CONTENTS CONTENTS 1 CORPORATE GOVERNANCE OF VINAMILK 2 I Corporate Governace Structure 3 II Board of Directors 3 1 Composition 3 III Rights of Shareholders 4 IV Role of Stakeholders 6 COMMITMENT TO ST[.]
CONTENTS CONTENTS CORPORATE GOVERNANCE OF VINAMILK I Corporate Governace Structure II Board of Directors: Composition: .3 III Rights of Shareholders: .4 IV Role of Stakeholders: COMMITMENT TO STAKEHOLDERS: V Information Disclosure and Transparency: Principles of Information Disclosure: Confidential information .9 Inside Information and Insider Dealing .9 Organization of information disclosure, management of information, transparency of information 10 Disclosure Items 12 Disclosure of information on major Shareholders .14 Information security 15 CORPORATE GOVERNANCE OF VINAMILK Company description: Vinamilk is the largest dairy company in Vietnam Based on the UNDP 2007 Top 200 largest firms in Vietnam report, it is also the 15th largest company in Vietnam In 2010, it is the first company in Vietnam to be included in the Forbes Asia's 200 Best Under A Billion list that highlights 200 top-performing small- and mid-sized companies with annual revenue under US$1 billion The company was established in 1976 as the state-owned Southern Coffee-Dairy Company, to nationalize and take over the operations of three previously private dairy factories in South Vietnam: Thống Nhất (belonging to a Chinese company), Trường Thọ (formerly owned by Friesland Foods, best known for its production of condensed milk that was widely distributed across the South) and Dielac (Nestlé) It was renamed United Enterprises of Milk Coffee Cookies and Candies in 1978 It became the Vietnam Dairy Company, formally established in 1993 In 2003, following its IPO to the Ho Chi Minh Stock Exchange, the company legally changed its name to Vietnam Dairy Products Joint Stock Company (Vinamilk) The principal activities of the Vinamilk are to produce and distribute condensed milk, powdered milk, fresh milk, soya milk, yogurts, ice-cream, cheese, fruit juice, coffee and other products derived from milk Vinamilk products such as powdered milk and condensed milk are also exported to the Middle East, Cambodia, the Philippines and Australia Exports accounted for $180m in 2012 Vinamilk's main competitors are Dutch Lady Vietnam (a division of Friesland Foods), Nestlé Vietnam, Abbott, Mead Johnson, Friso and Nutifood In September 2016 Vinamilk signed a strategic cooperation agreement with Chr Hansen to develop probiotics I Corporate Governace Structure SHAREHOLDERS MEETING BOARD OF DIRECTORS STRATEGY COMMITTEE NOMINATION COMMITTEE REMUNERATION COMMITTEE AUDIT COMMITTEE CHIEF EXECUTIVE OFFICER II Board of Directors: Composition: - The Board of Directors shall have at least five (5) members and not more than eleven (11) members The office term of a member of the Board of Directors shall not exceed five (5) years Members of the Board of Directors may be re-elected with an unlimited number of terms The total number of independent members of the Board of Directors must account for at least onethird of the total members of the Board of Directors The minimum number of independent members of the Board of Directors shall be determined by the method of rounding down The independent members of the Board of Directors must satisfy all conditions in accordance with the Vietnamese Law A member of the Board of Directors may be not a Shareholder of the Company, nor hold Vietnamese nationality and/or nor reside in Vietnam - The Board of Directors member shall not allowed to serve on the Board of Directors of more than five (05) companies at the same time, except as the member of the Board of the Management of the companies in the same corporation or companies operating under the Group, including parent company - subsidiary; an economic corporation or representatives of the fund management company; the securities investment company Structure: - The Board of Directors shall set up the Audit Committee, Strategy Committee, Personnel Committee and Salary and Bonuses Committee to assist it in carrying out the Board of Directors’ activities The Audit Committee, Personnel Committee and Salary and Bonuses Committee must respectively have at least one (1) independent member of the Board of Directors who shall act as the head of the sub-committee - The Board of Directors shall be required to set up other special subcommittees after the approving resolutions of the General Meeting of Shareholders - Structure of Audit Committee: A majority of the members of the Audit Committee are independent members of the Board of Directors and nonexecutive members of the Board of Directors The specific contents related to the organizational structure of the Audit Committee shall be prescribed in the Regulations on Corporate Governance.s III Rights of Shareholders: Shareholders shall be the owners of the Company and shall have rights and obligations corresponding to the number and classes of shares owned by them The Shareholders shall only be liable for the debts and other property obligations of the Company to the extent of the amount of capital they have contributed to the Company A person who holds ordinary shares shall have the following rights: a to attend and express opinions at the General Meeting of Shareholders and to exercise the right to vote directly at the General Meeting of Shareholders or through a proxy or by a remote vote; b to receive dividends at the rate decided by the General Meeting of Shareholders; c to freely assign shares which have been paid for in full