KDC Annual Report 2011 FINA en

DIVERSIFIED
KINH DO CORPORATION
141 nguyen Du Street, Ben thanh Ward, District 1, Hochiminh City tel: (+84) 8 38270838 Fax: (+84) 8 38270839 email: info@kinhdo.vn Web: www.kinhdo.vn
AnnuAl RepoRt 2011
INTEGRATED
TRANSFORMATION
IT ALL STARTED WITH FOOD

WHILE FOOD IS THE COMPANYS FOUNDATION, TODAY KINH DOS TRANSFORMATION IS WELL UNDERWAY TO DELIGHT CUSTOMERS AND CONSUMERS.
A STRONGER KINH DO IS EMERGING
CONTENTS
Message Vision Mission Chairmans Message Milestones Highlights
4 7 8 9 13 15
Management Team organizational Structure the Board of Directors the Board of Supervisors the Management team
17 19 21 27 29
Annual Report 2011 Business Review Strategies Moving Forward Marketing and Sales Strategy 2012 Goals
35 37 39 41 42
Consolidated Financial Statement Independent Auditor's Report Consolidated Balance Sheet Consolidated Income Statement Consolidated Cash Flow Statement
71 74 75 77 78
Kinh Dos 2011 Annual Report features excerpts from conversations with the leadership. their dialogue highlights how we are adapting to new dynamics in the markets; changing our formats, products, services, processes, business models, and capabilities; and shaping the evolution of our leadership team and the company all the while sustaining our vision, mission, culture, and values. What theyre saying, and what Kinh Do is doing, is defining success in an industry in transition.
VISION
MISSION
Our Consumer Mission
Is to identify and produce affordable staple and packaged foods, snacks, bakery products, beverages and juices, confectionaries and condiments, instant foods, processed meats and health supplements which people want. our products are pioneering market-leaders, hygienic, healthy, satisfying and conveniently available to all consumers.
FLAVOR YOUR LIFE

Kinh Do creates lifes flavor through wholesome, healthy, nutritious and convenient foods
Our Staff Mission
Is to nurture and develop the skills and abilities of our people to meet the professional demands of their work and satisfy their personal needs. In this way we create a dynamic, creative, innovative and dependable community within the company.
Our Community Mission
Our Shareholder Mission
Is to maximize investment returns over the long-term and to manage risk in order to give certainty and confidence that investments in our business can achieve our shareholders goals.
Is to contribute to the communities in which we operate through sponsorship programs and targeted community development and support activities.
Our Partner Mission
Is to create sustainable value for supply chain partners through the creation of innovative food products which address consumer demand trends and satisfy or exceed consumer expectations, and provide equitable returns for all.
Kinh Do Corporation Annual Report 2011
Chairmans Message
A Year of Progress and Consolidation Against A Challenging Environment

An interview with Kinh Do Group's Chairman tran Kim thanh
Kinh Dos recipe for success is explained in depth by the Chairman Mr. Tran Kim Thanh in this Q&A session.
How do you feel about Kinh Dos results this year and how do you view the situation in the current market in which the company operates? I think the Kinh Do team has done exceedingly well in a market where most businesses suffered. We have achieved a lot this year both in terms of operational improvements and growth. It was our first fiscal year we operated as a group and I think the team came together very well to establish the necessary structures and processes which have come to define our operating platform. this platform is important to the future of Kinh Do as this will be the foundation upon which we will use to achieve greater scale, not only in our operations, but also in our profitability and our execution. With 2011 behind us, we have now entered a new stage of development that will see us gain efficiencies in our operations, utilization of our assets; and ultimately scale up these efficiencies to reach higher levels of profitability for shareholders. Going forward in 2012, the operating environment will continue to be challenging and we will continue to have to work hard to grow sales and improve profitability, with the macroeconomic policies still focused on managing the delicate balance between inflation and growth. What do you see as the most significant achievement of the company to date and how do you plan to surpass that in the future? For a company with such a long history as ours, its hard to pin point one single or significant achievement that surpasses all the rest. What I would highlight as something Im most proud of is our transformation using the people, products and platform approach. this approach to building Kinh Do has created a solid foundation and a team that has been instrumental in building the company. We have made a good team even better by adding expertise that supports the business at the group level. We have also created a product portfolio which we are immensely proud of, upon which we will continue to grow and develop to include products that are part of the Food & Flavor strategy. this will see product extensions beyond Snack & Confectionary into products that reach into the everyday lives of consumers. Finally we have built a true platform upon which we can accelerate our growth in both scale and profitability. We have seen success stories in other markets where companies enter the cusp of positive change, and I believe we as a company have created an opportunity for that. our goal to surpass the present achievements is designed around doing what we have already done but better. the path to change is about being prepared: having a goal and a plan. I believe that
10
With the ambition to become both Vietnams and Asia Pacific regions leading company in the food and beverage category, Kinh Do has undergone a drastic transformation over the last few years through its investment in building a strong foundation for the future. the transformation and the change that have resulted, has defined the companys present and set the foundation for the future. this platform will accelerate the growth of the company in a differentiated approach. the challenges in 2011 did not slow Kinh Dos advances, as the company remained profitable and gained new market share in a difficult environment.
processes of the merged entity to great success. of course the integration process had begun much earlier than 2011 but the external challenges not only brought us together to act as a team but also to think like one. this was one of the greatest challenges, as we have distinct sets of cultures within different pockets of the company. We set the basis for how we would deal with adversity and challenges right at the beginning of the process. In a way the market was against us, but it made us a better team. Its easy to work together when times are good and there are a lot of resources to go around, but during tough times, we learn to economize and work together smartly. How do you see the industry changing and how will Kinh Do fit into this new world? I think the manufacturing industry in Vietnam is set for significant changes. like most countries that start by manufacturing products, its inevitable that you begin to shift around the value chain as the world around you shifts. Its particularly true in our industry where we are selling a food product and the tastes of the people begin to change. Were forced to keep up with the change or even get ahead of it to stay ahead of the competition. over all, the food & beverage industry in Vietnam has been undergoing drastic change and expansion for the last two decades. We have been lucky to be a part of that and have benefited by gaining manufacturing scale early on and securing a top spot. Going forward our advantage will continue to lie with scale but more on the sales and distribution side. essentially we are shifting our value proposition downstream closer to the customers. this has also become our biggest competitive advantage in a country where there continues to be a lot of inefficiencies and barriers to successfully delivering quality products to consumers. the investment in the sales and distribution channel will continue to be essential in safeguarding our position in the domestic market. A lot of investors would look at the business year to year, but the benefit of running a business is that you can view it with longer time horizon, which means you need to have a long term plan (which we do) on how to build a defendable position against competition while going out winning markets. theres no magic formula, but experience and scale helps a lot, both of which we have.
this downstream shift also means that branding and marketing will play a bigger role in Vietnam. As we shift more capital away from manufacturing, we will need to invest in brands to capture consumers loyalty which translates into future equity of our business. We have been successful at creating one of the best iconic brands in Vietnam and multiple strong product brands. We will continue to strive to build on this success in a faster and more scaled way, especially now that we have a platform to accelerate that. Youve laid out a very clear strategy on how you want to move forward, what needs to be done and what you want to achieve. How is the team planning to achieve all of this at the same time? the goals we have set forth are challenging but not impossible. As we look back at the history of the company, all the challenges we have faced also appeared to be daunting at the time but in the end we always prevailed. When failure isnt an option, success is the only acceptable outcome. I believe that the team we have put together is capable, competent and also very professional. their job is not to look at a problem and only see how big it is, but to find multiple options in which they can overcome it and succeed. Fortunately they have a lot of experience at this given the changes in the last few years and we are confident they will continue to succeed. As to their ability to deliver so many things at once, I also have faith that its possible as long as we focus on the small steps and milestones towards the bigger goals. More importantly we need to work, act and distinguish ourselves as a team. We are halfway through a transition and so far we have achieved very good results. As an investor, its often not easy to see the bigger picture and the larger goals beyond the annual results, but we believe a lot of our shareholders are long-term investors who have been with us for a long time and have been faithful to the path we have drawn. All we ask is for patience and perseverance as we complete what we set out to do and make a good company a great one.
our people, product and platform approach allows us to be fully prepared for the challenges to come. For example, our product Strategy of entering the next phase of change (Food & Flavor) gives us a definitive plan to move forward. Our Platform Strategy of achieving a 1) Foundation for Growth, 2) Profitability through Efficiencies and 3) Profitable Growth outlines the metrics upon which we and our shareholders will measure our success. Its a complex approach to a simple goal of profitable growth but each part plays on the strengths of overall management team. last but not least, as part of our people Strategy, we have assembled a management team with experience, insight, knowledge and most importantly shared vision and passion for growth.
What do you foresee as Kinh Dos biggest challenges in achieving all of these different goals set forth by your management team and how long do you think it will take it to achieve this? the process is dynamic and while we have the plan and the right pieces in places, there are a lot of external factors that could affect the progress. Its impossible to anticipate all the risks, but we have built a versatile and resilient company that should be able to withstand most of these external shocks and overcome most challenges. A great example is how we were able to achieve such scale and maintain profitability during a very difficult year. During this time, we established and tested the operational
11
12
Kinh Do Corporations Historic Milestones
Our Path of Growth

Beginning from a proud tradition
Business alliance with Ezaki Glico Co. Ltd (Japanese confectionary company)
Kinh Do founded launched cracker products and moon cakes
launched bun products
Acquired Walls Ice Cream from unilever. Kido founded 2000 2001 2002 2003 2004
Kinh Do Corp (KDC) Ipoed
1993
1994
1995
1996
1997
1998
1999
2005
2006
2007
2008
2009
2010
2011
launched snack products
launched chocolate candy
launched candy
13
1993 - 2011
launched cookie products
north Kinh Do (nKD) Ipoed
launched cakes.
Acquired majority of Vinabico
KDC, nKD, Kidos merged to form the Kinh Do Group
14
Our Highlights of The Year

