ANNUAL REPORT 2017

CONTENTS

GTNFOODS MILESTONES
IN 2017 AND MESSAGE INTRODUCTION BUSINESS OPERATION
FROM LEADERSHIP OF GTNFOODS

06 • Vision, Mission & Business 18 • General Information 60 • Economic outlook

Philosophy
30 • Key milestones 63 • Business results 2017
08 • Highlights and outstanding events
35 • Moc Chau milk 78 • Business plan 2018
10 • Message from leadership
40 • Vinatea
14 • Key indicators
46 • Other businesses

48 • Organizational structure

56 • Development strategy 2018 - 2020

 ANNUAL REPORT 2017

CORPORATE SUSTAINABLE CONSOLIDATED

GOVERNANCE DEVELOPMENT FINANCIAL STATEMENTS

84 • Report of the Board of Directors
88 • Report of the Supervisory Board
91 • Corporate governance report
92 • Risk management
107 • Summary of figures and typical 110 • For the financial year ended
activities in 2017 31 December 2017
(Audited)
108 • Vision, sustainable development
strategy of gtnfoods in
2018 - 2020 period

97 • Shares and shareholder relations

4
GTNFOODS MILESTONES IN 2017
AND MESSAGE FROM LEADERSHIP

5
 I. VISION, MISSION & BUSINESS PHILOSOPHY

“
GTNfoods continues its transformation into a
leading provider in Vietnam of fresh and safe food
with an extended value chain in Dairy and Tea.
“

6
 FRIENDLINESS DEVELOPMENT

CORE
VALUES

SHARING

VISION BUSINESS
PHILOSOPHY
GTNfoods continues its
transformation into a leading • For customers:
provider in Vietnam of fresh Product quality is always our top priority.
and safe food with an extended
value chain in Dairy and Tea. MISSION • For employees:
Our goals are to develop We are highly responsible for the living
together with the communities GTNfoods focuses on product
standard of our employees
in which we are engaged, innovation to achieve excellence,
to protect the environment pioneering Vietnamese efforts in
• For shareholders:
and offer the best benefits fresh and safe food for domestic and
Long-term sustainable shareholders’
to our customers, investors, international markets.
interests are protected.
employees and society in
overall. • For the society:
Our achievements must be in alignment
with the benefits to society

7
 II. HIGHLIGHTS AND OUTSTANDING EVENTS

01
ANNUAL MEETING OF
SHAREHOLDERS 2017
(28/3/2017)

02
MOC CHAU DAIRY CATTLE BREEDING
JOINT STOCK COMPANY and Mr. Tran
Cong Chien received the Second-
class Labor Medal (14/10/2017).

03
TEA PICKING CONTEST
IN MOC CHAU.
Award of Tea producing talent
contest (8/4/2017)

04
THE 14TH ANNUAL
MISS COW FESTIVAL
was held successfully
(16/10/2017)

05
FORMER PRESIDENT
TRUONG TAN SANG VISITED
Vietnam National Tea Corporation (Vinatea),
a member of GTNfoods (30/05/2017).

10 OUTSTANDING EVENTS
OF THE YEAR 2 0
8
 06
PRIME MINISTER
NGUYEN XUAN PHUC
visited and worked at
Moc Chau Milk (16/7/2017).

07
SECRETARY GENERAL OF THE
WORLD TEA ASSOCIATION
MANUJA PEIRIS VISITED AND
worked at Vietnam National
Tea Corporation (Vinatea) (15/11/2017).

08
ANNIVERSARY OF GTNFOODS
JOINT STOCK COMPANY,
Annual Exchanges (30/5/2017).

09
CHATEAU DALAT BECAME the Official
wine brand for heads of government
in APEC 2017 (05-11/11/2017).

10
GTNFOODS GALA & MEMBER
companies’ summaries 2017
(30/01/2018)

1 7
9
 III. MESSAGE FROM LEADERSHIP
Message from Chairman of Board of Directors

Dear Distinguished Shareholders, Investors,

Partners, Customers and Employees,

In 2017, GTNfoods attained

significant achievements in
restructuring its efforts into a clean
food company, focused on our
core businesses of Moc Chau Milk
and Vinatea Tea, with a significant
ownership in Vang Dalat, especially
as regards agricultural value chains
and sustainable development.

Mr. TA VAN QUYEN Vietnam’s GDP growth rate reached 6.81%, continuing a meaningful
growth of the middle class, enabling a continued consumer demand
Chairman of the Board
for clean and healthy foods. Vietnam’s dairy market achieved an
average annual growth rate of 17% from 2011 through 2015 period,
and is expected to continue to grow at an average annual rate of
9%, reaching 27-28 liters/person/year by 2020. Japan, South
Korea and China have attained an average per capita dairy product
consumption of 89 liters, 76 liters and 39 liters respectively, indicating
that Vietnam, expected to continue its economic expansion, holds
great promise for dairy product producers.

An outstanding achievement of Moc Chau Milk in 2017 is its efforts in

production and business with revenue growth in overall growth of the
sector and increased by 6% of growth in net profit after tax despite
the fierce competition of the market. The total revenue of Moc Chau
Milk increased by nearly 10%, with Horeca sales, particularly in
schools, developing rapidly. The 14th Annual Miss Cow Festival was
successfully held in October 2017, attracting 700 dairy households in
Moc Chau, the larger Son La Province community and thousands of
tourists. The festival is an annual cultural event to honor and promote
the unique environment of Moc Chau, with farmers and dairy herds of
international quality. In addition, the leadership of Moc Chau Milk has
promoted regular meetings and experienced sharing among experts
from the US, South Korea, Sweden and other leading dairy markets.

10
The tea market has also been flourishing as global demand
is increasing, suggesting that Vietnam’s tea exports will
be primarily to Pakistan, Taiwan and Russia. In 2017,
Vinatea achieved Rainforest Alliance (RA) certification for
its main tea gardens, as well as the Certificate of Good
Agricultural Practices in Vietnam - VIETGAP Products for
most of its tea growing areas. Total sales of tea increased
33%, of which raw tea increased 34% and contributed
93.7% to total sales. Branded tea accounted for 6% of
sales. Sales capacity increased from 4,000 tons per year
of pre-equitization to 10,000 tons per year. In addition to
its traditional export markets, Vinatea products have met
the import requirement and expanded sales into the United
Kingdom, the United States, Japan and Sweden, as well as
higher value-added markets including Taiwan and Russia;
Traditional markets in the Middle East have also expanded
to include new customers such as Jordan and the UAE.
Consolidated 2017 revenue increased approximately
VND 2,000 billion, a growth of 108% compared to 2016.
Revenue from core businesses increased by VND 2,586
billion, a growth of 687% compared to 2016. Gross profit
margin increased from 4% to 12%, concentrating on Moc
Chau Milk and Vinatea. Profit after tax reached VND 152
billion, an increase of VND 136 billion, a growth of 850%
compared to 2016 and the profit of the parent company
reached VND 40.4 billion.
The products of Moc Chau Milk are made from 100%
pure fresh milk from Moc Chau cows. All of Vinatea’s
tea, including bulk and branded product, comes from
clean material - achieving RA certification for sustainable
agricultural development. GTNfoods has continuously
produce safe, fresh and healthy foods.
Our goals include:
Investing in dairy operations, increasing direct and
indirect ownership in Moc Chau Dairy Cattle Breeding Joint
Stock Company. Promoting divestment outside of core
business activities. Target of market capitalization by 2020
is over VND 10,000 billion.
For Moc Chau Milk: repositioning the brands, boosting
marketing by developing sales activities, increasing selling
points and expanding modern sales channels. Sales
Targeting is expected to increase 15%-20% per year.
Accelerating the increase of of the cow herd with the goal
of reaching 100,000 cows by 2030.
For Vinatea: Continue efforts to achieve international
standards in commodity and branded tea. Increase the
export of tea to high profit margin markets. Promote
branded teas, build distribution channels, and promote the
brand image in Vietnam and international markets.
On behalf of Board of Directors and all employees of
GTNfoods Joint Stock Company, I would like to express my
true gratitude to Shareholders, Investors, Customers and
Partners for supporting us.
Wish you health, happiness and success.
Sincerely thanks.
Chairman of Board of Directors.
11
 Message from Chief Executive Officer
Dr. MICHAEL LOUIS ROSEN
General Director – CEO
Dear Shareholders,
In suggesting Mountain Fresh, Mountain
Good as the underlying theme for GTNfoods’
2017 Annual Report, I hoped to capture what
GTN could and in my belief should become
to succeed in bringing valuable Vietnamese
foods to discerning Vietnam and international
consumers.
My thought began with Moc Chau Milk, nestled
in the mountains and valleys of Moc Chau and
the closer surrounding Son La areas.
Vinatea’s most important plantations are in
Moc Chau and the mountains of Phu Tho.
Our ownership in Vang Dalat is in the
mountains of Dalat.
Vietnam’s mountains thus inform each
important product in GTNfoods.
What do mountains mean, what do mountains
offer that other places might not?
Mountain air is fresh. Mountain earth is clean
and rich. Its people are honest and true. As
evidence, the cows in Moc Chau are the best
in Vietnam - our liters of milk per cow and the
percentage of milk fat per liter evidence this.
12
Our tea is excellent, the best at 10,000 tons per
year that Vietnam has to offer.
When you start on a journey, you must have a strong
idea of why and where you wish to go and how you
plan to get there. Or you won’t arrive. Except for
natural or other disaster, if you don’t arrive, you’ve
failed.
A company’s vision and mission are thus its most
important assets. Management must offer a vision
and mission that enables success, and then set the
goals and strategies to turn dreams to reality.
GTNfoods has the opportunity with our excellent
products to offer unparalleled foods to Vietnamese
and international consumers. It is our responsibility
to differentiate each of our products and to achieve
a level of brand equity among consumers reflecting
this underlying excellence.
We are aware of this responsibility, and it is your
right to hold us accountable to this task in 2018 and
beyond.
Respectfully,
Dr. Michael Louis Rosen – CEO
13
 IV. KEY INDICATORS

