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VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010

TABLE OF CONTENTS

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Corporate information Statement by the Board of Directors Auditor’s report Consolidated balance sheet (Form B 01 – DN/HN) Consolidated income statement (Form B 02 – DN/HN) Consolidated cash flow statement (Form B 03 – DN/HN) Notes to the consolidated financial statements (Form B 09 – DN/HN)

1 2 3 5-8 9 10 - 11 12 - 42

VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY

CORPORATE INFORMATION

Business Registration Certificate No.

0300588569 dated 20 August 2010 issued by the Planning and Investment Department of Ho Chi Minh City.

Board of Management

Mdm Mai Kieu Lien Mr Hoang Nguyen Hoc Ms Ngo Thi Thu Trang Mr Wang Eng Chin Mr Le Anh Minh

Chairwoman Member Member Member Member

Board of Directors

Mdm Mai Kieu Lien Ms Nguyen Thi Thanh Hoa Ms Nguyen Thi Nhu Hang Ms Ngo Thi Thu Trang Mr Tran Minh Van Mr Nguyen Quoc Khanh Ms Nguyen Huu Ngoc Tran Mr Pham Phu Tuan

Chief Executive Officer Executive Director - Supply Chain Executive Director Dairy Farm Development Executive Director - Finance Executive Director - Project Acting Executive Director Production and Products Development Acting Executive Director - Marketing Acting Executive Director - Sales

Legal representative

Mdm Mai Kieu Lien

Chief Executive Officer

Registered office

184-186-188 Nguyen Dinh Chieu Street, Ward 6, District 3, Ho Chi Minh City, SR Vietnam.

Auditor

PricewaterhouseCoopers (Vietnam) Limited

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as well as evaluating the overall presentation of the consolidated financial statements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. 4th Floor. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. This responsibility includes: designing. the Vietnamese Accounting System and applicable regulations in SR Vietnam. and explanatory notes to financial statements including a summary of significant accounting policies. Board of Directors’ Responsibility for the Consolidated Financial Statements The Board of Directors of the Company is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards. 3 . which were approved by the Board of Directors on 28 February 2011. District 1 Ho Chi Minh City Vietnam Telephone: (84-8) 3823 0796 Facsimile: (84-8) 3825 1947 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY We have audited the accompanying consolidated financial statements of Vietnam Dairy Products Joint Stock Company and its subsidiaries (“the Group”). the auditor considers internal controls relevant to the entity’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 entity’s internal controls. including an assessment of the risks of material misstatement of the consolidated financial statements. Saigon Tower 29 Le Duan Street. implementing and maintaining internal controls relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement. We conducted our audit in accordance with Vietnamese Standards on Auditing. These consolidated financial statements include the consolidated balance sheet as of 31 December 2010. whether due to fraud or error. the related consolidated income statement and cash flow statement for the year then ended. as set out on pages 5 to 42. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors. The procedures selected depend on the auditor’s judgment. whether due to fraud or error. Those standards require that we comply with ethical requirements and plan and perform the audit in order to obtain reasonable assurance as to whether the consolidated financial statements are free from material misstatement.PricewaterhouseCoopers (Vietnam) Ltd. In making those risk assessments.

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292 2.765.351.986.363.398.000.214.158.000.985.902 2.473.431.669.274.889) 1.457.000 2.266.431.760.854.354.080 249.072.195 139.219.000 2.454.279.915) 87.400.618 4(a) 3 Note VND 5.657.000.162.792 2009 VND 5.943 (663.054.679.192 37.958 376.134.424.000.124.368.850.444.111) 2.096 21.802.073 16.958 50.566.472.894.369.000.701 (9.229.792 The notes on pages 12 to 42 are an integral part of these consolidated financial statements.917.330 263.556.172.259.455 (596.973.028.500) 1.431 38.346.270.933.266 76.092.080 14.314.487.100) 728.506.656.865.692 2.919.368.625 587.134.657.472.000 2.595.657. 5 .095.368.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 01 – DN/HN CONSOLIDATED BALANCE SHEET As at 31 December 2010 Code ASSETS 100 110 111 112 120 121 129 CURRENT ASSETS Cash and cash equivalents Cash Cash equivalents Short-term investments Short-term investments Provision for diminution in value of short-term investments 130 131 132 135 139 140 141 149 150 151 152 154 158 Accounts receivable Trade accounts receivable Prepayments to suppliers Other receivables Provision for doubtful debts Inventories Inventories Provision for decline in value of inventories Other current assets Short-term prepayments Value Added Tax to be reclaimed Other taxes receivable Other current assets 8(a) 7 6 5 (70.588.069.286 226.971.505.355.727 354.881 1.554 183.472.820) 288.711.000.515 513.253.937 (86.635.321.789.133.311.325.142 426.862.421 32.817 (4.762.162.904.

758.047.924.946 26.059.855.883 82.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 01 – DN/HN CONSOLIDATED BALANCE SHEET (continued) As at 31 December 2010 Code ASSETS (continued) 200 210 218 220 221 222 223 227 228 229 230 240 241 242 250 252 258 259 LONG-TERM ASSETS Long-term receivables Other long-term receivables Fixed assets Tangible fixed assets Cost Accumulated depreciation Intangible fixed assets Cost Accumulated depreciation Construction in progress Investment properties Cost Accumulated depreciation Long-term investments Investments in joint ventures and associates Other long-term investments Provision for diminution in value of long-term investments 260 270 271 272 278 280 Goodwill Other long-term assets Long-term prepayments Deferred income tax assets Other long-term assets TOTAL ASSETS 8(b) 12 11 (108.171.211 104.986) 173.714.502 ══════════════ 4(b) 9(c) 10 9(b) 9(a) Note VND 4.723 (1.467.822.391.150.360.963.051.520.800 2009 VND 3.339.822.229.758 8.877.232.245.577.624.860 ═══════════════ (96.729 100.150.558 53.295.299.693 3.795.871 (1.419.624.482.000 602.071.461.813.629.523.426.266 (89.073.850.112.955.098.059 889.885 4.506.289.405.776.317.740.070 3.653) 39.478.406.773.240 ─────────────── 10.213.428.975 263.799 1.098 97.589 2.453.124.933.036.300.415.797 (43.241.914) 650.036.524.835.113.146.693 23.322 62.865.135.141.816.129.817.659.894.548) 19.242.440 The notes on pages 12 to 42 are an integral part of these consolidated financial statements.275 214.846 27.309.116.545.000 27.489.506.536 1.012) 1.412.798.023 1.151.853.758 2.556.032.571.360 8.489.593.064.084.530 23.223 (3.731.857 194.664 162.091.395.298.551 672.580.589.571.291) 665.582.045) 249.240 ────────────── 8.282.808.112.406.140. 6 .035.

VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 01a – DN/HN CONSOLIDATED BALANCE SHEET (continued) As at 31 December 2010 Code RESOURCES 300 310 311 312 313 314 315 316 319 320 330 331 333 334 336 338 400 410 411 414 417 418 420 439 440 LIABILITIES Current liabilities Short-term borrowings Trade accounts payable Advances from customers Taxes and other payables to the State Budget Payable to employees Accrued expenses Other payables Bonus and welfare fund Long-term liabilities Long-term trade payables Other long-term liabilities Long-term borrowings Provision for severance allowances Unearned revenue OWNERS’ EQUITY Capital and reserves Share capital Treasury shares Investment and development fund Financial reserve fund Undistributed earnings MINORITY INTEREST TOTAL RESOURCES 20.236.223 7.983 6.699 163.000.209.083 20.000.000 12.385 399.162 116.788.363 28.373.910.345.866.431 892.365.000 34.970.983.454.251.012.773.789.870.964. 7 .474.930.530.964.876.272 567.497.257 83.295.983 208.521.865 353.933.771.282 3.000) 1.436.000 (154.417 ─────────────── 10.590.886.660.756.082.705.296.455.508.335 294.595.860 ═══════════════ 2009 VND 1.909.217 35.200.960.687.822 13.734.222.105 182.827.592.397 259.813.000.000.515.120.436.000 51.988 92.000 1.850.150.028.653.290.347.590.035.808.412. 21 21 21 21 21 23 18 13(b) 19 16 17 15 13(a) 14 Note VND 2.282 7.283.000.000 1.484.945.324.682 789.482.883 33.451.416.021.245 264.029.130.195.051.847.454.939.578 2.032.984 1.583.174 6.000) 2.172.512.000.474.909.282.614 256.535 ────────────── 8.592.394.306 92.502 ══════════════ The notes on pages 12 to 42 are an integral part of these consolidated financial statements.433 28.738.347.635 118.721.120 30.763.265.515.000 (669.991.645.531.549.089.293 281.295.072.455.962.983 3.964.

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794.932.455.000) (2.738.447.000.270 (68.199) 2.952.051.432.250.731.276.632.739.508.687) 16.2010 Code CASH FLOWS FROM OPERATING ACTIVITIES 01 02 03 04 05 06 07 07 07 08 09 10 11 12 13 14 15 16 20 Net profit before tax Adjustments for: Depreciation and amortisation (Reversal of provisions)/provisions Unrealised foreign exchange (gains)/losses Gain from disposal of fixed assets Interest expense Interest and dividend income Loss/(profits) from other investing activities Gain from disposal of investment in joint venture Operating profit before changes in working capital Increase in receivables (Increase)/decrease in inventories Increase in payables (Increase)/decrease in prepaid expenses Interest paid Business income tax paid Other receipts from operating activities Other payments on operating activities Net cash inflows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES 21 22 23 23 24 25 26 27 28 28 30 Payment for fixed assets and constructions Proceeds from disposals of fixed assets Purchases of equity securities and bonds Proceeds from disposal of short-term investment Loans collected from a joint venture Investments in other entities Proceeds from divestment in other entities Dividends and interest received Purchases of the minority shareholders’ shareholding in subsidiaries Decrease/(increase) in deposits at banks Net cash outflows from investing activities (121.12.215.743.267.706.422.891.250.420.291.299.358.444 (188.025.243 (14.436 (1.334.423.480 (146.603.450.466.560) 269.731 3.000) 101.960 3.303.110.046.884 (3.096.774.014) 6.793.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 03 – DN/HN CONSOLIDATED CASH FLOW STATEMENT (Indirect method) For the year ended 31.229) (23.074.700.654.577.280) The notes on pages 12 to 42 are an integral part of these consolidated financial statements.250.891. 26 29 26 24(b) 290.757.384.604.411) 453.968.123.090.359.259 4.000) 16.130.842 (134.184) (2.267.136) 6.315.558) (1.949.051) (293.015.000 (15.175 392.207.759.000.654) 607.654) 2.386.021 (200.018.000) 272.942.604 31.959 (275.480) 3.566 10.000.464.570.12.773.327.332.242) (5.468.485.889.000) (1.173) 66.032.381) (42.206.274.226.746.877.641. 10 24.837 (500.788 207.251.608 2.201.901.130.816. 10 .171.078.917.380.969.744 (993.348) 6.663 62.476.2009 VND Notes VND 9.252.980.034.257 (319.000.422) 690.274.493.347.082.820.098 (309.542 234.496.375.573.287.538.302.925) (139.211.639.105) (334.553.517 (654.174) 367.724.502.872.360.896.000 69.000.500.555.041.404.019.506.000.039.000 (2.742 (6.000.774.000) 134.508) (548.

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the Company was equitised following Decision No. On 1 October 2003. The Company was subsequently listed on the Ho Chi Minh City Stock Exchange on 19 January 2006 according to the Listing Licence No. sell and distribute beverages. Post-harvest services. irrigation. nutritious powder and other products from milk. Warehousing. 42/UBCK-GPNY dated 28 December 2005 issued by the State Securities Commission. The principal activities of the Company and its subsidiaries are:              Manufacture and distribute milk cake. Activities supporting agricultural operations such as: supply of seeds of cultivated crops. the Planning and Investment Department of Ho Chi Minh City issued the amended Business Registration Certificate No. fresh milk. Manufacture. Manufacture and sell plastic packages and label printing. cultivation harvest. 12 . On 20 August 2010. powdered milk. Cattle raising and agricultural operations. or “Vinamilk”) was initially established as a State Owned Enterprise under the control of the Ministry of Industry of the Socialist Republic of Vietnam (“SR Vietnam” or “the State”) in accordance with Decision No. equipment. Trading in houses. Cattle raising: supply of breeding animals and breeding techniques. 155/2003/QD-BCN issued by the Ministry of Industry. 0300588569 approving the increase in share capital (Note 20). Trading in food technology.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010 1 GENERAL INFORMATION Vietnam Dairy Products Joint Stock Company (“the Company”. spare parts. 4103001932 issued by the Planning and Investment Department of Ho Chi Minh City. guidance on cultivation techniques. refreshment drinks. the Company was incorporated as a joint stock company under the Law on Enterprises of SR Vietnam according to Business Registration Certificate No. transportation services and loading. grocery and processing foods. On 20 November 2003. materials and chemicals. soil working. Health care clinic operations. bottled milk. 420/CNN/TCLD dated 29 April 1993. soya milk. Manufacture and sell plastic products. roasted-groundfiltered and instant coffee. and Treatments on seeds for multiplication purposes. brokerage and leasing of real estate.

Thuan An. Ho Chi Minh City. the Company held 55% of ownership) issued the Resolution No. previously. Vietnam Dielac Dairy One Member 9 Tu Do Venue. District 3.5% 24.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09a – DN/HN 1 GENERAL INFORMATION (continued) The consolidated financial statements for the year ended 31 December 2010 comprises the financial statements of the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and jointly controlled entities as listed below: 31. New Zealand 20% 20% 20% 20% Horizon Apartment Business Cooperation Contract Miraka Limited (note d) 24. 9E My Phuoc 3 Industrial Zone. Lam Son Dairy Products Joint Stock Company was converted into a one-member limited company under the name of Lam Son Dairy One Member Company Limited in accordance with the Business Registration Certificate No. 13 . on 24 June 2010. Vietnam 214 Tran Quang Khai. PO Box 1091. District 3.3% - - Notes: (a) On 13 April 2010.Singapore Industrial known as F&N Vietnam Foods Zone. Ben Cat District. Limited Company (note b) Da Nang City.12. Subsequently. the shareholders’ meeting of Lam Son Dairy Products Joint Stock Company (in which. 2801074568 issued by the Planning and Investment Department of Thanh Hoa Province. Taupo. Vietnam Lam Son Dairy One Member Company Limited (formerly known as Lam Son Dairy Products Joint Stock Company) (note a) International Real Estate One Member Limited Company Le Mon Industry Zone.2010 31. Binh Duong Province. Ho Chi Minh City. Lam Dong Province.5% 19.5% 24.3% 19. Hai Chau District.2009 % % of % % of of voting of voting ownership right ownership right Name Subsidiaries: Address Vietnam Dairy Cow One Member 184-186-188 Nguyen Dinh Limited Company Chieu. Vietnam - - 100% 100% 100% 100% - - 25% 25% 25% 25% Associates: Asia Saigon Food Ingredients Joint Stock Company Lot C. Don Duong District.12. Vietnam Becker Findlay Allen C Tower 109 Tuwharetoa St. Ho Chi Minh City. Binh Duong Company Limited) (note c) Jointly controlled entities: Dairy Cow Development Project Tu Tra Ward. 01/04/NQ-DHDCD/10 to transfer all of the minority shareholders’ shares to the Vinamilk.5% 24. District 1. Vietnam 100% 100% 100% 100% Victory Real Estate One Member 95 Le Loi. Thanh Hoa Province. Vietnam 100% 100% 100% 100% 100% 100% 55% 55% 184-186-188 Nguyen Dinh Chieu. Company Limited (formerly Vietnam .

VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09a – DN/HN 1 GENERAL INFORMATION (continued) (b) On 11 March 2010. 2 2.000 New Zealand Dollar for a period of 40 years since the date of the initial Overseas Investment Certificate issued on 11 September 2010. As at 31 December 2010.2 Fiscal year The fiscal year of the Group is from 1 January to 31 December. (d) On 30 September 2010. The accounting principles and practices utilised in SR Vietnam may differ from those generally accepted in countries and jurisdictions other than SR Vietnam. Ltd. 2.453 employees (2009: 4. liabilities and owner’s equity to the parent company at book values. Ltd. 463043000209 approving the change in the investor from F&N Foods Pte Ltd. in F&N Foods Vietnam Co.000. dated 4 June 2010 to purchase the holding of F&N Foods Pte. Management Board of Vietnam – Singapore Industrial Zone issued amended Investment Certificate No. As at 31 December 2010. 01/2010/QD to dissolve the legal entity of Victory Real Estate One Member Limited Company and transferred the assets. the Group had 4. Vinamilk had an investment of 179. 389/BKH-DTRNN-DC1 approving Vinamilk's investment in Miraka Limited. to Vietnam Dairy Products Joint Stock Company and the change in the Company’s name from F&N Vietnam Foods Company Limited to Dielac Dairy One Member Company Limited in accordance with the agreement signed between Vietnam Dairy Products Joint Stock Company and F&N Foods Pte. The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than SR Vietnam. a company incorporated in New Zealand with total investment capital of 121.670 employees).315 million Vietnamese Dong (equivalent to 12. The handover procedures were completed on 13 October 2010.. Ltd. the parent company of Victory Real Estate One Member Limited Company – International Real Estate One Member Limited Company – issued the Decision No. (c) On 30 September 2010. 14 . the Vietnamese Accounting System and applicable regulations in SR Vietnam. The consolidated financial statements have been prepared under the historical cost convention. the Planning and Investment Ministry of Ho Chi Minh City issued the amended Investment Certificate No.5 million New Zealand Dollar) in Miraka Limited.1 ACCOUNTING SYSTEM AND ACCOUNTING POLICIES Basis of preparation of consolidated financial statements The consolidated financial statements have been prepared in accordance with Vietnamese Accounting Standards.

and its share of post-acquisition movements in reserves is recognised in consolidated reserves. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given. Accounting policies of joint ventures and associates have been changed where necessary to ensure consistency with the policies adopted by the Group.3 Consolidation In 2010. 15 . net of any accumulated impairment loss. the Group does not recognise further losses. plus costs directly attributable to the acquisition. being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary. Transactions and minority interests The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Unrealised gains and losses on transactions between the Group and its joint ventures and associates are eliminated to the extent of the Group’s interest in the joint ventures and associates. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. equity instruments issued and liabilities incurred or assumed at the date of exchange. Subsidiaries Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. They are de-consolidated from the date that control ceases. The Group’s share of its joint ventures’ and associates’ post-acquisition profits or losses is recognised in the consolidated income statement. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group’s investment in joint ventures and associates includes goodwill identified on acquisition. When the Group’s share of losses in a joint venture or associate equals or exceeds its interest in the joint venture or associate. Investments in joint ventures and associates are accounted for using the equity method of accounting and are initially recognised at cost. generally accompanying a shareholding of between 20% and 50% of the voting rights. unless it has incurred obligations or made payments on behalf of the joint venture or associate. the Company prepared its consolidated financial statements in accordance with Vietnamese Accounting Standard 25 – Consolidated Financial Statements and Accounting for Investments in Subsidiaries. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired. Inter-company transactions. balances and unrealised gains and losses on transactions between group companies are eliminated. Purchases from minority interests result in goodwill. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. the difference is recognised directly in the income statement.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09a – DN/HN 2. Disposals to minority interests result in gains and losses for the Group that are recorded in the income statement. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Joint ventures and associates Joint ventures are contractual arrangements whereby two or more parties undertake an economic activity which is subject to joint control. irrespective of the extent of any minority interest. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Associates are all entities over which the Group has significant influence but not control.

less the estimated costs of completion and selling expenses. Foreign exchange differences arising from these translations are recognised in the income statement.5 Currency The consolidated financial statements are prepared and presented in Vietnamese Dong.10 (a) Investments Short-term investments Short-term investments are investments with maturities less than 12 months from the balance sheet date and investments that are held with the intention to dispose within 12 months from the balance sheet date. Although these estimates are based on the Board of Directors’ best knowledge of current events and actions.8 Trade receivables Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review by the Board of Directors of all outstanding amounts at the year end. 2. actual results may differ from those estimates. 2. 2. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the Vietnam inter-bank rates of exchange ruling at the balance sheet date. Provision for diminution is recognised for short term equity securities where the cost exceeds the fair value of such securities. demand deposits and other short-term investments with an original maturity of three months or less. Bad debts are written off when identified. 2. cash in transit. cost includes all direct expenditure and production overheads based on normal levels of operating activity.7 Cash and cash equivalents Cash and cash equivalents comprise cash on hand. Short-term investments are initially accounted for at cost.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 2. costs of conversion and other costs incurred in bringing the inventories to their present location and condition. where necessary. cash at bank. slow-moving and defective inventory items. for obsolete. Cost is determined by the weighted average method and includes all costs of purchase. Net realisable value is the estimated selling price in the normal course of business. Foreign exchange differences arising from these transactions are recognised in the income statement. 2. 2. 16 . Provision is made.9 Inventories Inventories are stated at the lower of cost and net realisable value. the disclosures of contingent assets and liabilities at the date of financial statements and the amounts of revenues and expenses during the year.6 Form of records applied The Group uses voucher ledgers to record their transactions. In the case of manufactured products. Transactions arising in foreign currencies are translated at exchange rates ruling at the transaction dates.4 Use of estimates The preparation of consolidated financial statements in conformity with Vietnamese Accounting Standards requires the Board of Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities.

The estimated useful lives of the assets are as follows: Years Buildings and structures Machinery and equipment Livestock Motor vehicles Office equipment Software 10 .50 8 . Provision is required if there is evidence of a long-term decline in the value of the securities or in the case where the Group cannot recover its investments. Subsequent expenditure Subsequent expenditure relating to fixed assets that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expense is recognised in the income statement when incurred. Provision is made where there is a diminution in value of these investments.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 2.11 Fixed assets Tangible and intangible fixed assets Fixed assets are stated at historical cost less accumulated depreciation. 17 .10 6 10 3-8 3 The depreciation of land use rights is in accordance with Circular 203/2009/TT-BTC issued by Ministry of Finance on 20 October 2009. they are measured at cost less provision. (c) Long-term investments (i) Long-term bank deposits are those maturing after 12 months from the balance sheet date and are accounted for at cost. Depreciation Fixed assets are depreciated on the straight-line method. (ii) Investments in bonds are classified as long-term when they are held with no intention to dispose within 12 months from the balance sheet date. 2. Disposals Gains and losses on disposals are determined by comparing net disposal proceeds with the carrying amount and are recognised as income or expense in the income statement. land use rights are carried at cost and not amortised.10 (b) Investments (continued) Investments in joint ventures and associates Investments in joint ventures and associates are accounted under the equity method of accounting in the consolidated financial statements. to write off the cost of the assets to their residual value over their estimated useful lives or over the term of the project if shorter. These investments are initially stated at cost of acquisition. Historical cost includes expenditure that is directly attributable to the acquisition of the fixed assets. Subsequently. (iii) Other long-term investments comprise shareholding of less than 20% in listed and unlisted entities which are held with no intention to dispose within 12 months from the balance sheet date. Investments in bonds are initially stated at cost. According to this Circular.

