bien hoa sugar joint stock company and its subsidiary consolidated interim financial statements for the six month period ended 30 june 2012

Bien Hoa Sugar Joint Stock Company
and its subsidiary
Consolidated Interim Financial
Statements for the six-month period
ended 30 June 2012
\ -
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Corporate
Information
Establishment Decision No.
Business Registration
Certificate No.
Board
of
Management
Board
of
Directors
Registered Office
Auditors
44/20 IIIQD-TTg
27
March 200 I

3600495818
16
May
2001
The Company's business registration certificate has been
amended several times, the most recent
of
which
is
by
business
registration certificates
No.
3600495818 dated I August 2012.
The business registration certificate and
its
updates were issued
by
the Planning and Investment Department
of
Dong
Nai
Province.
Ms. Huynh Bich Ngoc
Chairwoman
(from
20
April 2012
to
2 August 2012)

Mr.
Thai
Van
Chuyen
Chairman
(from 2 August 2012)
Ms.
Ph
am
Thi Sum
Chairwoman
(until 20 April 2012)
Mr.
Nguyen
Xu
an
Trinh
Vice Chairman
(until
20
April 2012)
Mr.
Pham Dinh Manh Thu
Vice Chairman
Ms.
Dang Huynh
Uc
My
Member
Mr.

Tong Thong Member
(from
20
April 2012)
Mr.
Nguyen
Van
Loc
General Director
Mr.
Tran Tuu
Deputy General Director
(from 9 July 2012)
Mr.
Nguyen Thanh Cuong Deputy General Director
(until
27
July 2012)
Mr.
Bui
Van
Lang Deputy General Director
Mr.
Pham Cong Hai
Deputy General Director
Mr.
Nguyen Hoang Tuan
Deputy General Director
Industrial Zone 1
Bien Hoa City

Dong
Nai
Province
Vietnam
KPMG Limited
Vietnam
Bien Hoa Sugar Joint Stock Company and its subsidiary
Report
of
the Board
of
Management
STATEMENT OF THE BOARD OF MANAGEMENT'S RESPONSIBILITY IN
RESPECT OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The Board
of
Management and Board
of
Directors are responsible for preparing the
consolidated interim financial statements
of
Bien Hoa Sugar Joint Stock Company ("the
Company") and
its
subsidiary (collectively "t
he
Group")
in
accordance with Vietnamese
Accounting Standards, the Vietnamese Accounting System and the relevant statutory

requirements
of
each financial period which gives a true and fair view
of
the state
of
affairs
of
the Group and
of
its
results and cash flows for the period.
In
preparing these financial
statements, the Board
of
Management and Board
of
Directors are required
to:
•
select suitable accounting
pol
icies and then apply them consistently;
•
make judgments
and
estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed; and

• prepare the consolidated interim financial statements
on
the going concern basis unless
it
is
inappropriate
to
presume that the Group will continue
in
business.
The Board
of
Management and Board
of
Directors are also responsible for ensuring that proper
accounting records are kept which disclose, with reasonable accuracy
at
any time, the financial
information
of
the Group and
to
ensure that the accounting records comply with the
requirements
of
Vietnamese Accounting Standards, the Vietnamese Accounting System and the
relevant statutory requirements.
It
is
also responsible for safeguarding the assets

of
the Group
and hence for taking reasonable steps for the prevention and detection
of
fraud and other
irregularities.
The Board
of
Management and Board
of
Directors confirm that they have complied with the
above requirements
in
preparing the consolidated interim financial statements.
APPROVAL OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
We
hereby approve the accompanying consolidated interim financial statements which give a
true and fair view
of
the consolidated financial position
of
the Group
as
of
30
June 2012 and
of
th
~
~

ated
results
of
operations, changes
in
equity and cash flows for the six-month period
~~
;
~
<feU
~
a.ccordance
with Vietnamese Accounting Standards, the Vietnamese Accounting
,~
(
t
'\
' 4
~
"'
~~
m
anpthe
t'e
levant statutory requirements.
~/
(""
' ,
'J
\ ' . \

o
n:~e~
'
J
lf
~f
th
~
B
~
ard
of
Directors 0
;;:oti
cl
.
,"
,
.;!
~
" ,r:
~
~
i" O / :
lj
"
,,1-
(:IIJ
• () " :.b'lf' .
/-

,

~
-
v.;;
~
~
tv
lor
0"
• '
~.
Mr.
Nguyen Van Loc
General Director
Dong Nai,
27
August 2012
2
KPMG
Limited
Telephone +84
(8)
3821
9266
10"
Floor.
Sun
Wah Tower
Fax

+84
(8)
3821
9267
115 Nguyen Hue Street
Internet
wwwkpmg
.com.
vn
District
1.
Ho
Chi
Minh City
The Socialist Republic of Vietnam
INDEPENDENT
AUDITORS'
REPORT
ON RESULTS
OF
CONSOLIDATED
INTERIM
FINANCIAL STATEMENTS
REVIEW
To the Shareholders
Bien Hoa
Sugar
Joint
Stock Company
and

its subsidiary
Scope
We have reviewed the accompanying consolidated balance sheet
of
Bien Hoa Sugar Joint Stock
Company ("the
Company")
and its subsidiary (collectively
"the
Group") as
of30
June 2012, and
the related consolidated statements
of
income, changes
in
equity and cash flows for the six-
month period then ended and the explanatory notes thereto which were authorised for issue by
the
Company's
management on 27 August 2012 as set out on pages 4 to 53. These consolidated
interim financial statements are the responsibility
of
the
Company's
management. Our
responsibility is to issue a report on these consolidated interim financial statements based on
our
review.
The