In 2011 we made good progress in strengthening the foundation for accelerated growth. Both volumes and market share improved during the year, and the scaled platform of KDC proved to be a significant factor in achieving this success. Our solid financial performance alongside bigger innovations, new partnerships, and better execution will accelerate the growth in the coming years.
Operational Highlights
Category Biscuits Cakes Moon Cake Buns Ice Cream Yogurt Overall Net Revenue Growth %* 52.3% 12.2% 31.4% 33.8% 27.8% 44.6% 32.6% Market Share%** 33% 17% 76% 64% 29% 8%
Financial Highlights
Group Revenue*
VND4.247trn
Gross Profit Margin*
+32.6%
VND1.673trn
eBIt*
+33.8%
VND398bn
+14.3%
Operating Profit*
Net profit after tax
VND345bn
+0.7%
VND279bn
earnings per share
+11.1%**
VND2,312
total cash
VND967bn
total external debt
VND997bn
total equity
VND3.815trn
net Free Cash Flow from operations
Debt equity ratio
VND1.056trn
0.51x
external gearing ratio
0.26x
Strong markets share = profitabilty
(Gross profit margin)
39.4%
(Operating profit margin)
8.1%
large scale = resiliency Focus = growth
*Based on 2010 Proforma (including NKD, KIDO) Consolidated Financial Results **2010 NPAT adjusted for Proforma (including NKD, KIDO) and excludes on time gain of SJC disposal.
(Net revenue growth)
32.6%
*Based on 2010 Proforma (including NKD, KIDO) Consolidated Financial Results **Source: With the exception of Moon Cakes, Ice-cream, and Yogurt categories, all market shares numbers are from AC Nielsen 2011 Retail Audit
15
16
WHO WE ARE
INGREDIENTS FOR GROWTH
17
18
WHO WE ARE
Organizational Structure
Roles: Assessing Supervising Recommending Measuring Office of the BOM Business Application legal Investment Strategy pR Internal Audit Group Chairman Group President / CEO Group COO
Strengthening Our Platform for Growth
New Growth From Strong Roots

Support Team
HR Admin IT
Growth Team
Sales Marketin R&D Logistic
Cost Team
Production Purchasing Finance Accounting
Centralized
Centralized
Centralized
our ambition remains to build Kinh Do into a food and beverage company, clearly differentiated from our more commodity-oriented competitors. to achieve this we have designed a number of operating imperatives that enable us to operate as multiple, versatile small businesses, being both fast and decisive but on a large scale by leveraging strength and centralization; giving the best of both worlds.
SBu's
Cookies Cracker Wafer
Centralized
Centralized
Centralized
SBU HEADS must have qualification of a leader and Intrapreneurial mind.
Snack
Centralized
Centralized
Centralized
Cakes
Centralized
Centralized
Centralized
Creating Strategic Business Units (SBUs) by product category the creation of SBus around a product category allows us to meet the dynamics and market conditions of each category differently, for every industry, product and geography we can face different pressures at different times. the purpose of dividing the business into different SBus is to create focus and effectiveness in growth, profitability and competition. Creating functional teams at the group level Recognizing that while there are differences in the businesses, there are also commonalities. We needed to ensure that total focus did not result in duplication. this lead to the creation of the functional teams that manage areas such as Finance, HR, It, Accounting, logistics, Sales, and Marketing to ensure that while SBus focus on the competition, the function teams focus on keeping the SBus competitive. Empowering SBU Heads to manage their business as entrepreneurs In a large business, often the criticism is that the bureaucracy weighs on efficiency and slows decisions, resulting in lost opportunities. At Kinh Do this is not the case as the structure and the processes are designed to create efficiencies enabling well-informed timely decisions to maximize opportunities.
Leveraging the overall scale of the group to maximize efficiency in Supply Chain Management (SCM) our greatest value is our ability to market products. In order to do that we have to buy, make and move products which comes down to our supply chain. SCM is a key component of our business and we have wielded it as one of our key competitive advantages. As organizations grow this is usually the first to be strained, but not in our case., Thanks to the combined scale of Kinh Do, the sophistication of the eRp system, and the centralization of the SCM, one dollar saved here translates into several dollars earned downstream; ultimately more profits to our shareholders. Attracting the best talents by being the best Who we are is the most critical part of Kinh Do, and it is greater than the sum of the different personalities, diversified cultural backgrounds and the multiple experiences of our people. We are a multilateral corporation and the Kinh Do philosophy is to attract the best talent by being the best.
Buns
Centralized
Centralized
Centralized
Candies Chocolate
Centralized
Centralized
Centralized
Yoghurt
Shared Services
Centralized
Dedicated Resources
Shared Services
Dedicated Resources
Centralized
Centralized
Shared Services
Centralized
Ice Cream
Shared Services
Centralized
Dedicated Resources
Shared Services
Dedicated Resources
Centralized
Centralized
Shared Services
Centralized
Growth Team Role: the core team of the Group, this team develops and executes key business plans and works closely with the SBus Culture: Creative, dynamic, smart with "can do" spirit
Cost Team Role: Controls cost and meets the requirements of the Growth team Culture: Fast, accurate, cooperative, disciplined and highly analytical
Support Team Role: the last gate to assess, approve and monitor projects as well as support the Growth team and Cost team in execution Culture: Supporting, service oriented, disciplined, inflexible and analytical
Thanks to this flexible structure, Kinh Do can quickly and efficienly add new SBU's by utilizing available systems and resources
19
20
WHO WE ARE
The Board of Directors
The People Behind Who We Are
Mr. Thanh is the founder of Kinh Do Corporation

A visionary leader who has lead the company through a complex operating environment to create one of Vietnams best businesses.
A veteran entrepreneur with a lifetime of experience in management and business, he is the right combination of boldness in driving the company and caution in mitigating risk. under his leadership, Kinh Do has grown from a family business to become Vietnams number one confectionary company. His acute business sense led to the successful turnaround of Walls icecream business to become the countrys number one single serve ice cream company. Mr. thanhs leadership strategy for Kinh Do Corporation is to create the best company, consisting of the best people built around the best processes. Mr. thanh is currently Chairman of the Board for Kinh Do Corporation. He also sits on various boards of other large Vietnamese corporations and holds multiple key positions in Vietnams top companies. He is a Member of the Central Committee of the Vietnam Homeland Front. He has received several awards and accolades from both the Central and local Government of Vietnam for his significant contributions to the socio-economic developments of the country.
Mr. Nguyen co-founded Kinh Do Corporation
A bold and decisive leader, who has been instrumental in driving the growth of the company to become one of the countrys best known corporations.
An experienced entrepreneur with a track record of building large and profitable businesses, Mr. Nguyen has been instrumental in the development of Kinh Do Corporation. under his management, Kinh Do has emerged as one of the most well-known brands in Vietnam with a portfolio of market dominating products that are often considered the best in their category. It was Mr. nguyen that successfully engineered the acquisition of the Walls ice cream factory and who spear-headed the development of the business (and category) to the business it is today. Mr. nguyen also serves as both the Vice-Chairman and Ceo of Kinh Do Corporation. He is an active member of the board of directors for the Vietnam Chamber Commerce and Industry (VCCI) and participates on the board of several prominent companies in Vietnam.
21
22
WHO WE ARE
The Board of Directors
Interview with the CEO
The year 2011 was the first year of operations for the newly merged Kinh Do Group, Mr. tran le nguyen, Ceo of Kinh Do Group reveals the challenges and opportunities the company faced during the year and also discusses what the focus for 2012 will be.
The financial results achieved by Kinh Do Corporation are impressive, and the combined scale of the merged Kinh Do seems to have been successful. Can you provide us with some details as to what the results consist of and what we can expect from 2012?
total net sales improved by 32.6% compared to 2010, which consisted of one third volume and two third value increases. Despite a challenging year for raw material costs, we were able to pass on all of the increases to our customers. We also managed other costs extremely well and the combination of this allowed us to maintain our gross profit margins to our historical levels. In terms of specific products, 2011 was a breakthrough year for a number of categories. our success can be broken down into three specific areas: products that dominated the market, products that maintained their strong position and newer products that gained traction. our dominating products continued to grow faster than the market including crackers which grew at 56.3% to maintain its number one spot in the market, cookies which grew by 43%, buns by 33.8%, moon cake by 31.4% and ice cream by 27.8%. our cakes category continued to be a steady winner with 12.2% growth and a market share improvement of 6 percentage points to 26% in 2011. new products that gained traction include our yogurt category which grew by 44.6% to increase its share of the market to 8%. In additional to the financial and product successes, we also delivered operational improvements that were a direct result of the merger. We saw improvements in the operating structure, distribution systems, and the processes which would set the foundation for accelerating the improvements through 2012 and the years beyond. For 2012 we expect organic growth to be more tempered, particularly on our existing product portfolio. our Snack & Confectionary product portfolio should grow by 30%, with gross profit margins continued to be at around 38% to 39%. We will also likely see improvements in our operating profit margins (OPM) due to declines in interest expenses and better synergies of our
sales & general administration expenses, and we target opM to improve over time. In addition to the organic growth, we target to augment additional growth with new products particularly from our Food & Flavor product strategy; we have plans to launch a number of new product categories in order to extend our reach into meal compliments and meal replacements.
We see that Kinh Do has expanded its product offerings beyond those that are home-grown and extended its presence beyond the Vietnamese market. Whats the strategy and approach to this expansion and can you describe to us how this will fit into the current strategy of Kinh Do and fuel its growth in the coming years?
Kinh Do has achieved a fairly dominant market position in Snack & Confectionary over the last two decades. We have created a strong sales and distribution network which we believe will continue to gain efficiency as we increase the number and types of goods being put through it. this improvement in distribution utilization will help to achieve cost savings for the overall company. In this context, one part of our expansion strategy is to seek partners and products that are innovative and unique which we believe are suitable to Vietnam, and oeMed under our brand and distributed through our network, thus improving overall distribution utilization. Additionally we also leverage our relationships with our partners to increase export sales. one of our key initiatives this year is to extend our presence in export markets. We have had reasonable successes in exports but in 2012 we will begin expanding this part of our business in earnest as a way to increase production utilization. We expect this inside out and outside in approach to be a significant driver of both growth and profitability in the next few years. We aim to position Kinh Do as a key entry point for partners coming to Vietnam while also exporting Kinh Do products foreign markets.
2011 was a difficult operating environment and we continue to be challenged as an organization for delivering results in the face of internal and external changes. our results speak for itself and the team has delivered what I would consider exceptional. In addition, we were able to secure the partnership of a new strategic partner which both confirms our position in the market and also our thesis for growth in the Vietnamese market.
Mr. Tran Le Nguyen
Vice Chairman of the Board of Directors and Ceo of Kinh Do Group
23
24
The Board of Directors and Management
Mrs. Vuong Buu Linh
Co-founder and Member of the Board of Directors
Mrs. Vuong Ngoc Xiem
Mr. Ma Thanh Danh
Member of the Board of Directors
Mr. Co Gia Tho
Ms. linh co-founded Kinh Do Corporation and has been active in the development and growth of the company since. She is experienced in business and supply chain management for the Group and all it's subsidiaries contributing to singificant improvements in efficiency and cost reduction. Under her guidance, Kinh Do implemented the eRp system by SAp, effectively increasing the companys capability in making timely and accurate decisions with the right arsenal of information. Currently, Mrs. linh is both a member of the Board of Directors and a Vice president. She also takes part in key positions as a board member in the companys subsidiaries.
Ms. Xiem co-founded Kinh Do Corporation and has been actively participating in the management of the company since. She has many years of experience in managing the Retails system. With her experience and hands-on approach, she has been a key part of the management team and also essential to the growth of the company. Ms. Xiem is currently a member of the Board of Directors and a Vice president at Kinh Do.
Mr. Danh holds a Bachelors of Science (B.Sc) in electrical engineering, Degree in Business Administration from the university of economics and a Masters of Business Administration with a focus in International Business Strategy and Brand Management from Belgium. He has over ten years of experience in financial management, strategic and brand management consultancy and advisory in mergers and acquisitions. He was initially responsible for development of the buns business and the fresh cake business between 1997 and 2001. He held various senior management roles at BSC Cable television Company, a HtVCs subsidiary and Dona new tower Foods and Beverages Joint Stock Company.
Mr. tho is a member of the Board of Directors of the company. He founded thien long Corporation and currently holds the position of Chairman there. Hes an active part of many boards of Vietnamese companies and with his twenty plus years of experience in operations and management, has been an integral contributor to the growth of Kinh Do.
Mr. Wang Ching Hua
Mr. Tran Quoc Nguyen
Vice president of Kinh Do Group and General Manager of Kinh Do
Mr. Nguyen Van Thuan
Mr. Wang has over twenty years of experience in the food manufacturing and processing industry, he joined Kinh Do from its establishment, taking an active role in the development of its manufacturing operations. He is a co-founder currently a member of the Board of Directors and a Vice president looking after manufacturing operations at the Binh Duong production facility.
Mr. nguyen has over 15 years of experience managing various member companies within Kinh Do Group. He has held several key senior management positions within the group including General Manager, Board Member and Vice president. He is currently the General Manager at Kido Ice Cream Company, a member of the Board of Directors at Kinh Do and Vice president of Kinh Do.
He is a Member of the Board of Directors of Kinh Do Corporation. He got a Doctorate in economics, Dean of Finance Banking Department at Ho Chi Minh City open university. He has gained over 28 years teaching in the filed of banking and finance. He is very knowledgeable about financial market and banking industry in Vietnam. Besides his academic works at Ho Chi Minh open University for 20 years , he is also a financial consultant and advisor for many companies and foreign organizations operating in Vietnam.
25
26
The Board of Supervisors
Leading with vision and passion