Depreciation Investment properties are depreciated on the straight-line method to write off the cost of the assets over their estimated useful lives. 18 . Other borrowing costs are recognised in the income statement when incurred. 2.50 The depreciation of land use rights is in accordance with Circular 203/2009/TT-BTC issued by Ministry of Finance on 20 October 2009.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 2.12 Leased assets Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Where the Company or its subsidiaries purchase the Company’s equity share capital (treasury shares).13 Investment properties Investment properties are land use rights or a building – or part of a building – or infrastructure held by the Group to earn rentals or for capital appreciation or both rather than for use in the production or supply of goods or services or administrative purposes or for sale in the normal course of business. According to this Circular. Payments made under operating leases are charged to the income statement on the straight-line basis over the period of the lease.14 Share capital and treasury shares Ordinary shares in issue are classified as equity.16 (a) Revenue recognition Sales of goods Revenue from the sale of goods is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. 2. any consideration received less any directly attributable incremental transaction costs is included in equity attributable to the Company’s equity holders.15 Borrowing costs Borrowing costs that are directly attributable to the construction or production of any qualifying assets are capitalised during the period of time that is required to complete and prepare the asset for its intended use. as follows: Years Buildings Infrastructure 10 25 . the consideration paid. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or the likely return of goods. including directly attributable incremental costs. Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction from the proceeds. is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. land use rights are carried at cost and not amortised. 2. 2. Where such shares are subsequently sold or reissued. Disposals Gains or losses on disposals are determined by comparing net disposal proceeds with the net book value and are recognised as income or expense in the income statement.

Final dividends are declared and paid in the following year from undistributed earnings based on the approval of shareholders at the Company’s Annual General Meeting. Interim dividends are declared and paid based on the estimated earnings of the year. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of occurrence affects neither accounting nor taxable profit or loss. based on tax rates that have been enacted or substantially enacted by the balance sheet date. on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. using the liability method.19 Method of reserve appropriation Appropriation to reserve funds in accordance with the Company’s Charter is as follows: Investment and development fund Bonus and welfare fund Financial reserve fund 10% of profit after tax 10% of profit after tax 5% of profit after tax Appropriation to financial reserve fund will cease when the amount reaches 10% of the Company’s paid in capital. (d) Interest income Interest income is recognised on an earned basis. by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 2.17 Deferred income tax Deferred income tax is provided in full. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due.18 Dividend distribution The Company’s net profit after tax is available for appropriation to shareholders as dividends after approval by shareholders at the Company’s Annual General Meeting and after making appropriation to reserve funds in accordance with the Company’s Charter.16 (b) Revenue recognition (continued) Processing services Revenue from processing services is recognised in the income statement when the goods have been processed and accepted. 2. (e) Dividend income Dividend income is recognised in the period in which the dividends are declared by the investee entities. the Board of Directors or the shareholders depending on the nature and magnitude of the transactions involved as stated in the Company’s Charter and financial regulations. Deferred income tax is determined at the tax rates that are expected to apply to the financial year when the asset is realised or the liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. 19 . 2. 2. (c) Sales of services Revenue from the sales of services is recognised in the income statement when the services are rendered. Utilisation of the above reserve funds requires approval of the Chief Executive Officer.

However. and the amount has been reliably estimated. With the implementation of the unemployment scheme. 20 . Up to 31 December 2008. severance allowance to be paid to existing employees as of 31 December 2010 will be determined based on the employees’ years of service as of 31 December 2008 and their average salary for the six-month period prior to the employment termination date. control. directly or indirectly. key management personnel. the Company.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 2. However. If the time value of money is material. The State Capital Investment Corporation holds the largest shareholding in the Company and accordingly is regarded as a related party.21 Provisions Provisions are recognised when: the Company or its subsidiaries have a present legal or constructive obligation as a result of past events. or are not influenced by. Associates and individuals owning. Pursuant to Law on Social Insurance. or are controlled by. it is probable that an outflow of resources will be required to settle the obligation. the Company is required to contribute to an unemployment insurance fund managed by the Vietnam Social Insurance Agency. the Company is no longer required to provide for the service period after 1 January 2009. 2. subsidiaries and fellow subsidiaries are related parties of the Company. an interest in the voting power of the Company that gives them significant influence over the enterprise. In considering each possible related party relationship. the Company. and not merely the legal form. provisions will be measured at their present value using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Provisions are measured at the expenditures expected to be required to settle the obligation. including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. The increase in the provision due to passage of time is recognised as interest expenses. enterprises which are controlled or significantly influenced by the State Capital Investment Corporation are not considered as related parties of the Company for the purposes of disclosure since they do not influence. including holding companies. the provision has been calculated on the basis of a half month’s salary for each employee for each year of service with the Company. employees of the Company are entitled to a severance allowance based on their years of service. This will be paid as a lump sum when the employee leaves the Company. effective from 1 January 2009.22 Provision for severance allowances In accordance with Vietnamese labour laws. or are under common control with. Provisions are not recognised for future operating losses. attention is directed to the substance of the relationship. based on salary levels as of that date. or indirectly through one or more intermediaries.20 Related parties Enterprises and individuals that directly. A provision for severance allowance is made for the estimated liability for employment termination as a result of services rendered by employees. 2.

000.669.121 374.000 100.472.100) ──────────── 70.506.000.378 (36.792 (70.958 ═════════════ 4 (a) INVESTMENTS Short-term investments 2010 VND Investment in unlisted securities Investment in listed securities Short-term deposits at banks Corporate bonds Government bonds 82.292 ══════════════ 2009 VND 82.657.536.865.717.000 87.652.100) ────────────── 2.314.000.000.278) ──────────── 86.080 ═════════════ 2009 VND 636.000 ────────────── 2.848.100 7.762.000 3.566.955.640.500 ════════════ 2009 VND 122.555.092.368.700.100 ════════════ 21 .283.722 3.431.571.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 3 CASH AND CASH EQUIVALENTS 2010 VND Cash on hand Cash at bank Cash in transit Cash equivalents 739.692 ══════════════ Provision for diminution in value of short-term investments Provision for diminution in value of short-term investments has been made to reflect the fall in market prices of the related shares as at the end of the year.979.000.200.500 (23.976 50.657.657.573 14.760.283.253.816.241. Movements in the provision for diminution in value of short-term investments during the year were as follows: 2010 VND Opening balance Increase Reversal Closing balance 86.000.792 2.000 24.500) ────────────── 2.134.014.431.259.660.921.771.865.786.706.669.993.917.792 (86.000.000 ────────────── 2.000 ───────────── 426.400.785 245.000 ───────────── 263.227.506.571.792 1.506.658.000 40.660.200.861 840.162.000.865.007.995.408.488.000.