Net revenue growth

over the years
GTNfoods revenue from core businesses (Moc Chau 2017 2018
Milk and Vinatea) increased 78% in 2017, and is
expected to account for 95% of revenue in 2018.
Accounted
for 78 % Expected to
account for 95 %

819
496
1.452
2.018
635,4 2017
2016 374

2014 2015

2.466

Moc Chau Milk Vinatea Others

22%

13% Revenue structure

by business segments Moc Chau Milk

2017 65%
Vinatea

Other

14
 Profit over the years

Unit: billion VND

500
Gross profit
450 439

400 Profits after tax

350
Profit of shareholders of
300
parent company
250

200
152
150

100 90 86
63 57 79
53,5 54 40
50
16 16
0
2014 2015 2016 2017

Key financial indicators over the years

Owners Equity

Total Assets

Cash & Deposits

4.802
Borrowings

Revenue 3.505
3.814 3.781
Unit: billion VND
2.781
2.109 1.826
2.101

1.081 997 1.207

866 635 641
604
416
176
11 30 43

2014 2015 2016 2017

15
 Charter Capital

Unit: billion VND

2.500
2.500

2.000

1.500
1.500

1.000
748
680

500
80

30/05/2011 20/01/2013 26/03/2015 26/01/2016 18/11/2016

Net revenue of Vinatea

Unit: billion VND

600 4 5%
GR
500
CA 495,7
374
400
300
235,7
200
100
0
2015 2016 2017

16
Net consolidated cash flow

Unit: billion VND

500
400 386

300
200
102
100
-136 - 324
0
-100
-200
-300
-400
2014 2015 2016 2017

Net revenue of Moc Chau Milk

Unit: billion VND

R 5%
3.000 C AG
2.280 2.466
2.500
1.941,6
2.000
1.500
1.000
500
0
2015 2016 2017

17
 INTRODUCTION OF GTNFOODS

I. GENERAL INFORMATION

1. General information

Legal name: CÔNG TY CỔ PHẦN GTNFOODS

English name: GTNFOODS JOINT STOCK COMPANY
Abbreviation: GTNfoods
Stock code: GTN is being listed on Ho Chi Minh Stock Exchange according
to Decision No. 367/QĐ-SGDHCM on 23/09/2014

Business registration and tax code: 0105334948, 1st registration on 30 May 2011, and 14th amendment
on 17 November 2016.
Charter capital: VND 2,500,000,000,000
Address: 92 Vo Thi Sau, Thanh Nhan Ward, Hai Ba Trung District, Hanoi
Tel: (84-24)62766366
Fax: (84-24)62766466
Email: info@gtnfoods.com.vn
Website: www.gtnfoods.com

18
19
20
2. Main businesses of GTNfoods:

GTNfoods is a dairy and tea company grown through acquisition of former State Owned Enterprises. The
legacy businesses of the company, outside of dairy and tea, are being divested. GTNfoods’ focus is to bring
value to its subsidiaries by cooperating with their management to improve and modernize their products and
operations, to refresh branding and marketing, and to extend distribution and sales.

The major assets of GTNfoods’ subsidiaries now are 4,700 ha of tea garden, a dairy herd of over 23,000
cows, more than 1,000 ha of directly utilized Moc Chau agricultural land and over 4,000 ha of land used by
the Moc Chau’s farming families. These areas are strictly protected, for food safety.

Sữa tươi thanh trùng

Non-sweetened Non-sweetened pasteurized

pasteurized fresh milk fresh milk

Sweetened pasteurized Sweetened pasteurized

fresh milk fresh milk

21
22
 Coconut UHT Fresh Milk Banana UHT Fresh Milk

Orange UHT Fresh Milk Strawberry UHT Fresh Milk Chocolate UHT Fresh Milk

Sweetened UHT Fresh Milk Non-Sweetened UHT Fresh Milk Hi-land UHT Fresh Milk

23
24
 Orange UHT Drinking Yogurt Strawberry UHT Drinking Yogurt Guava Drinking UHT Yogurt

Sweetened Spoon Yogurt Non-sweetened Spoon Yogurt Fruit Spoon Yogurt Vera Spoon Yogurt

Glutinous Rice Spoon Yogurt Milky Cake

25
 Enticing tea,
a perfect day

26
 Compressed White Tea Viet Flavour (“Hương Việt”) Tea

100-Year Old White Tea Premium Olong Loose Tea

Olong Loose Tea Olong Van Son Loose Tea Jasmine Loose Tea

27
 n g t e a s , a p erfect
t i c i day
E n

28
Thai Nguyen Tea-bag Thai Nguyen Loose Tea

Premium Black Tea Sleepwell Tea

Ginger Tea Honey Chamomile Tea

29
 II. KEY MILESTONES

Establishment: GTNfoods In May 2014, the

Uncle Ho Chi Minh visited
Vinatea tea factory
Joint Stock Company
was established on
30/05/2011, with a
charter capital of VND
80 billion, initially focused
on industrial bamboo
production, infrastructure
construction, minerals,
construction materials,
plastics, agricultural
products and foodstuffs.
company was listed on
HOSE with the stock
code of GTN. The
Company redefined
its business strategy,
boosting investment
in agriculture and
consumer goods.

Uncle Ho Chi Minh visited

Moc Chau Milk f a c to ry
30/05/2011 05/2014
1959
07/2013 03/2015
In July 2013, GTNfoods In March 2015,
acquired shares of GTNfoods increased
Lam Dong Foodstuffs its stake in
Joint Stock Company Ladofoods to 35%.
(Ladofoods).

Uncle Ho Chi Minh visited

Vinatea tea factory

30
Total consolidated assets of GTNfoods by the end
of 2017 reached VND4,802 billion, an increase of
nearly VND1,300 billion compared to the beginning
of the year; its consolidated equity increased sharply
from VND1,032 billion in the beginning of the year to
reach VND3,814 billion.
In 2017 GTNfoods reached nearly VND3.781 trillion
in consolidated revenue, an increase of 108% YoY.
Consolidated NPAT was VND152 billion, an increase
of 850% YoY. NPAT-MI was over VND40.4 billion, an
increase of 159% YoY.

On 26/1/2016, GTNfoods
In December In January 2017,
issued individual shares from
2015, GTNfoods GTNfoods acquired 65%
VND 752 billion to VND 1500
acquired 75% of Vilico and thereby
billion with the participation of
ownership in gained a controlling
strategic investors such as West
Vinatea. interest in Moc Chau Milk.
Ocean Investment JSC., TAEL,
SNET.

12/2015 26/01/2016 01/2017

Quarter I 18/11/2016 11/2017

2016
In the first quarter of
2016, GTNfoods raised
its stake in Vinatea to
95%.
GTNfoods issued individual shares for the
In November 2017,
second time in a year from VND1500 billion
GTNfoods raised
to VND 2,500 billion with the participation of
its stake in Vilico to
existing shareholders namely West Ocean
73.72%.
Investment JSC. TAEL and new institutional
shareholders such as PEMN, Kingsmead,
Probus, Hanil Feeds.

31
 Outstanding achievements in product developments:

2007 & 2009 07/2011 13/11/2015

In 2007, Moc Chau In July 2011, Moc Chau Milk In 2012, Moc Chau Milk products

Milk achieved Vietnam products won the award of were honorably awarded Vietnam

Gold Star Award for Vietnamese Goods Favored by Golden Rice Award for the first

the 1st time. The 2nd Consumers. times and on 13/11/2015 Moc

time was in 2009. Chau Milk won the second Vietnam

Golden Rice Award.

2011 2014
In 2011, Moc Chau Milk products won In 2014, Moc Chau Milk products
High quality Vietnamese Goods Award were in the Top 10 Brands of
for the 1st time. sustainable development - high
The 2nd time was in 2012 quality products.
The 3rd time was in 2013
The 4th time was in 2015

32
23/12/2015
On 23/12/2015, Viatea obtained Vietnamese
Good Agricultural Practices Certificate -
VIETGAP Crop Products for most of tea
growing areas.
25/11/2016
On the evening of 25/11/2016, Vietnam National
Tea Corporation (Vinatea) organized an event with
the theme “Wonderful Nature”, Vinatea introducing
its rebranded position to the market, launching
Vinatea branded products, as well as its new
business strategies.
16/12/2016
On 16/12/2016, the Chateau Dalat brand of the
Ladora Winery was officially awarded the Silver
Prize by the head of Cathay Pacific International
Wine & Spirit Competition 2016, after a blind test
between the Chateau Dalat Signature Shiraz with in
competition with four wines from France, Australia,
Chile and South Africa.
Quarter III, 2017
In the 3rd quarter of 2017, Vinatea’s main tea regions
achieved the international certificate of Rainforest
Alliance for sustainable agricultural development.
To achieve this certificate, all businesses must meet
stringent requirements in all stages from agricultural to
industrial activities in compliance with the Sustainable
Agriculture Network (SAN). In addition, the company’s
facilities, workshops, internal management systems
and archival systems must be compliant with SAN
standards.
33
34
III. MOC CHAU MILK