Mr. Le Cao Thuan
Head of the Supervisory Board and Financial Director north Kinh Do
Joining Kinh Do Corporation since its early days, Mr. thuan has deeply bound and understood the operation and development of the corporation, particularly the financial and accounting activities. He is one of the first pioneers who took part in building north Kinh Do Company and played an important role in to the companys success today, contributing to strong growth of the Kinh Do Corporation. Mr. thuan graduated MBA valedictorian at Benedictine university - uSA, Bachelor of Accounting - Audit at university of economics and Bachelor of Computer and Mathematics Applications at polytechnic university. Currently, he is the Finance Director of north Kinh Do and Head of the Supervisory Board at Kinh Do Corporation.
our management team brings both deep and broad experience together with a collective commitment to maintaining Kinh Dos position as one of Vietnams top food company, all the while building and strengthening Kinh Dos position as a regional force.
Mrs. Luong My Duyen
Member of the Supervisory Board
Mr. Vo Long Nguyen
Member of the Supervisory Board
Ms. Duyen has been working for Kinh Do since 1993 and has held several key positions, including Accountant, Deputy Manager of the Accounting Department at Kinh Do Construction and Food processing Company ltd. and Chief Accountant at a branch of Kinh Do Construction and Food processing Company ltd. Since 2006 Mrs. Duyen has been the Chief Accountant at Kinh Do Real estate Joint Stock Company. She holds a degree in Finance and Accounting and has spent her career at Kind Do.
Mr. nguyen holds a Bachelor of economics with a specialization in Business Administration. He is a certified Fund Manager with a certificate issued by the State Securities Commission of Vietnam. He was one of first brokers of the OTC market Vietnam and has over 10 years of investment experience.
27
28
WHO WE ARE
The Management Team
Mr. Nguyen Khac Huy

Group Coo
Mr. Kelly Wong

Group CFo
Mr. Huy has been with Kinh Do Group since october 2009. With over twenty-two years living and working in uSA, Japan, Hong Kong and Singapore, Mr. Huy has held several top positions such as Ceo at three high-tech companies in uSA, Vice president of Marketing for a Singaporean logistics company, General Counsel and Director of Consulting for a Swiss fund management company in Singapore, CEO of a strategy consulting firm in Vietnam. He has experience in operating including telecom, steel, chemicals, FMCG, and banking sectors. He has consulted many economic development projects sponsored by non-governmental organizations such as World Bank, unCtAD, Wto, eu, and ItC and taught u.S. MBA programs in Vietnam, Singapore and Malaysia. He completed his doctorate degree in law at Kent College of law (1997) in Chicago, MBA which specializes in Finance at Illinois Institute of technology, BA in economics at California State university long Beach.
Mr. Kelly Wong joined Kinh Do Group in August 2011. prior to joining Kinh Do, Mr. Wong was a Managing Director with Ho Chi Minh Securities Corporation (HSC), where he helped to establish the Investment Banking & Advisory team in and was awarded the Rising Star Domestic Investment Bank in Vietnam in 2011 by the triple A Country Awards for his achievements. Among the many transactions he was involved in, Mr. Wong lead landmark M&A transactions in the media industry, telecom, consumer retail and retail food & beverage. Before joining HSC in 2008, Mr. Wong worked for HSBC Vietnam for four years where he was involved in corporate commercial banking and global markets. Mr. Wong holds a Bachelor of Commerce from the university of British Columbia in Vancouver, Canada and a Diploma in Asia Pacific Management from the McRae Institute of Management at Capilano University.
Last year,Kinh Do Corporation has made a lot of changes to achieve the growth platform based on the combined merged entities. What are the most significant changes the company has undergone?
The most significant change is the administration and operations of the Strategic Business units (SBu). this has been a critical turning point and an essential foundation for the ongoing development of the food business. this will allow us to grow rapidly and in a differentiated manner from our competitors. It is essentially having a company in a company and will allow us to be very focused on the strategic business unit, while having the flexibility to grow as a firm overall. Its our way of having the best of both worlds; being focused and innovative like a small business while leveraging the scale and expertise of a large one. ultimately its about having someone specialized that knows the business and the market which can rapidly create value for a product category.
competitive and also scalable. We aim to have a platform that enables us to add new SBus that have great potentials and also complimentary to the overall business. the goal is to leverage the existing shared services and group platform to create new and successful businesses quickly and effectively. In fact, we are so confident that we already have plans to add a couple of new SBus this year and more in the coming years.
How do you determine capital allocation to finance the subsidiaries?

As a group of companies, we allocate our capital based on the best returns we can achieve. the minimum requirement is that each new project or SBu provide a decent return in the near term (i.e. 2 years) and that the business is scalable. Making money quickly cannot be the only criteria but it needs to achieve a meaningful scale in the long term (i.e. 3 to 5 years).
What is your forecast for interest rates and inflation in 2012?

I believe that the worst is over for inflation and as a result high interest rates. We continue to be cautiously optimistic of the situation as the cycles in Vietnam tend to be very short, with the potential to change very easily. We saw inflation peak last September and along with it borrowing costs. We have seen both inflation and interest track lower this year but on the back of poor liquidity in the VnD market. this tells me that while the situation has improved, it continues to be delicate.
Creating SBUs seems like the right approach to growing the business but realistically how are you going to achieve this with both speed and efficiency?
Internally, we will continue to fine-tune our internal operations to further achieve speed and efficiency and to better leverage our sales, distribution and marketing capabilities. this means we will continue to seek out strong partners with either strong products that are attractive to the Vietnamese consumers or partners with scaled and low cost manufacturing. We will work with partners to find the lowest cost approach to creating and manufacturing the products; effectively maximizing value for our shareholders and also the total profits of the partnership. The goal is to ensure that partnership interests are truly aligned and benefits maximized for those involved
How did high interest rates and inflation affect Kinh Do in 2011?
The high interest rate is a policy reaction to the high inflation, both of which had a large impact on our business. We were vigilant in our approach to managing this situation as high interest rate and high inflation is generally poor for businesses and consumer sentiment. In contrast to the rest of the market, we continued to grow, and were profitable in this environment which is a testament to our management team and the initiatives we took to continue to drive the business.
What is your view of the stock market in general and the future share price of KDC?
I think the stock market reached a low point right before tet 2012 and is poised at least for a technical rebound. the fundamentals remain weak in the overall economy but it is steadily improving. For the shares of KDC, I continue to believe that there is value here. primarily because we have reached scale but not yet efficiency. To unlock potential value, we will need to continue to grow this year and also reach better profitability metrics as a merged entity. In addition, I believe the product strategy, growth strategy and finance strategy we have devised will bring KDC to new heights within the next three years.
Having experienced so much change already, what is the plan for 2012, and how do you foresee the company changing in the coming year?
In 2012, we will continue to further improve the infrastructure. It has always been the goal to grow the scale of the business and also solidify the infrastructure so we can continue to be
29
30
WHO WE ARE
Management Team
Moving Up the Value Chain