consolidated financial statements
of
the Group as
of
and for the year ended
31
December
2011 were audited by another firm
of
auditors whose report dated 5 March 2012
expressed an unqualified opinion on these financial statements. Additionally, the consolidated
interim financial statements
of
the Group as
of
and for the six-month period ended 30 June 20
II
were
reviewed by another firm
of
auditors whose report dated
10
August 2011 expressed an
unqualified review conclusion on those financial statements.
We conducted our review
in
accordance with Vietnamese Standard on Auditing 910 on
Engagements to Review Financial Statements. This standard requires that we plan and perform
the review to obtain moderate assurance as to whether the financial statements are free
of

material misstatement. A review
is
limited primarily to inquiries
of
the
Group's
personnel and
analytical procedures applied to financial data and thus provides less assurance than an audit.
We
have not performed an audit and, accordingly, we do not express an audit opinion.
Conclusion
Based on
our
review, nothing has come to
our
attention that causes us to believe that the
accompanying consolidated interim financial statements do not give a true and fair view,
in
all
material respect,
of
the consolidated financial position
of
the Group as
of30
June 2012 and
of
its
consolidated results
of

operations and its cash flows for the six-month period then ended
in
accordance with Vietnamese Accounting Standards, the Vietnamese Accounting System and the
relevant statutory requirements applicable to interim financial statements.
KPMG
Limited
Lam Thi goc Hao
CPA No. N0866IKTV
Ho
Chi Minh City, 27 August 2012
KPMG Limned. a V
ie
tnamese hmited lIabllily company and a me
mtx!
r
i
r
tm
of
lhc
KPMG networ
k.
of Independent
me
mber fir
ms
affiliated
I/
lU
h <PMG Interna

ti
onal Cooper ative ("KPMG Internationa
l")
.
'.J
SW
I
$$
e~
\
!(
l
V
. All
ri
ghts
re
served.
3
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Consolidated
balance

sheet
at
30
June
2012
ASSETS
Current
assets
(100 = 110 + 120 + 130 + 140 + 150)
Cash and cash equivalents
Cash
Cash equivalents
Accounts receivable
Accounts receivable - trade
Prepayments
to
suppliers
Other receivables
Allowance for doubtful debts
Inventories
,
Inventories
Other
current
assets
Short-term prepayments
Deductible value added tax
Other current assets
Long-term assets
(200 = 210 + 220 + 240 + 250 + 260)

Accounts receivable - long-term
Other long-term receivables
Fixed assets
Tangible fixed assets
Cost
Accumulated depreciation
Intangible fixed assets
Cost
Accumulated amortisation
Construction
in
progress
Code
100
110
1 I 1
J
12
130
131
132
135
139
140
141
150
151
152
158
200

210
218
220
221
222
223
227
228
229
230
Note
5
6
7
6
8
9
10
Form
BOla
- DNIHN
30/06/2012
31112/2011
VND
VND
571,619,716,909
752,872,194,158
38,652,993,172
178,778,249,429
18,652,993,172

16,878,249,429
20,000,000,000
161,900,000,000
304,751,594,820
234,744,313,899
108,477,810,779
47,347,504,711
193,073 ,084,349 190,011,179,869
4,476,605,341 7,540,396,530
(1,275,905,649) (10,154,767,211)
221,556,449,039 333,067,839,753
221,556,449,039 333,067,839,753
6,658,679,878
6,281,791,077
15,600,000
1,246,20 I ,565 4,631,692,020
5,412,478,313 1,634,499,057
518,944,903,180
528,865,023,153
70,804,060,634 58,765,140,846
70,804,060,634 58,765,140,846
403,896,375,002
406,501,374,593
310,493,391,435 201,125,463,345
660,114,331,342 521,794,159,598
(349,620,939,907) (320,668,696,253 )
11,456,664,924 12,261,509,740
20,440,816,437 20,361,700,982
(8,984,151,513) (8,100,191,242)
81,946,318,643 193,114,401,508

The accompanying notes are an integral part
of
these consolidated interim finanCial statements
4
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Consolidated
balance
sheet
at
30
June
2012
(continued)
Long-term investments
Other long-term investments
Allowance
for
diminution
in
the
value
of

long-term investments
Other long-term assets
Long-term prepayments
Deferred tax assets
Other long-term assets
Goodwil1
TOT AL ASSETS
RESOURCES
LIABILITIES (300
= 310 + 330)
Current liabilities
Short-term borrowings and
IiabiIities
Accounts payable - trade
Advances
from
customers
Taxes payable
to
State Treasury
Payables
to
employees
Accrued expenses
Other short-term payables
Bonus
and
welfare fund
Long-term liabilities
Long-term borrowings and

liabilities
Provision for severance allowance
EQUITY (400 = 410 + 430)
Owners' equity
Share capital
Capital surplus
Investment and development funds
Financial reserves
Retained profits
TOT AL RESOURCES
(440
= 300 + 400)
Code
250
258
260
261
262
268
269
270
300
310
3
11
312
313
314
315
316

319
323
330
334
336
400
410
411
412
417
418
420
440
Note
11
12
13
14
15
16
17
18
19
20
21
22
23
25
25
30/06/2012

VND
9,000,000,000
9,000,000,000
35,244,467,544
11,432,488,519
1,254,305,0 I 0
5,652,450,000
16,905,224,015
Form
BOla
- DNIHN
31/1212011
VND
30,775,710,000
50,239,70 I ,076
(19,463,991,076)
32,822,797,714
7,920,159,075
1,254,305,0 I 0
5,652,450,000
17,995,883,629
1,090,564,620,089 1,281,737,217,311
547,641,997,627
433,111,233,345
297,633,101,646
59,349,838,697
1,763,233,503
9,791,890,757
10,418,220,202
23,294,183,054

