ANNUAL REPORT Millennium Corporation

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ANNUAL REPORT Millennium Corporation

CONTENTS
COMPANY PROFILE .................................................................................................................. 3 FINANCIAL HIGHLIGHTS ........................................................................................................ 3 LETTER TO SHAREHOLDERS ................................................................................................ 4 COMPANY OPERATION AND SIGNIFICANT DEVELOPMENTS ..................................... 6 FINANCIAL STATEMENT ...................................................................................................... 16 MILLENNIUM BOARD OF DIRECTORS ............................................................................. 31

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ANNUAL REPORT Millennium Corporation

COMPANY PROFILE
Millennium Corp. is an international distributor of premium quality fragrances. Founded in the beginning of 2010, the Company has succeeded in widening its distribution network as well as bringing consumers the best goods with the most proper prices in the previous year. Millennium Corp. is one of the leading enterprises in the field of allocating scent products, with perfume for women and aftershave for men as the two main products.The Companys products are positioned in the prestige segment of the fragrance market, and range from $169.00 to $189.00 for aftershave and from $299.00 to $349.00 for perfume in wholesale pricing. The Companys licensed brands for fiscal 2012 and 2013 include ZEUS, HERA. Distribution of these brands is carefully targeted to department stores, specialty stores, perfumeries, and selected national chain stores in the NAFTA and Europe areas. The Companys worldwide headquarters are on 250 Broadway, New York City, United States. Besides, we also built a branch at 68th floor of Victoria Building, 20 avenues Victoria, Paris.

FINANCIAL HIGHLIGHTS
For the Year Ended December 31, 2012 2013 (in US dollars) Operating Results Net Sales Net (Loss) Income Per Share of Common Stock Basic Net (Loss) Income Dividend Stockholders' Equity Financial Position at Year-End Bonds Long-Term Debt Total Asset Equity 16644369.5 3917237.61 12767302.25 2351976.11

9.67 0.5 11.25

7.84 7 11.63

700000 500000 5774305 4556805

700000 0 4207293 3489793

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ANNUAL REPORT Millennium Corporation

LETTER TO SHAREHOLDERS
Dear Shareholders,
First of all, Millennium is pleased to thank all the loyal shareholders to stick with company in the past. Since the rst issue of our annual report, we have added a collection of sections to help our investors better understand our product from initial development to point of sale. As a global competitor Millennium has positioned itself as a reliable, high end producer of quality mens aftershave and womens perfume. Initially, our carefully branded Zues (Aftershave) and Hera (Perfume) is just the start of a protable generating product. These new products have been released to the market and received satisfaction of consumer. As you see, fiscal year ended December 31, 2013 was a much fluctuated year. Quarter 2 was the quarter of the Greece crisis's public debt, and the money we spent on advertising and promotion so inefficient. Fortunately, the crisis has been handled quickly, the revenue has been restored at $6.607.000, rose 480% from previous quarter, caused a great increase to a new peak. General revenue in 2013 decreased $600,000, declined 12% from the previous year. We are pleased to announce that many of our goals have been reached, both from a nancial standpoint, as well as non-nancial milestones. Stock price in 2013 is fluctuated; but in general, increase 51 point from the previous year. Over the last year we saw the dividend per share went up dramatically. This type of return is excellent and we are condent that the stability of our company can maintain such average yearly returns for many years to come. Despite the reported loss, net cash provided by our operating activities was approximately $1150133.08. We ended the fiscal year with cash of approximately $1978367.5 and no bank debt. In light of the challenges and difficulties faced by the Company in fiscal 2013, the Board determined that a change in strategy was required. Our strategic focus is to return to profitability, and to establish a basis for growth. This focus has been three fold: (1) evaluate the potential of our existing licensed product lines and position these products in channels of distribution to provide profitability, (2) reduce discretionary spending and introduce profit improvement programs to provide an effective and efficient operating structure, (3) seek new licenses that will provide revenue growth. I am pleased to report progress on all three fronts: (1) we have written down those licensed product lines that did not receive the expected customer support, and are expanding our efforts internationally and to other channels of distribution for those that have viability, (2) major

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ANNUAL REPORT Millennium Corporation

reductions in spending have been made and a profit improvement committee was established to provide on-going improvements, (3) we recently signed a worldwide fragrance license with Vince Camuto, the well established creative force behind numerous successful brands, which we believe will strengthen our position in department stores and other important channels of distribution. We currently have an agreement with Artistic Brands for a number of celebrity fragrances, the first of which will be spotlighted by the major introduction of a Beyonce fragrance during next fiscal year 2014. In 2014, we enter the next era of growth for our business. Over the next ve years, the overall objective is to grow organically between 4.5% and 5.5% per annum, assuming a market growth of 2-3%, and to continue on the path of market share gains. Our rm is also proud to inform investors of our newest plan for marketing strategy to expansion the market to Asian area, we keen on Japan, Korea and China. Our company has used the global strategy to entry the new market. The new plan will allow us to build our brand name anywhere in the world and in turn increasing the margin of our products and maximize value for shareholders. Millennium conrms its intention to return above 60% of the Companys free cash ow to shareholders once the targeted leverage ratio dened as net debt,divided by net debt plus equity of 25% has been reached. We have a challenging agenda ahead but I am condent that we will continue to build on and expand our distinct position in our scent industry. I am grateful to our dedicated staff of employees who have contributed to strengthening the Companys future. The support of our customers and suppliers will continue to have our full attention. Above all, I am appreciative of all our loyal shareholders. The success of the Company has special meaning for me. You have my assurance that I will make every effort to merit your continuing support.