A conversation with the management team Having transformed Kinh Do into a stronger business through the merger of the food business, the team has also transformed from a good management team to a great one. We are now in a much better position to accelerate the companys development from a strong local player to a regional one due to a broader and deeper management team that has faced adversity together and come out on top. Having achieved so much and looking to achieve more, we discuss with the management team their individual approaches to creating one of Vietnams best companies.
efficiencies achieved. In particular, we were able to implement cost controls in procuring raw materials in a centralized, scaled manner that allowed us to maximize bulk discounts. We also reviewed all the processes involved in the supply chain so as to be flexible and responsive to our demand requirements thus allowing us to be proactive in managing supply levels.
The companys distribution network can reach far and wide. It can be considered one of the essential assets of Kinh Do and also the key barrier to entry against competition. What factors support this fact and how do you continue to expand its reach? In 2011, +30% growths in net sales can be considered a turning point for Kinh Do and forms the basis of the future platform for growth. our distribution network covers all 64 provinces in Vietnam reaching over 160,000 points of sale nationwide. Kinh Do is now actively organizing the distribution networks in neighboring countries such as lao and Cambodia in order to capture the potential growth there. In addition, our export markets now reach more than 30 countries, including several highly competitive markets such as the european union, united States, Japan, South Korea and Australia. our current sales team has a total of 1,600 sales people across the country that reach 160,000 points of sale, 20,000 freezers and 5,000 coolers nation-wide. In addition, we leverage our 19-year-old relationships with our distributors to create one of the most effective and far reaching sales organizations in Vietnam. Given that the market continues to be 80% general trade, these relationships are what drive the success of Kinh Do. the broad reach and deep penetration through our distributors gives Kinh Do a distinct advantage in moving product and creating value, allowing us to move a broad range of products through our distribution channel. the sales and distribution channel has a distinct advantage of allowing us to effectively add new products and categories quickly by simply plug-and-play.
Mr. Bui Thanh Tung

SBu Director Kinh Do Group
Mr. Tran Tien Hoang

Supply Chain Director Kinh Do Group
Mr. Tung has over 10-year experience in manufacturing management and with in-depth knowledge on the SBU operating model. He is currently a SBU Director and Head of the Labor Union for the group. He holds a degree from the University of Economics and UCLA Anderson University (Los Angeles, USA) with a specialization in Business Administration. As one of the SBU heads, how do you compare the SBU model that Kinh Do has implemented with other operating models? I believe that the current model of operations of Kinh Do has several key advantages. First and foremost, the SBu operates as an independent organization which is responsible for its own financial results. This makes us responsible for an entire business and its shareholders which in this case is Kinh Do. the purpose is to create a larger sense of accountability at the operating level. In addition, the SBu structure allows us to be very much focused on the market, as the group provides all the ancillary services and support functions and we worry only on the sales, competition and the product.
Mr. Hoang began his career at Kinh Do in 1997 managing distributors in the Central and Northern regions. He has over 12 years of experience in procurement management in the FMCG industry. He was appointed to Director of Supply Chain at Kinh Do Group in 2011. He currently leads the companys COST TEAM and plays a significantrole in developing the order management strategy for the entire group. He holds a Bachelor of Economics from the University of Economics and Higher Leadership Skill Certificate from UCLA AndersonUniversity (Los Angeles, USA). How did supply chain management contribute to the Kinh Dos success last year and what is the direction and strategy outlined for this year? Last year, against the difficult economic situation, we not only managed to grow faster than the market but also maintained our historical gross profit margins. Supply chain management was a key component to that success by ensuring that procurement, transportations and logistics costs were effectively stabilized and
In 2012, we expect the economy to continue to face difficulties, including both inflation and the volatility in the raw material prices. In the face of such a tough operating environment, we aim to continue to be tightly integrated to the rest of the operations, and maximize our scale in purchasing and procurement. We will maintain stable cost of goods sold, and high standards in our product quality to ensure that we are efficient and effective.
Mr. Le Van Thinh

Vice president of Sales Kinh Do Group
Prior to joining Kinh Do Group, Mr. Thinh worked as a National Commercial Director for PepsiCo Vietnam. He has over fourteen years of experience in building up distribution channels and developing food and beverage business units for multinational corporations.
31
32
WHO WE ARE
Management Team
We aim to build a consumer-focused company, moving away from selling what we can make, to making what the consumers need.
product innovation has always been Kinh Dos life blood, and an important competitive advantage of ours. last year we brought to fruition more than sixty innovations in new products, product extensions and simplifications, including the successful relaunches of AFC crackers and SolIte sponge cakes, buns, and wafers.
Mr. Le Anh Quan

Vice president of Marketing Kinh Do Group
Mr. Quan has over eighteen years of experience in business management and brand building in various industries, from media to consumer goods, to e-commerce communication. Before joining Kinh Do Group, he was Commercial Director at HTV2, Business Unit Director at Unilever Vietnam, and Internet Marketing Manager at Walt Disney Company in Los Angeles. He holds a MBA, specializing in Marketing from California University (UCLA Anderson). In the past year, how did marketing contribute to the growth of Kinh Do? What are the strategic marketing initiatives in the coming year? last year, Kinh Dos marketing team focused on three aspects, namely brand building, efficiency improvements, and product innovations. During the mid-autumn festival, we created an iconic brand by maximizing the exposure of the KInH Do moon cake brand and further strengthening its bonds with consumers. We also succeeded in increasing market penetration of our AFC and CoSY brands by attracting new users, enhancing the value proposition of many other brands through product upgrades and re-launches with renewed packaging and communication and by doing so, growing the category values. We improved our operational efficiency by focusing on fewer and bigger, more impactful programs/projects, emphasizing quality over quantity and achieving better speed to market from concept to launch.
In 2012 and beyond, we aim to build a consumer-focused company, moving away from selling what can to make, to making what the market requires us to sell, thus best satisfying the consumers needs and wants. this cannot be possible without strengthened market intelligence and consumer insights function that guide our innovations. Simultaneously, we will enhance Kinh Dos brand portfolio value by restructuring its architecture, essentially consolidating small brands into megabrand franchises that can better attract new consumers and retain their loyalty. the ultimate goal is to turn Kinh Do into the most ubiquitous household brand in Vietnam.
Mr. Tran Quoc Viet

Vice president of Kinh Do Group, General Director of north Kinh Do
Mr. Mai Xuan Tram

SBu Director Kinh Do Group General Director of Vinabico
Mr. Viet has over 15 years of experience in managing companies in the FMCG industry. As General Director of north Kinh Do, he has led the company to achieve remarkable growth over the last 8 years. He is also a member of the executive Committee of Vietnam Marketing Association (VMA), Vietnam Food Safety Association (VInAFoSA) and an expert in analyzing and consulting business strategy. Mr. Viet holds an MBA and now completing his doctoral thesis at the national economics university.
Mr. Tram was among the first of the management team to help lay the foundation of the current group distribution system. He has been with Kinh Do since the early days and has developed a deep understanding of the company, its competitive environment and the Vietnamese market. He holds an MBA from California Miramar university in the u.S.
Mr. Nguyen Xuan Luan

Vice president of Systems Kinh Do Group
Mr. luan is responsible for many different tasks such as developing export markets, It systems and directing the implement of eRp SAp for KDC, nKD, BKD, KIDo. He is also appointed to several top positions such as Chairman of the Board of Directors, Ceo, Vice Ceo at Kinh Do's subsidiaries. Currently, Mr.luan in charge of building Business operation Systems and Decision Making Systems of Kinh Do Group as well as manage the SBu.
the biggest challenge to short-shelf-life products such as fresh cake and yogurt is effective distribution. this means that we need to ensure deliveries are prompt and products are fresh when sold to the end consumers. therefore, the distribution channels must operate in a timely fashion, be flexible in its approach and finally overcome any issues to deliver product effectively.
Mr. Tran Tien Hoang
Director of Supply Chain Kinh Do Group
33
34
WHERE WE ARE
PRODUCING ONE OF VIETNAMS MOST ADMIRABLE COMPANIES
35
36
WHERE WE ARE
Overview
on the back of a small recovery in 2010, the Vietnamese economy continued to be fragile through 2011 and was heavily weighed down by high inflation, negative investor and consumer sentiment, a depreciating Dong, and high cost of borrowing. The primary issue facing most companies in Vietnam through 2011 was inflation which was driven by three key factors including rising and volatile raw material prices, increases in labor, electricity and fuel costs, and high interest rates. the compound effect of these factors choked most local businesses into financial distress. Against this backdrop, Kinh Do experienced one of its best growth years as a newly merged food group. the merger which had been completed in late 2010 gave us a solid foundation and significant operating scale going into 2011 and helped us to gain momentum early in the year. not only was our business drive consistent, but so was our focus. Conscious of the risks and poor macroeconomic environment, we strived to leverage the scaled platform created through the merger and the business momentum coming in 2011 to deliver solid growth. this alignment and determination to focus on the food business validated the M&A strategy of the different food businesses, and successfully created a strong framework for Kinh Do to operate within a growingly competitive environment.
It was a significantly difficult year to operate, with increasing costs, poor consumer confidence and overall wealth erosion in the country. Despite this Kinh Do managed to grow to new levels and also maintain reasonable profitability throughout the year with key categories gaining market share.
Factors Affecting Our Results

three key risk factors affecting the results of our business in 2011 include: 1. Inflation 2. High interest costs 3. Declining equity markets
sustain liquidity in funding our operations given the combined scale of our business and strength of relationships with the banks. While average borrowing costs were high, we focused on short-term funding on the expectation that the rate cycle was peaking and that the rate resets in 2012 would impact the company positively. this strategy worked well as most seasonal funding has since be repaid early in the year, and those amounts outstanding continued to be reset at lower levels.
Average Lending Rate (2010-2011)

Average lending rate 23.0% 22.0% 21.0% 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% 14.0% 13.0%
'10.1 '10.12 '11.1 '11.12
High inflation
Vietnam faced one of the toughest years in recent history with inflation. After a 2 year increase, year-on-year inflation finally peaked at 23% in September 2011. This is on the back of a rise in commodity prices which had a significant impact on our raw material costs. We were able to pass on all the additional costs increases to our customers particularly given our strong market positions in each of the categories and even grow volumes to a achieve a positive result.
Vietnam CPI y/y vs. Global Commodity Index y/y

CpI y/y 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% CRB Commodity Index y/y 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0%
1 2009 3 2009 5 2009 7 2009 9 2009 11 2009 1 2010 3 2010 5 2010 7 2010 9 2010 11 2010 1 2011 3 2011 5 2011 7 2011 9 2011 11 2011
Declining equity markets

As liquidity was squeezed out of the money markets, equity markets declined along with investor sentiment. the negativity has a direct correlation with poor consumer confidence as the equity market continued to be lackluster and borrowing costs high. This left very little opportunity for companies to issue equity to substitute the high cost of borrowing, causing most companies stagnant for most of the year. our own share price also fell with the market but despite this, Kinh Do managed to complete a private placement to ezaki Glico for 10% new equity at a price above the market. the price aside, the successful placement will allow both sides to form a business alliance which will include the distribution of Glicos products in Vietnam. We expect this alliance to have a positive impact on the overall business late in 2012 and through 2013.
KDC Share Price vs. VNINDEX
120 110 100 90 80 70 60 50 40