> 60.000
Points of sale

23.000
Cows

Production

tons of fresh milk p.a

35
 Founded on 08/04/1958, Moc Chau Dairy Cattle
Breeding Joint Stock Company, the predecessor to
Moc Chau Farm, was the original company in Vietnam’s
cow breeding and dairy sector.
Nearly 200 km northwest of Hanoi, at an average
elevation of 1050 meters, Moc Chau offers Vietnam’s
most favorable conditions for raising healthy, happy
cows, enabling the company and its network of nearly
700 farming families to offer delicious milk and an
extensive range of other excellent dairy products.
Moc Chau’s business operates at international
standards. From 1987 to 1988, when it began its
network of farming families, the dairy herd of Moc Chau
Milk has grown steadily, currently reaching over 23,000
cows with an average yield of ~ 26 liters/head/day.
Dairy farms meeting international standards
Moc Chau’s farming families are honest, industrious
and skillful. Farmers are supported in utilizing modern
methods and equipment ensuring the excellence of
production and product.
Moc Chau regularly organizes technical training courses
on cow raising, along with opportunities for farmers
to visit countries with advanced dairy production such
as the US and Australia, learning first hand modern
methods of raising cows in those countries, thereby
applying modern machinery, scientific techniques to
dairy farming to improve productivity and milk quality.
Moc Chau Milk has been awarded the Silver Globe
Award, Vietnam High Quality Award 2001, Vietnam Gold
36
Star Award 2003 granted by the Ministry of Science,
Technology and Environment, Golden Lotus Cup, and
many other gold, silver medals and other awards for
dairy products and milk. Moc Chau has become one of
the five key dairy development areas of the country. Moc
Chau Milk has been invested by the State to become
the dairy cattle breeding center of the whole country.
A firm handshake between farmers and the
company
In order to promote the development of the dairy herd
in scale and quality, Moc Chau Milk has chosen to work
closely with farmers in a sustainable out-farming system.
Accordingly, Moc Chau Milk is a center for skills training
and technology transfer to farmers, helping them access
science and technology to produce by goods scales.
Moc Chau pursues a sustainable development policy.
The company has invested in all stages of breeding and
production.
Moc Chau Milk has become the first enterprise in
Vietnam to establish livestock insurance and milk price
insurance funds, beginning in 2004.
After each of the two daily milking shifts, all milk collected
from the nearly 700 individual farms is transported
to the factory by specialized vehicles. Here, modern
production lines with milk production technologies
in accordance with European standards, operating
daily, including holidays and festivals, ensure that dairy
products are always the freshest. The individual farms
operate in line with the VietGAP standards to ensure
the highest milk quality; in addition to the excellent feed
sources in Moc Chau, the company also imports alfalfa
from the US with high nutrient content, well mixed in
appropriate proportion at the TMR feed mill to serve for
the dairy herds of the company and its farming families.
Moc Chau Milk also motivates farmers with the annual
Miss Cow Festival. Each October, Moc Chau bustles
with tourists from all over the world, and the cow
breeding farmers flock to prepare for the contest from
taking care, cleaning, brushing hair, hoof-trimming,
applying perfume and more so their cows might shine
during the Festival - a unique contest in Vietnam,
honoring dairy farming, expressing gratitude to farmers
and their cows of international quality, helping all of
Moc Chau to feel proud of dairy farming. In addition,
the purpose of this contest is to create motivation for
breeding households to apply innovative methods,
modern farming technologies in accordance with world
standards to produce highly productive cows, at the
same time, this is also an opportunity for cattle-raising
farmers to exchange their experience, and to promote
the Moc Chau Milk brand.
Milk products from “wholeheart of Moc Chau”
Currently, Moc Chau Milk is a significant Vietnam milk
brand, especially in the North and North Central regions.
Moc Chau Milk offers a range of products made from
100% fresh milk, including pasteurized liquid milk, UHT
liquid milk, yogurt, drinkable yogurt, etc. with many
different flavors, sugar and fat content to suit the tastes
of consumers. Moc Chau Milk has also developed
other dairy products such as cream, butter, milk cake,
and specially tomme cheese used in many hotels and
restaurants in Vietnam.
The combination with GTNfoods toward the bright
future
In the beginning of 2017, GTNfoods owned 65% stake
in Vilico, which brought 51% indirect ownership of Moc
Chau Dairy Cattle Breeding Joint Stock Company (Moc
Chau Milk). Moc Chau Milk contributed 2,466 billion
dong of net revenue to GTNfoods’ income, helping the
total revenue of the group reach 3,781 billion dong and
439 billion dong of gross profit in 2017.
Moc Chau Milk has three large scale farms of 1,000
cows/farm, totaling approximately 3,000 cows, with
farming families owning nearly 20,000 cows, as well as
1,000 ha of concentrated agricultural land, enabling a
total output of approximately 100,000 tons of fresh milk
per year. The company expects to maintain an annual
cow herd growth rate of 15-20%, increasing the cow
herd to 35,000 by 2020.
37
 MOC CHAU MILK FULL & SUSTAINABLE
AGRICULTURAL VALUE CHAIN

660 1
farmer households hect

38
 Production capacity

1.000 ~1 0 0 . 0 0 0
cta of farming area tons of fresh milk/year

39
 IV. VINATEA

VIETGAP standard

4.700 ha
of tea plantation Rainforest alliance

Production

10.000
tons

Raw material areas Tea preliminary station Tea refining factory

in the tea area
Export

50
countries

Vietnam Tea Corporation - JSC (Vinatea, jsc) is a former
state owned enterprise originally under the Ministry
of Agriculture and Rural Development, established
in 1958. Over many years, Vietnam Tea Corporation
was honored to receive the Labor Medal of Grade
1, 2, 3 and with certificates of merit, awards of the
Government and the Ministry of Agriculture and Rural
Development after more than 50 years of operation.
According to Decision 864 of the Prime Minister on
the transformation of the business model into a joint
stock company, in December 2015 Vietnam Tea
Corporation JSC officially announced the company’s
transformation. Vietnam Tea Corporation JSC enjoyed
all rights and obligations of the former Vietnam Tea
Corporation. Vinatea holds substantial tea gardens
and processing facilities throughout Vietnam’s
northern provinces, with factories in Phu Tho, Moc
Chau, Thai Nguyen, Yen Bai, Nghia Lo, Lien Son, Ha
Tinh and Hanoi.
Vietnam is the world’s fifth largest tea exporter, with
124,000 hectares of tea plantation, producing over
500,000 tonnes of finished commodity tea per year. The
global tea market reached USD 24.3 billion in 2016, and
is expected to reach USD 37.5 billion by 2025, with a
growth rate of 5% per year for the period 2017-2025. The
increasing global tea demand indicates that the prospect
of Vietnamese tea exports in the future is promising.

40
 The sustainable and full agricultural value chain of Vinatea:
Exported to
50+ countries
Branded tea
products
Branded tea plant -
Vinatea Kim Anh
Vinatea is one of the largest tea producers in Vietnam
with a total plantation area of 4,700 hectares with
high-quality tea gardens, high-standard processing
factories, maintaining a full value chain from plantation
to factory with skilled farmers and workers. Vinatea’s
production was approximately 8,500 tons in 2016, and
reached 10,000 tons in 2017, of which the Moc Chau
tea gardens contributed approximately 30%, the Phu
Tho tea gardens contributed 55% with the balance
from Yen Bai, Thai Nguyen, Ha Tinh and elsewhere.
Production capacity is expected to increase as Vinatea
expands its commercial tea portfolio. In 2017, total
revenue of Vinatea reached nearly VND 500 billion,
exceeding VND 375 billion revenue in 2016.
Commodity tea sales generated 93.7% of Vinatea’s
total revenue. Utilizing its global relations with more
> 400.000 Consumers
Points of Sales
than 120 companies and trade organization in over
50 countries and territories, Vinatea will continue to
expand its export markets through increasing the the
proportion of its sales to high tea consuming markets
such as Taiwan, Russia and the Middle East, and to
high-end markets such as the US, the UK, Japan and
the EU. Vinatea’s products now meet higher stringency
qualifications enabling a higher selling price above the
average Vietnam price level. Vinatea believes it is able
and will achieve the average tea sales price of US$
2.8/kg. The company’s products include black tea
processed under Orthordox technology, CTC, oolong
tea, pouchung, gunpowder tea, green tea processed
under OTD technology, green tea produced with
Japanese technology, herbal tea and fruit flavored tea.
In Vietnam, Vinatea is the supplier for nearly 200 tea
trading companies.
41
 EXPORT MARKETS

China

Czech Republic

Eastern Europe

Germany

Japan NEW

Middle East

Pakistan

Afghanistan

Oman

Russia

Southeast Asia

Sweden NEW

Taiwan

The UK NEW

USA NEW

Vinatea also achieved remarkable success when
launching its branded tea into the domestic market in
November 2016, with 4 premium teas (hundred year
white tea, premium oolong tea, compressed white tea
and “Huong Viet” tea); mainstream traditional tea (Thai
Nguyen green tea, jasmine tea and premium black
tea); herbal tea (sleep well tea, Singer tea, honey
chamomile tea). By the end of 2017, Vinatea has
signed distribution contracts with larger distributors
offering the company’s teas in over 400,000 POS in
Vietnam. Vinatea expects these distribution contracts
to bring steady revenue to the branded tea business
in the coming years.

42
Significant improvements have been made in Vinatea’s
operations since its acquisition by GTNfoods. These
include improvements in human resources, enhanced
product quality including strict regulation of pesticide
and fertilizer use enabling the company achieve key
certifications and qualifying the company’s teas for
export to higher value and better margin markets such
as the US, the UK, Japanese and the EU. GTNfoods
intends to increase the quality and value of its
commodity tea sales, and to significantly extend the
market for branded tea consumption in the daily lives
of Vietnam’s consumers.
43
 DOMESTIC BRANDED TEA MARKET

Together with the strategy of expanding the commodity tea market, Vinatea also
achieved remarkable success when launching the branded tea into domestic market
in November 2016, with 4 premium tea line (Hundred year white Tea, Premium oolong
tea, Compressed white tea and “Huong Viet” Tea); mainstream traditional tea (Thai
Nguyen green tea, Jasmine tea and Premium black tea); herbal tea (Sleeping-well tea,
Singer tea, Honey chamomile tea). By the end of 2017, Vinatea has signed distribution
cooperation contracts with larger distributors in the market owning accumulatedly to
over 400,000 POS in Vietnam market. Vinatea expects these cooperations can bring
steady revenues to branded tea business in coming years.