in accordance with this Charter and the applicable Law; d to be given priority in subscribing for new shares offered for sale in proportion to the number of ordinary shares each Shareholder holds in the Company; e to check information relating to each Shareholder in the list of Shareholders who are qualified to attend the General Meeting of Shareholders and to request amendment of incorrect information; to consult or copy of the Charter of the Company, the book of minutes of meetings of the General Meeting of Shareholders and resolutions of the General Meeting of Shareholders published on the website of the Company f If the Company is dissolved, to receive a part of the remaining assets in proportion to the number of shares they own after the Company has paid out the debts and obligations and the shareholders holding preference shares; g to request the Company to redeem shares in the cases stipulated in Clause Article 129 of the Law on Enterprises; and h other rights stipulated in this Charter and by Law A Shareholder or a group of Shareholders holding more than five percent (5%) of the total ordinary shares for six (06) consecutive months or more shall have the following rights: a to stand for election of or nominate candidates to the Board of Directors in accordance with Clause Article 19 of this Charter; A group of Shareholders when implementing the rights stipulated at Point 3.a of this Article shall be liable for submitting documents from a securities company (or corresponding other documents accepted by the Company) certifying the number of shares, the ratio of shares, time of shares holding to prove the satisfaction of all corresponding conditions above b to request the Board of Directors to convene a General Meeting of Shareholders in accordance with Article 114 and Article 136 of the Law on Enterprises; c (i) to inspect and (ii) receive a copy or an extract of the list of Shareholders entitled to attend and vote at a meeting of the General Meeting of Shareholders after each meeting; d to request the Board of Directors to inspect each particular issue relating to the management of the Company’s operation whenever necessary The request must be made in writing and must contain the full name, permanent address, nationality, number of people’s identity card, passport or other lawful personal identification in respect of a Shareholder being an individual; or the name, permanent address, nationality, number of establishment decision or number of enterprise registration in respect of a Shareholder being an organization; number of shares and date of registration of shares of each Shareholder, total number of shares of the group of Shareholders and the percentage of ownership of the total number of shares of the Company; issues to be inspected and purpose of the inspection In this case, the inspection shall be directly carried out and reported by the Audit Committee e Other rights stipulated in this Charter and other provisions of the Law IV Role of Stakeholders: The development of society has brought many benefits to the community, yet raised many challenges at the same time The whole world has faced a variety of serious problems such as food hygiene and safety, environmental pollution, new diseases, depletion in natural resources, and global warming These problems, as we believe, could only be reduced and resolved if there was a close collaboration and support between residents and businesses Every individual as well as every organization are part of society Their development is also the development of society, and vice versa, the rise of the society will result in certain positive influences on its members We need to enhance our awareness for sustainable development as well as our responsible actions towards the community and society This is necessary and useful for not only ourselves but also the present society and future generations In recent years, Vinamilk has made an impressive development and become one of the biggest corporations in Vietnam, and now continues to make constant efforts to conquer international markets, approaching its goal to be positioned as one of the 50 biggest dairy companies worldwide Obviously, the company's development is proportional to its influences on society, especially in Vietnam Being highly aware of this matter as well as the challenges that the whole society has faced, Vinamilk has identified its specific business rules that focus on a harmonious connection between business targets and social responsibilities, adhering to the principles of sustainable development Vinamilk commits to fulfil its responsibilities toward all of its stakeholders and attempts to bring them as many values as possible Vinamilk's sustainable development orientation focuses on the following points: Community Local Environment &for Energy Responsibility product Responsibility for employee development economic support development COMMITMENT TO STAKEHOLDERS: Consumers: - Provide the best and safest products - Diversify products and creat new product values to improve and increase human health - Provide products with resonable price Shareholders: - Ensure a safe and suitainably profitable investment State: - Comply with the State policies and regulations in the operating fields Employees: - Create satisfaction in safe working conditions, personal development and competitive income Suppliers: - Collaborate and develop on the basis of common benefit, transparency and social responsibility Community: - Be responsible, share values and jointly develop community V Information