Audited results turn Kinh Do’s profit into loss

HCMC – Vietnam’s well-known confectionery maker Kinh Do Corporation (KDC) incurred losses of VND61.7 billion in the 2008 business year instead of a profit of VND142.3 billion as earlier reported, shows the consolidated financial report that has been audited.
The huge difference is due to the ways provisions are extracted for long-term equity investment under the Ministry of Finance’s Circular 13/2006/TT-BTC, the southern-listed firm said in a statement on its website.
In the firm’s fourth quarter financial report, Kinh Do did not set aside the provisions for its long-term equity investment in accounting, while the audited report done by Ernst & Young took this into account.
According to the Q4 report released by Kinh Do, the company’s total long-term financial investment as of December 31 was VND902.8 billion, with VND9.14 billion invested in its subsidiaries, VND32.4 billion in joint ventures, and VND835.6 billion in other investments. Its total provision for the falling value of long-term investments as of end-2008 was over VND19 billion.
Besides KDC, many other listed companies also face the same problem. Therefore, in the drafted circular on information disclosure by listed firms, the State Securities Commission requires listed companies to ask auditors to examine their six-month financial reports before publication.