Pham Thu Huong Chairman and Chief Executive Officer

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ANNUAL REPORT Millennium Corporation

COMPANY OPERATION AND SIGNIFICANT DEVELOPMENTS

Products At present, we have four products for both of EU and NAFTA markets (including A1P1 and A1P2 products to EU market and A2P1 and A2P2 products to NAFTA market). We focus on A1P1 and A2P2 products. Our fragance products are priced from $299 to $339 for perfume and from $169 to $ 189 for aftershave.

Nowadays, perfume is more and more necessary for modern women. Therefore, we focus on selling perfume in the high-end segment. Besides, a lot of men use aftershave to make a fresh, strongly and confidence, but at this market price is sensitive. Thus, we decided to adjust the price of this product into middle range segment. We invested to change the design and packaging of each quarter. Additionally, we research and improve the quality of product to suit to the needs of customers in each quarter. Especially in the 4th quarter of the year, when the products are consumed most, this action should be conducted more carefully. In detail, for Christmas 2012, we lauched special edition with very attractive red outlook. For aftershave in winter, a cool but sexy model creates the feeling of mistery and wants to explore. In the 1st quarter of 2013, with the Valentine topic, we made couple edition to attract more customers and increase this products consumtion. In the 2nd quarter of 2013,

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ANNUAL REPORT Millennium Corporation

we used the orange background to bring the youth and hot of dynamic summer. The passionate and sexy of winter collection in third quarter of 2013 lured the buyer from the first look.

In order to distribute products to retailers and consumers, we have to make customers believe in the quality of our products. As a result, we require the manufacturers caution from selecting raw materials to production process. This process often takes twelve to eighteen months to complete.

Marketing Report in 2012 - 2013 Millennium Corp. are always proud to be one of the leading distributors of high quality fragrance in the industry, the company hold product quality steady at high-end segment, the No. 3 company in group 3. In just two years, we expanded our distribution network across the most popular cities in the NAFTA and EU. By the appropriate marketing strategy, we had a strong brand image in the minds of consumers. In addition, every year we commit to advance new R&D method to improve product quality. Year in review 2012 Price When launching the product in 2012, Millennium Corp. originally positioned our product with the top quality in the market and the high price segment. After doing research and

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business analysis, we realized that customer demand and acceptance level for each product, each area is different. We realized that NAFTA market was sensitive with price while EU market was less sensitive with price. Consumers in NAFTA accept the low price products, when the price leaps, demand will decline dramatically. On the other hand, a fluctuation of price do not have a big impact to consumers demand in EU market where is under the influence of commission and salary for Sales Rep. In NAFTA, the demand for the high price product is lower than the EU, so our prices in this market were the middle or up-middle range segment. Namely, perfume Hera was sold for $299 per unit (at up-middle range) and aftershave Zeus was sold for $169 per unit (at middle range). As for the EU, the competition tended to concentrate in the segment of middle-range and low-end, so we decided to keep strong and focused highend market domination. Particularly, perfume Hera was sold for $329 per unit (the highest price in market) and aftershave Zeus was sold for $179 per unit (the second rank in market). In the next quarters, we continue to maintain pricing strategy based on business results. Till quarter 4 in 2012, basing on the forecast of the product demand in the holiday shopping year-end season and avoiding the rival companies tending to spread into the premium segment, Millennium Corp. decided to adopt the strategy increasing price in common with the launching a special edition for X-mas season.We have increased the range of $10 for each product in each area.

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ANNUAL REPORT Millennium Corporation

In relation to other intro Firms, Posatis (Firm 36) had a competitive price strategy, pricing their aftershaves in the middle-range and perfumes in the high-end in both with high quality products in both market. In quarter 1 of 2012, Posatis sold aftershave in NAFTA for $159 and $139 in EU. They sold perfume in NAFTA initially for $309 and $319 in EU. In next quarters, Posatis Firms price fluctuated, up and down about $5 per unit for each product in each market. Then in quarter 4, they have reached to our price level and our high-end segment, becoming the main competitor. Despite this fact, Posatis Corp. (Firm 36) still priced effective enough to be considered a high-end in perfume and middle-range in aftershave market. Throughout the year Posatis Corp. continued with their competitive price strategy, pricing their products slightly lower than ours. Our pricing strategy may not have maximized the amount of market share we captured because all our products belonged to high quality and high price segment, however, maximizing net income due to the percentage of the proper margin profit. Therefore, Millennium Corp. attained the goal working out our business plan. Marketing Programs In 2012, we carried out Marketing Programs in order to build and coverage our brand image in the consumers mind in the launching new products period. We put advertisement posters in the magazines such as Forbes, US Weekly, OK!, Cosmopolitan, Elle, Marie Claire, Vogue, Fashion UK, Glamour, In Style and commercial TVC on Fox Channel, Star World, Fashion TV, EPSN. Besides, we performed outdoor advertising including the giant panels built on the top of buildings, large signs, and posters on the public bus, subway and high-speed rail cars. Millennium Corp. established the distribution system in some metropolitan areas such as New York, Los Angeles, Chicago, Seatle, Toronto, and Montreal, Vancouver, Mexico City in NAFTA and London, Paris, Milan, Berlin, Geneve in EU. To intermediate distributors, we had some Sales Promotion such as discount 5% for new retailers in the first-three transactions and 3% for the old retailers, supporting display shelves to new retailers and training Sales Rep, having reward for distribution with high sales. To consumer, we held some fairs to popularize our poducts and our brand, celebrating events in Christmas, offering VIP card for close consumer with special price and additional services.