19,883,815,299
10,976,950,187
114,530,764,282
113,697,161,832
833,602,450
542,922,622,462
542,922,622,462
299,975,800,000
39,817,240,000
87,752,273,950
25,241,483,303
90,135,825,209
733,238,203,768
628,124,819,122
361,712,095,401
81,093,001,599
131,773,602,991
16,726,524,877
1,938,277,345
4,828,609,292
13
,960,3 80,260
16,092,327,357
105,113,384,646
104,338,661,817
774,722,829
548,499,013,543
548,499,013,543
299,975,800,000
39,817,240,000

65,413,962,846
17,795,379,602
125,496,631,095
1,090,564,620,089 1,281,737,217,311
The
accompanying notes are an integral part
oj
these consolidated interim financial statements
5
Bien Hoa Sugar Joint Stock Company and its subsidiary
Consolidated balance sheet at 30 June 2012 (continued)
OFF
BALANCE
SHEET
ITEMS
30/06/2012
VND
Materials and goods held for third parties I, I 06,677,022
Bad debts written
off
10,896,024,834
Foreign currencies
•
USD
114,615,658
•
EUR
7,110,632
Prepared by:
Form B 01a - DNIHN

31112/2011
VND
378,751,390
2,339,968,982
264,169,457
7,110,632
Vo
Cong
Minh
Nguyen
Van
Loc
Chief
Accountant
General Director
27 August 2012
The
accompanying notes are an integral part
of
these consolidated interim financial statements
6
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary

Consolidated
statement
of
income
for
the
six-month
period
ended
30
June
2012
Form
B 02a - DNIHN
Six-month period
Six-month period
from 1/1/2012 to
from 1/1/2011 to
Code
Note
30/6/2012
30/6/2011
VND
VND
Total revenue
01
26
1,383,474,726,241
1,108,653,236,733
Less revenue deductions

02
(800,943,207)
(640,377,482)
Net revenue
(10
=
01
- 02)
10
1,382,673,783,034
1,108,012,859,251
Cost
of
sales
11
27
(1,285,628,830,419)
(982,225,332,971 )
Gross profit (20 =
10
- 11) 20
97,044,952,615 125,787,526,280
Financial income
21
28 19,027,409,092
15,629,444,060
Financial expenses
22
29
( 13,446,218,432) (55,532,684,149)

In
which: Interest expenses
(J
5,263,029, 754) (46,342,400,661)
Selling expenses
24
(33,261,237,961 ) (15,451,198,590)
General and administration expenses 25 (18,004,068,735)
(23,118,984,999)
Net operating profit
30 51,360,836,579
47,314,102,602
{30
= 20 +
(21
- 22) - (24 +
25)}
Other income
31
433,899,107
63,795,748
Other expenses 32
(513,319,621)
(3,600,000)
Results
of
other
activities
40
(79,420,514) 60,195,748

(40=31-32)
Profit before tax (50 = 30 +
40
+ 41)
50 51,281,416,065
47,374,298,350
Income tax expense -
current
51
30
(6,869,310,485)
( 4,846,622,353)
Income tax benefit - deferred
Net profit
60
44,412,105,580 42,527,675,997
(60 = 50 -
51
- 52)
The accompanying notes are an integral
part
of
these consolidated interim financial statements
7
Bien Hoa
Sugar
Joint Stock Company
Statement
of
income for the six-month period ended 30 June 2011 (continued)

Code
Note
Attributable to:
Equity holders
of
the
Company
Earnings per
share
Basic earnings per share
62
70
31
Prepared by:
Six-month period
from
11112012
to
30/6/2012
VND
44,412,105,580
1,481
Form B 02a - DNIHN
Six-month period
from
11112011
to
30/6/2011
VND
42,527,675,997

1,418
27
August
2012
The
accompanying notes are an integral part
of
these consolidated interimjinancial statements
8
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Consolidated
statement
of
changes
in
equity
for
the
six-month
period
ended
30

June
2012
Form
B
09a
-
DNIHN
Investment
and
Financial
Other
equity
Total
owners'
Share
capital
Capital
surplus
development funds
reserves
funds
Retained profits
equity
VND VND VND
VND
VND
VND
VND
Balance
at

1
January
2011 185,316,200,000
154,476,840,000 43,083,053,253 10,351,743,071
103,446,818,448
496,674,654,772
Net
profit for the period 42,527,675,997
42,527,675,997
Dividends (Note 24)
(27,797,430,000)
(27,797,430,000)
Appropriation to bonus and
welfare fund (Note 20)
(13,407,140,723)
(13,407,140,723)
Appropriation to equity
funds
22,330,909,593 7,443,636,531 3,541,026,295
(33,315,572,419)
Utilisation
of
funds
(3,541,026,295)
(3,541,026,295)
Balance
at
30
June
2011 185,316,200,000 154,476,840,000 65,413,962,846

17,795,379,602
71,454,351,303
494,456,733,751
Balance
at
1
January
2012 299,975,800,000 39,817,240,000 65,413,962,846 17,795,379,602
125,496,63 1,095
548,499,013,543
Net
profit for the period
44,412, I 05,580
44,412,105,580
Dividends (Note 24)
(44,996,370,000)
(44,996,3 70,000)
Appropriation to bonus and
welfare fund (Note 20)
( 4,270,648,883)
(4,270,648,883)
Appropriation to equity
funds
22,338,311, I
04 7,446,103,70 I
721,477,778
(30,505,892,583)
Utilisation
of
funds

(721,477,778)
(721,477,778)
Balance
at
30
June
2012 299,975,800,000 39,817,240,000 87,752,273,950
2$
:2
4
1'
A8J.3J)3
"
"'
, .
.\
90,135,825,209
542,922,622,462
Prepared
by:
:
o
CongMmh
Chief
Accountant
27 August 2012
The
accompanying notes are an integral part
of
these consolidated interim financial statements

