1.

Company Background Dutch Lady Milk Industries Berhad ("Dutch Lady Malaysia") is a leader in the quality branded dairy

business in Malaysia. It was incorporated in 1963, and was the first milk company in Malaysia to be listed on Bursa Malaysia, the local Stock Exchange in 1968. Its holding company is Royal FrieslandCampina, a Dutch multinational corporation and one of the largest milk companies in the world (Annual report 2012). 1.1 Vision and Mission The vision for the Dutch Lady Milk Industries Berhad is To further strengthen our position as the leading dairy company, driving growth. In line with Dutch Lady Milk Industries Berhad mission of Helping Malaysians move forward in life with trusted dairy nutrition, Dutch Lady Milk Industries Berhad aim to continue developing products that contribute to a healthy society. The year saw the Dutch Lady involved in the biggest and most in-depth nutritional study in the region, organised by their parent company (Annual report 2012). 1.2 Product Background The Dutch Lady brand has different types of dairy products suitable for both children and adults or family. There are a lot of dairy products brand name for the children which is Dutch Lady 123, Dutch Lady 456, Dutch Lady 6+, Dutch Lady ActivGold Step 3 & 4 and also Friso Gold 3 & 4. Dutch Lady 123 and 456 not only come enhanced with TT-Ratio Advance to aid in expanding children's attention span for better learning experience, it is also now fortified with 5 x DHA that is proven to aid in brain development. This range, together with Dutch Lady 6+ Growing Up Milk, come in the usual vanilla, honey and chocolate flavors' that children enjoy most. Meanwhile, Dutch Lady Milk Malaysia also produced product brand name under family group. For example, DL Chocolate Drink EzyMix, DL Yogurt, Dutch Lady Milk Powder, Dutch Lady UHT Milk and Dutch Lady Sterilised Milk. The Dutch Lady's constant efforts to develop an increasing variety of enjoyable dairy-based treats for the entire family (Annual report 2012). 1.3 Corporate/Core Values Dutch Lady core values are used to derive the company principles and to transcend company size and its growth rate. Following are the core values of Dutch Lady which is selling high quality natural and healthy dairy products to satisfy customers. Secondly is, build team member excellence and happiness to create a work environment where team members can grow and succeed to their highest potential. Lastly is, committed to integrity, timeliness and transparency in communicating with valuable suppliers to remain as a market leader, by creating new, unique and innovative dairy products. 1.4 Financial Statement During the financial year 2012, Gross Profit increased by 14% compared to last financial year. The increase in Gross Profit was contributed by the strong Ringgit Malaysia against the US Dollar in the first 6 months of the current financial year. Profit before tax had also increased by 17% apart from the aforesaid also backed by the increase in the Companys net interest income.

1.5

Shareholders There are top ten of shareholders list for the Dutch Lady Milk Industries Bhd. For example,

FrieslandCampina DLMI Malaysia Holding, Amanahraya Trustees Berhad, Amanahraya Trustees Berhad as 1Malaysia, and Kumpulan Wang Persaraan. There are also individual shareholder such as Yong Siew Lee and Yeo Khee Bee. Other than that, these shareholders are came from Citigroup Nominees (Tempatan) Sdn Bhd, Public Nominees (Tempatan) Sdn Bhd, Aun Huat & Brothers Sdn Bhd, and also Amanahraya Trustees Berhad. (PB Balanced Fund). 1.6 Issues On 11 September 2008, melamine contaminated milk product were reported to be responsible for urinary tract calculi in infants and children in China. The dairy industry suffered a huge setback after Chinese officials discovered traces of melamine in baby formula. Sanlu Group, a Hebei province-based dairy producer partly owned by New Zealand dairy export giant Fonterra Co-operative Group Ltd, issued an immediate recall of milk formula made before Aug 6, saying about 700 tonnes of melamine-contaminated powder were in circulation. Melamine, used as an ingredient in plastics, fertilisers and cleaning products, was "highly suspected" to have contaminated batches of Sanlu-brand milk formula. Four babies in China have died from kidney failure and more than 6,000 have fallen ill. On 21 September 2008, Dutch Lady Milk Industries Berhad issued a statement reassuring consumers that its products are safe for consumption. The company said it did not import any milkbased products from China, which is recalling dairy products following a melamine contamination. Their products were made from local fresh milk or milk powder sourced from the Netherlands and New Zealand (Dutch Lady dairy products from M'sia 'safe' NST, 2008).