000 206.270.000.000.548 ═════════════ 2009 VND 96.270.551 ════════════ (ii) Other long-term investments 2010 VND Long-term corporate bonds Other long-term investments: Listed securities Unlisted securities Investment funds Others 600.521.765.000 ───────────── 672.129.151.800 106.000.684.350.000.000 ────────────── 1.061.129.593.000 ───────────── 214.520.955.000.140 20.209.684.343 (18.942.073.000.000.129.232.840) ───────────── 108.000 223.405.045 ──────────── 96.405.405.000 122.725 179.731.000 122.426.072.084.045 30.350.144.315.472 9.580.800.000.826 7.800 ══════════════ 2009 VND 200.045 ════════════ 22 .000.470.000 9.000.677.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 4 (b) (i) INVESTMENTS (continued) Long-term investments Investments in associates and joint ventures 2010 VND Long-term equity investments in associates and joint ventures: Asia Saigon Food Ingredients Joint Stock Company Horizon Apartment – Business Cooperation Contract Dairy Cow Development Project Miraka Limited 2009 VND 17.146.826 7.996.633.725 ──────────── 26.023 ═════════════ 9.800.036.942.073.000.209.440 ═════════════ (iii) Provision for diminution in value of long-term investments The movements in the provision for diminution in value of long-term investments are as follows: 2010 VND Opening balance Increase Reversal Closing balance 96.319.300 106.

696.712.270.013.321.350.487 124.487.144.902 ══════════════ 2009 VND 375.002.930 574.382 425.135 ────────────── 2.409.862 96.727 ═════════════ 2009 VND 513.358.001.047.664.524 34.084.379.280.881 ══════════════ Provision for decline in value of inventory 23 .236.527.132.418.455 ═════════════ 2009 VND 831.139 7.379.373 377.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 5 TRADE ACCOUNTS RECEIVABLE 2010 VND Third parties 587.917.765.915) ────────────── 2.701 (9.354.805 7.367.837.359 250.894.229.162 86.091.588.695.647.214.986 5.195 ═════════════ 6 OTHER RECEIVABLES 2010 VND Dividends receivable Interest income Interest income receivable on bonds and loans Import tax refundable Claims to suppliers Others 54.113.454.120.505.563.560.668.656.817 (4.735.056.457.444.346.173.351.477.101.943 ════════════ 7 INVENTORIES 2010 VND Goods in transit Raw materials Tools and supplies Work in progress Finished goods Merchandise inventories Goods on consignment 623.339.007 2.207.956.813.054.711.916 6.788 1.979.133.000 56.215 34.715.545.078 ──────────── 76.440 5.850.355.820) ────────────── 1.264 ───────────── 183.192.969.274.549 11.946 ────────────── 1.904.311.567.156.807 5.731.705 15.057 8.642.664.

warehouse and other rental expenses Software development and server maintenance expenses Tool and supplies Other expenses 2.384 2.667.400.849 4.494 7.072 ───────────── 194.764.117.915 ═══════════ 8 (a) PREPAYMENTS Short-term prepayments 2010 VND Advertising expenses Freezers and coolers Land.012.497.558 ═════════════ 1.505.133.505.002.122.881.838.594.805.914 2009 VND 14.306.214.595.102 2.714.004.656.802.137.308 3.543 4.225.057 (6.536.379.390.883 2009 VND 3.727.136 7.192 ════════════ 8.740.099.212.986.780.021.823 29.194.656.339) (6.162 4.509.813.830) ──────────── 9.003 2.606.359.163 13.432.674.386.557.007.249.732.401.978.186.843 ──────────── 21.166 (28.024 ──────────── 97.987 ──────────── 38.844.286 6.267.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 7 INVENTORIES (continued) The movements in the provision for decline in value of inventory are as follows: 2010 VND Opening balance Increase Reversal Utilisation Closing balance 9.304.774.726.317.372.820 ════════════ 24 .073 ════════════ (b) Long-term prepayments 2010 VND Land rental Freezers and coolers Other expenses 86.072.596.900.473.301) (5.404.685.661) ─────────── 4.992 2.091.820 6.322 ════════════ 2009 VND 189.

170.558 31.062. 25 .766.680.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 8 (b) PREPAYMENTS (continued) Long-term prepayments (continued) Movement of long-term prepayments during the year was as follows: 2010 VND Opening balance Increase Charge to income statement Transfer to intangible fixed assets Other decrease Closing balance 194.017.559.534) ───────────── 194.676.714.032) (14.285 (1.893) (77.091.813.852.512.091.755.438) ──────────── 97.328.558 ═════════════ Other decrease during 2010 mainly represents a portion of long-term prepayments to be allocated within a year.740.190) (49.900.126 (480.743.714.437.136.322 ════════════ 2009 VND 195.998 13.

652 (249.481) (19.639.190) (9.683) (45.220 ──────────── 1.832 31.740.299) (363.448.618.737 (2.433.348.496) (5.434) ───────────── 778.146.531.097 (423.765) ──────────── 16.864.782 ════════════ 1.311.050.306.626 ═════════════ 38.738) (218.195.978.467.736 30.550.668) ──────────── 89.486.468.529.037 11.643.835.002 ───────────── ───────────── 3.406.619.567.955 33.859 ══════════════ 237.866.924.871.122 65.904 23.844.150.311.737.928.506.734 14.687) (11.325) ────────────── 1.304) ────────────── 4.904) (33.266 223.042 (6.010) (110.619.221.751.057 8.934.582.489.030) (109.336.144.558.735.629.854) (26.084.680 (64.611.536.909.506 ════════════ 92.300.443.120.503.894.378.314.492.779.121 65.475) (2.272.228) (25.512.546.522.245.936 (2.547) (8.281.097 (398.000) ───────────── 330.279.739.663.051.103) (10.724.382.308.230.370.496) ───────────── 220.064.317.144 43.837 ════════════ 29.799 ════════════ 86.849 ───────────── 114.175.745 67.260.038.132.090.871 ────────────── Accumulated depreciation At 1 January 2010 Charge for the year Additions due to business combination Transfers to investment properties Reclassifications Disposals Other decreases At 31 December 2010 164.706.436 181.543 68.425.506.750 31.849.426.299) (84.712.697.508.114.421.692.191.577.302 65.581.426.299.227.576.992.135.645.900.300 (24.955.250 480.332.248.125.580.123.309.629 67.078.885 ────────────── 354.211 233.223 ───────────── 76.793 109.879.401.502.974.561 ───────────── 933.544.712.260.852.091.489 19.956 ──────────── 8.427) 2.629 5.113.323 1.078.025.506.070 ══════════════ 2.970.107.091.057 (62.234.356.159.672.269.371.718.000) (64.216.936.019.814 897.306.702.083.986 ────────────── Net book value At 1 January 2010 At 31 December 2010 438.400) ───────────── 123.041.500 3.565.213.041 1.978.890 ═════════════ 558.708 ══════════════ 1.781 ═════════════ 1.026 ────────────── 117.342 ───────────── 2.430 (1.933.214.244.580.531) (235.793.956.236.653 276.501.592.934.523.997 (756.567.358.364.680.589.703.133.804.574 70.197 (70.958) (433.676.512.652.269) 562.376.531.489.885 ══════════════ 26 .761.167 ═════════════ 206.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 9 (a) FIXED ASSETS Tangible fixed assets Buildings and structures VND Historical cost At 1 January 2010 New purchases Transfers from construction in progress Transfers from inventory Additions due to business combination Other additions Transfers to investment properties Reclassifications Disposals Other decreases At 31 December 2010 Machinery and equipment VND Motor vehicles VND Office equipment VND Livestock VND Total VND 603.166.754.415.443.072.450.430.778.743.626 3.801.022.739.393) ────────────── 1.723 196.288 37.555.611.000) ────────────── 2.464.870) ───────────── ───────────── 176.571 (43.768.468.090.822.649) (55.994.