Q
Bien
Hoa
Sugar
Joint
Stock
Company
and
its subsidiary
Consolidated
statement
of
cash flows for the six-month period ended 30
June
2012 -
Indirect
method
Form
B 03a - DNIHN
Code Note
Six-month period
from
1/112012
to
30/6/2012
VND
Six-month period
from
111/2011
to

30/6/2011
VND
CASH
FLOWS
FROM
OPERATING
ACTIVITIES
Profit before tax
Adjustments for
Depreciation and amortisation
Allowances and provisions
Unrealised foreign exchange losses
Gain
on
disposal fixed assets
Interest income
from
deposits
Interest income
from
prepayments
to
sugar cane farmers
Dividend incomes
from
long-term
investment
in
securities
Loss

from
disposal
of
long-term
investments
in
securities
Interest expense
01
02
03
04
05
05
05
05
os.
06
51,281,416,065
35,991,516,170
(19,348,219,965)
( 136,064,815)
( 4,836,593,920)
(12,182,590,938)
17,445,051,076
15,263,029,754
47,374,298,350
31,985,163,284
5,060,473,279
45,920,000

(2,000,000)
(1,974,196,984)
(9,808,546,453)
(3,046,004,586)
46,342,400,661
Operating
profit before changes
in
working capital
08
83,477 ,543,427 115,977 ,507
,551
Change
in
receivables
Change
in
inventories
Change
in
payables and other
liabilities
Change
in
prepayments
09
10
II
12
(82,259,051,000)

122,633,825,152
( 120,887,953,942)
(8,427,583,927)
55,742,092,282
(549,048,498,860)
216,722,865,375
(4,247,908,241 )
(5,463,220,290) (164,853,941,893)
Interest paid
Income tax paid
Other payments for operating
activities
13
14
16
( 15,263,029,754)
(7,768,680,695)
(10, I 07,503 ,831)
(46,342,400,661 )
(10,814,053,146)
(11,093,033,282)
Net cash flows from operating
activities
20
(38,602,434,570) (233,103,428,982)
The
accompanying notes are an integral part
of
these consolidated interim financial statements
10

Bien Hoa
Sugar
Joint Stock Company and its subsidiary
Consolidated statement
of
cash flows for the six-month period ended
30
June 2012-
Indirect method (continued)
Code Note
CASH FLOWS
FROM
INVESTING ACTIVITIES
Payments
for
additions
to
fixed
assets
and
other long-term assets
21
Proceeds
from
disposals
of
fixed
assets
22
Proceeds from disposal

of
long-term
investments
in
securities
25
Receipts
of
interests and dividends
27
Net cash flows from investing
30
activities
:
CASH
FLOWS
FROM
FINANCING ACTIVITIES
Proceeds
from
Sholt-term and long-
term borrowings
33
Payments
to
settle debts
loan
principals 34
Payments
of

dividends
36
Net cash flows from financing
40
activities
Net cash flows during the period
50
(50 = 20 +
30
+ 40)
Cash and cash equivalents at the
60
beginning
of
the period
Cash and cash equivalents at the end
70
5
of
the period (70 = 50 + 60 + 61)
Six-month period
from
11112012
to
30/6/2012
VND
(27,464,537,667)
220,000,000
23,794,650,000
5,896,750,420

Form B
03a - DNIHN
Six-month period
from
11112011
to
30/6/2011
VND
(32,075,192,164 )
2,000,000
5,597,753,582
2,446,862,753
(26,475,438,582)
438,980,450,435
(493,700,944,175)
(49,249,190,700)
828,254,757,360
(549,163,731,162)
(26,663,579,500)
(103,969,684,440) 252,427,446,698
(140,125,256,257)
(7,151,420,866)
178,778,249,429
58,758,932,992
38,652,993,172
51,607,512,126
The accompanying notes are an integral part
of
these consolidated interim finanCial statements
II

Bien Hoa
Sugar
Joint Stock
Company
and its subsidiary
Consolidated statement
of
cash flows for the six-month period ended
30
June
2012-
Indirect method (continued)
Form B
03a -
DNIHN
NON-CASH INVESTING ACTIVITIES
Six-month period Six-month period
from 11112012 to
from
11112011
to
30/6/2012 30/6/2011
VND
VND
Net off purchase
of
sugar cane against interest income
receivables
from
sugar cane farmers

11,122,434,438
9,230,994,441
Prepared
by:
Vo
Cong Minh
Chief
Accountant
27
August 2012
The accompanying notes are an integral part
of
these consolidated interim financial statements
12
Bien Hoa Sugar Joint Stock
Company
and its subsidiary
Notes to the consolidated interim financial statements for the six-month period
ended 30 June 2012
Form B
09a
-
DNIHN
These notes
form
an
integral part
of
and
should

be
read
in
conjunction with the accompanying
consolidated interim financial statements.
1.
Reporting Entity
Bien Hoa Sugar Joint Stock Company ("the Company")
is
a joint-stock company incorporated
in
Vietnam. The consolidated interim financial statements for the six-month period ended 30
June 2012 comprises the Company and
its
subsidiary ("the Group") -
Hai
Vi
One Member
Limited Company ("Hai Vi"). The principal activities
of
the Group are producing sugar;
planting sugar cane; producing and trading products using sugar or
its
by
products, waste
products; producing and trading fertilizer, agricultural materials; and consulting technology and
management
in
sugar's production industry.
The Company has one 100% shareholding subsidiary, Hai

Vi
One Member Limited Company,
whose principal activities are planting sugar cane; producing
and
trading fertilizer, agricultural
materials under the Business License
No
. 3900244283 issued
by
the Department
of
Planning
and Investment
of
Tay Ninh Province
on
29
July 2010. The head office
of
Hai
Vi
is
located
at
Thanh Tan Hamlet, Thanh Long Commune, Chau Thanh District, Tay Ninh Province, Vietnam.
The Group's shares are listed
on
the
Ho
Chi