'10.1 '10.12 '11.1
KDC
VnInDeX
-60.0%
High borrowing costs

As a counter measure to high inflation, government macroeconomic policy was focused primarily on keeping rates high and Dong liquidity in the market low. Consequently, this negatively impacted borrowing costs for most of the year with average lending rates of the Vietnamese banks rising from 14% at the end of 2010 to 23% in September 2011. even at these rates, liquidity remained low with borrowers having to register in advance for credit limit funding and therefore lending was still heavily restricted. We were able to
'11.12
37
38
WHERE WE ARE
Performance Review
Overall performance was positive with improving sales. Market share saw gains across the categories we compete in. Gross profit margins remained stable or improved slightly across SBus as the market absorbed the cost increases and gave some volume improvements. eBIt growth across categories remained robust despite the rising operating costs and larger investments in the group infrastructure and platform. The sales mix of the business has also shifted significantly with biscuits, cakes, moon cakes, buns, and ice cream making up approximately 88% of total sales. Dependence on the moon cakes sales has declined significantly over the last year primarily due to the merger of the operating entities and growing sales of other categories, which has helped us to mitigate the operating risks. the product portfolio is now much more balanced with a more tempered spread across five major product categories.
Sales
Revenue growth was approximately 32% with each Strategic Business unit (SBu) averaging double digit growth. the merged operations were able to achieve significant scale for the year and expand market share within each of its categories for an overall improvement in market share across all categories tracked.
Profitability
Gross profit margins were stable with cost increases being passed on. EBIT from the all the SBUs continued to grow at 14.4% despite the increases in labor costs, transportation costs and fuel costs. Regardless of these, combined margins fell, with eBIt margins falling from 10.8% to 9.3% due to higher operating costs and further investments this year in operational infrastructure at the group level. This is also the first year in which the cost of the merger in the form of goodwill was expensed which was an additional VND49.4bn in operating expenses. the primary compression in eBIt margins are due to the fact that while the goodwill charge was expensed combined with the fact that the expected merger efficiencies have also yet to be attained. The first year focus after the merger was to primarily test the operational process to ensure that the growth platform was operable and the right processes were up and running. While this impacted profitability somewhat and was compounded by a difficult inflationary environment, the effect is temporary and will improve over the course of 2012 as merger synergies and efficiencies are achieved in the coming two years. As a result, net profit after tax declined to VND278bn, equaling a 56.9% decline compared to last year (compared to adjusted pro forma results of combining nKD, Kido and KDC). there was also the lack of any income from real estate and other investments in 2011 (as compared to 2010) as the company shifted its strategy to focus on food only businesses. Adjusting the net profit after tax in 2010 to exclude income from the one time gain from real estate disposal, net profit after tax from core food business actually grew by 11.1%.
Market Share vs. Revenue Growth

Market Share Mooncake Buns Biscuits Cakes Ice Cream Snacks Yogurt Revenue Growth Candy/Chocolate
80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Equity
The first stage goal of building a single platform for future growth has been achieved through the merger. The operational processes has been established and successfully tested in 2011. this resulted in both positive results in both sales growth and market share.
Contribution to Revenue 2011

Candy/Choco 3% Snacks 4% Yogurt 4% Ice Cream 11%
Biscuits 28%
While no significant changes in equity took place during the year, the share price of Kinh Do fell by 48% during 2011 on the back of average daily volumes of 320,000 shares. this represents a low point in the Vietnamese equities market as the VnIndex also fell by 28% with volumes of averaging around 33m shares per day. Kinh Do shares have since recovered faster than the market to make significant gains in terms of price and volume. During this time, we continued return cash to shareholders totaling VND142bn in the form of cash dividends in 2011. As validation of our resiliency and overall strength as Vietnams largest confectionary company, we signed a deal to issue 14m shares to ezaki Glico Co. ltd (Japan) as part of a business alliance which will see both parties working jointly in distributing Glicos products in the Vietnamese market.
Buns 13% Cakes 21% Mooncake 16%
39
40
WHERE WE ARE
Looking Ahead
Strategies Moving Forward

Our financial performance going forward will see significant improvements. This is based on the four stage plan the team developed back in 2009 as part of the process to create a scaled food & beverage platform that would cold be leveraged for accelerated growth. We are glad to report to stakeholders that this process is now halfway done with the first two stages complete.
firm. As the architect of this change, the marketing function will be a key driver of this transformation. Culturally it is also a significant shift as it will mean manufacturing as a function will no longer be dictating what the company will sell through its ability to produce but we will broaden our product sourcing beyond our factories to the best, lowest cost, and most effective source of products. At the center of this paradigm shift was our view of brands. We will look to restructure the brand architecture and build a robust and stretchable brand portfolio for all major categories. this will help to build broader and deeper value in each of our market segments. Brand building has always been important at Kinh Do but now we aim to further cement consumer loyalty through brands and heighten brand recognition through a targeted and strategic approach. the goal is to create value within the sub-brands which aggregate to achieve even bigger value and loyalty in the Kinh Do brand. The sales strategy will be key in ensuring that we deliver financially in terms of profit and also in terms of creating brand value for the future. In 2011 we have achieved significant success in the first year of using the merged platform. As we look forward into 2012, we aim to achieve similar growth rates in sales revenue, and improve our distribution reach from 160,000 to 200,000 points of sales. Mindful that this year is profitability, the sales function will focus on productivity and efficiency of capital spending as we improve the use of the platform. We will need to implement improvements across the sales and distribution channel including the flow of goods from our warehouse to the distributors and from distributor to the retailers. An important aspect of this change will be the implementation of the DMS (Distribution Management System) which has already been in place across the group. this system will be the primary driver in providing marketing intelligence to the team in creating targeted and effective strategies that change with the dynamics of the market.
RSM manage
Stage
4
Stage
Profitable Growth

2013
Focus on asset efficiency and overall profit growth Quantum of results now must equal better quality of results as well Scale not only in sales but also in profitability
Profitability Through Efficiencies

3
Stage
2012
Establish a profitable growth mindset and culture Operational efficiencies and cost management equal better financial results Achieve the right profitability ratios for the scaled business
2
Stage
Foundation

2011
Achieve the economies of scale by leveraging the platform Reach record growth in sales and reach of distribution Begin looking at improving processes and create operational efficiencies
3 5 5
5 ASM 9 SS
15 M
Preparation

ASM manage
2009 - 2010
Preparation for the merger of KDC, NKD, BKD & KIDO Establishment of the operational framework for the Kinh Do Group Establish the foundation for unparalleled growth
RS
SS manage
the timeline of implementation continues to be on track, with stage 2 having just been completed. While we would have wished to have completed stage 2 against a much more positive macroeconomic backdrop with more positive results, we are satisfied at the outcome and that we were able to return shareholders money through dividends, complete the strategic alliance and complete the creation of the scaled platform against a harsh operating environment. As we look back at the year and our results, our ability to persevere, deliver results and attract the right international partners says a lot about the resiliency of the organization we have built.
9 Salesmen
40
AS
6 23
SS
Stage 3 and 4 Are Profit Centric

Looking forward the challenges and opportunities continue to be prevalent. 2012 will also be a year of significant change as we look towards improving efficiencies in our operations and also look at efficiency of our assets. This will include not only physical assets such as plant and machinery but also financial assets. The past approach of improving results through financial and real estate investments will be reviewed and we will revisit the use of capital and efficiency of assets. The goal will be on creating synergies in the food business and its efficiency in the use of its assets. The coming year will also be a year of cultural change as we shift slightly from being growth orientated only to both growth and profit orientated. We will focus on the right profitability and on achieving that, scaling it up with efficiency in assets and turnover. The goal will be to be disciplined with costs, while not sacrificing growth.
0 1,6
0S
s ale
me
2012 Goal
Sales 1st Choice: For business partners For sales productivity & efficiency 200,000 Active service outlets in 2012
15
9 9,5
tl Ou
et
#1 Distribution for each product category
#1 Confectionary and food sales system
Sales and Marketing Strategy

our focus continues to be downstream from manufacturing and focused on sales and marketing. We believe that this is both the key component to our growth platform and one of the key barriers to maintaining our market leadership. What this means for marketing is that we will continue to restructure and focus on creating professional processes that help us execute effectively. this includes creating a marketing strategy and direction early in the year and ensuring that team understands the primary goal for the year. In 2012, we will begin to build the foundation of change by creating a corporate culture that is consumer focused. What this means is that we will take direct business intelligence and use this insight to determine what type of products we sell, how we sell them and to whom we sell them. this is of critical importance as it forms the foundation on which we will build the future of our
Marketing
+50 product innovations in 2012
3 new product category entered in 2012
Finance
Minimum 30% net revenue growth in 2012 from current products
Minimum of 38% Gross profit margins in 2012
9.1% Operating profit margins in 2012
7.3% Net profit margins in 2012
41
42
North
Kinh Do Factory Hung Yen
Kidos Cold storage warehouse in Hanoi
Laos
Centre
02 Kidos Cold storage warehouse in nha trang, Da nang
Thailand
Campodia South
Kinh Do Factory Binh Duong
South
Vinabico Ho Chi Minh Kido Ice Cream Factory Ho Chi Minh
Kidos Cold storage warehouse in Southern (Can tho, Cu Chi ).
43
44
WHAT WE DO
CREATING SUPERIOR VALUE THROUGH BRANDS
45
46
WHAT WE DO
Brand
Creating Value Through Brands

