The half-year financial report has been prepared on a historical cost basis, except for investment



VIETNAM INDUSTRIAL INVESTMENTS LIMITED

ABN 64 063 656 333


ANNUAL REPORT 2015

Corporate Directory

ABN 64 063 656 333


ASX Code: VII


Directors

R.S.L Kwok Independent Non-Executive Director

Chairman

V.H. Lam Managing Director (Chief Executive Officer)

A.A. Young Non-Executive Director

A.D. Walker Independent Non-Executive Director

J.H.S Murray Independent Non-Executive Director


Company Secretary

P Williams


Registered Office in Australia Unit 5A, 1 Station Street SUBIACO Western Australia 6008 Telephone: (618) 9388 0155

Facsimile: (618) 9388 9155

E-mail: administrator@vii.net.au


Website: www.vii.net.au


Auditors

Ernst & Young

11 Mounts Bay Road

PERTH Western Australia 6000


Legal Advisors

DLA Piper

Level 31, Central Park

152-158 St Georges Terrace PERTH Western Australia 6000


Bankers

Australia & New Zealand Banking Group Limited 8 St Georges Terrace

PERTH Western Australia 6000


Bankwest

Bankwest Place 300 Murray Street PERTH Western Australia 6000


Share Registry

Security Transfer Registrars Pty Ltd Suite 1/770 Canning Hwy APPLECROSS Western Australia 6153


Home Exchange

Australian Securities Exchange Limited

Level 40 Central Park, 152-158 St Georges Terrace PERTH Western Australia 6000


Vietnam Operations


Vinausteel Limited

Km9, Vat Cach, Quan Toan Hong Bang District

Hai Phong VIETNAM

Telephone: (84) 31 3850 145

Facsimile: (84) 31 3850 140

E-mail: vinausteel@vinausteel.com.vn

Website: www.vinausteel.com.vn

Austnam Joint Stock Corporation Lane 109 Truong Chinh Street Thanh Xuan

Hanoi VIETNAM

Telephone: (84) 4 3869 1579

Facsimile: (84) 4 3869 1632

E-mail: hn@austnam.com.vn

Website: www.austnam.com.vn


SSESTEEL Ltd

Km9, Vat Cach, Quan Toan Hong Bang District

Hai Phong VIETNAM

Telephone: (84) 31 3850 818

Facsimile: (84) 31 3850 828

E-mail: ssesteel@sse.com.vn

Website: www.thepuc.com.vn


Total Building Systems Limited

2 Flr., SPT Building, 199 Dien Bien Phu Street Ward 12, Binh Thanh District

Ho Chi Minh City VIETNAM Telephone: (84) 8 3843 1917

Facsimile: (84) 8 3843 2072

E-mail: info@tbs.vn

Website: www.tbs.vn


VRC Weldmesh (Vietnam) Company Limited Indochina Park Tower

4 Nguyen Dinh Chieu Street Dakao Ward, District 1

Ho Chi Minh City VIETNAM Telephone: (84) 8 3911 5272

Facsimile: (84) 8 3911 5254

Website: www.vrcvn.com


Contents

Summary of 2015 2

Chairman's Report 3

Operating and Financial Review 4 - 8

Directors' Report 9 - 16

Auditor's Independence Declaration 17

Corporate Governance Statement 18

Consolidated Statement of Financial Position 19

Consolidated Statement of Comprehensive Income 20

Consolidated Statement of Changes in Equity 21

Consolidated Statement of Cash Flows 22

Notes to the Consolidated Financial Statements 23-77

Directors' Declaration 78

Independent Audit Report 79 - 80

ASX Additional Information 81 - 82

VIETNAM INDUSTRIAL INVESTMENTS LIMITED


SUMMARY OF 2015


Corporate

  • Sales revenue from Vietnam operations was $355.937 million (VND5.834 trillion), up 3% on 2014 of

    $297.006 million (VND5.664 trillion).

  • Net profit after tax attributable to the owners of the parent was $9.868 million (2014: net loss after tax attributable to the owners of the parent of $0.528 million).


    Austnam Joint Stock Corporation (VII shareholding 67%)

    Annual sales of 536,634 m², up 35% on 2014 (398,800 m²).