Over the past 50 years of operation, the guiding principle in all activities of Vinatea is to
improve continuously to meet customers increasing demand; supply high quality, safe
and environment-friendly products. In the big picture, Vinatea will reorganize the tea
business into an a combined group of agricultural products - food - cultural tourism,
creating new inspiration for the public and enhance the proud of the most important
and long-history tea company in Vietnam.

Notable restaurants and hotel chains using Vinatea products: Metropole, Sheraton, JW
Marriott, Sunway Hotel, Sunrise Hoi An.

Notable supermarket chains providing Vinatea products: BigC, VinMart, Lanchi,

LotteMart, Co.op Mart, TMart, AEON, FiviMart

44
45
 V. OTHER BUSINESSES
AFFILIATED COMPANY – LADOFOODS
Lam Dong Foodstuffs Joint Stock Company (Ladofoods)
is the successor to a French wine company, Lafaro,
established in the 19th century, specializing in producing
mulberry wine, then popular in the cooler climate of
Vietnam’s Highlands.
Ladofoods, the privatized successor to the state owned
company, has focused on expanding the offering of wines
for domestic and international consumption. The quality
and branding of Dalat wine constantly improves, with the
company now able to compete with imported wines. On
24/9/2016, Lam Dong Foodstuffs Joint Stock Company –
Ladofoods — inaugurated its new Ladora Winery, in line
with its effort to become the largest winemaker in the South
East Asia, aiming to establish Vietnam’s wines on the world
map. Ladora Winery has established a team of experienced
European wine professionals with experience in France,
Italy, Switzerland and more. High quality grape harvests
have enabled to the company to now offer premium wines
under the Chateau Dalat brand.
Official wine
brand served at
the 2017 APEC
Summit
46
Ladora Winery will expand its vineyards up to 100 hectares,
operating according to modern standards.
Ladofoods wine distribution is extensive, with wholesalers
and retailers in all 64 provinces and over 80,000 POS
covering the country. The company’s products are also
avaialbe in many large superarkets in Vietnam such as
Metro, Big C, Coop Mart, Fivi Mart, Hapro Mart, Coop
Food, Citimart and Vinatex Mart.
Chateau Dalat’s Signature Shiraz, a “Wine for the Heads of
State”, was the official and only wine served at the 2017
APEC summit in Da Nang. Chateau Dalat has won two
international wine awards: a silver medal at the Cathay
Pacific competition in 11/2016 and a bronze medal at the
San Francisco wine testing in August 2017.
In 2017, Chateau Dalat became the first Vietnamese wine
brand to be displayed at the Vineum Bodensee House for
Wine, Culture and History in Meersburg, Germany.
LIVESTOCK FARMING - VILICO
Vietnam Livestock Corporation was established
according to Decision No. 862/NN-TCCB/QD
issued on 21/6/1996 to in the livestock sector
nationwide. The company belowed to the Ministry
of Agriculture and Rural Development. In 2013, the
Corporation was equitized under the decision No.
1893/QD-TTg issued on 14/12/2012 by the Prime
Minister.
In 7/2013, Vietnam Livestock Corporation JSC
officially began operating as a joint stock company
after successfully implementing equitization plan
through an IPO. On 26/10/2015, the Vietnam
Livestock Corporation shares (stock code: VLC
Securities) were officially traded on UPCom stock
exchange, Hanoi stock exchange.
In 1/2017, GTNfoods increased its ownershp in
Vilico to 65%, initiating a restructuring process.
Vilico restructuring strategy is based on the actual
situation with the identified main livestock farming
business area, GTN has effected a signficant
reduction in livestock operations other than dairy,
actively divesting capital and discontinue non-core
operations. In production and business operation,
Vilico has streamlined is operations, strengthened
management and supervision and optimized
operating costs. Vilico has reduced staff and
professionalized mangement .
Swine farming faced a crisis throughout Veitnam
in 2017, caused by the suspension of export to
China, leading to a sharp decline in pork prices and
severely affecting all swine producers. Pork prices
remained low for a considerable time, only in the
past few months showing signs of recovery but still
not sufficiently high to cover operating costs. Vilico
reduced its sow herd by 70% to reduce losses,
increasing reproductive performance (weaning/
sow/year) to 8.1% and working with agents to
expand sales and the marketing to Phu Tho, Son
Tay. In 2018, Vilico is aiming to acheive profit in pig
farming, to develop pork products, and maintain
efficiency in all business sectors of the Corporation.
47
 VI. ORGANIZATIONAL STRUCTURE

GENERAL MEETING OF
SHAREHOLDERS

SUPERVISORY
BOARD

BOD
CHAIRMAN OF BOD

EXECUTIVE BOARD
GENERAL DIRECTOR

FINANCIAL BOARD OPERATION BOARD

PROJECT
FINANCE INVESTMENT ADMINISTRATION LEGAL
MANAGEMENT

48
1. Board of Directors

● Mr. Ta Van Quyen

Chairman

● Mr. Nghiem Van Thang

Vice Chairman

● Mr. Michael Louis Rosen:

THE CURRENT
Member

● Mr. Nguyen Hong Anh: BOARD OF

Member

● Mr. La Manh Tien:

DIRECTORS
Member

● Mr. Lars Kjaer

Member

● Ms.Chew May Ying

Member

CHANGES IN MEMBERSHIP OF BOARD OF DIRECTORS IN THE YEAR:

According to the Resolution of the Annual Meeting of Shareholders in 2017 No. 01/NQ/ĐHĐCĐTN, Mr. Nguyen
Hong Anh and Mr. Lars Kjaer have been appointed to replace Mr. Nguyen Tri Thien and Mr. Hoang Manh Cuong.

49
 Mr. TA VAN QUYEN
Chairman of the Board of Directors
In 2012, Mr. Ta Van Quyen became a member
of Board of Directors and has held the position of
Chairman of the Board since 2016. He has extensive
operational expertise in food production, used to
hold many important positions such as manager in
Hai Ha Confectionery Company, Viet Nam Polycom
Co Ltd, Tien Bao Food Processing Co Ltd; Chairman
& Director, Q&Q Vietnam Food JSC.
Mr. Ta Van Quyen’s aspiration is to lead GTN to
be a leading food & consumer company in Vietnam
with major brands.
Mr. Ta Van Quyen graduated from the Hanoi
University of Science and Technology, majoring in
Food Technology Engineering.
50
MR. NGHIEM VAN THANG
Vice Chairman of the Board of Directors
Mr. Nghiem Van Thang worked in the Food Safety
Department, Ministry Agriculture and Rural Development.
He has extensive knowledge and experience in managing
operations in the agriculture and food production sectors
that are GTNfoods’s core businesses. He also worked as
Vice Planning Manager, Bibica and Production Manager,
Trang An Confectionery. Mr. Nghiem Van Thang also has
deep expertise in financial management as Vice Proprietary
Trading Manager, Morgan Stanley – Gateway and Branch
Director of MB Securities. Mr. Nghiem Van Thang invested
into Ladofoods in 2012 and became a BOD member of the
company. He is currently Vice Chairman of Ladofooods.
He has significant experience in establishing and leading
systems of management, sales and distribution. He is also
a founder of GTNfoods, leading its transformation to an
agriculture and food enterprise.
Mr. Nghiem Van Thang graduated from the Hanoi
University of Science and Technology, majoring in Food
Technology Engineering.
 DR. MICHAEL LOUIS ROSEN
Member of the Board of Directors
Dr. Michael Rosen was previously Vice Chairman and
founding CEO of PAN Group as it entered the agriculture and
food industries. He was principally responsible for PAN’s
initial fundraising rounds at the time of its transformation
into these sectors, as he has been responsible for the
same at GTNfoods.
In New York, he was CEO and principal owner of Oscar
Gruss & Son Incorporated, a member firm of the New York
Stock Exchange. He was CEO of Continental Information
Systems Corporation (NASDAQ: CISC). A New York City
real estate developer, investor and property manager, he
pioneered luxury residential rental in Manhattan’s Lower
East Side. He was an award winning Associate Professor
in NYU’s business school.
MR. NGUYEN HONG ANH
Member of the Board of Directors
Mr. Nguyen Hong Anh is an agricultural specialist
with over 20 years of experience as Director of Hanoi
Agricultural Extension Centre. He was also former
Deputy Head of Hanoi Plant Protection Department from
2004 to 2014. Mr. Nguyen Hong Anh was appointed as
CEO of Vilico, a subsidiary of GTNfoods in 2016 and as
a Board Member of GTNfoods in March 2017. He holds
a Master Degree of Agriculture from Vietnam National
University, Hanoi.
51
 Mr. LARS KJAER
Member of the Board of Directors

Mr. Lars Kjaer has been Vice Director of PENM Partners – a strategic partner of
GTNfoods — since 2006. He has been a member of GTNfoods’s BOD since 3/2017.

Mr. Lars Kjaer has been in the Boards of Directors of 11 international and local
companies, including Masan Group, Hoa Phat Group, Vinh Hao Mineral Water JSC and
Coca-Cola Nordic Bottler.

Mr. Lars Kjaer was previously Director at Nordic Project Fund, focusing on emerging
markets, with a portfolio of more than 200 companies. He was a Director at InWear &
IC Company and a Director at Carlsberg Denmark.

With extensive experience in emerging markets, strategy formulation, corporate

growth, operations development and restructuring and M&A as well as experience as a
BOD member in Vietnam and in Europe, Mr. Lars Kjaer has had significant value in his
Board role in GTNfoods.