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ANNUAL REPORT Millennium Corporation

Advertising Expenses In quarter 1 of 2012, we spent $282,000 on advertising expenditures because this was the time we launched our new products. In the two next quarters, we decided not to allocate extensive spending towards the Marketing budget, so decreasing Advertising Expenses to $210,000 and $110,000 respectively. We waited until the end of the year, the crucial times of the peak demand, to disburse a heavier budget $444,000. Our sales force has remained constant through out 2012 as we felt that our team was sufficient enough to meet the forecasted demand and sales revenue. Posatis Corp. (F36) spent an enormous amount of the capital on advertising. When compared to other companies they spent the most. Spending money on advertising and sales representatives may give the rm better awareness within the market, resulting in more sales and greater market share. In comparison to other rms, we spent a lower amount on advertising. However, after the extensive evaluation of the market demand and consumer behaviour in NAFTA and EU, we realized that NAFTA market is more sensitive with marketing than EU market while a fluctuation of advertising budget do not have a big impact to consumers demand in EU market where is under the influence of commission and salary for Sales Rep. Therefore, Millennium decided to allocate a reasonable amount of capital in advertising in the next year, in order to compete better in the market, but we would not spent too much budget on marketing. Year in review 2013 Market At the end of the second year, we have ranked third capturing the market shares for A1P1, A1P2, A2P1 and A2P2 are 15%, 15%, 14% and 12% in the order with our net sales being $1,150,133. The top company in the market still were 4M&W company (IF 35) dominating the market with net sales of $1,602,426 all successful selling in both markets. Therefore, in year two in order to better compete in the market and more adequately meet the needs of our customer we decided to raise our expenses on both products. Quality control In the first haft of year two Posatis (IF 36 main competitor) allocated $696,268.00 into quality control and $ 3,508,785.00 for all the second year. Posatis has already built a

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ANNUAL REPORT Millennium Corporation

reputation in the market for producing high quality products and continues to invest a large amount in quality control to ensure that high quality goods are being produced.

In the first haft of year two, on quality control we spent to $993,939.00 and after that we continue to increase our QC and reach $2,295,724.00 for all the second year. This supports our strategy to produce one of the the highest quality products in the industry. More interestingly, this will also stretch the effectiveness of our employees. We believe that through investment in Hi-Tech technology as well as quality control in the long run we can out perform other manufactures on quality. We experience close to zero returns therefore we believe that with our high quality products we can satisfy a greater amount of customers gaining a greater market share.

Price In 2012, although our products just accounted for 9% - 16% market share, we achieved the target of profit and stock price. In the quarters of 2013, we found that competitors tend to go the price down. Therefore, our company decided to keep the high-price segmentation for perfume and upgrading aftershave to the higher price in order to enhance brand value and create more profits for shareholders. We also adjusted the price to suit each market.

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ANNUAL REPORT Millennium Corporation

In the first quarter 2013, we remained the price as in the end-year quarter of 2012. Particularly, perfume Hera was sold for $309 per unit in NAFTA, $339 per unit in EU and aftershave Zeus was sold for $179 per unit in NAFTA, $189 per unit in EU. Posatis Corp. followed the same price strategy as in year one. They chased our segment, selling aftershave in NAFTA for $179 and perfume for $307, aftershave in EU for $189 and perfume for $337. Millennium Corp. decided to change our price strategy, going up our product price in the quarter 2. In NAFTA market, we sold aftershave for $185 and perfume for $319. In the EU market, we sold aftershave for $195 and perfume for $349. We moved up prices further to maintain the premium segment, competing directly with Posatis because consumers demand in this quarter was expected to be high.

However, in the second quarter in 2013, the EU market took a serious crisis due to economic problems. This affected heavily our company, making a lot of product inventory, and almost no sales in the EU. Net income plunged to -44297.1 USD. During recovery of the market, our company reduces aftershaves price in quarter 3 because of of the demand reduction Millennium Corp. decided to adopt the strategy increasing price.We have decreased the range of $5 for aftershave Zeus in each area.