Disclosure and Transparency: Principles of Information Disclosure: - Definition: “Disclosure of information is defined as ensuring access to information for all interested parties, regardless of the purpose of obtaining the information, through a transparent procedure that ensures that information is easily found and obtained.” - The principles of disclosure: + Provided on a regular and timely basis + Easily and broadly available + Correct and complete + Consistent, Appropiate and with a bibliography - The Company has an obligation to disclose complete, correct and timely information on regular and irregular bases on the Company’s business and production, finance and corporate governance status of the Company to Shareholders and the public in accordance with the Information Disclosure Regulation of Ho Chi Minh Stock Exchange - The information disclosure is performed using methods to ensure that Shareholders and investors can have access fairly and at the same time The wording of the information disclosed must be clear and easy to understand and avoid causing misunderstanding to Shareholders and investors, ensure transparency of information Confidential information - To avoid potential negative impacts of information disclosure on the lawful rights and benefits of the Company and its shareholders, the Company is allowed to keep confidential information within business secrets in accordance with the Law on Competition - The Scope of business secrets and other confidential information is stipulated in the Regulation on information disclosure and the Information security policy Inside Information and Insider Dealing Inside information is defined as any information relating to the Company, which has not been made public, and which can have significant influence on the Company's stock price if made public - Inside information is kept confidential by competent person in accordance with the regulations mentioned in the Information security policy - Individuals with access to inside information include: + Members of BM, IC, the General Director, other Managers, within the scope of their responsibilities and assigned tasks + Major shareholders of the Company 10 + External Auditor, Securities companies, security investment fund management companies and The Company’s securities practitioners + Organizations or individuals which have relationships of business cooperation or service provision with the Company and the employees of such organizations + Organizations or individuals who have directly or indirectly obtained inside information from the above-mentioned individuals - Insiders with access to inside information are prohibited from: + Buying, selling or disposing of securities to which such information relates + Disclosing such inside information to any other person unless such disclosure is made in the normal course of the performance of his/her assigned duties + Recommending or inducing another person, on the basis of the inside information they have access to, to acquire or dispose of securities to which that information relates - Illegal internal trasactions (insider/internal dealings) are inside transactions that occur when people with access to inside information use that information to obtain profit or to avoid losses in the stock market - The General Director shall be responsible for implementing the information security policy and to specify regulations and procedures for avoiding conflicts of interests of the Company to correct activities relating to violations in the use of inside information , internal dealing Organization of information disclosure, management of information, transparency of information 4.1 Organization of information disclosure - BM shall be responsible for establishing, approving and maintaining the Regulation on Information disclosure which is in accordance with the Law on Securities, the guidelines and other relevant legal regulations - To ensure accuracy and timeliness, the Company shall establish a new department/ existing derpartment for disclosure of information Standards and conditions of this personnel / department are stipulated in the Regulation on 11 information disclosure Officers who are in charge of information disclosure of the Company, must exercise his/her assigned rights and duties - The disclosure of information is done through the media of the State Securities Commission and Stock Exchange, and on the Company’s publications and websites 4.2 Management of confidential information, inside information - The General Director shall hold the highest reponsibility for constructing / proposing criteria to classify information and the systems of management of inside information, confidential information in accordance with the current law In principle, inside information must becentrally managed in a top-down manner Each department, depending on its nature of work, evaluates the level of sensitivity of the information which occurs in that department for suitable methods of resolution, security and management - During the development of business activity, the list of the information needs to be regularly supplemented and updated for the purpose of close management and monitoring, limiting the negative effects of the disclosure of inside information to the outside 4.3 Transparency The Company commits to ensure transparency of disclosure of information in accordance with the Regulation on the disclosure of information 4.4 Individual responsibility for compensation - Individuals violating the Regulation on the disclosure of information, including but