Mr. LA MANH TIEN Ms. CHEW MEI YING

Member of the Board of Directors Member of the Board of Directors

Mr. La Manh Tien has been dedicated his efforts to
building development strategy and business culture.
Mr. Tien graduated from Montesquieu University, France
with a Masters in Financial Management. He previously
held senior positions in Vinaconex JSC, Vincom
Construction Co. and Vinabamboo JSC.
With extensive corporate experience, Mr. Tien joined
GTNfoods with the mandate to professionalize GTNfoods
regarding transparency and efficiency.
Mr. Tien is a member of the BOD is the Deputy General
Directorat GTNfoods cum General Director in Vinatea.
Ms. Chew Mei Ying has 20-year experience in
accounting and investment banking, she used to work
at PricewaterhouseCoopers for 5 years from 1996 to
2001, before playing many senior management roles
including: manager at Public Investment Bank Berhad
from 2001 to 2005; a senior manager at RHB Investment
Bank Berhad from 2005 to 2007; Associate Director
at AmInvestment Bank Berhad from 2007 to 2008.
Presently, she is an Executive Director of TAEL Partner
Groups – GTNfoods’s strategic investment partner.

52
2. Supervisory Board

Mr. TRAN VIET THANG

Head of Supervisory Board

Mr. Tran Viet Thang has extensive experience in Accounting

and Auditing. He has held key roles in the area, including as Head
of Accounting Department at Thu Duc Steel JSC, a subsidiary of
Vietnam Steel Corporation, Financial Controller at Gia Loi Plastic
JSC, Head of Audit Committee at Southern Construction JSC, Head
of Audit Committee of Hong Ha Beton JSC, Member of Nghia Nhan
Real Estate JSC’s BOD, and Head of Audit Committee of National
Phyto Pharmaceutical. He is a BOD member and Head of the Audit
Committee of Ladofoods JSC. He has a strong background in Saigon
real estate development and investment.

He graduated with Finance and Accounting Degrees at University

of Finance - Accounting.

Mr. PAN MUN KIT Ms. NGUYEN THI THU

Member of Supervisory Board Member of Supervisory Board

Mr. Pan Mun Kit has 10-year experience working
in investment banking sector. He joined TAEL Partners
in 2013 and currently holds the position of Director.
He used to work at OSK Investment Bank - Malaysia
from 2007 to 2009 and Maybank investment bank -
Malaysia from 2009 - 2013.
Ms. Nguyen Thi Thu became a member of GTNfoods
Supervisory Board in April 2016. She has worked as an
accountant at Hachi Production and Commerce JSC and
TMI Vietnam Investment JSC.
Ms. Thu holds a master degree in Economics – Finance.

53
 3. Executive Board at GTNfoods & its core subsidiaries
Dr. MICHAEL LOUIS ROSEN
General Director of GTNfoods cum
Member of GTNfoods’ BOD
Mr. NGUYEN VAN MINH
Chief Financial Officer of GTNfoods
Mr. Nguyen Van Minh has more than 13 years of
experience in finance and management, consulting
in risk management, internal control and finance
as well as in financial audit for many companies
across a range of sectors. He formerly the Head
of Internal Audit for one of Vietnam’s leading dairy
company. Mr. Minh was appointed as CFO of
GTNfoods in October 2017.
54
Mr. LA MANH TIEN
Deputy General Director of GTNfoods,
cum Member of BOD and General
Director of Vinatea
Mr. HOANG MANH CUONG
Chief Accountant of GTNfoods
Mr. Hoang Manh Cuong is currently holding the position of
Chief Accountant of GTNfoods. Before joining the company,
he held senior positions at the following enterprises:
Accountant of Ha Tay Food Complex Corporation,
Chief Accountant of Bach Hop Food Import and Export
Corporation, Manager of Trung Kien Manufacturing
and Investment Corporation. Mr. Hoang Manh Cuong
graduated with a master’s degree in Economics, and has
a deep understanding regarding accounting and finance.
 Mr. TRAN CONG CHIEN Ông NGUYỄN HỒNG ANH
General Director of Moc Chau Milk CEO of Vilico

Member of the Board of Directors of GTNfoods

Mr. Tran Cong Chien has many years of experiences in
agricultural and production management, especially in the
dairy farming. He is a pioneer in Vietnam’s dairy industry, and
the recognized leader in establishing Moc Chau Milk and the
first Vietnam fresh milk brand.

Mr. HOANG DANG TIEN Mr. LE HAI CHAU Mr. NGUYEN DUY CHANH
Deputy General Director of Vinatea Deputy General Director Deputy General Director

of Vinatea of Vinatea

Mr. Hoang Dang Tien has 15 years
of experience in management and
supervision, personnel management,
with extensive knowledge in the food
production sector.
Mr. Le Hai Chau has 14 years Mr. Nguyen Duy Chanh has over
of experience in technology 30 years of experience in control
management and is an agriculture and management in tea producing
expert in Vinatea. and processing. He possesses
extensive knowledge overall in
agriculture with a specialization in
tea production.

55
 VII. DEVELOPMENT STRATEGY 2018 - 2020
GTNfoods has taken important steps in transforming
itself into a leading dairy and tea company.
Overal, GTNfoods owns 4,700 hectares of green tea
plantation stretching across the north of Vietnam,
more than 23,000 dairy cows and over 1,000 hectares
of agricultural land in Moc Chau in combination with
over 4,000 hectares of land available to the area’s
farming families;. These closely managed agricultural
areas assure high quality foods to consumers in and
outside Vietnam.
GTNfoods continues to focus on its core businesses
of dairy and tea, strengthening product positioning,
communication efforts as well as sales promotion
for the Moc Chau Milk brand, including expanding
56
the points of sale for general trade and expanding
modern trade distribution, targeting sales growth of
15%-20% pa, and raising the cow herd to 100,000
cows.
For Vinatea, GTNfoods and the Executive Board
of Vinatea continue to comply with the agricultural
practices of international standards, promoting the
export of commodity tea to higher profit margin
markets, developing the branded teas, expanding
distribution channels and otherwise increasing
market presence.
GTNfoods pays considerable attention to maintaining
international standards in food hygiene and safety.
STABILIZATION TURN-AROUND TRANSFORMATION
2017 2018 2019 2020

PRESENT

Identify core sectors,

minimize non-core sectors

Discontinue investments and

assets outside core strategy

Improve personnel’s quality, Improve personnel’s quality

optimize human resource

Promulgate the process of controlling

and standardizing systems

Expand market

Improve agricultural quality standards and production

operations, increase productivity

Building branded products. Marketing & Branding.

57
58
BUSINESS OPERATION

59
 I. ECONOMIC OUTLOOK

1. Macroeconomic situation 2017

2017 marked the prosperity of the fast-moving consumer goods in general and the
food industry in particular

Vietnam's economy growth in 2017 reached 6.81%, exceeding the target of 6.7% set by National Assembly, achieving
the highest growth rate over the past 10 years, according to data released by General Statistics Office of Vietnam. In
particular, the economy in the last two quarters recorded annualized growth of over 7%. Vietnam continued as a market
for foreign investors. FDI investment was estimated at $ 17.5 billion, an increase of 10.8% over 2016 and a record over
the past 10 years.

SOCIO-ECONOMIC OVERVIEW OF VIETNAM 2017

• ECONOMIC GROWTH
Growth rate of gross domestic product (GDP)

Unit: % * Compared to the same period in 2016

6,81
6,78 6,68 6,21
6,23 5,98
5,32 5,59 5,42
5,03

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

VND 5,008 trillion VND 53.5million/person/year

Gained economy size GDP per capita
Increase VND 3.7 million

60
• FOREIGN DIRECT INVESTMENT (FDI)

FDI disbursement
Unit: USD billion

17

15,8
14,5
12,35
11,5 11,5
11 11 10.46
10

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

• Largest investment partner • Provinces attract the most capital

Unit: USD million Unit: USD million

7.745
3.159
2.584
2.314
3.973 3.771
1.409 1.356
1.409
740
a

ty

nh

g
n

ng
or

Ho

Ho
re

in
pa

on
Ci

Di
ko
Ch
Ko

ap
Ja

Du
M
h

h
ng

m
ng

HC
an

an

Na

h
Ho
Si

Th

Kh

n
Bi

The total 2017 economy was over VND 5 quadrillion. Industry, construction and services continue to be key
players, contributing 74% to the overall economy. GDP per capita in 2017 reached VND 53.5 million per year (US$
2,385), a 7.67% growth of US$170 compared to 2016.

The World Economic Forum raised Vietnam's competitiveness by 5 levels to 55/137; The World Bank raised
Vietnam's business environment by 14 levels, to 68/190 countries and territories.

Vietnam's sustainable development index in 2017 increased 20 levels to 68/157 countries and territories.

Inflation was controlled at 3.53%, lower than the ceiling of 4%.

61
 MIDDLE CLASS POPULATION

AC Nielson estimates that Vietnam’s middle class

95
population will reach 44 million by 2020, and 95 million
8 44
million million
by 2030. The consumer goods industry is therein
million expected to grow strongly, including the sale of clean
in 2012 in 2020 in 2030
and nutritious foods.

According to Nielsen, Vietnam’s fast-moving consumer

goods sector in the first quarters of 2017 achieved the
highest growth rate over the past three years, including
each of the six major sectors, including beverage,
MIDDLE CLASS POPULATION foodstuffs, milk, home care products, personal care
products and cigarettes. In particular, foodstuffs, home
care and personal care products reached a record
growth of 12-14%.

$ 46 $ 310 $ 940 According to Vietnam Report, by the end of the third

billion billion billion quarter of 2017, the total market capitalization of
in 2012
in 2020 in 2030 consumer goods, foodstuffs and beverage reached
approximately VND 2.74 quadrillion, or US$ 120.4
billion.