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ANNUAL REPORT Millennium Corporation

In the end quarter 2013, Millennium Corp. conducted discount strategy for aftershave product to encourage buying and increase market share, the price of aftershave Zeus was $169 and $175 per unit in NAFTA and EU respectively. Posatis Corp. in this quarter kept the price at high-end level for aftershave, so they did not make up the most of market share. While due to the proper decision, we attained the goal about market share and NPV. Marketing Programs In 2013, we expanded the distribution system in some potential areas such as Houston (Texas), Philadelphia (Pennsylvania), Phoenix (Arizona), SanDiego (California), Detroit (Michigan), Denver (Ohio), Lousiville (Kentucky), New Orlean (Louisiana), Miami (Florida) in US; Ottawa (Ontario - Quebec), Winniepeg (Manitoba), Quebec City (Quebec) in Canada; Manchester, Liverpool, Marseille, Lyon, Roma, Vernice, Copenhagen, Marid in EU market. We also had Duty free shop in some International Airport. In addition, with online store and Catalogue, customers will be scheduled for a pre-arranged delivery day once or twice a week, depending on the quantity and timeline of product needed. In stable development period, our company concentrated on Publicity and Public Relations by introducing products and firm on the press, posting some news related to firm on the media, organizing the press conference, drafting the press release such as Finance Release, Pictorial Release, Video news Release. Moreover, we enhanced the brand and reputation of the company in social activities such as charity for poor people, campaign for environment.

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ANNUAL REPORT Millennium Corporation

Advertising Expenses In 2013, customers were aware of the company's image, so Millennium Corp. reduced the advertising expenditure. Especially, we raised advertising expenditure of all products of two areas in the fourth quarter. Total costs of advertising in 2013 were about 1,4million USD, including over $700,000 for quarter 4.

Market Trends Perfume is just one of the many faces of fashion, and it has its phases and fads, too. There are some types of perfume which are really being eclipsed, and the trends might surprise our modern customers. Millenium manufactures perfume with exclusive quality. We constantly search new suppliers of organic raw materials for the best quality of our products. Besides, we negotiate the best purchasing prices to increase margins of goods.

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ANNUAL REPORT Millennium Corporation

About the Price: Natural perfuming ingredients are always more expensive than man made. The modern noses are cued to modern fragrance elements. Since the ingredients in natural perfume are limited, the things man can come up with are limited and the public clamors for new new new all the time. Naturals just can't deliver on that score. Finally, naturals never are that strong smelling. Naturals fade fast and just don't deliver the novelty which everyone is craving now. Have a strong attachment to nature will be a very popular trend in perfume the future. Our perfume manufacturers are more interested in nature in the production process. They add odorless compounds in perfume recipes to preserve them from infection after one year or just a few drops of musk are enough to keep odors longer. Shaving has been a part of the male experience. But even with todays high-tech razors, there is a lots of men aftershave. Mens today is ussually difficult to choose the good ones. The new trends for the global aftershave, in which men with fresh natural scents, convincing style strong man, masculine, young and liberal... with the woody scent. So, the current positive trends? Sandalwood, banana, and jasmine are real leaders. Sounds like India & Pakistan are the trend setters here, and they are. Art follows success. Add a good dollop of coconut and that is the sexiest way to smell circa 2012. It is always difficult to predict sales levels, and is even more difficult in a challenging economic environment. We continue to take steps to reduce our expenses by reducing employee headcount and advertising expenses, where feasible, as we anticipate launching newly licensed brands in fiscal year 2012, and are cautiously optimistic that we are positioned for a profitable fiscal year 2012 with our expected product mix and revised cost structure. The cost structure requires additional spending for development and advertising and promotional expenses. In addition, the new launch are with celebrities (either entertainers or athletes), which require substantial royalty commitments and whose careers and/or appeal could change drastically, both positively and negatively, based on a single event. If our new product introductions is unsuccessful, or the appeal of a celebrity that is tied to any of our fragrances or accessory product brands diminishes, it could result in a substantial reduction in profitability and operating cash flows. We also continue developing our new market in Asia. Launched for the most part in Japan, Singapore, Hong Kong and department stores in another Asia country, fuels the growth of our industry.

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ANNUAL REPORT Millennium Corporation

FINANCIAL STATEMENT
Financial Review
$ 2012 Sales Revenue Gross Margin Net income as % of Sales Earning per share 16656000.5 63.76% 3917237.61 24% 9.67 $ 2013 12776552.25 67.08% 2351976.11 18% 7.84

(a)

The Common shares in the end of 2012 were 405,000 shares and in the end of 2013 were 300,000 shares. Sales Revenue and Net Income The Sales revenue and net income have significant changes between years. We can see that sales revenue in 2012 is higher than in 2013, because in 2013 our industry in particular and other industries had to face the crisis in Greece-EU. As a result, the second quarters of 2013, all firms in the scent industry were declined seriously in sales revenue, especially in EU. The return on sales (ROS ratio) of our firm was not high, approximately 23.5% in 2012 and 18% in 2013, it proves that our firm is not get high earnings rate on a product. We ready use a large amount of costs to stimulate sales, which will enable Millennium Corp sustainable development.

18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0

2012

2013

Sales Revenue

Net income

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ANNUAL REPORT Millennium Corporation

Sales Revenue 2012

$ NAFTA Sales Revenue 2012 2013 4152336 4728087 $ EU 12503664.5 8048465.25
75.07% 24.93%

NAFTA EU

Millennium Corp's main markets are NAFTA area and Europe, the sales revenue of them is completely different. The market that brought large revenues to the company is Europe; this is also Sales Revenue 2013 the target market that we have aimed from the beginning. But we also do not under estimate any markets at all; especially NAFTA is a stable market and good growth from 24.93% in 2012 increased to 37.01% 62.99% 37.01% in 2013. The goals in EU we initially set out to accomplish. In the following years, we will embark on developing market in NAFTA and make it a large market, potentially profitable market equivalent to EU.