160).082.241.869 ════════════ 7.000 ───────────── 263.984 ──────────── 49.266 ───────────── 35.190 82.798.959.339 30.090.125.253.406.624 Software VND Total VND The amortisation of the Group’s land use rights ceased from 1 January 2004 following the Decision No.125.584.971.883 ═════════════ 173.787 ──────────── 85.186 30.624 46.098. but which are still in active use.751).720 ════════════ 39. but which are still in active use.142.291 ──────────── 11.685.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 9 (a) FIXED ASSETS (continued) Tangible fixed assets (continued) Included in the cost of tangible fixed assets were assets costing VND647. 206/2003/QD-BTC issued by the Ministry of Finance dated 12 December 2003 which regulated that freehold land use rights are carried at cost and not amortised.366.136.755.055.255 ═════════════ 15.142 which were fully depreciated as of 31 December 2010 (31 December 2009: VND26.483.705.597 3.055.984.054 ──────────── 89.523.395. 27 .555.224 ──────────── Net book value At 1 January 2010 At 31 December 2010 24.099.797 33.360.479 ───────────── Accumulated amortisation At 1 January 2010 Charge for the year Additions due to business combination Transfer from short-term and long-term prepayments At 31 December 2010 5.600.553.339.845 62.584.278.282.171.523.505.776.310.067.271.924.589.000 ───────────── 213.984 31.889. (b) Intangible fixed assets Land use rights VND Historical cost At 1 January 2010 New purchases Additions due to business combination Transfer from short-term and long-term prepayments At 31 December 2010 85.959.069.253.299.505.604.750.457.604.298.600.067 ──────────── 5.596.339 43. Included in the Group’s cost of intangible fixed assets were assets costing VND18.608.347.116.591 which were fully depreciated as of 31 December 2010 (31 December 2009: VND620.054 ──────────── 47.312.229.233.490.310.014 ═════════════ 165.659.338.914 10.655 62.871.310.200 29.633.553.975 ═════════════ ──────────── 42.289.728 10.

394 51.764.772.302) (12.453.969) ───────────── 665.733.832) ───────────── 650.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 9 (c) FIXED ASSETS (continued) Construction in progress (continued) 2010 VND Opening balance Additions Transfers to tangible fixed assets Transfers to investment properties Transfers to inventory Disposals Other decreases Closing balance 650.521.457 731.166.648.891 ═════════════ 2009 VND 313.265) (1.733.389.322.929.857.323.846 ═════════════ 28 .391.411.729 ═════════════ Main projects belong to these following locations: 2010 VND Head Office Saigon milk factory Tien Son milk factory Truong Tho milk factory 277.867.636.995 ═════════════ 2009 VND 356.909.565 114.767.846 1.361.282.435 36.837.102 49.391.140.263) (1.929.440 (1.140.544.340.529.836) (4.507.051 185.175.734.041.794.146.225.453.683.401.182.021) (643.320 (432.013.495.155.652 31.

818.030 (161.796 ─────────── 5.000 ═════════════ 100.197 ─────────── 11.737.489.955.213.159.449.421.450 ────────── 544.290.697.000 ════════════ ═══════════ 5.059.713 423.576.489.755 24.376.427 3.474 ────────── 2.977.223 ───────────── 27.974 1.012 ─────────── Net book value At 1 January 2010 27.701.211 ═════════════ The land use rights of the Group represented freehold land in Hai Chau District.872.299 ─────────── 3.425.242.269 161.758.958 ───────────── 104.626.978.863.988.626.933.150.815. 29 .340.879.291 62.489.376.411.450) ─────────── 2.459.489.796) ──────────── 70.366.000 ──────────── 709.318.150.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 10 INVESTMENT PROPERTY Land use rights VND Infrastructure VND Buildings VND Total VND Historical cost At 1 January 2010 Transfers from construction in progress Transfers from tangible fixed assets Reclassifications ──────────── At 31 December 2010 27. Da Nang City and was carried at cost and not amortised.723 ═══════════ ════════════ 67.817.546.150.878.489.545.279.994.000 27.000 Accumulated depreciation At 1 January 2010 Charge for the year Transfers from tangible fixed assets Reclassifications ────────── At 31 December 2010 ────────── 358.488 ════════════ 27.265 64.000 ════════════ At 31 December 2010 27.150.538 ─────────── 2.489.863.531 (3.150.026 ──────────── 12.290.182.958 398.150.417.

933.933. the Company acquired the remaining shares (45%) from the minority shareholders of its subsidiary – Lam Son Dairy One Member Company Limited (formerly known as Lam Son Dairy Products Joint Stock Company).520. Ltd.731. in F&N Foods Vietnam Co.680.230 6. respectively.057) ──────────── 19.059 9..059 ════════════ 2009 VND ───────── ═════════ 30 . Ltd. Ltd.721 (1. on 13 October 2010.520.344.275.808.556. dated 4 June 2010 to purchase the holding of F&N Foods Pte.865.829 ──────────── 53.236.664 ════════════ 12 DEFERRED INCOME TAX ASSETS The gross movement in the deferred income tax.696. 2009 VND 47. Movements of goodwill during the year were as follows: 2010 VND Opening balance Increase Charged to the income statement Closing balance 20.536 ════════════ The deferred income tax asset mainly arises from the provisions and accruals.123.036.245.103. Moreover. is as follows: 2010 VND Opening balance Income statement credit Closing balance 53. the Company completed hand-over procedures in the agreement signed between the Company and F&N Foods Pte.539. without taking into consideration the offsetting of balances within the same tax jurisdiction.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 11 GOODWILL On 13 April 2010. Goodwill arising from these transactions is amortised over 10 years using the straight-line method commencing on 1 April 2010 and on 1 October 2010.477 ──────────── 62.

000 ═════════════ 2009 VND 3.417.089.436. The borrowings are used to settle payables to oversea suppliers and are unsecured.000 ───────────── 567.436.646.000 ──────────── 13.682 9.120 ══════════════ 2009 VND 789.384. 14 TRADE ACCOUNTS PAYABLE 2010 VND Third parties 1.416.295.811.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 13 (a) BORROWINGS Short-term borrowings 2010 VND Short-term borrowings Current portion of long-term borrowings 567.283.000 (9.590 (31 December 2009: VND68.960.508.4% per annum.963.082. The loan was secured by tangible fixed assets with net book value at 31 December 2010 of VND59.000) ──────────── 12.731.215.319.813.711. this loan was repaid in full to Ho Chi Minh City Investment and Development Fund and Vietcombank Ho Chi Minh City. As at 31 December 2010.000. (b) Long-term borrowings 2010 VND Long-term borrowings Repayable within twelve months Repayable after twelve months ─────────── ═══════════ 2009 VND 22.000 ════════════ The loan as at 31 December 2009 was signed by the Company with Ho Chi Minh City Investment and Development Fund (40%) and Vietcombank Ho Chi Minh City branch (60%) to finance the condensed milk packing production line at Thong Nhat factory.09% per annum.960.428) and bears interest at the average interest rate of 12 month time deposits plus 2.000.682 ════════════ The Group’s balance of short-term borrowings as at 31 December 2010 represented 5 six-month to one-year borrowings from a branch of a foreign bank amounting to US$30 million with the interest rates ranging from 2% to 2.866.454.963.433 ═════════════ 31 .

