsu-cho, Shiba Park 1-7-6, Minato-ku, Tokyo, Japan Tel: +81 3 66346868 Fax: +81 3 66346869 Representative offices Osaka Address: Chiyoda Building, East tower 10F, 2-9-4 Higashi Tenma, Kita-ku, Osaka-shi, Osaka-fu 530-0044, Japan Tel:+81 6 6356 1005 Fax:+81 6 6655 1166 Nagoya Address: 33 Sobajima Daini Noritake Building 1-9-9, Noritake, Nakamura-ku, Nagoya-shi, Aichi Pref, 453-0014, Japan Tel: +81 5 2453 1013 Fax: +81 5 2453 1014 THE UNITED STATES Head office Address: 801 East Campbell Rd., Suite 525, Richardson, Texas 75081, USA Tel: +1 214 253 2662 Fax: +1 214 253 2988 Representative offices New York Address: 1385 Broadway, Suite 912, New York, NY 10018, USA Tel: +1 212 418 4793 Los Angeles Address: 801 Parkview Drive North, Ste#100, El Segundo, CA 90245, USA Tel: +1 424 336 9888 Bellevue Address: 13920 SE Eastgate Way, Suite 140, Bellevue, WA 98005, USA Tel: +1 425 590 9125 SINGAPORE Head office Address: 8 Kallang Avenue, 12-09 Aperia Tower 1, Singapore 339509 Tel:+65 6338 4353 Fax:+65 6338 1987 FRANCE Address: Tour Pacific, 11-13 Cours de Valmy, Defense 7, 92977 Paris La Defense, France Tel: +33 1 7329 4749 Fax: +33 1 7329 4500 AUSTRALIA Address: Level 13, 2 Park Street, Sydney NSW 2000, Australia Tel: +61 2 9004 7160 Fax: +61 2 9004 7070 MALAYSIA Address: Suite 9.06, level 9, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia Tel: +60 3 2287 8086 Fax: +60 3 2287 7086 GERMANY Address: Business-Center Dornhofstrasse 34, 63263 Neu-Isenburg, Frankfurt, Germany Tel: +49 6 102 812 534 Fax: +49 6 102 299 938 CAMBODIA Address: 49, Street 306, Sangkat Boeung Keng Kang 1, Khan Chamka Morn, Phnom Penh, Cambodia Tel: +855 236 877 779; +855 236 336 236 Fax: +855 236 877 778 LAOS Address: 61, Unit 03, Dongpalane Street, Sisattanak District, Vientiane, Lao PDR Tel: +856 209 396 465; +855 976 869 160 Renton Address: 901 Powell Avenue SW, Suite 111, Renton, WA 98057, USA Tel: +1 650 931 7246 MYANMAR Address: 60/A Pyidaungzu Yeikthast, Dagon tsp, Yangon, Myanmar Tel: +95 1 218 223; +95 1 1221 668 Fax: +95 1 218 224 Silicon Valley Address: 830 Stewart Dr, Suite 246, Sunnyvale, CA 94085, USA Tel: +1 408 786 7621 FPT SLOVAKIA S.R.O Address: Južnátrieda 6, Košice 040 01, Slovakia Email: [email protected] FPT CORPORATION Head office: FPT Building, Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi Tel: +84 4 7300 7300 Fax: +84 4 3768 7410 www.fpt.com.vn