Minh Stock Exchange
in
accordance with the
Licence
No.
79fUBCK-GPNY dated
21
November 2006 issued
by
the
Ho
Chi Minh City Stock
Exchange
on
21
November 2006 and formal trading
on
20
December 2006. The Group's head
office and factory are located
at
Binh Hoa Industrial Zone
I,
An
Binh Ward, Bien Hoa City,
Dong Nai Province.
The Group's branches and other factories
at
30
June 2012 included:

• Bien Hoa - Tay Ninh factory was established
in
accordance with Business Registration
Certificate No. 45030000050 I dated
13
June
2001
which
is
located at highway 22B, Tan
Phuoc, Tan Binh Ward, Tay Ninh City, Tay Ninh Province.
•
Bien Hoa - Tri
An
factory
was
established
in
accordance with Business Registration
Certificate No. 4713000435 dated 7 December 2007 which
is
located at hamlet
1,
Tri
An
Ward, Vinh Cuu District, Dong Nai Province.
•
Thanh Long agricultural enterprise
was
established

in
accordance with Business
Registration Certificate No. 3600495818-0 IOdated
15
July 2009 which
is
located at Thanh
Dong Hamlet, Thanh Long Ward, Chau Thanh District, Tay Ninh Province.
• Da Nang branch
was
established
in
accordance with Business Registration Certificate No.
3213000033 dated
11
June 200 I which
is
located at
120
Ong
Ich
Khiem Street, Thanh Khe
District, Da Nang City.
•
Can Tho branch was established
in
accordance with Business Registration Certificate
No.
5713000208 dated 8 June
2001

which
is
located
at
550 Cach Mang Thang Tam Street,
An
Thoi Ward, Binh Thuy District, Can Tho City.
•
Ho
Chi Minh branch was established
in
accordance with Business Registration Certificate
No.
3600495818008-008 dated
15
September 2003 which
is
located at
24
Nguyen Truong
To, District
4,
Ho
Chi Minh City.
As
at
30
June 2012, the Group
had
975 employees

(31
December 2011: 1,056 employees).
13
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Notes to
the
consolidated interim financial
statements
for
the
six-month period
ended
30
June
2012 (continued)
Form B
09a - DNIHN
2. Basis
of
preparation
(a)
Statement

of
compliance
The consolidated interim financial statements have been prepared
in
accordance with
Vietnamese Accounting Standards, the Vietnamese Accounting System and the relevant
statutory requirements applicable
to
interim financial reporting.
(b) Basis
of
measurement
The consolidated interim financial statements, except for the statement
of
cash flows, are
prepared
on
the accrual basis using the historical cost concept. The statement
of
cash flows
is
prepared using the indirect method.
(c)
Annual
accounting
period
The annual accounting period
of
the Group
is

from
I January
to
31
December.
(d) Accounting
currency
The consolidated interim financial statements are prepared and presented
in
Vietnam Dong
("VND
"
).
3.
Summary
of
significant accounting policies
The following significant accounting policies have been adopted
by
the Group
in
the preparation
of
these consolidated interim financial statements.
(a) Basis
of
consolidation
(i)
Subsidiaries
Subsidiaries are entities controlled

by
the Group. The financial statements
of
subsidiaries are
included
in
the consolidated interim financial statements from the date that control commences
unti I the date that control ceases.
(ii)
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arISing
from
intra-group
transactions, are eliminated
in
preparing the consolidated interim financial statements.
Unrealised gains and losses arising from transactions with equity accounted investees are
eliminated against the investment
to
the extent
of
the Group's interest
in
the investee.
14
Bien Hoa
Sugar
Joint
Stock
Company

and
its subsidiary
Notes to the consolidated interim financial statements for the six-month period
ended 30
June
2012 (continued)
Form
B 09a - DNIHN
(b) Foreign
currency
Monetary assets and liabilities denominated
in
currencies other than VND are translated
into
VND at rates
of
exchange ruling
at
the balance sheet date. Transactions
in
currencies other than
VND during the year have been translated into VND at rates approximating those ruling at the
transaction dates.
All foreign exchange differences are recorded
in
the statement
of
income
in
accordance with

Vietnamese Accounting Standard No.
10
("VAS 10") - The
Eff
ects
of
Changes
in
Foreign
Exchange Rates.
(c)
Cash
and
cash equivalents
Cash comprises cash balances
and
call deposits. Cash equivalents are short-term highly liquid
investments that are readily convertible
to
known amount
of
cash, are subject
to
an
insignificant
risk
of
changes
in
value, and are held for the purpose

of
meeting short-term cash commitments
rather than for investment or other purposes.
(d) Investment
Investments are stated at cost.
An
allowance
is
made for reductions
in
investment values if
market value
of
the investment falls below cost or if the investee has suffered a loss. The
allowance
is
reversed if the subsequent increase
in
recoverable amount can
be
related
objectively
to
an
event occurring after the allowance was recognised.
An
allowance
is
reversed
only

to
the extent that the investment's carrying amount does not exceed the carrying amount
that has been determined
ifno
allowance
had
been recognised.
(e)
Accounts receivable
Trade and other receivables are stated at cost less allowance for doubtful debts.
(f)
Prepayments
to suppliers
Prepayments
to
sugar cane farmers are stated at cost less allowance
for
overdue receivables.
The Group's policies
on
making allowance for overdue receivables are
in
accordance with the
guidance under Circular No. 228/2009/TT-BTC issued
by
the Ministry
of
Finance
on
7