Sales Revenue 2012

10.53% Aftershave 89.47% Perfume

Sale Revenue 2013

14.50 %

85.50 %

$ Aftershave Sales Revenue 2012 2013

$ Perfume 1754263.308 14901737.19 1852834.907 10923717.34

Our main products are perfume for women and aftershave for men, both products have brought sales revenue to our firm, and the sales ratio of products is totally different. In our strategy, we planned to focus in perfume market at the beginning. This ratio was relatively stable over two years, in which the proportion of Perfume was stood out, in our
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oppinion was not due to quality or price. The fact that Perfume's prices are always higher than Aftershave's, so the reason is that Perfume is a substitute for Aftershave, and the trend of consumers now prefer the perfume, especially in Europe. But we still not underestimate the profit of aftershave products, and we are making a plan to stimulate sales of this product.

NPV
15.00 10.00 5.00 0.00
Q1 Q2 2012 Q3 Q4 Q1 Q2 2013 Q3 Q4

NPV is driven by stock price and dividends.Despite the crisis in 2013, but in general our NPV steadily increased over the quarter and average growth 30, 38% per quarter, prove that our perfomance is really stable, so shareholders can rest assuredy our investment in our firm.

Stock Price
14 12 10 8 6 4 2 0 IPO Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Stock price growth steadily in 2012 and average growth 22, 54% per quarter and the fourth quarter of 2012 is the highest growth rate with 27, 69% showed the investors belived in our stock and business, also demonstrate the perfomance of our firm was great, but in the second quarter of 2013 the stock price declined 10, 96% because of the crisis mentioned above. In the fourth quarter of 2013, stock price began to rise marked a recovery phase.

Board succession planning In order to facilitate a smooth Board succession planning over the next years, the Board of Directors will propose to the Annual General Meeting, two changes to the Articles of Incorporation, allowing exible terms of ofce between one and three years and allowing to increase the number of Board members from 5 to a maximum of 7. The Board will propose the election of Prof Henner Carlos for a term of one year. He will then have

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served for ten years as a Board member and will no longer stand for re-election. In addition, Ms Lilian Huang, a Chinese national, will be proposed as a new member for a term of three years. Ms Huang is a Board member of Shiseido Corporate. Consolidated Income Statement
Consolidated Income Statement of 2012 $ Q1 Sales Revenue Less: Processing Costs Net Sales Cost of Goods Sold Gross Margin Gross Margin % Expenses Advertising Quality Control Bad Debts Product Improvement Engineering Studies Sales Expense Administrative Expense Invt./Shipping Charges Maintenance Depreciation Interest Expense Factor Cost Miscellaneous Expense Total Operating Expenses Income Before Taxes Income Taxes Net Income 4660653 7016 4653637 1701370 2952267 63.44% 281280 184452 10423.27 0 0 101160 50000 7864.8 0 0 277518.47 0 111000 1023698.54 1928568.5 924087.88 1004480.63 $ Q2 2245948 355 2245593 836215 1409378 62.76% 218280 158100 8534.67 0 0 65972.5 50000 8202.9 0 0 32682.74 0 3000 544772.81 864605.25 413385.50 451219.75 $ Q3 2245296.5 217 2245079.5 814960 1430119.5 63.70% 109270 71100 5692.98 0 0 81135.6 50000 2256.3 0 0 32673.6 0 9000 361128.48 1068991.02 511490.66 557500.36 $ Q4 7504103 4043 7500060 2679810 4820250 64.27% 444000 237735 26402.11 0 0 352716 50000 247.8 0 0 32664.92 0 18000 1161765.83 3658484.25 1754447 1904036.87

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ANNUAL REPORT Millennium Corporation

Consolidated Income Statement of 2013 $ Sales Revenue Less: Processing Costs Net Sales Cost of Goods Sold Gross Margin Gross Margin % Expenses Advertising Quality Control Bad Debts Product Improvement Engineering Studies Sales Expense Administrative Expense Invt./Shipping Charges Maintenance Depreciation Interest Expense Factor Cost Miscellaneous Expense Total Operating Expenses Income Before Taxes Income Taxes Net Income Q1 3837947.5 1972 3835975.5 1337390 2498585.5 65.14% 250790 156415 10321.63 0 0 253444 50000 3175.8 0 0 17656.68 0 0 741803.11 1756782.39 841630.55 915151.84 $ Q2 615465.75 716 614749.75 207874.75 406875 66.19% 224705 108095 2494.8 0 0 79869.5 50000 6123.6 0 0 17648.84 0 0 488936.74 (82061.74) (37764.64) (44297.10) $ Q3 1716224 701 1715523 555439.38 1160083.62 67.62% 163868 116633 7733.68 0 0 147898 50000 7918.6 0 0 17641.4 0 15000 526692.68 633391 302402.65 330988.29 $ Q4 6606915 5861 6601054 2102361 4498693 68.15% 789112 656132 31839.18 0 0 622692 50000 5114.1 0 0 17634.33 42500 75000 2290023.61 2208669 1058536.31 1150133.08