859.222.660.483 10.660.690.581 5.815.069.155 201.944.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 15 TAXES AND OTHER PAYABLES TO STATE BUDGET 2010 VND Value Added Tax Import duty Business income tax Personal income tax Others 63.750 2.865.573 11.303.883 ═════════════ 16 ACCRUED EXPENSES 2010 VND Sales incentives for customers Advertising expenses Transportation expenses Utility expenses Repair and maintenance expenses Others 125.515.239.866 ───────────── 118.475.543.870 20.668.884.497.000 3.600 4.631.203.847.178.062 ───────────── 281.442 9.983.007. rental fee and fuel expense.330.893.000 2.789.332 91.406.736.545 13.397 ═════════════ 2009 VND 48.760.902.635 ═════════════ 2009 VND 143.859.771.257 ═════════════ 2009 VND 52.959.697.288 ───────────── 399.586 20. interest expense.835 6.560.524 203.105 ════════════ 32 .363 ═════════════ Other accrued expenses as at 31 December 2010 mainly represented general operating expenses.783.684.473.788.789.150.305.000 5.765 754.930.555 130.005.465 536.994 83.468 10.558.800 74.130.425.975 30.995.130.184.908.614.385.332.049 3.518.611.576 34.264. 17 OTHER PAYABLES 2010 VND Deposits received from customers Import duty payables Payables to minority shareholders of subsidiaries Other payables relating to financial investments Insurances and trade union fee Others 13.940 ───────────── 208.484.660.270.847.752 330.660.620.396 ───────────── 264.129 ──────────── 83. audit fee.800.652.472.702.338.095.962.169 9.625.474.115 37.236.

886.485.052.149.498.12.200.320) (154.072.008.000) (15.100 ══════════ 3.020) (669.512.000.249.653. In respect of shares bought back by the Company.000 351. the Planning and Investment Department of Ho Chi Minh City issued the amended Business Registration Certificate No.300 ══════════ VND 3.300 3.856.476.530.200.930.970.930.133) ──────────── 51.104.000 ═══════════════ 31. whichever comes first.000 VND 3.265.653.2009 2009 VND 35.2010 Number of shares Authorised share capital 353.570. The transfer can only be effective upon approval by the bank’s Annual General Meeting or Board of Management and its founding shareholders.000 ═══════════════ Number of shares 351.265. 19 PROVISION FOR SEVERANCE ALLOWANCES Movements for provision for severance allowances during the year were as follows: 2010 VND Opening balance Increase Utilisation Reversal Closing balance 34.006.120 3.778.000 Vietnamese Dong.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 18 OTHER LONG-TERM LIABILITIES Other long term liabilities represented an advance payment received from a third party in respect of the future transfer of the Company’s investment in a bank.512.721. 0300588569 approving the increase in share capital to 3.933.819.530.174 ════════════ All ordinary shares have a par value of VND10.475. Ordinary shares are ranked equally with regard to the Company’s residual assets.538) (1.185.886.120 ══════════ Issued share capital Ordinary shares Treasury shares Ordinary shares Shares currently in circulation Ordinary shares 353.854.000.900) ──────────── 34.779 (3.980 ══════════ 3. all rights are suspended until those shares are reissued.000) 353.12. or after five years from the date of establishment of the bank.530. The Company’s authorised and issued share capitals are: 31.833 4.936.000 ═══════════════ (66.051.200.512.567. 33 .521) (3. Each share is entitled to one vote at shareholders’ meetings.083 ════════════ 20 SHARE CAPITAL On 20 August 2010.000.721.072.000 ═══════════════ 351.174 24.721.899.530.222.373.563 (4.

021.756.000 2.200.455.765.000 18.371.653.000 ────────────── As at 31 December 2010 3.072.000) ══════════ 869.431 58.037.064.802.616.000.180 6.000) ────────────── 1.420.620.531.827 (691.692.185.910.502.180 6.000) ────────────── 7.145.282.185.585.436.222.492.626 3.756.721.823) 2.853.000 3.879.051.280.315.700.670.000) ────────────── 6.200.280.696 (359.431 ───────────── 294.622 886.765.964.948.000 119.577) (1.676) (1.178.949.591.000 ═════════════ 803.759.983 17.290.697.000 ══════════════ 34 .051.051.412.000) ────────────── 892.692.243.217 3.300.665.530 ────────────── 2.172.861) (351.512.594.724.688.590.375.417 ══════════════ 4.948.896.200.592.789.865 ══════════════ 175.028.206.696 (834.949.345.120.474.530.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 21 MOVEMENTS IN OWNERS’ EQUITY Share capital VND Share premium VND Treasury shares VND Investment and development fund VND Financial reserve fund VND Undistributed earnings VND Total VND As at 1 January 2009 Capital increase during the year Profit for the year Appropriations to reserves Dividends paid 1.000) ─────────── (154.218 (1.177 (1.301.000) (514.553.375.876.853.000 ────────────── 1.222.144.616.275.714.177) ────────────── ────────────── ══════════════ (154.882.000 1.072.347.688.848.713 ────────────── 1.218 (238.420.282 ══════════════ As at 31 December 2009 Capital increase during the year Profit for the year Other increases Appropriations to reserves Dividends paid (Note 22) 3.007.583.752.000) ────────── (669.005) (351.714.569 ───────────── 353.909.027.068.829.335 416.620.064.200.243.

000 (VND1.123.874) ─────────────── (206.209) (34.519.645) ─────────────── 10.185.466.365.652.800 ═══════════════ 69.613.652.489 10.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 22 DIVIDENDS During 2010.865.770.239.076 27.771) (9.750) ──────────── 35.728) (6.600.531.990.505.184.141. VND353.436.890.688.193) (8. Final dividends in respect of the year ended 31 December 2010 are to be proposed at the Company’s Annual General Meeting in 2011.000 (VND1.773.950 (15.250 5.629.079.000 per share) and VND1.414.603.620.183.968) ────────────── (328.000 per share).335 374.425 ═══════════════ 35 (196.535 (693.613.703 ─────────────── 10.648. 23 MINORITY INTEREST VND As at 1 January 2009 Profit attributable to minority shareholders Acquiring shares of subsidiaries held by minority shareholders As at 31 December 2009 Loss attributable to minority shareholders Acquiring shares of subsidiaries held by minority shareholders Other decrease As at 31 December 2010 50.598) ──────────── ════════════ 24 (a) REVENUE Net sales 2010 VND Sales Sales of merchandise goods Sales of finished goods Sales from provision of services Sales from provision of real estate services 158.920.752.264.730.347.081.059. the Company paid final dividends for the year ended 31 December 2009.820.586 Sales deductions Trade discounts Sales returns (320.055.161) ─────────────── Net sales 15.622.056.792.239 ─────────────── 16.000 (VND3.054.010.405.890.999.965.316.665.410.520.585. respectively.990.021 15.460.000 per share).087. additional dividends for 6 years of equitization and interim dividends of the year ended 31 December 2010 amounting to VND353.984.970.253 20.445 2009 VND .370.

880.656 3.123.237 ═════════════ 139.165 60.870.127.579.057.116.197 ═══════════════ 2009 VND 6.569.518 ═════════════ 47.396.360 18.285.920 124.165.267 3.512.293.530.250 4.804 127.051 9.899.613 ───────────── 439.129.061.807 25 COST OF SALES 2010 VND Finished goods sold Merchandise goods sold Services provided Real estate services provided Inventories deficiencies Costs for operating under normal capacity Provision for the decline in value of inventory 10.854.711.577.031.820.442.679.191.740 50.793.311.826.693.001.488 ───────────── 448.587.128.037.756 ─────────────── 10.965.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 24 (b) REVENUE (continued) Financial income 2010 VND Interest income on deposits Interest income on bonds Gain on disposal of market securities Dividends income Bonus shares Realised foreign exchange gain Unrealised foreign exchange gain from valuation of balances at year end Proceeds from disposal of investment in joint venture Others 230.568.184 ══════════════ 36 .099.131 909.930.850.863.208.255 2009 VND 106.760.209.569 1.956 196.849.572.506.435.155 1.823 6.285.341 66.292.259 33.284.936.825.064 40.609.124 14.416.637.827 ────────────── 6.356.480 4.680.654 204.135.458 145.705 1.264.735.703.458 7.273.569.498.301.024.588.