December 2009. Increases and decreases
to
the provision balance are recorded
as
finance
expense
in
the income statement.
15
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Notes to the consolidated
interim
financial
statements
for the six-month period
ended 30
June
2012 (continued)
Form B 09a -
DNIHN
(g) Inventories
Inventories are stated at

the
lower
of
cost and net realisable value. Cost
is
determined
on
a
weighted average basis and includes
all
costs incurred
in
bringing the inventories
to
their present
location and condition. Cost
in
the case
of
finished goods
and
work
in
progress includes
raw
materials, direct labour and attributable manufacturing overheads. Net realisable value
is
the
estimated selling price
of

inventory items,
less
the estimated costs
of
completion and selling
expenses.
The Group applies the perpetual method
of
accounting for inventory.
(h)
Tangible
fixed assets
(i) Cost
Tangible fixed assets are stated at cost less accumulated depreciation. The initial cost
of
a
tangible fixed asset comprises
its
purchase price, including import duties, non-refundable
purchase taxes and any directly attributable costs
of
bringing the asset
to
its
working condition
for
its
intended use. Expenditure incurred after tangible fixed assets have been put into
operation, such
as

repairs
and
maintenance and overhauls cost,
is
charged
to
income
in
the
period
in
which
the
cost
is
incurred.
In
situations where
it
can
be
clearly demonstrated that the
expenditure has resulted
in
an
increase
in
the future economic benefits expected
to
be

obtained
from the use
of
tangible fixed assets beyond their originally assessed standard
of
performance,
the expenditure
is
capitalised as
an
additional cost
of
tangible fixed assets.
(ii)
Depreciation
Depreciation for tangible fixed assets which are directly involved
in
the production
in
Tay Ninh
and Tri
An
factories
is
computed based
on
estimated average productivity at 418,000 tons
and
221,000 tons per annum for Tay Ninh factory and Tri
An

factory, respectively. The estimated
depreciation charge rates are VND595/kg
of
raw
sugar
in
Tay Ninh factory and VND61O/kg
of
raw sugar
in
Tri
An
factory.
Depreciation for other fixed assets (including Bien Hoa factory)
is
computed
on
a straight-line
basis over the estimated useful lives
of
tangible fixed assets. The estimated useful lives are
as
follows:
•
buildings and structures
3 -
15
years
•
machinery and equipment

2 -
12
years
•
office equipment
3 - 6 years
•
motor vehicles
3 - 7 years
16
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Notes to the consolidated
interim
financial
statements
for the six-month period
ended
30
June
2012 (continued)
Form B 09a -
DNIHN

(i)
Intangible
fixed assets
(;)
Land
use rights
Land use rights are stated at cost less accumulated amortisation. The initial cost
of
a land
use
rights comprises
its
purchase price and any directly attributable costs incurred
in
conjunction
with securing the
land
use rights. Amortisation
is
computed on a straight-line basis over
20
years.
(U)
Development costs
Expenditure
on
development activities, whereby research findings are applied to a plan or design
for the production
of
new or substantially improved products and process,

is
capitalised
if
the
product or process
is
technically and commercially feasible
and
the Group has sufficient
resources
to
complete development. The expenditure capitalised include the costs
of
materials,
direct labour
and
an
appropriate portion
of
overheads. Other development expenditure
is
recognised
in
the statement
of
income
as
an
expense as incurred. Capitalised development
expenditure

is
stated at cost less accumulated amortisation, which
is
provided
on
a straight-line
basis from 5
to
15
years.
(j)
Construction
in progress
Construction
in
progress represents the cost
of
construction and machinery which have not been
fully completed or installed.
No
depreciation
is
provided for construction
in
progress during the
period
of
construction and installation.
(k)
Long-term

prepayments
Long-term prepayments mainly comprise prepaid advertising expenses, prepaid land cost,
building and machinery insurance which are initially stated at cost
and
amortised
on
a straight
line basis over the estimated useful lives from 2
to
3 years.
(I)
Goodwill
Goodwill arises on the acquisition
of
subsidiary. Goodwill
is
measured at cost less accumulated
amortisation. Cost
of
goodwill represents the excess
of
the cost
of
the acquisition over the
Group's interest
in
the net fair value
of
the identifiable assets, liabilities and contingent
liabilities

of
the acquiree. When the excess
is
negative (negative goodwill),
it
is
recognised
immediately
in
profit or loss. Goodwill
is
amortised
on
a straight-line basis over
10
years.
In
respect
of
equity accounted investees, the carrying amount
of
goodwill
is
included
in
the
carrying amount
of
the investment.
(m)

Trade
and
other
payables
Trade and other payables are stated at their cost.
17
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Notes to the consolidated interim financial statements for the six-month period
ended
30
June
2012 (continued)
Form B
09a
- DNIHN
(n) Provisions
A provision
is
recognised
if,
as
a result

of
a past event, the Group
has
a present legal or
constructive obligation that can
be
estimated reliably, and it
is
probable that
an
outflow
of
economic benefits will
be
required
to
settle the obligation. Provisions are determined
by
discounting the expected future cash flows
at
a pre-tax rate that reflects current market
assessments
of
the time value
of
money and the risks specific
to
the liability.
(i)
Severance allowance

Under the Vietnamese Labour Code, when employees who have worked for
12
months or more
("eligible employees") voluntarily terminates his/her labour contract, the employer
is
required
to
pay
the eligible employee severance allowance calculated based
on
years
of
service until
31
December 2008 and employees' compensation
at
termination. Provision for severance
allowance
is
made at the rate
of
2%
(20
II:
2%)
of
the total basic salary
in
accordance with the
guidance based

on
Circular
No.
82/2003/TT-BTC dated
14
August
2003
of
the Ministry
of
Finance.
•
•
Pursuant
to
Law
on
Social Insurance, effective from I January 2009 the Group and
its
employees are required
to
contribute
to
an
unemployment insurance
fund
managed
by
the
Vietnam Social Insurance Agency. The contribution

to
be
paid
by
each party
is
calculated
at
I %
of
the lower
of
the employees' basic salary and
20
times the general minimum salary level
as
specified
by
the
Government
from
time
to
time. With the implementation
of
unemployment
insurance scheme, the Group
is
no
longer required