not limited to (i) information disclosure; (ii) use of information of leaking information; (iii) incomplete or inaccurate preparation of information for disclosure; are liable to compensate and/or receive disciplinary measures according to the level of violation 4.5 Mechanism for regular communication with major shareholders The Company shall communicate with major shareholders whenever BM considers it necessary, but on the principle of no less than twice a year 12 Disclosure Items 5.1 Disclosure of information on corporate governance - The Company must disclose information on its corporate governance status at the Annual meeting of GMS and in Annual reports of the Company Such information must include at least: + Members and the structure of BM and IC; + Activities of BM and IC; + Activities of independent non-executive members of BM; + Activities of the Sub -committees of BM; + Plans to enhance the efficiency of corporate governance; + Remuneration and expenses for the members of BM, Inspection Committee, the General Director, Managing Directors + Information on transactions of Company’s shares by members of BM, IC, the General Director, the Managing Directors, major Shareholders as well as other transactions by members of BM, IC, the General Director, the Managing Directors, major Shareholders and of people related to the above-mentioned people + The Number of BM members, Inspection Committee members, the General Director who have attended training courses on corporate governance + Matters which are not in compliance with the Regulation, the reasons and solutions - The Company must report quarterly and anually and disclose information on corporate governance in accordance with laws, regulations of the State Securities Commission and Ho Chi Minh City Stock Exchange - Members of BM, members of IC, the General Director, and the Management Apparatus has a duty to report and disclose information on: + The transactions between the Company and the company of which the aforementioned members are founding members or members of BM, the General Director, or Director, in the previous 03 years; + The transactions between the Company and the company of which the 13 84 related persons of the aforementioned members are founding members or members of BM, the General Director, or Director; + Transactions giving advantages, tangible and intangible, to the aforementioned members 5.2 Contents of disclosure: The scope of information that must be disclosed includes: - Regular information: audited financial statements and an annual report - Extraordinary information - Information requested by the SSC - Information related to transactions by major shareholders - Information related to transactions of treasury shares - Transactions of shares by founding shareholders during restricted periods - information related to public transactions or offers - Public offer for sale of securities and scheduled use of capital received from the offer - Other information in accordance with the Law 5.3 Voluntary Disclosure of Information The information that the Company may voluntarily disclose (not falling within the scope of requirements of the law) on its website includes: - The objectives of the Company - The ownership structure of major and important shareholders, voting rights - Information on members of BM and members of the Board of Managing Directors - The key predictable risk factors - The employees and other related -interest parties - The structure and policies of the Company’s corporate governance 14 5.4 Scope of information disclosed to major shareholders The scope of information disclosed to major shareholders includes: - Inside information - Opinions proposed by major shareholders on corporate gorvenance Disclosure of information on major Shareholders 6.1 The Company must organize periodical disclosure of information on each major Shareholder, the main contents including: - Full name and date of birth (individual shareholders); - Contact address; - Occupation (individual shareholders), or areas of business (institutional shareholders); - Number and percentage of shares owned in the Company - Changes of ownership among major shareholders - Information that may cause big changes in terms of shareholders of the Company - Increase or decrease in shares, and pledge or mortgage of shares of the Company owned by major shareholders 6.2 The Company has an obligation to report on a quarterly and annual basis and to disclose information about the fluctuation in shareholders in accordance with regulations of the State Securities Commission to the State Securities Commission and to the Ho Chi Minh Stock Exchange 6.3 To ensure the interests of Shareholders, Shareholders must provide the Company with their information regularly and timely In the case the Shareholders not provide information, leading to the interests of shareholders being affected and if such effect does not originate from the Company’s mistake, the Company shall not be liable for compensation 15 Information security - The General Director is responsible for establishing and implementing regulations and procedures on information security (as part of the Information security policy) - The Scope of regulation includes inside information, confidential information and other Company’s sensitive information that need to be kept confidential - The main contents must include at least: information risk management, implement department, asset management, storage, communications, access control, management of confidentiality agreement in relation to third parties 16