2. Macroeconomic outlook for 2018 and growth in core industries:

2018 - Maintaining steady growth and stable
economic situation

International experts are optimistic regarding Vietnam’s
economic growth in 2018, forecasting GDP growth
of 6.8%, continuing as one of Asia’s fastest growing
markets. Inflation in 2018 is estimated to average 4%,
with the first half of the year being higher the second half
of the year moving sideways.
The beverages price index as calculated by the World
Bank shows that world tea prices rose slightly in the 3rd
quarter of 2017 from the 2nd quarter, and increased
15% compared to the same quarter of the previous year.
Following a supply shortage due to weather affecting
many tea growing regions, especially in East Africa and
Sri Lanka, 2018 production is forecasted to increase.
The global tea market reached US$ 24.3 billion in 2016,
expected to reach US$ 37.5 billion by 2025, with a
growth rate of 5% per year over the 2017-2025 period,.
Tea prices increased by 17% in 2017, and are forecasted
to remain stable in 2018 and 2019.
BMI Research predicts that with positive results in
the past year, Vietnam’s consumer goods sector will
maintain annual double digit growth in the period 2018-
2019 of approximately 0.9%. Also according to the BMI’s
research, the dairy industry is expected to grow by 10%
per year and consumer demand will increase sharply in
foodstuffs and essential consumer goods.

62
II. BUSINESS RESULTS 2017

1. Production and businesses results

439
Net revenue growth over the years Profitability

Moc Chau Milk Consolidated Gross profit

Vinatea Consolidated Profit after tax

Others Profit of shareholders of parent company

819

496
152
90
86,5 79
1.444 63 57 54
2.018 2.466 53,5 40
635,4 16 16
376

2014 2015 2016 2017 2014 2015 2016 2017

INDICATORS 2017 2016 CHANGE

Net revenue 3.781 1.826 108%

Gross profit 439 78,7 457%

Consolidated profit after tax 152 16 850%
Profit of shareholders of parent company 40,4 15,6 159%
EPS (VND) 162 101 60,4%

In line with the roadmap set for 2017-2020, GTNfoods
management has achieved important steps, beginning to
be reflected in the company’s 2017 business results.
Consolidated revenue of the Group in 2017 increased by
approximately VND2,000 billion, an increase of 108% over
2016, mainly due to the acquisition of Vietnam Livestock
Corporation JSC. Particularly, Moc Chau Milk contributed
VND 2.466 billion of net revenue, tea revenue increased
120 billion (equivalent to 32%). Non-core activities are being
reduced in line with the company’s strategic orientation,
resulting in a decrease of approximately VND 600 billion.
The gross margin increased positively from 4% to 12% as
the result of the shift of the product structure from spreading
to concentrating on the core industries of dairy and tea.
Consolidated profit after tax reached VND 152 billion, an
increase of VND 136 billion, an increase of 850% over
2016, profit of shareholders of parent company was VND
40.4 billion, EPS was 162 bVND, an increase of 60.4% YoY.
In the fourth quarter of 2017, the Company has proactively
addressed the factors causing cost ineffectiveness such as
adequate provision for inventory and investments remaining
from the period before equalization, in order not to negatively
affect 2018 business results.
In 2017, GTN has emerged as a dairy and tea company
divesting businesses and assets not core to these areas.

63
 Business segment results. Unit: VND billion

REVENUE GROSS PROFIT

SECTORS
2017 2016 Change 2017 2016 Change
(*) (*)

Dairy production and business activities 2.142 - - 420 - -

Tea production and business activities 489 369 32,52% 20,5 36,4 (43,7)

Livestock farming activities 146 - - (36,8) - -

Non – core activities 915 1.327 31,05% 54,5 30,6 78,8%

Other activities 89 130 (31,54%) (19,2) 11,7 -

Total 3.781 1.826 108% 439 78,7 457%

(*) In 2016, GTNfoods has not yet acquired Vietnam Livestock Corporation - JSC

Consolidated asset growth:

Total assets and equity have grown strongly more than 4 times over the past four years thanks to strategic
M&A activities in dairy and tea businesses.

Equity

Total assets

Cash & deposits

4.802
Loans

Revenue 3.505
3.814 3.781

Unit: VND billion 2.781

2.109 1.826
2.101

1.081 997 1.207

866 635 641
604
416
176
11 30 43

2014 2015 2016 2017

64
 Asset structure:

Asset structure as of 31/12/2017

23% Cash and deposits

25%

Current assets

11% Fixed assets

Financial investment
23%
18%
Intangible assets

Strong capital structure:

Capital structure as of 31/12/2017

16% Short-term liabilities

24%
5% Long-term liabilities
1%
Equity
0%
Funds and resources

Undistributed EAT
54%
Non-controlled interest

Cash and deposits account for the largest share
of assets in GTNfoods, reflecting good liquidity.
In 2017, the Company undertook a restructuring
process, focus on restructuring acquired
businesses; large investment projects have not
been carried out. Existing current assets along with
funds realized from the divestment and liquidation
of non-core assets will be the main source for the
Group to invest in its core businesses, especially
dairy in the period 2018-2020.
Total payable debt accounted for only 21% of
the capital structure, reflecting a strong financial
structure. Minority shareholder interests are high
and mainly from Moc Chau Milk. GTNfoods’ Board
of Directors has decided to increase both direct
and indirect ownership in Moc Chau Milk in the
near future.

65
 KEY FINANCIAL INDICATORS

Thanks to strict financial management, the indicators of liquidity and capital structure for the company were
maintained at a safe level, ensuring strong financial resources for future projects. The profitability indices
were not high as the company was in the process of restructuring operations, but improved compared to
2016 and management continues to follow the plan.

INDICATORS UNIT SEPARATE FIGURES CONSOLIDATED FIGURES

31/12/2016 31/12/2017 31/12/2016 31/12/2017

Indicators of liquidity

Short-term liquidity ratio Times 94,96 177,49 4,38 3,00

Quick liquidity ratio Times 94,29 177,36 4,22 2,43
Indicator of capital structure

Debt/Total assets Times 0,04 0,00 0,21 0,21

Debt/Equity Times 0,04 0,00 0,26 0,26

Indicators of operational capacity

Inventory Turnover (*) Turn 286,89 110,62 17,58 14,10

Net revenue/Total assets % 58% 17% 65% 91%

Indicators of profitability

Profit after tax/Net revenue % 0,41% 0,43% 0,87% 4,02%

Profit after tax/Equity % 0,24% 0,07% 0,57% 3,66%

Profit after tax/Total assets % 0,24% 0,07% 0,57% 3,66%

Gross profit/Total assets % 0,72% 0,82% 0,92% 4,05%

Earnings per share (EPS) VND - - 101 162

(*) In 2017, the company decided to cut down non-core activities thus inventory balance of Parent company
as at 31/12/2017 was zero.

SHAREHOLDER STRUCTURE, EQUITY CHANGE

Shares information

Charter capital of the Company VND 2,500,000,000,000

Par value of shares VND 10,000
Volume of shares in circulation 250,000,000 shares
Volume of listed shares 250,000,000 shares
Treasury shares 0 share
Market capitalization as of VND 4,050,000,000,000
31/12/2017

66
OWNERSHIP STRUCTURE

DOMESTIC SHAREHOLDERS FOREIGN SHAREHOLDERS

Number of % Number Number of % Number

No. SHAREHOLDERS
shares Owner-ship of shares Owner-ship of
shareholders shareholders

1 Major 70.047.880 28,02% 1 69.999.990 28% 2

2 Others 62.701.837 25,08% 1061 47.250.293 18,9% 48

Total 132.749.717 53,1% 1062 117.250.283 46,9% 50

* Shareholder structure is updated in accordance with announcement of personnel on transaction of major

shareholders and internal shareholders, internal shareholders’ stakeholders until 31/12/2017 and compared
with the list of shareholders dated 26/02/2018 for the purpose of closing the right to attend the Annual General
Meeting of Shareholders in 2018.

OWNERSHIP OF MAJOR SHAREHOLDERS

No. ITEMS NUMBER OF SHARES RATIO

1 West Ocean Invest JSC 70.047.880 28,02%

2 TAEL Two Partners 55.000.000 22%

3 PENM IV Germany GmbH & Co. KG 14.999.990 6%

INFORMATION ON TRANSFER RESTRICTION SHARES UNTIL 31 DECEMBER 2017

Number of transfer restriction shares Number of freely Total

(*) transferable shares
Shares 0 250.000.000 250.000.000

Ratio (%) 0% 100% 100%

* Transfer restriction shares from two individual private placement to increase charter capital in 2016, with
restricted transfer of one year from the date of completion of the private placement in accordance with the
Law on Securities and other current legal regulations. By 18/11/2017, the above number of shares is no longer
restricted for transfering, and can be transferred freely in accordance with the law.

67
 2. Organization and personnel:
As a larger corporation with a workforce of 4,042
employees on a consolidated basis, stretching from
North to South, with its predecessors as well known and
large state-owned corporations (primarily Vinatea and
Vilico), GTNfoods is engaged in integrating the work of
colleagues formerly working as state officials and newly
recruited staff from the private sector. Understanding
these differences, GTNfoods is working to achieve a
corporate culture combining the pride of long-established
state companies with the next generation of employees,
together with the expertise of senior international
managers offering internationally recognized principles
of operations.
GTNfoods is dedicated to achieving a corporate culture
enabling the integration of former state owned enterprise
organizations into a contemporary, modern focused
operation. In this regard, we focus on:
68
• “Localization” to find a common voice between the
parent company and our subsidiaries. Acquisitions are
just the beginning. Successful M&A takes place when
two companies agree to share the same path, agreeing
on the same ideal to build and develop. Disagreeing
means not sharing the same path, and not sharing
the same path will not achieve necessary results and
achievements. As such, GTNfoods always strives to
build a common voice between its subsidiaries and the
parent company.
• Personnel policies in GTNfoods in 2017 have focused
on building and strengthening professionalism, including
recruiting high quality staff, implementing KPIs to
evaluate weekly and monthly work, paying salaries and
bonuses to employees based on performance, and
ensuring the right people on the right job consistent
with expertise and experience. Information technology
is being introduced into operations, including in human
resources and efficient work monitoring, helping to
establish a modern and professional personnel system.
In the field of agriculture, in parallel with productivity constantly recruiting more qualified staffs and training
increase, GTNfoods has focused on training, its existing staffs, for the purpose of expanding the
improving skills and the professional capacity of market.
farmers to maintain and improve product quality.
In 2017, GTNfoods continuously held great events,
For clean food business, GTNfoods has gradually helping to improve the working environment and
been strengthening its sales and marketing teams by enhance intimacy in the teams.