At Kinh Do, we are passionate about brands. And it shows in the numerous awards and recognitions we have received throughout the years. But most important to us is the trust consumers generously bestow upon our brand: in a 2011 survey, Kinh Do was selected the #1 confectionery and snack brand and made the top 10 list of best brands in Vietnam1
90%
consumers surveyed know the brand
70%
love the brand
69%
had bought and consumed the brand before
considered buying the brand in the future
63%
59%
recommend to others
90 70 69 63 59
consumers surveyed know the brand
love the brand
have bought and consumed the brand before
consider buying the brand in the future
recommend to others
Source: Vietnams Best Brands 2010 by research company FTA. The biannual study, commissioned by the Vietnam Chamber of Commerce and Industry (VCCI), surveyed over 3000 consumers to select and then rank 500 brands available in Vietnam according to Brand Strength Index. Kinh Do Corporation Annual Report 2011
47
48
WHAT WE DO
Brand
together with the Kinh Do main brand, the company also manages a portfolio of over 20 other popular product brands, including AFC and CoSY (biscuits), trang Vang (premium moon cakes), SolIte (sponge cakes), MeRIno (ice cream), etc., many of those are widely known in both domestic and export markets. In 2012, KDC will overhaul its brand architecture, establishing a common platform to leverage Kinh Dos iconic brand equity to endorse other brands. the vision is to build a multi-trillion-dong mega brand while optimizing brand building investment.
Vietnams Best Brands 2011
Top 10
Highest
Brand Strength Index in the confectionery and snack category
a survey held by the daily Saigon Liberation (Si Gn Gii Phng) in November 2011
Most Loved Vietnamese Brands
Selected amongst
awarded by Trade Promotion Bureau, Ministry of Industry & Trade
National Brands
Won
49
50
WHAT WE DO
Brand
Market share:
76%
Sales
of moon cakes,
Kinh Do Moon Cakes
Despite the negative impact of the overall economics and consumer sentiment, Kinh Dos sales of moon cakes still grew by over 31%, gaining to 76% market share, thanks to the brands strong following and dominant competitive position. Kinh Dos Mid-Autumn Festival campaign, now in its 3rd year running, was embraced by consumers, transforming Kinh Do from the best known brand to the most loved one during the mid-autumn season. Its message Sincerity is the best gift of all was well liked by 71% of the consumers. not resting on its laurels, Kinh Do will continue to improve overall product quality and take the premium brand trang Vang further up market with new packaging and shop designs, new communication and more intensive media weight.
2,100 tons
Volume
VND 652bil
up 31% from 2010
Kinh Do TET Cookies

Kinh Dos cookies brands including Good Choice, Korento, and Story (tet gifts), accounting for 27% market share within the category. the Korento premium brand received a facelift with new packaging, improved quality, and multiple marketing activities in both modern trade and general trade channels. early readings showed encouraging results of the brands gaining traction in the upper market segment.
growing at 40% per year
VND 331bil
Kinh Do Tet Cookies
Market share
27%
51
52
WHAT WE DO
Brand
Sweet biscuits market size
growing at 40% per year
VND 1,550bil
VND 309bil
up 42% from 2010 AFC Savory Biscuits
AFC consolidated its market leadership in the savory biscuits category. In 2011, KDC introduced a new AFC with 5 flavors, all fortified with 4 healthy nutrients. The campaign AFC fun snack, real health benefits (www.afc-anchoikhoethiet.com) attracted over 10 million page views online. through multiple activities, the brands top of mind awareness increased from 55% to 73% with 100% category users knowing AFC. of that 58% confirmed they would definitely buy AFC after exposed to the new tVC.
Sales
COSY Sweet Biscuits

In 2011, CoSY grew by 75%, twice as fast as the category growth. the promotion Share a CoSY & win big helped the brand achieve its market penetration goal, with sales increasing 80% over the normal running rate. Brand awareness went from 40% up to 60%. CoSY still has a lot of room for growth as currently only 50% of the distribution network carry the brand. this represents a unique opportunity to continue to grow the CoSY brand organically within our own network and bring bigger and broader sales reach for the product.
VND 472bil
Cosy sales
Market share:
30.4%
Market share
increasing 75% year on year
56%
53
54
WHAT WE DO
Brand
VND 169 Billion

Yogurt - WEL YO
According to market research, dairy products in Vietnam have great growth potentials. the average person in Vietnam consumes an average of 14 liters of milk & other dairy products per year, much below that of the thais, who consume up to 41 liters per year. the category has been growing at 10% per annum and Kinh Do has a running rate of 3x that. our strategy to enter the milk & dairy products category is part of our Food& Flavor strategy and leveraging our sales, marketing and distribution platform we have gone from new entrant to over 8% market share in a very short time.
Sales
Market share
compared to 2010
44.6%
Growth
8%
MERINO and CELANO Ice-cream

MeRIno and CelAno are Kido's own brand of single serve ice cream. these two brands were developed upon the establishment of the Kido's business. this is one of Kinh Do's key success stories of creating a market dominant product brand and entering an entirely new product category. Combined these two brands now are 29% of the total market growing at 27.8%.
compared to 2010
27.8%
Growth
Market share
29%
VND 441 Billion

Sales
55
56
WHAT WE DO
SOLITE and SOPHIE Sponge Cakes

SolIte and SopHIe are Kinh Dos sponge cakes brands. In 2011, SolIte was repositioned to enter the premium cake market, a segment that has showed strong growth in past few years but has been monopolized by only a few imported brands such as Custas (orion) and Custard (european Cake). the new SolIte was launched in 9 key cities with totally new product and packaging, accompanied by extensive sampling and activation activities. the reach has so far been impressive with a strong 6 point gain in 2011 and momentum to gain further in 2012. the fresh cakes segment (7 day shelf life) is typically occupied by either bakeries or artisan products and is a very fragmented market due to the challenges of national distribution in such a short time frame. Kinh Do best in market sales and distribution allows us to overcome this challenge and with the brand SopHIe we are the dominant market leader with over 90% market share.
VND 848bil
14% increase from 2010
Sales
VND 630bil
34% increase from 2010 ALOHA Sandwich & SCOTTI Super Soft Buns
Sales
Market Share
gaining 6 percentage points from 2010
26%
Kinh Dos brands Aloha and Scotti maintained market leadership in the packaged bread category thanks to good quality products, extensive distribution network, and efficient logistics. the market still holds much growth potentials as product penetration is still low: only 35% of consumers ever tried packaged bread as a breakfast / snacking alternative. We are continuing to extend our reach and improve penetration of this product and the two brands.
Market share
64%
57
58
WHAT WE AIM FOR
OUR PERFECTLY BUILT SOLUTION
59
60
GROWTH STRATEGIES
Kinh Dos Main Ingredient
Building a Portfolio for Growth
In addition to the Food & Flavor strategy, we have not forgotten what has brought us success over the last 18 years, and that it comes down to our existing customers and our existing Snack & Confectionary products. Its sometimes difficult to embrace change when doing what weve done has brought so much success. But being acutely aware that resting on our laurels is not an option, and over the last two decades are customers have aged, and developed different tastes, we as a company have strived to stay ahead of the trend by providing better quality products with different elements that are fit for our changing customer base.
our product portfolio consisting of confectionary products have been the foundation of the company. We have expanded Kinh Do from a single product, single brand company to one that includes one primary Kinh Do brand and multiple product brands. the name Kinh Do is now synonymous with snack and confectionary. In order to accelerate the growth of Kinh Do, we are reaching beyond our traditional products to expand into products that extend our reach to the next stage of development which includes Food & Flavor. the Food & Flavor strategy is designed to extend our product portfolio beyond impulse purchase and seasonal gifting. It aims to entrench Kinh Do products into the meal time, and add a presence for our products during meal times.
Case Study
Re-Energized the Old Crackers: AFC Re-launch Campaign 2011
Improving Value proposition for Consumers Through Better Product Innovation and Quality Food and Flavor Meal Compliments and Replacements Issues
- Communication idea: tAStY & HeAltHY TASTY: savory biscuit with variety of flavors HEALTHY: 4 nutrients - execution: 360-degree campaign: tVC, print, pR, online, Sampling, poSM, outdoors, Display - Brand awareness: 100% - top of mind awareness: 53% ->73% - Brand attributes improved significantly A healthy brand Worth every penny Premium, modern brand - Improvements in sales
Snack and Confectionary
Impulse purchase and occasion Driven
Several consumer researches revealed AFC crackers packaging and communication did not appeal to consumers. Instead of aiding consumer choices, the product lineups confused them with convoluted flavor-nutrient combinations. Consequently, the brand positioning of nutrition was not clearly understood by consumers.
What was done
Improving Choices for Consumer through new types of products and Brands
the team chose to re-launch the brand, introducing the new AFC crackers with all 4 nutrients combined (4 in 1). packaging was redesigned to become clean and clutter-free, clearly communicating the benefits of the 4 nutrients. Communication was based on simple insight that good, tasty foods often are not healthy (and vice versa, healthy foods do not taste good). the new AFC is the only one product that offers consumers both HeAltH & tASte
Results
61
62
GROWTH STRATEGIES
Expanding Our Horizons
Case Study
the primary case study for M&A for Kinh Do has been the merger of nKD, BKD, and Kido under KDC. the goal of the merger to create Vietnams number one confectionary company and a primary growth vehicle that will enable us to leverage 3 phases of development, including: 1) Foundation which includes achieving scale and reach by establishing the platform. 2) Profitability Through Efficiencies to increase operational efficiencies and achieve the right type of profitability. 3) Profitable Growth which will focus on asset efficiency and overall profit growth. Outside of the financial strategy, and the product strategy, the actual resources and value of Kinh Do resides in the following: With this we can effectively plug-n-play multiple businesses, products and partners into Kinh Do to take advantage of opportunities that arise. This is all guided of course by both our adherence to the product strategy, and extreme focus on the financial strategy for profitability.
Accelerating through acquisitions & partnerships Accelerating Through Acquisitions & Partnerships
Cooperation has been a fundamental principal upon which Kinh Do has found its success in the local market. understanding that the value of partnerships and alliances helps to develop the market overall, Kinh Do has been actively involved in forming and leveraging local partnerships and alliances particularly amongst the food and beverage companies. over the course of Kinh Dos history we have engaged in many investments, acquisitions and partnerships all with specific purpose, and intent. Whether it is knowledge, sharing of resources, or development of a category, we have been actively and constructively working with partners for a common good. the development of our business, the extension of our portfolio strategy demands that we look beyond Vietnam to international partnerships that will help us to leverage our platform growth beyond the Vietnamese market. our strategy in partnerships and acquisitions requires that we take a two pronged approach that encompasses either a product extension or a capability extension. this was when we decided to take on a strategic partnership which ended with the alliance with ezaki Glico Co. ltd, which we believe provides with both extension of our product portfolio and ultimately extend our capabilities. For Kinh Dos own acquisition strategy, we will continue to be opportunistic, looking at companies and businesses which complement our Snack & Confectionary strategy or Food & Flavor initiative. In addition, we will look at alliances which bring us beyond the borders of Vietnam which we believe will be our next phase of development.
pl
r tfo a o
m t
pr p
c du le
p eo
63
64
Corporate Social Responsibilty
The Foundation of Kinh Do
Beyond Vietnam
Broadening Our Offer

