ANNUAL REPORT 2015 VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY Stock Code: VNM Vietnamese name : Công ty Cổ phần Sữa Việt Nam Abbreviated name : Vinamilk Share capital : VND12,006,621,930,000 Headquarter : No.10 Tan Trao Street, Tan Phu Ward, District 7, Ho Chi Minh City Tel : (84-8) 54 155 555 Fax : (84-8) 54 161 226 Email : [email protected] Website : https://www.vinamilk.com.vn : http://www.vuoncaovietnam.com : https://www.youtube.com/user/Vinamilk Business registration certificate and tax code: 0300588569 CONTENTS MISSION AND VISION CORE VALUES KEY FINANCIAL INFORMATION CHAIRWOMAN’S MESSAGE PART I: GENERAL INFORMATION 15 1. Corporate history 16 2. Principal business activities and localities 18 3. Information about corporate model, business organization and managerial apparatus 24 4. Development orientations 44 5. Risks 45 PART II: BUSINESS OPERATIONS IN THE YEAR 46 1. Overall business operations 48 2. Investment activities, projects implementation 62 3. Financial situation 64 4. Shareholders’ structure, change in the owners’ equity 66 5. Investor relations activities 68 PART III: REPORT AND ASSESSMENT OF BOD 72 1. Assessment of operating results 74 2. Financial situation 75 3. Improvements in organization structure, policies, management 77 4. Development plans in the future 78 5. Sustainable development report 80 PART IV: BOM’S ASSESSMENT ON THE COMPANY’S OPERATIONS 87 1. BOM’s assessment on the Company’s operations 88 2. BOM’s assessment on BOD’s performance 90 3. BOM’s business plans and orientations 91 PART V: CORPORATE GOVERNANCE 93 1. Board of Management 94 ABBREVIATIONS 2. Inspection Committee 98 3. Transactions, remunerations and interests of BOM, IC and BOD 102 The Company : Vietnam Dairy Products BOM : Board of Management 4. Risk management report 104 Joint Stock Company IC : Inspection Committee Vinamilk : Vietnam Dairy Products BOD : Board of Executive Directors PART VI: FINANCIAL STATEMENTS 108 Joint Stock Company IA : Internal Audit AGM : Annual General Meeting SCIC : The State Capital Investment Corporation CONTACTS 178 HOSE : Ho Chi Minh Stock Exchange VISION, MISSION, CORE VALUES Vision To become a world grade brand in food and beverage industry, where people put all their trust in nutrient and health products. Mission To deliver the most valuable nutrition to community with our respect, love and responsibility. Core Values INTEGRITY RESPECT FAIRNESS COMPLIANCE ETHICS SUSTAINABLE HUMAN CUSTOMER IS RESPONSIBILITIES CREATIVITY DEVELOPMENT DEVELOPMENT CENTER Whole hearted We do business on We have high opinion We attach special We always pursue what commitment to the basis of paying of renovation and importance to all brings true thing, good Integrity and To have To be fair with To comply To respect the mission and acting attention to long-term creativity in order activities related thing for customers transparency self-respect, employees, with legal established with the highest interest of customers, to improve quality, to development and keep customers in actions and to respect customers, regulations, ethical responsibility are shareholders and performance of all of knowledge and centered principle transactions. colleagues. suppliers and the Company’s standards and always accompanied relevant parties. operations. competence of in every thought and by us. employees. action. To respect the other parties. Code of act accordingly. Company and Conduct and partners. To the Company’s cooperate with procedures and respect. policies. VINAMILK 6 Annual report 2015 www.vinamilk.com.vn 7 40,223 35,187 31,586 45,000 40,000 27,102 35,000 22,071 30,000 CAGR = 22% 16,081 25,000 20,000 10,820 8,381 15,000 6,675 2015 6,289 2014 10,000 2013 5,659 2012 2011 2010 5,000 2009 2008 2007 0 2006 KEY2005 FINANCIAL INFORMATION 9,367 (Audited consolidation) Unit: VND billion 8,010 7,613 10,000 6,930 9,000 8,000 4,979 40,223 7,000 CAGR = 32% 4,251 6,000 TOTAL REVENUE 35,187 Unit: VND billion 5,000 31,586 2,731 45,000 4,000 40,000 27,102 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growth(*) CAGR(**) 3,000 1,371 2015 2014 35,000 22,071 955 2013 2,000 2012 Total revenue 5,659663 6,289 6,675 8,381 10,820 16,081 22,0712011 27,102 31,586 35,187 40,223 7.1 22% 30,000 CAGR = 22% 603 2010 16,081 1,000 2009 2008 25,000 Profit before tax 603 6632007 955 1,371 2,731 4,251 4,979 6,930 8,010 7,613 9,367 15.5 32% 0 2006 20,000 10,820 2005 8,381 15,000 Profit after tax 605 660 963 1,249 2,376 3,616 4,218 5,819 6,534 6,068 7,770 12.2 29% 6,675 2015 20,924 6,289 2014 10,000 2013 5,659 2012 19,800 2011 2010 5,000 2009 2008 Total assets 3,898 3,601 5,425 