to
provide severance allowance for the
service period after 1 January 2009. However, severance allowance
to
be
paid
to
the existing
eligible employees
as
of
31
December 2008 will
be
determined based
on
the eligible
employees' years
of
service
as
of
31
December 2008 and their average salary for the six-month
period prior
to
the termination date.
(ii) Provisions
for
maintenance fees and supports

for
sugar cane farmers
Provision for maintenance fees and supports for sugar cane farmers relate
to
possible
maintenance works and technical support costs during seasonal non-production periods. The
estimation
is
based
on
experience, events and management best judgments. Inevitably, such
circumstances and information
may
be
subject
to
change
in
subsequent periods and thus
the
eventual outcome
may
be
better or worse than the assessments made
in
drawing
up
periodic
financial reports.
(0) Bonus

and
welfare
funds
Allocations are made
to
bonus
and
welfare funds based
on
shareholders' resolution. This fund
is
used exclusively
to
pay
bonus and welfare
to
the Group's staff. Payments
from
bonus
and
welfare funds are not charged
to
consolidated statement
of
income.
18
Bien
Hoa
Sugar
Joint

Stock
Company
and
its
subsidiary
Notes to
the
consolidated
interim
financial
statements
for
the six-month
period
ended
30
June
2012 (continued)
Form B 09a -
DNIHN
(p) Classification
of
financial
instruments
Solely for the purpose
of
providing disclosures about the significance
of
financial instruments
to

the Group's financial position and results
of
operations and the nature and extent
of
risk arising
from financial instruments, the Group classifies
its
financial instruments
as
follow:
(i) Financial assets
Financial assets
at/air
value through profit or loss
A financial asset
at
fair value through profit or loss
is
a financial asset that meets either
of
the
following conditions:
• It
is
considered
by
management
as
held for trading. A financial asset
is

considered
as
held
for trading
if:
acquired or incurred principally for the purpose
of
selling or repurchasing
it
in
the near
term;
there
is
evidence
of
a recent pattern
of
short-term profit-taking; or
a derivative (except for a derivative that
is
financial guarantee contract or a designated
and
effective hedging instrument).
•
Upon initial recognition,
it
is
designated
by

the Group
as
financial assets
at
fair value
through profit or loss.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and a fixed maturity that the Group has the positive intention and ability to hold
to
maturity, other than:
• those that the Group
on
initial recognition designates
as
at fair value through profit or loss;
•
those that the Group designates
as
available-for-sale;
and
•
those that meet the definition
of
loans and receivables.
Loans
and
receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted

in
an
active market, other than those:
• that the Group intends
to
sell immediately or
in
the
near term, which are classified
as
held
for trading, and those that the entity
on
initial recognition designates
as
at fair value through
profit or loss;
•
that the Group
on
initial recognition designates
as
available-for-sale; or
•
for which the Group may not recover substantially
all
of
its
initial investment, other than
because

of
credit deterioration, which are classified
as
available-for-sale.
19
Bien Hoa
Sugar
Joint
Stock
Company
and
its subsidiary
Notes to
the
consolidated interim financial statements for the six-month period
ended 30
June
2012 (continued)
Form
B 09a - DNIHN
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated
as
avai lable for sale or that
is
not classified
as:
• financial assets at fair value through profit or loss;
• held-to-maturity investments; or
• loans and receivables.

Under the above disclosure requirements, cash
in
bank are under the category
of
held-to-
maturity assets and
all
other financial assets are under the category
of
loans
and
receivables.
(ii)
Financial liabilities
Financial liabilities at fair value through profit or loss
A financial liability at fair value through profit or loss
is
a financial liability that meets either
of
the following conditions:
•
It
is
considered
by
management
as
held for trading. A financial liability
is
considered

as
held for trading
if:
acquired or incurred principally for the purpose
of
selling or repurchasing
it
in
the near
term;
there
is
evidence
of
a recent pattern
of
short-term profit-taking; or
a derivative (except for a derivative that
is
a financial guarantee contract or a designated
and effective hedging instrument).
•
Upon initial recognition,
it
is
designated
by
the Group as financial liability at fair value
through profit
or

loss.
Financial liabilities carried at amortised cost
Financial liabilities which are not classified
as
financial liabilities at fair value through profit or
loss are classified
as
financial liabilities carried at amortised costs.
Under the above disclosure requirements, all financial liabilities are under the category
of
financial liabilities carried at amortised cost.
The above described classification
of
financial instruments
is
solely for presentation and
disclosure purpose and
is
not intended
to
be
a description
of
how the instruments are measured.
Accounting policies for measurement
of
financial instruments are disclosed
in
other relevant
notes.

20
Bien
Hoa
Sugar
Joint
Stock
Company
and
its
subsidiary
Notes to the consolidated
interim
financial
statements
for the six-month period
ended 30
June
2012 (continued)
Form
B 09a - DNIHN
(q)
Taxation
Income tax
on
the profit or loss for the period comprises current and deferred tax. Income tax
is
recognised
in
the statement
of

income except
to
the extent that
it
relates
to
items recognised
directly
to
equity,
in
which case
it
is
recognised
in
equity.
Current tax
is
the expected tax payable
on
the taxable income for the period, using tax rates
enacted or substantially enacted at the balance sheet date,
and
any adjustment to tax payable
in
respect
of
previous periods.
Deferred tax

is
provided using the balance sheet method, providing for temporary differences
between the carrying amounts
of
assets
and
liabilities
for
financial reporting purposes and the
amounts used for taxation purposes. The amount
of
deferred tax provided
is
based on the
expected manner
of
realisation or settlement
of
the carrying amount
of
assets and liabilities
using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset
is
recognised only to the extent that
it
is
probable that future taxable profits
will
be