976.861.245.490.698.721.096.987.021.014 100.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 26 FINANCIAL EXPENSES 2010 VND Payment supports for distributors Interest expenses on loans Interest expense on deposit received Realised foreign exchange losses Unrealised foreign exchange loss from valuation of balances at year end (Reversal of provision)/provision for diminution in value of investments Brokerage fee Other financial expenses (3.460 5.629 2009 VND 6.769.253.000 ───────────── 153.571.766 132.572.524 369.032 173.185.916.625.694.840 ══════════════ 37 .069.989.392 37.827.118 31.553.517.811.095.097) 154.118.611.765 484.708 7.963.809.429.207.871 277.198.951.872 ══════════════ 2009 VND 127.303.563 237.000 110.895 ────────────── 1.996.137.385 27 SELLING EXPENSES 2010 VND Staff costs Material expenses Tools and supplies expenses Depreciation expense Warranty expenses Outside services Advertising expense Promotion expense Support and commission expenses for distributors 111.030.407.988 ═════════════ 59.329.536.867 15.438.842 401.033.236.894.966.781.021.388.234.115 228.526 21.452 36.674.586.032 ────────────── 1.447.326.240.668.171.958 14.260 267.858 ───────────── 184.770.805.352.708.940.286 247.074 25.771.275.461.243 ═════════════ 5.269.620.150.613.476.895.375 7.666 6.959 1.336.726.648 6.

634. tools and supplies Rebate income from suppliers Sundry income 1.313) ───────────── Net other income 608.226.267.972) (1.532.617.321.873.187 38.347.198 6.858 90.243.288.537.959.531.314. tools and supplies disposed Fines due to contract breach Sundry expenses (349.413.703 8.665 ───────────── 2009 VND .830.132.085) ───────────── (7.074.156.789.021) (17.480.264.108.373 58.039.325.308.216.232.182 701.151.395) (1.627.180 24.745.019 19.933) (525.156.171.642.785.616 ───────────── Other expenses Net book value of fixed assets disposed Cost of construction in progress disposed Fixed assets disposal expenses Cost of scraps.276.674) (5.071.885) (2.778 ═════════════ 29 NET OTHER INCOME 2010 VND Other income Compensation received from other parties Proceeds from disposals of fixed assets Proceeds from sales of scraps.980 29.343.709 6.252 5.951.162.182.453.147.569.637.180 14.500.877.168.943) (626.748.313.552 217.960 91.024.286 28.978 6.495.185.011 58.722.030.744.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 28 GENERAL AND ADMINISTRATION EXPENSES 2010 VND Staff costs Material expenses Office supplies Depreciation expense Fees and duties Provision of bad debts Outside service expenses Loading expenses Per diem allowances Bank charges Others 105.595.525.620.434 ───────────── 143.959.333.914.593.945 6.991.454) (347.874.347) ───────────── (374.522.355.461.984 ───────────── 982.191.180 ───────────── 388.032.430.310 15.695.268.495.124.303 ═════════════ 38 (5.195.067 ───────────── 292.754.290.668.780.772 ═════════════ 2009 VND 81.226 124.987.269 ═════════════ 1.139.431.475 38.201.181.396) ───────────── 135.525 3.595.818 4.293.942.705 8.601.687.081 7.145.358 12.099.325 8.150.790 37.993.019.

Other companies either are in the exempt period or have no taxable income.494.923) (124.281 (149.878.358.572.168) 3. only the Company incurred the business income tax charge. In the Group.608 ────────────── 1.700) (2.955.129.778) ───────────── 355.423.042) (113.851.548. 39 .796) 2.131.552.740.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 30 BUSINESS INCOME TAX The Group is required to pay business income tax (“BIT”) at rates ranging from 15% to 25%.062.942.815.542 ────────────── 682.484.630.131. on taxable profits.175.086.291.319 473.885 The Group’s business income tax charge for the year is based on estimated taxable income and is subject to review and possible adjustment by the tax authorities.731.714.726 ═════════════ 1.902 2009 VND 2.801. The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the normal tax rate of 25% as regulated in current tax regulations as follows: 2010 VND Net accounting profit before tax Tax calculated at the tax rate of 25% Effect of: Change in tax rate Unrealised loss eliminated for which deferred tax assets were not recognised Different tax rates applicable for branches and subsidiaries Income not subject to tax Expenses not deductible for tax purposes Tax incentives Tax losses for which no deferred income tax asset was previously recognised Current tax losses in subsidiaries for which no deferred income tax asset was recognised Under/(over) provision in previous years Business income tax charge 3.871.637 ═════════════ (48.772. depending on locations of the factories.417.075.401 (250.780 (172.662.267.555.631.575) 4.251.038 ───────────── 635.855.680.076) (17.052.185) (11.994.566.238.207.397.

471.000 ════════════ 30. 2010 VND Net profit attributable to shareholders Weighted average number of ordinary shares in issuance Basic earnings per share 352.788. there are only transactions of compensations to members of Board of Management and Board of Directors as follows: 2010 VND Compensation to members of Board of Management and Board of Directors 41.628.059.283.251 ══════════════ The Company does not have potentially dilutive ordinary shares.592.545.185.937.843.739 490.777.999.692.019.438.057 ─────────────── 8.074 570.560.375.224 33 SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES During the year.163 1.155.769 ══════════════ 3.851.369 ═══════════════ 2009 VND 6.864.520 229.813.223.864 ════════════ 2009 VND 40 .139 996.268.721.528.629.598 ────────────── 10.733.949. 32 COST OF GOODS MANUFACTURED BY FACTORS 2010 VND Raw materials Labour costs Depreciation expense Outside service expenses Other cash expenses 10.286 377.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 31 BASIC EARNINGS PER SHARE The calculation of basic earnings per share at 31 December 2010 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding.425.586.153.616.511 282.861 ────────────── 6.882 ─────────────── 12.924.853.180 2009 VND 2.889.875 ═══════════════ 350.996.101.873 460.517.141.950.428.

770. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.394 ────────────── ────────────── 3.VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Form B 09 – DN/HN 34 SEGMENTAL REPORTING Segment information is presented in respect of the Group’s geographical segment.989. geographical segments.249.329.579.890.197) (6. segment revenue is based on the geographical location of customers.688.228 ═════════════ ═══════════════ 41 .865.616 ══════════════ 9. other gains or losses. selling.173.145. is based on the Group’s management and internal reporting structure.741) (5.021.800 ────────────── 3.570 5.108. Geographical segments In presenting information on the basis of geographical segments.129. The primary format.500.220.096.730.197.870.745.172) (1.978.561.693.140. Domestic 2010 VND Sales revenue Cost of sales Segment income 14.139.656. and corporate income tax.550. financial income and expenses.881.846.735.543.425 2009 VND 10.012) (10.415.198.046 327.061.184) ───────────── ─────────────── 349. Unallocated items comprise assets and liabilities.938 ══════════════ ══════════════ (9.886.057.456) (848. which is located in Vietnam (“Domestic”) or countries other than Vietnam (“Export”).093.528.031 ────────────── 4.709.757.564.247.582 Total 2010 VND 15.999. general and administration expenses.005.657.752.218 1.290 ══════════════ 2009 VND Export 2010 VND 2009 VND 1.664.613.208.720.878.