Vietnam continues to be our home market and key to our future strategy as we believe there cannot be a growth strategy without Vietnam. At the same time we also believe that the future must include more than Vietnam which is why the third dimension of our product strategy of Improving Value and Improving Choice will also include Improving Reach. Reach will not be defined by geographical boundaries but by Kinh Dos ability to sell its product to consumers in other markets, geographies and localities through the establishment of additional channels for distribution.
Improving Value proposition for Consumers through Better product Innovation and Quality
Improving Reach of products to Reach Customer through exports, partnerships and overseas expansion
Nurturing Talent Maximising Potential

people are the foundation of our business and form the core of what we do. As both a manufacturer and fast moving consumer goods company, we have people from a range of background and levels of experience. our ability to keep them all engaged and motivated is not a job, or a career but culturally part of who we are. to enable us to broaden the foundation for future growth, we continuously strive to develop talent internally to be the best in market. this achieves two goals: 1) we ensure a consistent team of results oriented people that deliver on the goals we outline, and 2) by being the best we attract the best talent available. this cycle of training and investment in our people ensures that the scalability of the platform at the fundamental level is maintained while organic and inorganic growth will not sacrifice excellence.
Improving Choices for Consumer through new types of products and Brands
65
66
Corporate Social Responsibility
Our Responsibility to the Community

As a leading corporation in Vietnam market, Kinh Do is always aware of its social responsibility to the community. Commitments to corporate responsibility are not only projects or initiatives but are part of who we are and what we do. In aspects both big and small we as a company and individuals ensure that every aspect of our business processes are responsible to the community and we are accountable for the results.
It Starts with Managing Quality

our products reach a broad number of people every day and we need to ensure that product quality is maintained. All Kinh Do Corporations products are manufactured at its two main plants in Binh Duong and Hung Yen. We start by carefully selecting the machinery to ensure that it produces at the highest quality and efficiency. Our vendors are primarily European and produce some of the worlds most advance machines in our industry, including high output low power consumption and energy efficient. To ensure products coming off the lines are of consistent quality, we ensure that the adopted quality management standards, such as Quality Management Standard ISO 9001:2008 certified by Bureau Veritas Certification, Food Safety Management System ISO 22.000:2005 and Total Quality Management (TQM) are fully adhered to. We aim to meet the most stringent quality standards and produce our products using the most efficient process possible, decreasing wastage, increasing energy efficiency and also using environmentally friendly materials where possible.
It Ends with the Customer

We select the best inputs materials and ensure that the products origins are traceable and clear. We focus on quality of product and ensure that the process of manufacturing is tightly controlled and that the output is consistent and of a high quality. our goods reach a large number of people and any compromise in quality can have a huge social impact. As a producer of food products we have a strong sense of responsibility on the impact that our products can have in the larger community; therefore we strive to ensure that customer satisfaction is high with our products.
Its Based on the Community

With our broad reach in terms of sales and distribution we get to see a very diverse part of the country including the rural areas. In order to create a positive impact in all the communities we tough through our sales team and our products, we have initiatives to support community development. Kinh Do actively creates and contributes to programs aimed towards improving the lives of communities and societies as a whole. In particular, Kinh Do Corporation always focuses on providing support to students through many meaningful programs, such as sponsoring a scholarship fund named " Contribute to Students, organizing plant visits to increase awareness within the future generation of our company and our products, and also mentor students to share our experience and knowledge with them. For many years, Kinh Do Corporation has also been involved in actively supporting the meaningful social programs of the Ho Chi Minh City Vietnam Fatherland Front and sponsoring the Association for poor patients. We also provide donations and gifts of food during the holiday season to ensure that we share our success with the communities within which they are based from.
67
68
FINANCIAL STATEMENT
MEASURING OUR SUCCESS
69
70
General information
General information (Continued)
COMPANY
Kinh Do Corporation (the Company) is a shareholding company incorporated under the law on enterprise of Vietnam pursuant to the Business Registration Certificate (BRC) No. 4103001184 issued by the Ho Chi Minh City Department of Planning and Investment on 6 September 2002 and the following Amended BRC:
MANAGEMENT
Members of the management during the year and at the date of this report are
Mr tran le nguyen Ms Vuong Buu linh Ms Vuong ngoc Xiem Mr Wang Ching Hua Mr nguyen Khac Huy Mr Foo Woh Seng Mr nguyen Xuan luan Mr Mai Xuan tram Mr Bui thanh tung Mr Le Anh Quan Mr Tran Quoc Nguyen Mr Tran Quoc Viet Mr le Van thinh Mr Nguyen Quoc Nam
21 January 2010 1 november 2010 26 March 2011
General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director Deputy General Director appointed on 5 January 2011 appointed on 31 March 2011 appointed on 16 August 2011 resigned on 15 September 2011
Amended BRC:
No. 4103001184 The first amendment the second amendment the third amendment the fourth amendment The fifth amendment the sixth amendment the seventh amendment the eighth amendment the ninth amendment the tenth amendment No. 0302705302 the eleventh amendment the twelfth amendment the thirteenth amendment
Date:
26 november 2002 22 September 2003 11 December 2003 3 August 2004 7 october 2004 11 May 2005 18 May 2006 6 July 2006 6 november 2007 10 october 2008
Mr tran tien Hoang Mr Gariel Magno torres Mr Kelly Yin Hon Wong Mr Luong Quang Hien
the Company was listed on the Ho Chi Minh Stock exchange in accordance with the license no. 39/uBCK-GpnY issued by the State Securities Commission on 18 november 2005. The principal activities of the Company are to process agricultural products and foods; produce confectionery, purified water, and fruit juice; and sell and purchase agricultural products and foods, industrial products, and fabric. The registered head office of the Company is located at 141 Nguyen Du, Ben Thanh Ward, District 1, Ho Chi Minh City, Vietnam.
LEGAL REPRESENTATIVE
the legal representative of the Company during the year and at the date of this report is Mr. tran le nguyen.
AUDITORS BOARD OF DIRECTORS

Members of the Board of Directors during the year and at the date of this report are:
Mr tran Kim thanh Mr tran le nguyen Mr Wang Ching Hua Ms Vuong Buu linh Mr Co Gia tho Ms Vuong ngoc Xiem Mr Tran Quoc Nguyen Mr Ma thanh Danh Mr nguyen Van thuan Chairman Vice Chairman Member Member Member Member Member Member Member appointed on 23 April 2011 appointed on 23 April 2011 appointed on 23 April 2011 appointed on 23 April 2011
the auditors of the Company are ernst & Young Vietnam limited.
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Mr le Cao thuan Mr Vo long nguyen Ms luong My Duyen Head of the Board of Supervision Member Member appointed on 23 April 2011
71
72
Report Of Management
Management of Kinh Do Corporation (the Company) is pleased to present its report and the consolidated financial statements of the Company and its subsidiaries (the Group) as at and for the year ended 31 December 2011.
Reference: 60752643/15053333
MANAGEMENTS RESPONSIBILITY IN RESPECT OF THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the consolidated state of affairs of the Group and of the Groups consolidated results and consolidated cash flows for the year. In preparing those consolidated financial statements, management is required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure that the accounting records comply with the registered accounting system. 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. Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial statements.
INDEPENDENT AUDITORS REPORT

To: The Shareholders of Kinh Do Corporation
We have audited the consolidated financial statements of Kinh Do Corporation and its subsidiaries (the Group) as at and for the year then ended 31 December 2011, from which the summarised consolidated financial statements as set out on pages 5 to 9 were derived, in accordance with the Vietnamese Standards on Auditing. In our report dated 25 March 2012, we expressed a qualified opinion on those consolidated financial statements. Our opinion was qualified with respect to the overstatement of share capital and intangible fixed assets relating to the brand name Kinh Do by VnD 50,000,000,000 and VnD 27,083,333,352, respectively, as at 31 December 2011 and the overstatement of the related amortisation charge by VND 2,500,000,000 for the year then ended. Except for the effects of this matter, the consolidated financial statements gave a true and fair view of the consolidated financial position of the Group as at 31 December 2011, the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with the relevant statutory requirements. In our opinion, the accompanying summarised consolidated financial statements are consistent, in all material respects, with the consolidated financial statements from which they were derived and on which we expressed a qualified opinion. For a better understanding of the Groups consolidated financial position and the consolidated results of its operations for the year and of the scope of our audit, the summarised consolidated financial statements should be read in conjunction with the consolidated financial statements from which the summarised consolidated financial statements were derived and our audit report thereon.
STATEMENT BY MANAGEMENT
Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2011 and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with the Vietnamese Accounting Standards and System and comply with relevant statutory requirements. For and on behalf of management:
ernst & Young Vietnam limited
Mai Viet Hung tran Deputy General Director Certificate No. D.0048/KTV Ho Chi Minh City, Vietnam tran le nguyen General Director 25 March 2012 25 March 2012
Bui Xuan Vinh Auditor Certificate No. 0842/KTV
73
74
Summarised Consolidated Balance Sheet