Youth Exchange Festival in Moc Chau Anniversary of the Company

Gala Year End Dinner

69
 3. Situation of investment, project development

GTNfoods Joint Stock Company operates under brands, good infrastructure, but are facing many
the model of holding company in which the parent barriers in distribution, sales or marketing. GTNfoods’
company acts as the capital management company M&A activities were carefully assessed in terms of
and coordinates the production and business efficiency and feasibility, ensuring the consistence
activities. Over the past years, the GTNfoods’ with the long-term goal to become a leading clean
investment activities mainly consists of M&A formerly food company in Vietnam.
state-owned companies with long history, popular

INVESTMENT IN INCREASING OWNERSHIP AT VIETNAM LIVESTOCK CORPORATION – JSC (“VILICO”)

Motivation • In 2017, GTNfoods JSC.has determined its long-term development strategy to become a fresh

and safe food company with an extended value chain, with two core businesses: Milk (Moc

Chau Dairy Cattle Breeding Joint Stock Company, or “Moc Chau Milk”) and Tea (Vietnam Tea

Corporation - Vinatea).

• Increased ownership in Vilico (Vilico currently owns 51% of Moc Chau Milk) and Moc Chau Milk

Method and • In 2017, GTNfoods Joint Stock Company continued to buy more shares to increase its

progress ownership in Vietnam Livestock Corporation (“Vilico”):

+ 2015 - 2016: Acquired 4,833,162 shares, equivalent to 7.66%

+ 01/2017: Acquired more 36,182,488 shares, equivalent to 57.34% of charter capital.

+ 08/2017: Acquired more 3,184,586 shares, equivalent to 5.05% of charter capital.

+ 11/2017: Acquired more 2,319,000 shares, equivalent to 3.67% of charter capital

Investment results • As of 31/12/2017, GTNfoods owned 46,519,236 VLC shares, equivalent to 73.72% of
charter capital with the total investment value of 1,416 bVND

List of subsidiaries and associated companies in accordance with the consolidated financial statements
as at 31/12/2017:

COMPANY INTEREST RATIO AS VOTING RIGHT

AT 31/12/2017 RATIO AS AT
31/12/2017
SUBSIDIARIES

Vietnam Tea Corporation - JSC 95% 95%

Vietnam Livestock Corporation - JSC 73,72% 73,72%

Lien Son Tea JSC (*) 48,66% 51,22%

70
 COMPANY INTEREST RATIO AS VOTING RIGHT
AT 31/12/2017 RATIO AS AT
31/12/2017
SUBSIDIARIES

Nghia Lo Tea JSC (*) 48,45% 51%

Vinatea Kim Anh JSC (*) 92,79% 97,67%

Moc Chau Dairy Cattle Breeding Joint Stock Company (**) 37,60% 51%

Mien Trung Livestock JSC (**) 67,11% 91,03%

GTNfoods Consumer Co., Ltd 100% 100%

Mien Trung Plastic JSC 90% 90%

Moc Chau Bamboo JSC 96,37% 96,37%

ASSOCIATES

Sai Gon Forestry Import Export JSC 35% 35%

LamDong Foodstuffs Joint Stock Company 35% 35%

Phu Da Tea Company (*) 42,75% 45%

Tran Phu Tea JSC (*) 27,36% 28,8%

Kim Anh Tea Joint Stock Company (*) 34,20% 36%

Hai Phong Poultry Investment and Export-Import JSC (**) 19,50% 30%

Chau Thanh Chicken Breeding Joint Stock Company (**) 25,58% 39,35%

Southern Poultry Breeding JSC (**) 23,87% 36,72%

Viet Phong JSC (**) 20,00% 30,78%

Dong Giao Plant Seeds and Animal Breeds JSC (**) 23,69% 36,44%

Thanh Ninh Cattle Breed JSC (**) 29,25% 45%

North Central Part Varieties and Industrial Supplies JSC (**) 24,23% 37,37%

Central Cattle Breeds Development JSC (**) 17,67% 27,19%

An Dai Viet JSC (**) 22,65% 34,84%

PeterHand Hanoi Livestock Development Co.,Ltd 23,40% 36%

Luong My Poultry Breeding Joint Stock Company (**) 23,40% 36%

Dong A Development Service Trading JSC(**) 22,76% 35,02%

(*) Indirect subsidiaries, associates under Vietnam Tea Corporation - JSC

(**) Indirect subsidiaries, associates companies under Vietnam Livestock Corporation – JSC

71
 OPERATION AND FINANCIAL INFORMATION OF CORE SUBSIDIARIES

Moc Chau Dairy Cattle Breeding Joint Stock Company (“Moc Chau Milk”)

Unit: VND billion

2017 2016 Change

Current assets 814,48 817,37 -0,35%

Long-term assets 245,82 277,47 -11,55%

Short-term liabilities 316,98 351,17 -0,97%

Total assets 1.085,83 1.063,18 2,13%

Net revenue 2.466,11 2.280,53 8,14%

Gross profit 450,72 431,39 4,48%

Net profit after tax (“NPAT”) 216,79 203,69 6,43%

2017 is the third year of the 5-year plan 2015-2020
of Moc Chau Milk and the first year Moc Chau Milk
is on the same board with GTNfoods. The company
has continued to develop and consolidate the
closed production model from Cultivation - Animal
feed processing - Dairy farming - Processing and
Consumption, thus utilizing all advantages and
resources for the business.
For production activities, the company applied
appropriate procedures such as food stockpiling,
insurance for dairy cows, reward scheme on input
milk purchasing price, etc. to facilitate farming
household in daily works. Dairy farming households
continue to invest leading to stead expansion in
farming scale. The feed stockpiling is prepared with
over 170,000 tons silage per corn crop, helping
to take initiative in the feed for dairy cow herd.
Moc Chau Milk also restores local grass and test
on some new foreign ones into trial plantation at
Breeding Center, giving positive results. TMR feed
mill is currently sufficient to supply daily feed to the
Breeding center and farming household’s high-yield
cow herd. The synchronous applying of VietGap
program and intensified control in Moc Chau Milk’s
dairy farms has improved the productivity and
quality of fresh milk. Notably, the production of
fresh milk produced in 2017 increased 14.9% YoY.
The fierce competition of Vietnam dairy industry
has increased in recent years. Dairy companies
have continuously invested in promotion and
advertising campaigns. Moc Chau Milk maintains
and expands its market share by promoting
the message of “100% pure fresh milk” with the
company’s tagline “Thao nguyen xanh, Sua mat
lanh”. These marketing activities on mass media
and promotions in distribution are to strengthen
Moc Chau Milk brand awareness on the market.
The net revenue of Moc Chau Milk in 2017 reached
VND 2,466 billion, exceeding the plan, increasing
108.15% YoY.

72
Revenue of some Moc Chau Milk’s sub-categories:
Unit: VND billion

1.601 68 318

1500

1000

500

UHT milk Pasteurized milk Yogurt

NPAT increased 6% YoY, ROE in 2017 reached 30.55%, ROA reached 20.32%.
Liquidity of the company has been always in safety position, strong capital structure.

1%

Asset structure 2017

25%
Cash and deposits
43%
Current assets

Long-term assets

31% Other assets

Capital structure 2017

6%
12%
Short-term liabilities 29%

Long-term liabilities

Equity
0%
Retained Earnings

Other funds 53%

73
 Vietnam Tea Corporation - JSC

Unit: VND billion

NĂM 2017 NĂM 2016 CHANGE

Short-term assets 530,4 626 15,27%

Short-term liabilities 451 554,5 -18,67%

Total assets 788,6 902,6 -12,63%

Net revenue 495,7 374,02 32,53%

Gross profit 23,7 40,06 -40,84%

Net profit after tax -13,1 2 -

In 2017, Vietnam Tea Corporation - JSC has built

a Vietnamese tea brand for domestic market
with a series of enticing new branded products,
aiming to bring a 60-year-old tea brand closer to Commodity tea revenue 2017

34 %
Vietnamese consumers. In 2017, Vinatea has won
the Tea Master Cup contest, opened a brand-new
tea showroom at 46 Tang Bat Ho Street, Hanoi
etc. Revenue from branded tea increased by 19.8
increased
bVND YoY and received positive feedback from
consumers.

In addition, the company continues to maintain and

develop the exporting commodity tea business.
In 2017, Vinatea achieved widely recognized
certificates for its main tea plantation: 70% of main
black tea and 50% of green tea plantation and Net revenue
factory qualified for Rainforest Alliance Certificates,

32,5%
100% green tea plantation qualified for VietGAP.
These certificates facilitate Vinatea to penetrate into
more demanding markets such as Japan, United increased
States, United Kingdom, Taiwan, etc... Revenue of
commodity tea in 2017 increased at 34% YoY while
total net revenue of Vinatea increased by VND 122
billion YoY, equivalent 32.5%.

74
 Tea exporting markets structure

11%
4% 3%
9% 2%
7%
USA
5%
3% Europe

2016 10% 2017 6% Taiwan

Southeast Asia

Middle East
70% 70% South Asia

Despite high revenue growth, gross profit fell 40% because Vinatea has pro-actively provisioned for non-
core assets and long-overdue inventory inherited from the pre-privatization period.. Profit from tea business
is expected to increase significantly in 2018, when there is no cost incurred from pre-privatization and
restructuring activities.