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ANNUAL REPORT Millennium Corporation

Consolidated Balance Sheet

Consolidated Balance Sheet of 2012 $ Q1 Assets Cash Account Receivable Marketable Securities Inventories Net Plant Total Assets Liabilities and Equity Accounts Payable Special Loan Short Term Loan Term Loan Bonds Total Liabilities Common Stock Other Paid In Unmort. Disc. Retained Earnings Total Equity Total Liability & Equity 970711.55 1863694.25 0 1008920 0 3843326 17500 0 0 500000 700000 1217500 500000 1125000 (3654.78) 1004480.75 2625825.97 3843326 $ Q2 2346687 896355.38 0 1051685 0 4294728 17500 0 0 500000 700000 1217500 500000 1125000 (3472.04) 1455700 3077228 4294728 $ Q3 3314857 898938 0 289225 0 4503020 17500 0 0 500000 700000 1217500 450000 1012153 (3298) 1826665 3285520 4503020 $ Q4 2752331 2988934 0 33040 0 5774305 17500 0 0 500000 700000 1217500 405000 910608.13 (3133.51) 3244330 4556805 5774305

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ANNUAL REPORT Millennium Corporation

Consolidated Balance Sheet of 2013 $ Q1 Assets Cash Account Receivable Marketable Securities Inventories Net Plant Total Assets Liabilities and Equity Accounts Payable Special Loan Short Term Loan Term Loan Bonds Total Liabilities Common Stock Other Paid In Unmort. Disc. Retained Earnings Total Equity Total Liability & Equity 3472055.75 1536005.5 0 406010 0 5414071 17500 0 0 0 700000 717500 364500 819234.13 (2976.84) 3515813.25 4696570.54 5414071 $ Q2 3436743.5 245684.83 0 733215.25 0 4415644 17500 0 0 0 700000 717500 328050 737013.25 (2828.00) 2635908.5 3698144 4415644 $ Q3 2927339.25 684999.69 0 194785.88 0 3807025 17500 0 0 0 700000 717500 300000 673753 (2687) 2118458.75 3089525 3807025 $ Q4 1978367.5 1644199.5 0 584725.75 0 4207293 17500 0 0 0 700000 717500 300000 673753 (2552.27) 2518592 3489793 4207293

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ANNUAL REPORT Millennium Corporation

Consolidated Cash Flow

Consolidated Cash Flow of 2012 Beginning Cash Balance Cash Inflows Net Cash Sales Investment Income Income from Subsidiary Collection of Receivables Receivables Factored New Special Loan New Short Term Loan Change in Term Loan New Bond Less Discount New Stock Issue Cash Available for Operations Cash Dispursements Bad Debts Expense Advertising Expense Quality Control Expense Sales Expense Administrative Expense *.65 Inventory and Shipping Costs Maintenance Expense Interest Expense Factoring Expense Miscellaneous Expense Income Tax Beginning Accounts Payable Beginning Short Term Loan Beginning Special Loan Prepay Bonds Repurchase Common Shares Cash Dividends Paid Total Cash Dispursements Q1 10000 2789942.75 0 0 0 0 0 0 500000 696152.88 1625000 5621095.63 10,423 281280 184452 101160 32500 7864.8 0 277326.13 0 111000 924087.88 0 0 2720290 0 0 0 4650384.08 Q2 91731.5 1349237.63 0 0 1863694 0 0 0 0 0 0 3304663.13 8,534.67 218280 158100 65972.5 32500 8202.9 0 32500 0 3000 413385.50 17500 0 0 0 0 0 957975.57 Q3 2294187 1346141.88 0 0 896355.38 0 0 0 0 0 0 4536684.26 5,693 109270 71100 81135.6 32500 2256.3 0 32500 0 9000 511490.66 17500 0 0 0 349500 0 1221945.54 $ Q4 891232 4511126 0 0 898937.63 0 0 0 0 0 0 6301295.63 26402.11 444000 237735 352716 32500 247.8 0 32500 0 18000 1754447 17500 0 0 0 430200 202500 3548748.29

Computed Ending Cash Bal. Quarterly Stmt Cash Bal. Computed minus Actual Bal.

970711.55 2346687.56 3314738.72 2752547.34 970711.55 2346687 3314857 2752331 0 0.56 -118.28 216.34
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ANNUAL REPORT Millennium Corporation