  • Sales revenue was $4.089 million (VND67.025 billion), up 23% on 2014 sales revenue of $2.859 million (VND54.516 billion).

  • Net profit after tax and before non-controlling interests was $0.229 million (VND3.750 billion), up 51% on 2014 net profit of $0.130 million (VND2.487 billion).


    SSESTEEL Ltd (VII shareholding 100%)

  • Rebar sales of 191,267 tonnes, up 51% on 2014 (126,531 tonnes).

  • Wire rod sales of 63,494 tonnes, up 139% on 2014 (26,595 tonnes).

  • Total sales revenue was $202.507 million (VND3.319 trillion), down 4% on 2014 total sales revenue of

    $182.215 million (VND3.475 trillion).

  • Net profit after tax and before non-controlling interests was $5.142 million (VND84.290 billion) (2014: net loss of

    $0.104 million (VND1.983 billion)).


    Total Building Systems Limited (VII shareholding 99%)


  • Revenues were $3.770 million (VND61.790 billion), down 44% on 2014 total revenues of $5.818 million (VND110.946 billion).

  • Net profit after tax and before non-controlling interests was $97,000 (VND1.589 billion) (2014: net loss of

    $32,000 (VND385 million)).


    Vinausteel Limited (VII shareholding 70%)


  • Annual sales of 226,593 tonnes, up 46% on 2014 (154,886 tonnes).

  • Sales revenue was $145.155 million (VND2.379 trillion), up 18% on 2014 sales revenue of $105.721 million (VND2.016 trillion).

  • Net profit after tax and before non-controlling interests was $7.393 million (VND121.182 billion), up 364% on 2014 net profit of $1.369 million (VND26.110 billion).


VIETNAM INDUSTRIAL INVESTMENTS LIMITED

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Dear Shareholders

CHAIRMAN'S REPORT


I am pleased to report excellent results from our operations in Vietnam led by increased activity in housing, commercial and industrial construction.


Net profit after tax attributable to members is $9.868 million, a turn-around of $10.396 million on the net loss after tax of

$0.528 million reported in 2014.


Our rolling mills in Haiphong contributed most of this profit with SSESTEEL achieving a profit after tax of $5.142 million (2014: net loss after tax of $0.104 million) and Group share of Vinausteel's profit $5.175 million (2014 $0.958 million), a pleasing improvement on 2014. The Steel Products Division, Austnam and TBS, also managed to stay in the black with a profit of $0.253 million, little change from 2014's $0.293 million.


We attribute the improved results on the dramatic fall in the international price of iron ore and oil. This had the effect of stimulating construction and enabled our businesses to source lower cost inputs and be more competitive against our competitors that produce steel by the iron ore/blast furnace route. The result was also boosted by the depreciation of the A$ against VND of approximately 14% (Average rates against the A$ of 16,391 in 2015 against 19,070 in 2014).


Indications are that economic activity will continue with robust growth of GDP forecasts of 6.7% for the current year. We can expect to have another satisfactory result in 2016, however, I must caution that there is an issue that could impact adversely on our operations.


Effective from 22 March 2016, the Government imposed a "Safeguard Tax" on imported billets of 23.3% increasing the import tax to 33.3% (Previously 10%). Ostensibly, the tax is to protect the local steel industry from imported products but it has the effect of protecting a small number of steel producers that use iron ore for steel making, to the detriment of the other rolling mills, including ours. Our group, together with some other mills are lobbying (Initially unsuccessfully) against the imposition of the Safeguard Tax. We believe that we have a sound and reasoned argument as to why this tax should not be imposed and we will continue our lobbying efforts.


If we can resolve the tax issue, I believe that we can expect another good year. I commend management on taking advantage of trading conditions in 2015 to achieve an excellent result. Our thanks too to our bankers and suppliers for their support during the year.


ROGER KWOK

Chairman


VIETNAM INDUSTRIAL INVESTMENTS LIMITED

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Vietnam Industrial Investments Limited issued this content on 30 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 31 March 2016 00:33:27 UTC

Original Document: http://www.vii.net.au/Portals/6/EasyDNNNewsDocuments/VII Annual Report 2015.pdf