5,967 8,482 10,773 15,583 19,698 22,87517,545 25,770 27,478 7.0 22% 2007 25,000 0 2006 2005 15,493 Owners’ equity 2,247 2,684 4,224 4,666 6,455 7,964 12,477 15,493 17,545 19,800 20,924 9.3 25% 9,367 20,000 12,477 Total liabilities 1,651 917 1,201 1,301 2,027 2,809 3,105 4,205 5,307 5,970 6,554 4.0 15% PROFIT BEFORE TAX 8,010 7,613 (*):15,000 Growth 2015 vs 2005 (times) 6,930 CAGR = 25% 7,964 10,000 (**): Compound Average Growth rate 2005-2015 6,455 9,000 10,000 8,000 4,979 4,666 4,224 7,000 OWNERS’ EQUITY 2015 CAGR = 32% 4,251 2014 AND TOTAL LIABILITIES 2013 6,000 5,000 2,684 2012 2,247 2011 5,000 2010 2,731 Owners’ equity 2009 2008 4,000 2007 Total0 liabilities 2006 2005 3,000 1,371 2015 2014 955 2013 2,000 2012 663 2011 603 2010 1,000 2009 23% 24% 2008 23% 2007 21% 0 2006 20% 2005 24% 26% 100% 22% 22% 20,924 90% 25% OWNERS’ EQUITY 19,800 80% 42% 25,000 17,545 70% 77% 76% 15,493 79% 77% 60% 80% 20,000 74% 12,477 50% 78% 76% 78% 40% 75% 15,000 CAGR = 25% 7,964 30% 58% 2015 6,455 2014 10,000 20% 2013 4,666 2012 4,224 2011 2015 10% 2010 2014 2009 2013 2008 5,000 2,684 2012 2007 2,247 2011 0% 2006 2010 2005 2009 2008 2007 0 2006 2005 VINAMILK 23% 24% 8 23% 9 Annual report 2015 20% 21% www.vinamilk.com.vn 24% 26% 100% 22% 22% 90% 25% 80% 42% 70% 77% 76% 77% 60% 80% 79% 74% 50% 78% 76% 78% 40% 75% 30% 58% 2015 2014 2013 20% 2012 2011 2010 10% 2009 2008 2007 0% 2006 2005 CHAIRWOMAN’S MESSAGE THE BOARD OF MANAGEMENT PLEDGES to go shoulder to shoulder with Vinamilk’s Board of Executive Directors in the construction of short and long-term plans and strategies. The broad objectives are to constantly expand the Company’s market, diversify products and upgrade quality. For the Company to thrive in a competitive and integrated environment, the accomplishment of these goals will be based on the application of advanced technology in production and trading, the establishment of an internal management and risk management system compliant with international standards. Dear valued clients, shareholders and the entire • Total revenue was VND40,223 billion, up 14% staff of Vietnam Dairy Products Joint Stock from 2014 and reaching 105% of the guidance Company, assigned by the Annual General Meeting. As the year of 2015 passed, it witnessed • Profit before tax was VND9,367 billion, up 23% encouraging improvements in the economy and from 2014 and realizing 114% of the guidance financial market of Vietnam. For its part, Vinamilk assigned by the Annual General Meeting. made a huge leap in its audited consolidated • Profit after tax was VND7,770 billion, up 28% business results in 2015 after overcoming many from 2014 and fulfilling 114% of the guidance obstacles of 2014 (milk price fluctuations, the price assigned by the Annual General Meeting. ceiling on milk products, etc.): As it strives to meet all financial targets, Vinamilk has VINAMILK 10 Annual report 2015 www.vinamilk.com.vn 11 CHAIRWOMAN’S MESSAGE (continued) NOT ONLY STRIVES TO MEET ALL FINANCIAL TARGETS, Vinamilk has been perseverant in its vision of sustainability and social responsibilities with the aim to ensure balanced interests of the Company and its consumers. The Company offers absolutely safe, highly nutritious and best-priced products to its consumers. been perseverant Vinamilk is proud integration under the TPP would introduce to thrive in a competitive and integrated in its vision of to be celebrated enterprises, including Vinamilk, to both environment, the accomplishment of these sustainability and by domestic and opportunities and challenges. goals will be based on the application of social responsibilities overseas investors as advanced technology in production and with the aim to ensure one of Vietnam’s leading Taking into account harsh and increasing trading, the establishment of an internal balanced interests of the enterprises in term of firm competition in the dairy industry, meeting the management and risk management system Company and its consumers. size, operating efficiency and guidance of 2016 and the five-year period compliant with international standards and The Company offers absolutely safe, corporate governance. In 2015, the of 2012-2016, that is, cementing Vinamilk’s finally the fostering of human resources. highly nutritious and best-priced products Company continued to receive many honors position as Vietnam’s leading milk producers while concentrating on the environmental aspect and awards from prestigious local and international and bringing the Company to the world’s Top On behalf of Vinamilk’s Board of Executive of corporate development and ensuring a “green” organizations.