Consolidated Cash Flow of 2013 Beginning Cash Balance Cash Inflows Net Cash Sales Investment Income Income from Subsidiary Collection of Receivables Receivables Factored New Special Loan New Short Term Loan Change in Term Loan New Bond Less Discount New Stock Issue Cash Available for Operations Cash Dispursements Bad Debts Expense Advertising Expense Quality Control Expense Sales Expense Administrative Expense *.65 Inventory and Shipping Costs Maintenance Expense Interest Expense Factoring Expense Miscellaneous Expense Income Tax Beginning Accounts Payable Beginning Short Term Loan Beginning Special Loan Prepay Bonds Repurchase Common Shares Cash Dividends Paid Total Cash Dispursements Computed Ending Cash Bal. Quarterly Stmt Cash Bal. Computed minus Actual Bal. Q1 1041971 2299970 0 0 2988934 0 0 0 (500000.00) 0 0 5830875 10322 250790 156415 253444 32500 3175.8 0 17500 0 0 841630.55 17500 0 0 0 411075 364500 2358852 3472023 3472055.75 -32.73 Q2 2936976 369064.94 0 0 1536006 0 0 0 0 0 0 4842047 2495 224705 108095 79869.5 32500 6123.6 0 17500 0 0 (37764.64) 17500 0 0 0 462186 492075 1405284.26 3436762.68 3436743.5 19.18 Q3 3419734 1030523.31 0 0 245684.8 0 0 0 0 0 0 4695942 7734 163868 116633 147898 32500 7918.6 0 17500 0 15000 302402.65 17500 0 0 0 339685.5 600000 1768639.43 2927302.68 2927239.25 63.43

$ Q4 434939 3956854.5 0 0 684999.69 1000000 0 0 0 0 0 6076793 31839 789112 656132 622692 32500 5114.1 0 17500 42500 75000 1058536.31 17500 0 0 0 0 750000 4098425.6 1978367.6 1978367.5 0.10

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ANNUAL REPORT Millennium Corporation

Notes to the consolidated financial statements Consolidated Income Statement Sales Revenue and Net Income This is two important accounts in the consolidated income statement and they show the performance of our firm. If considered separately for each year, as we analyzed above, second and third quarter are two difficult quarters in sales, so the sales revenue and net income is the lowest, especially when the crisis took place in Greece, our firm has been affected quite seriously, net income was -44297$. At present we are in the recovery phase, as evidenced by sales revenue and net income in the 4th quarter of 2013 are 6606915$ and 1150133$. The 4th quarter of 2012 is the quarter with the highest sales revenue and net income, 7504103$ and 1904037$. The Sales Revenue and Net Income in 2012 are higher than 2013 for each quarter, indicating the competitive environment is increasingly fiercely, and customers' demand increased strongly, so we had creat a new development plan for our firm for the years after. Less: Progressing Cost This cost presents the reprogressing product and turn them back in inventory. This cost helps us to control the payment for quality control to make our products better.

Q4 2013 2012 Q3 Q2 Q1

Q4 Less progressing proportional to market demand, which is low in the second and Q3 the third quarter and high in the first and Q2 the fourth quarter. Because customers' s Q1 demand inscreased highly, so even 0 2000 4000 6000 8000 though our firm had increased the quality control cost but still increased cost less progressing, so we will adjust the quality control cost increases strongly, further aims to reduce this account to zero.

Advertising and Quality Control These two types of costs kept increasing year by year shows that our firm always concentrates in stimulating sales through Pull-strategy. But we also use Push-strategy by increasing commission and base salary of sales reps (presented by Sales Expense). Both
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ANNUAL REPORT Millennium Corporation

strategies we use are very effective, the evidence although we faced the crisis in the EU but we have recovered very quickly and now after only two quarters our stoch price, sales revenue, net income... are approximately the highest in the past and keep increasing, promises to increase dramatically over the past. Those charts below are the changes in advertising cost, quality control cost and sales expense.
700000 600000 500000 400000 300000 200000 100000 0

700000 600000 500000 400000 300000 200000 100000 0

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

quality control 2012

quality control 2013

sales expense 2012

sales expense 2013

800000 700000 600000 500000 400000 300000 200000 100000 0

Q1

Q2

Q3

Q4

Advertising 2012

Advertising 2013

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ANNUAL REPORT Millennium Corporation

Bad Debt
0.60%

This account can be viewed as a risk, when customers lose their ability to pay, our firm is affected. The rate of bad debts of our firm is stable and is not disproportionately large. The lowest was in the first quarter of 2012 with 0.22% and the highest is in the fourth quarter of 2013 with 0.48%. Interest Expense

0.50% 0.40% 0.30% 0.20% 0.10% 0.00% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013

This was very low, since the first 300000 quarter of 2013 the interest expense is 250000 17500 per quarter; this is the bond 200000 interest, indicating a very strong 150000 financial capacity. When we first 100000 started the business we had to borrow 50000 a special loan, so interest expense was 0 very high in the first quarter, but only Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 after a quarter of operation, we solved this special loan, and not to borrow more in the next quarter. In 2012, our dept structure contained special loan, long term dept and bonds. But after a year, we just had to pay bonds interest, it proved that our business was really great and we could pay back after a year of operation. We now retain the bonds simply because of leverage and bonds have the lowest interest rate in the dept tools. Receivables Factored and Factor Cost These are based on our risk management program. By paying factor cost, we may soon receive money from receivable account for the next quarter, which increases an amount of cash-in-hand to be able to manage those changes arise. Our firm's cash-in-hand is always available in five beginning quarters, so we do not use them, But after facing crisis in Eu, and preparing for fourth quarter - the most favorable sales quarter, we planned to apply them. And the factor cost is 4, 25% of receivable factor.