as at 31 December 2011
B01-DN/HN
as at 31 December 2011
Summarised Consolidated Balance Sheet (Continued)
B01-DN/HN
VND
Code 100 110 111 112 120 121 129 130 131 132 135 139 140 141 149 150 151 152 154 158 200 218 220 221 222 223 224 225 226 227 228 229 230 240 241 242 250 252 258 259 260 261 262 268 269 270 VI. V. IV. III. 4. 1. 2. 3. 2. B. I. II. V. IV. III. II. ASSETS A. I. CURRENT ASSETS Cash and cash equipvalents 1. 2. 1. 2. 1. 2. 3. 4. 1. 2. 1. 2. 3. 4. Cash Cash equivalents Short-term investments provision for short-term investments trade receivables Advances to suppliers other receivables provision for doubtful debts Inventories provision for obsolete inventories Short-term prepaid expenses Value-added tax deductible tax and other receivables from the State other current assets Ending balance 2,558,532,922,412 967,330,130,617 185,816,130,617 781,514,000,000 373,770,318,479 434,804,094,447 (61,033,775,968) 724,910,919,717 202,402,215,815 88,277,731,306 436,692,571,164 (2,461,598,568) 398,032,090,636 399,655,331,306 (1,623,240,670) 94,489,462,963 27,523,140,386 3,495,249,715 9,261,522,658 54,209,550,204 3,250,888,458,201 345,000,000 1,431,032,627,594 830,120,570,346 1,466,067,600,094 (635,947,029,748) 454,552,831,520 527,050,756,383 (72,497,924,863) 146,359,225,728 26,591,686,628 34,524,970,816 (7,933,284,188) 1,255,715,348,986 1,207,972,190,946 91,823,744,124 (44,080,586,084) 143,691,728,058 94,489,225,035 48,652,720,023 549,783,000 393,512,066,935 5,809,421,380,613 Beginning balance (As restated) 2,328,287,599,110 672,316,189,794 142,316,189,794 530,000,000,000 160,410,864,700 208,473,029,447 (48,062,164,747) 1,018,355,262,592 165,221,725,147 77,996,492,241 777,468,509,891 (2,331,464,687) 434,328,356,064 434,929,611,012 (601,254,948) 42,876,925,960 18,366,201,256 2,997,336,086 26,113,381 21,487,275,237 2,703,632,096,551 611,868,000 1,279,052,782,572 774,281,348,537 1,284,750,762,016 (510,469,413,479) 1,395,763,417 23,795,629,857 (22,399,866,440) 461,113,298,581 501,184,139,393 (40,070,840,812) 42,262,372,037 29,165,075,656 34,524,970,816 (5,359,895,160) 1,163,078,794,488 997,278,628,828 259,972,213,291 (94,172,047,631) 104,719,903,672 72,548,806,717 31,888,182,455 282,914,500 127,003,672,163 5,031,919,695,661 Code 300 310 311 312 313 314 315 316 319 323 330 333 334 336 400 410 411 412 414 416 417 418 419 420 439 440 B. I. II. RESOURCES A. I. LIABILITIES Current liabilities 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 3. Short-term loans and borrowings trade payables Advances from customers Statutory obligations payables to employees Accrued expenses other payables Bonus and welfare fund other long-term liabilities long-term loans and debts provision for severance allowance Ending balance 1,959,475,083,174 1,783,559,913,116 882,654,433,040 274,134,221,072 36,056,645,617 58,171,397,947 65,677,580,413 221,099,438,573 203,176,971,073 42,589,225,381 175,915,170,058 17,039,941,861 114,079,573,944 44,795,654,253 3,814,673,283,799 3,814,673,283,799 1,195,178,810,000 1,950,665,093,455 (153,869,778,400) (891,411,434) 25,370,280,515 25,792,635,752 15,909,752,661 756,517,901,250 35,273,013,640 5,809,421,380,613
VND
Beginning balance (As restated ) 1,176,456,816,317 1,045,048,288,708 380,554,458,699 271,379,023,953 35,154,328,758 39,637,621,073 22,499,912,401 142,672,413,121 123,442,819,920 29,707,710,783 131,408,527,609 6,804,898,383 93,788,208,227 30,815,420,999 3,739,264,944,505 3,739,264,944,505 1,195,178,810,000 1,950,665,093,455 (138,650,412,400) 1,122,511,871 25,370,280,515 25,792,635,752 16,135,952,510 663,650,072,802 116,197,934,839 5,031,919,695,661
Short-term investments
Accounts receivable
Non-current liabilities
Inventories
OWNERS EQUITY Capital 1. 2. 3. 4. 5. 6. 7. 8. Issued share capital Share premium treasury shares Foreign exchange differences reserve Investment and development fund Financial reserve fund other funds belonging to owners equity undistributed earnings
Other current assets
NON-CURRENT ASSETS Other long-term receivables Fixed assets 1. Tangible fixed assets Cost Accumulated depreciation Finance leases Cost Accumulated amortisation Intangible fixed assets Cost Accumulated amortisation Construction in progress Cost Accumulated depreciation Investment property
C. MINORITY INTERESTS TOTAL LIABILITIES AND OWNERS EQUITY
OFF BALANCE SHEET ITEM

ITEM Foreign currencies: united States dollar (uS$) euro (euR) Yuan (CnY) 1,562,941 102 173,300 1,268,691 1,410 Ending balance Beginning balance
Long-term investments 1. Investments in associates and jointly controlled entity 2. 3. 1. 2. 3. other long-term investments provision for long-term investments long-term prepaid expenses Deferred tax assets other long-term assets
Other long-term assets
nguyen thi oanh Chief Accountant 25 March 2012
tran le nguyen General Director
Goodwill
TOTAL ASSETS
75
76
Summarised Consolidated Income Statement

for the year ended 31 December 2011
B02-DN/HN
Summarised Consolidated Cash Flow Statement

for the year ended 31 December 2011
B03-DN/HN
VND
Code 01 02 10 11 20 21 22 23 24 25 30 31 32 40 45 50 51 52 60 61 62 80 19. 8. 9. 11. 12. 14. 15. 16. 17. 18. ITEMS 1. 2. 3. 4. 5. 6. 7. Revenue from sale of goods and rendering of services Deductions Net revenue Cost of goods sold and services rendered Gross profit Financial income Financial expenses In which: Interest expense Selling expenses General and administration expenses Other income Other expenses Shares of profit in associates Profit before tax Current corporate income tax expense Deferred income tax benefit Net profit after tax Attributable to: 18.1 18.2 Minority interests The Companys shareholders 5,083,224,574 273,552,212,312 2,312 56,040,276,111 524,871,382,360 5,211 Current year 4,278,051,638,403 (31,166,008,599) 4,246,885,629,804 (2,573,745,939,917) 1,673,139,689,887 127,492,814,648 (180,679,651,253) (117,213,229,417) (943,673,596,925) (331,706,403,979) 344,572,852,378 18,467,397,145 (20,752,611,249) (2,285,214,104) 6,893,562,118 349,181,200,392 (87,310,301,074) 16,764,537,568 278,635,436,886 Previous year (As restated) 1,942,808,210,059 (9,173,917,964) 1,933,634,292,095 (1,248,243,869,518) 685,390,422,577 663,953,281,287 (242,452,529,798) (42,458,074,975) (347,589,483,929) (141,634,937,498) 617,666,752,639 36,463,816,736 (12,799,790,999) 23,664,025,737 34,961,809,058 676,292,587,434 (110,883,359,058) 15,502,430,095 580,911,658,471 02 03 04 05 06 08 09 10 11 12 13 14 15 16 20 21 22 23 24 25 26 27 28 30 31 32 III. II. 01 Code ITEMS I. CASH FLOWS FROM OPERATING ACTIVITIES 349,181,200,392 201,421,618,766 37,875,188,972 (1,542,696,225) (116,676,647,656) 117,213,229,417 587,471,893,666 368,476,239,477 35,274,279,706 137,986,606,744 (31,097,357,448) (114,190,654,109) (81,711,661,306) 95,628,083,095 (64,725,870,817) 933,111,559,008 (326,069,078,042) 5,422,364,340 (1,133,598,500,000) 856,510,211,400 (594,741,569,279) 162,925,087,803 24,296,773,701 (1,005,254,710,077) (15,219,366,000) 1,914,616,265,909 (1,390,497,638,485) (143,195,195,714) 365,704,065,710 293,560,914,641 672,316,189,794 1,453,026,182 967,330,130,617 Current year
VND
Previous year (As restated) 676,292,587,434 86,996,450,123 86,227,023,956 (700,049,569,830) 42,542,135,420 192,008,627,103 40,724,734,956 (54,295,266,985) (788,888,268,100) 6,161,542,965 (41,829,766,890) (165,742,128,330) (8,654,486,938) (820,515,012,219) (62,314,631,856) 2,945,120,000 (574,979,609,869) 1,001,623,000,000 (603,500,000,000) 853,000,000,000 84,109,242,789 77,595,357,035 778,478,478,099 33,649,000,000 883,576,745,987 (1,065,451,930,589) (122,784,149,976) (271,010,334,578) (313,046,868,698) 984,610,642,098 752,416,394 672,316,189,794
Profit before tax Adjustments for: Depreciation and amortisation provisions unrealised foreign exchange gain Profits from investing activities Interest expense Operating income before changes in working capital Decrease in receivables Decrease (increase) in inventories Increase (decrease) in payables (Increase) decrease in prepaid expenses Interest paid Corporate income tax paid Other cash inflows from operating activities Other cash outflows from operating activities Net cash flows from (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase and construction of fixed assets Proceeds from disposals of fixed assets loans to other entities Collections from borrowers payments for investments in other entities proceeds from sale of investments in other entities Dividends and interest received Cash proceeds from business combinations Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Capital contribution Capital redemption Borrowings received Borrowings repaid Dividends paid Net cash flows from (used in) financing activities Net increase (decrease) in cash Cash and cash equivalents at beginning of year Impact of exchange rate fluctuation Cash and cash equivalents at end of year
10. Operating profit
13. Other (loss) profit
Basic earnings per share
33 34 36 40 50 60 61 70
77
78

KDC Annual Report 2011 FINA en

Uploaded by

Copyright:

Available Formats

KDC Annual Report 2011 FINA en

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

KDC Annual Report 2011 FINA en

Uploaded by

Copyright:

Available Formats

DIVERSIFIED

AnnuAl RepoRt 2011

IT ALL STARTED WITH FOOD

A STRONGER KINH DO IS EMERGING

Message Vision Mission Chairmans Message Milestones Highlights

FLAVOR YOUR LIFE

Our Staff Mission

Our Community Mission

Our Shareholder Mission

Our Partner Mission

Kinh Do Corporation Annual Report 2011

A Year of Progress and Consolidation Against A Challenging Environment

Kinh Do Corporation Annual Report 2011

Kinh Do Corporations Historic Milestones

Our Path of Growth

Kinh Do founded launched cracker products and moon cakes

launched bun products

Kinh Do Corp (KDC) Ipoed

launched snack products

launched chocolate candy

north Kinh Do (nKD) Ipoed

Acquired majority of Vinabico

KDC, nKD, Kidos merged to form the Kinh Do Group

Kinh Do Corporation Annual Report 2011

Our Highlights of The Year

Gross Profit Margin*

Net profit after tax

earnings per share

total external debt

net Free Cash Flow from operations

Debt equity ratio

external gearing ratio

Strong markets share = profitabilty

(Gross profit margin)

(Operating profit margin)

large scale = resiliency Focus = growth

(Net revenue growth)

Kinh Do Corporation Annual Report 2011

INGREDIENTS FOR GROWTH

Kinh Do Corporation Annual Report 2011

Strengthening Our Platform for Growth

New Growth From Strong Roots

SBU HEADS must have qualification of a leader and Intrapreneurial mind.

Kinh Do Corporation Annual Report 2011

The Board of Directors

The People Behind Who We Are

Mr. Thanh is the founder of Kinh Do Corporation

Mr. Nguyen co-founded Kinh Do Corporation

Kinh Do Corporation Annual Report 2011

The Board of Directors

Interview with the CEO

Vice Chairman of the Board of Directors and Ceo of Kinh Do Group

The Board of Directors and Management

Mrs. Vuong Buu Linh

Co-founder and Member of the Board of Directors

Mrs. Vuong Ngoc Xiem

Mr. Ma Thanh Danh

Co-founder and Member of the Board of Directors