available against which the temporary difference can
be
utilised. Deferred tax assets are
reduced
to
the extent that
it
is
no
longer probable that the related tax benefit will
be
realised .
(r) Revenue
(i)
Goods sold
Revenue
from
the sale
of
goods
is
recognised
in
the statement
of
income when the significant
risks and rewards
of
ownership have been transferred
to

the buyer.
No
revenue
is
recognised if
there are significant uncertainties regarding recovery
of
the consideration due or the possible
return
of
goods.
(ii) Services rendered
Revenue
from
services rendered
is
recognised
in
the statement
of
income
in
proportion
to
the
stage
of
completion
of
the transaction at the balance sheet date. The stage

of
completion
is
assessed
by
reference
to
surveys
of
work performed. No revenue
is
recognised if there are
significant uncertainties regarding recovery
of
the consideration due.
(iiij
Interestinco~e
Interest income
is
recognized
on
a time proportion basis with reference to the principal
outstanding and the applicable rate.
(iv)
Dividend
inco~e
Dividend income
is
recognised when the right
to

receive payment
is
established.
21
Bien Hoa Sugar Joint Stock Company and its subsidiary
Notes to the consolidated interim financial statements for the six-month period
ended 30 June 2012 (continued)
Form B 09a - DNIHN
(s) Operating lease payments
Payments made under operating leases are recognised
in
the
statement
of
income
on
a straight-
line basis over the
term
of
the lease. Lease incentives received are recognised
in
the statement
of
income
as
an
integral part
of
the total lease expense.

(t) Borrowing costs
Borrowing costs are recognised
as
an
expense
in
the period
in
which they are incurred, except
where the borrowing costs relate
to
borrowings
in
respect
of
the
construction
of
qualifying
assets,
in
which case the borrowing costs incurred during the period
of
construction are
capital ised
as
part
of
the cost
of

the
assets concerned.
(u) Earnings per share
The Group presents basic earnings per share ("EPS") for
its
ordinary shares. Basic
EPS
is
calculated
by
dividing the profit or
loss
attributable
to
the ordinary shareholders
of
the
Group
by
the weighted average number
of
ordinary shares outstanding during the year.
(v)
Segment reporting
A segment
is
a distinguishable component
of
the Group that
is

engaged either
in
providing
related products or services (business segment), or
in
providing products or services within a
particular economic environment (geographical segment), which
is
subject
to
risks and rewards
that are different from those
of
other segments. The Group primary format for segment
reporting
is
based
on
business segments.
(w) Related company
Related companies include major shareholders and
its
ultimate parent company
and
its
subsidiaries
and
associates.
(x)
Off

balance sheet items
Amounts which are defined
as
off balance sheet items under
the
Vietnamese Accounting System
are disclosed
in
the relevant notes
to
these consolidated interim financial statements.
4.
Segment
reporting
The Group operates mainly
in
one business segment, which
is
in
producing
and
trading sugar
and sugar related by-products and
in
one geographical segment, which
is
in
Vietnam.
22
Bien Hoa Sugar Joint Stock Company and its subsidiary

Notes
to
the consolidated interim financial statements for the six-month period
ended
30
June 2012
Form B 09a - DNIHN
5. Cash and cash equivalents
30/06/2012
3111212011
VND
VND
Cash on hand
329,116,426
188,492,846
Cash
in
banks
18,323,876,746
16,689,756,583
Cash equivalents
20,000,000,000
161,900,000,000
38,652,993,172
178,778,249,429
Cash
and cash equivalents at
30
June 2012 included amounts denominated in currencies other
than

VND
amounting
to
VNDl22
million (31/12/2011: VND271 million).
6. Accounts receivable - short-term and long-term
Accounts receivables included the following amounts due from related parties:
30/0612012
31112/2011
VND
VND
Amounts due from shareholders
Trade
309,003,000 247,000
The
trade related amounts due from shareholders
were
unsecured, interest free and are
receivables on demand.
Including in prepayment to suppliers and other long-term receivables were prepayments to sugar
cane farmers, details are as follows:
30/06/2012
3111212011
VND
VND
Short-term prepayments to sugar cane farmers 166,291,383,346 136,758,001,114
Long-term prepayments to sugar cane farmers 70,804,060,634
58,765,140,846
237,095,443,980
195,523,141,960

The
prepayments to sugar cane farmers are partially secured by the farmers' land use rights and
earned interest at fixed rate
of
1.125% per month (20
II:
1.125% per month). The prepayments
to sugar cane farmers are receivables at most four-year from each drawdown date.
23
Bien Hoa Sugar Joint Stock Company and its subsidiary
Notes
to
the consolidated interim financial statements for the six-month period
ended 30 June 2012 (continued)
Form B 09a - DNIHN
Other short-term receivables comprised:
30/06/2012
31112/2011
VND
VND
Harvest and transportation receivables from sugar
cane farmers
704,968,545
5,655,136,101
Personal income tax paid on
behalf
of
employees
2,141,432,328 854,284,433
Interest income receivables 178,888,889

687,061,111
Others
1,451,315,579 343,914,885
4,476,605,341 7,540,396,530
Movements
in
the allowance for doubtful debts during the period were as follows:
Six-month period
Six-month period
from 11112012 to
from
11112011
to
30/06/2012 30/06/2011
:
VND
VND
Opening balance
10,154,767,211
10,80 1,168,078
Increase
in
allowance during the period
77,771,665
Allowance utilised during the period
(8,714,823,052)
(164,641,794)
Written back
(241,810,175)
(481,759,073)

Closing balance
1,275,905,649
10,154,767,211
At
30 June 2012 trade receivables with a carrying value
of
VNDI05,772
million and
USD129,400 (31112/2011:
VNDI,493
million) were pledged with banks as security for loans
granted to the Group.
24