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ANNUAL REPORT Millennium Corporation

Miscellaneous Expense This is our hiring and training cost. Based on the Human Resource's plan, we set out a training program and then measured cost for this. This figure is quite low but it does not mean we do not focus on training staff, but because our employees have confidence in our firm so we do not have to spend too much money on hiring new employees, in the fourth quarter of 2013 we spent a huge amount for training for new knowledge in the new environment. Consolidated Balance Sheet Cash This is the amount of cash in hand, 3500000 used to prepare next quarter 3000000 operation. In addition to costs for 2500000 business, we also spent a great 2000000 amount of cash in hand for 1500000 repurchasing shares, dividends but 1000000 our cash was still high that 500000 demonstrate strong financial 0 performance of our firm. The cash of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 our firm tend to rise in the three 2012 2013 beginning quarters and declined in the last quarter, because in the 4th quarter we usually increase the costs for business because this is the hot sales quarter of year as well as the time for increasing massively our spending for the dividends. Inventories
1500000 1000000 500000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012

Q4

2013

Our inventories are expected in addition to fully satisfy customer's demand, it use to control product prices. Usually Inventories are higher in the second quarter becourse this is the most difficult in years, and in 2013 this is the time of the crisis in Greece. And now we have a very good estimate of customer demand, so the amount of

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ANNUAL REPORT Millennium Corporation

inventories in the last quarter was maintained at a low number, in 4th quarter of 2013 inventories of ours only $584725.75. Account receivable Approximately 40% of Sales revenue that is deferred accounts of customers, shall comply with firm policy, we use it to stimulate sales, which customers can be proactive in the distribution of funds. However, it also has risks, and is expressed through Bad Dept; we always try to maintain it as low as possible. Account Payable This is the amount of capital that companies can take up with the interest rate by zero and equivalent to 25% administrative costs of a quarter. Since 2013, We does not use financing in the long term dept, our firm's capital structure is simple, only including bonds and equity, this simplifies the management of capital budgets, ensure the solvency of our company. When the company has no debt, will be much easier in the mobilization dept when require, but our firm retains this structure even though we have just dealed with the crisis, demonstrating our firm's capacity. We issued 700,000 bonds with low interest rates 1.75%, as mentioned above is the lowest interest rates in debt instruments, so we maintain the number of bonds. Number of shares of our firm was on a decline, because we had run shares repurchase program since the 3rd of 2012, to maximize the value of shareholders investment. And we stopped at 300,000 shares, since that is the best number. If more than 300,000, the profit shareholders will be lower, but less than 300,000, the shares will become less attractive because the number is too low, that is what we concern. And now with 300000 shares issued, we easily increased the EPS and of course the dividends. We promise in next year, our dividends will be the highest in the stock market due to our strong financial capability.
4000000

Retained earnings This is the account where gains and losses are recorded to the Stockholder. Retained earnings of our firm was always positive, so shareholders can assured that we always have the ability to pay high dividends. Especially whether the crisis in Greece, in addition to
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3500000 3000000 2500000 2000000 1500000 1000000 500000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013

ANNUAL REPORT Millennium Corporation

we mentioned above, we ran stock repurchase program and increased dividend massively over the quarter, but retained earnings was still very high. Consolidated Cash Flow Beginning Cash Balance This is calculated by the last quarterly statement cash balance less the cost of imported goods the quarter after, through quarters, this number is always positive, prove that our firm's financial calculations were correct, so our firm hasn't had special loan since the second quarter of 2012. Net Cash Sales Approximately 60% of that quarter sales revenue. This is the amount customers pay first; the rest is recorded in account receivable the balance sheet. The birth of this clause has been mentioned above. Collect of Receivable As mentioned above this is the customer's debt, and it is collected at the beginning of our next quarter. Similarly, beginning Account Payable is the money paid for the occupancy of Administrative Expense from the previous quarter. Beginning Special Loan This is the special dept that is applied when our firm does not have enough money to operate; it has the highest interest rate, so we try hard to avoid it. Liked we mentiones above, when we first started the business we had to borrow this kind of dept with $2720290. But after a quarter of operation, we could pay back this dept. After that we succeed in avoiding special loan by using long term dept and bonds. Now we only have to repay bonds prove that our financial capability is high. Repurchase Common Shares Like we mentioned above, since the third quarter of 2012, we had run stock repurchase program, this account present how much we have to pay to repurchase stock. And the repurchase stock is 10% of the standout stock.

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ANNUAL REPORT Millennium Corporation

MILLENNIUM BOARD OF DIRECTORS

Pham Thu Huong Chairman of the Board and Chief Executive Officer

Huynh Thi Nhat Phuong Senior Vice President and Chief Financial Officer Nguyen Hoa Hung Senior Vice President and Chief Marketing Officer Tran Thuy Nhat Hy Board Member and Sales Director Tran Dang Thanh Quyen Board Member and HR Director

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ANNUAL REPORT Millennium Corporation

Millennium Board of Management

Pham Thu Huong Chief Executive Officer

Tran Dang Thanh Quyen HR Director

Huynh Thi Nhat Phuong Chief Financial Officer

Vu Huy Quoc Cuong Vice Financial Director

Nguyen Hoa Hung Chief Marketing Officer

Tran Thi Thu Thuy Vice Marketing Director

Tran Thi Mai Thao Vice Marketing Director

Luong Van Quang Vice Marketing Director

Tran Thuy Nhat Hy Sales Director

Nguyen Pham Minh Tam Vice Sales Director

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