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 statement of cash flows for the six-month period ended 30 June 2012­Indirect method continued CASH FLOWS FROM INVESTIN

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

by the Planning and Investment Department of Dong Nai Province

Ms Huynh Bich Ngoc Chairwoman

Mr Pham Dinh Manh Thu Vice Chairman

Ms Dang Huynh Uc My 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 "the 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

KPMG Limited

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

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

Bien Hoa Sugar Joint Stock Company and its subsidiary Consolidated balance sheet at 30 June 2012

ASSETS

(100 = 110 + 120 + 130 + 140 + 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

(200 = 210 + 220 + 240 + 250 + Accounts receivable - long-term Other long-term receivables Fixed assets

Tangible fixed assets

Cost Accumulated depreciation

Intangible fixed assets

Cost Accumulated amortisation

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

4

Long-term investments

Other long-term investments

Allowance for diminution in the

value of long-term investments

Other long-term assets

Advances from customers

Taxes payable to State Treasury

Payables to employees

Accrued expenses

Other short-term payables

Bonus and welfare fund

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

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

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

27 August 2012

The accompanying notes are an integral part ofthese consolidated interim financial statements

6

Bien Hoa Sugar Joint Stock Company and its subsidiary

Form B 02a - DNIHN

Net operating profit

(60 = 50 - 51 - 52)

Code Note

Attributable to:

Equity holders of the Company

Earnings per share

Basic earnings per share

62

Prepared by:

Six-month period from 11112012 to

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

Share capital Capital surplus development funds reserves funds Retained profits equity

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

Appropriation to bonus and

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

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)

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

(46,342,400,661 ) (10,814,053,146) (11,093,033,282)

Net cash flows from operating

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)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for additions to fixed assets and other long-term assets 21 Proceeds from disposals of fixed

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

Net cash flows during the period

50

Cash and cash equivalents at the

60 beginning of the period

Cash and cash equivalents at the end

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

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

Net off purchase of sugar cane against interest income

receivables from sugar cane farmers 11,122,434,438 9,230,994,441

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

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)

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)

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

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

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

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 e cts 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

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

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

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

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 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

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

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

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:

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

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-to­maturity assets and all other financial assets are under the category of loans and receivables

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

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

Dividend income is recognised when the right to receive payment is established

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 straight­line 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

6 Accounts receivable - short-term and long-term

Accounts receivables included the following amounts due from related parties:

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:

Harvest and transportation receivables from sugar

Personal income tax paid on behalf of employees 2,141,432,328 854,284,433

4,476,605,341 7,540,396,530

Movements in the allowance for doubtful debts during the period were as follows:

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

221,556,449,039 333,067,839,753

At 30 June 2012 inventories with a carrying value of VND132,508 million (3111212011: VND 185,926 million) were pledged with banks as security for loans granted to the Group

Form B 09- DN

8 Tangible fixed assets

Buildings and structures VND

Machinery and equipment VND

Office equipment VND

Motor vehicles VND

Total VND Cost

394,680,667,009 130,006,998,609 (233,333,333)

5,099,476,414 1,247,998,574

12,476,758,262 521,794,159,598

138,553,505,077 (233,333,333)

Included in the cost of tangible fixed assets were assets costing VNDI06,895 million which were fully depreciated as of 30 June 2012

(311l2/201l: VND65,675 million), but which are still in active use

At 30 June 2012 tangible fixed assets with a carrying value ofVND219,884 million (311l2/2011: VND132,430 million) were pledged with

banks as security for loans granted to the Group

26