Production growth (Tons) Revenue growth (VND billion)

12.000 600

10.000 500

8.000 400

6.000 300

4.000 200

2.000 100

0 0
2015 2016 2017 2015 2016 2017

In 2017, Vinatea upgraded 46 Tang Bat Ho Street showroom to enhance the brand awareness of Vinatea.

Payment ratio was at 1.15, Debt/Equity structure of Vinatea still remained at the healthy level.

75
 Vietnam Livestock Corporation - CTCP (Vilico)
Unit: VND billion

2017 2016 CHANGE

Short-term assets 367,65 369,65 -0,54%

Short-term liabilities 39,94 68,51 -41,7%

Total asset 757,33 792,03 -4,38%

Net revenue 235,44 410,05 -42,58%

Gross profit -15,52 37,73 -141,32%

Profit from business operation 40,5 74,51 -45,64%

Net profit after tax 45,16 77,16 -41,47%

Vilico’s main business activities were pig farming, animal feed production and trading of livestock machinery
and equipment. In 2017, the Vietnamese pig market experienced a deep drop of over 54% in pork selling
price, even lower than the production cost at some points of time. This is a result of the unsustainable
development of pig herd scale in the whole Vietnam market in 2016.

Growing Pig selling price (main product of Vilico)

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4

Growing Pig selling price

Heavily affected by price crisis, two Vilico’s major livestock branches, Tam Dao and My Van, has applied
many flexible and adaptive strategies, e.g reducing the sow herd size, applying competitive procurement in
materials purchasing, restructuring of pig farming system. These activities aimed to reduce production cost
and minimize losses. In 2017, Vilico lost more than 15 BVND from business operation while total revenue
reached 236 BVND, in term of Parent financial statement basis.

76
OPERATION AND FINANCIAL INFORMATION OF ASSOCIATES

Lam Dong Foods Joint Stock Company:

Unit: VND billion

2017 2016 CHANGE

Short-term assets 187,45 182,72 2,75%

Long-term assets 56,67 47,23 20%

Short-term liabilities 59,34 52,43 13,18%

Long-term liabilities 1,16 0,46 150%

Total asset 244,11 229,96 6,15%

Revenue 585,05 443,69 31,86%

Gross profit 50,11 47,51 5,47%

Net profit after tax 21,20 20,47 3,57%

EPS (dong) 1.446 1.397 -

2017 is marked as a memorable year for Lam Dong Foods Joint Stock Company (“Ladofoods”)
with a series of outstanding events, such as Chateau Da Lat being the official wine brand for
APEC Summit 2017, Vang Da Lat Festival ... The brand Ladora Winery has marked a strong image
in consumers’ awareness as the first Vietnamese wine brand which reach out to global market.

In addition, Ladofoods revenue grew dramatically at 31.86% YoY, NPAT reached 21.2 BVND,
profit margin was 3.62%, decreasing 1% compared to 2016 due to heavy investment in marketing
activities.

77
 III. BUSINESS PLAN 2018

GTNfoods orientation in 2018

2017 marked as the turning point of GTNfoods, as high quality personnel resources as consultants,
infrastructure and long-term growth strategies are experts in agriculture, management, distribution &
clearly laid out for the company and its subsidiaries. sales, marketing, finance, etc… from investment
In 2018, GTNfoods will accelerate the infrastructure funds who are currently GTNfoods’ strategic
of its core businesses, divest and stop non-core shareholders.
operations that are not in the strategic direction.
These movements are to further improve production Sustainability is also being interested and initially
efficiency and optimize costs to generate benefits to developed by the GTNfoods. These activities
shareholders. Step by step, GTNfoods expands and include sustainable development in corporate
upgrades synchronously the system of plantations, growth, environment protection and corporate social
productions and sales capability with in core responsibility, especially in the main raw material
businesses, while maintaining the cooperation with areas of GTNfoods.

Unit: VND billion

INDICATORS
No. IMPLEMENTED 2017 PLAN 2018 GROWTH
(CONSOLIDATED)

1 Revenue & financial income 3.913 3.450 (11,83)%

2 Consolidated profit after tax 151,9 300 97,5%

3 Profit attributable to Parent Shareholders 40,4 165 333%

The official financial plan for 2018 will depend on the final approval of the General Meeting of Shareholders.

Looking at overall plan data for 2018, the projected resources into efficient core businesses, closing
revenue is decreased by 463 billion VND YoY, but down and divesting non-core operations. Although
NPAT and NPAT-MI are expected to grow by 97.5% these activities may cause lower net revenue, the
and 333%. This is the expected result of shifting profit will be higher.

78
1. Moc Chau Milk:

Moc Chau Milk’s target for 2018 is to maintain and consumers, increasing mass media. These
develop the domestic market, especially in the rural activities will help to increase the surplus value of
areas of North and North Central where it already Moc Chau Milk in the market.
has strong positions. Moc Chau Milk promotes the
core values of the full and sustainable agricultural Moc Chau Milk continuously strengthens the
value chain: delicious fresh milk products and cooperation with the dairy farming families,
prestige long-standing brand in the market. In applying advanced technologies to the farming
addition, Moc Chau Milk continues to develop process, veterinary, quarantine and milk
production. In particular, standardization studies
and vendor evaluation systems are applied to
ensure clean stable high quality milk; expanding
the feed plantation, upgrading the processing
capacity synchronously.

Moc Chau Milk specially attends long-term

investment in high quality human resources:
promoting business partnerships with international
advisors and partners, streamlining current
team and recruitment of new quality personnel.
GTNfoods help building up and improving the
working environment to be friendly, effective, and
comprehensively from the strong dairy cow herd’s to maximize individual capacity. Following up with
growth to the expansion of distributions in target 2017, GTNfoods will promote the investment in
markets, in which Hanoi is strongly focused. human resource, construction and management
General trade (“GT”) including traditional markets, of Moc Chau Milk in 2018 in all areas: finance -
retailers and mom-and-pop stores, are still the accounting, human resources, and business -
leading channel, bringing most of the revenue for marketing, product research…
Moc Chau Milk. In 2018, the company’s orientation
is to expand the rural area markets where GT
channel plays a pivotal role. For the big cities such
as Ha Noi, Hai Phong, Ha Long, etc., there are
strong changes in consumers’ shopping behavior
due to life standard’s changing. Modern trade (MT)
is on the rise in comparison with GT. Therefore,
hypermarkets, supermarkets and convenience
stores will be focused more by Moc Chau Milk in
near future.

Along with extending the market coverage, Moc

Chau Milk promotes the brand repositioning
and repackaging of exist products, research
and development of new products, increasing
awareness and product experience/trial for

79
 2. Vinatea

Aiming to maintain the quantity of 10,000 tons

of tea per annual from 2018 to 2020, Vinatea is
making real transformation as the strategic direction
gradually shifts from the low-profit-margin markets
to high-end international markets, and at the same
time shifting from sales dependent on supply to
sales based on market demands. This orientation
brings many opportunities and challenges for
Vinatea as those high quality markets demand high
and sophisticated product quality.

For commodity tea sector, besides the traditional In term of branded tea, in 2018, the company will
markets, Vinatea is continuing to promote the research the consumer needs, concentrating in
higher level markets as USA, UK, Japan and healthy product segment to differentiate Vinatea’s
European Union (EU). Vinatea’s tea products have tea brands, strengthening sales force, developing
been constantly improved to meet strict quality distribution channels in both exporting market and
censorship so that the average tea price of Vinatea domestic market.
is usually higher than Vietnam’s average tea price
and leaning toward the world’s average tea price of
$ 2.8/kg. Vinatea climbs up its tea products value
chain of Vietnam tea industry in particular and
worldwide in general.

80
3. Divestment and liquidation of non-core businesses
In the 3-year restructuring plan 2018-2020, aside
from the objective of developing core business
milk and tea, divestment from non-core businesses
plays an important role in building GTNfoods’
future. Particularly, Moc Chau Bamboo JSC, Mien
Trung Plastic JSC, associates and investments
under Vilico and Vinatea which are not in line with
the core businesses.
At the BOD’s meeting of 3Q2017, Board of Directors
and Management of GTNfoods set out specific
objectives and procedures for the divestment plan,
which can help GTNfoods maximize its resources
for core business in milk and tea. Specifically, at the
3Q2017 BOD meeting, Resolution No. 10/2017/
NQ/HDQT issued on November 3, 2017, decided to
establish a restructuring project commissioned by
Mr. Nguyen Van Minh - CFO. In addition, resolution
No. 12/2017/NQ/HDQT promulgated approving
the policy of divestment from subsidiaries, affiliated
companies, subsidiaries and affiliated companies
which is not in line with Group core strategy.
Accordingly, all investments are assessed by the
project committee based on valuation methods,
providing the basis for management to make
divestment decisions at reasonable existing prices.
In 2018, GTNfoods will divest from a large
proportion of Mien Trung Plastic JSC and a number
of investments. It is expected that GTNfoods will
completely divest from non-core investments by
the end of 2020.
81
82
CORPORATE GOVERNANCE

83
 I. REPORT OF THE BOARD OF DIRECTORS

1. Assessment on activities of the Group and the Management by the

BOD: supervisory activities and results

Monitoring activities: In 2017, in accordance with the existing Rules, Regulations, Internal Control Regulations
and Existing Laws, GTNfoods had close and specific supervisory activities.

Internal control system: chaired and successfully organized 2017 AGM on 28/03/2017. GTNfoods has
continued to focus on building a strong human resource as well as corporate governance system, improving the
internal control system of the Company.

Improve the risk management system to minimize any negative impact on the business results and sustainable
development of the entire GTNfoods system.

Monitoring the implementation of the resolutions promulgated by the Board of Directors and AGM; Monitoring
the activities of Management and senior executives in: organizing implementation of Financial Statements
2017, Quarterly Financial Statements and Annual Report 2017; protecting the rights and legitimate interests of
shareholders.

84
Continuing the process of implementing the M&A
strategy for target companies: directing, organizing
and supervising the implementation of issues related
to production, business, capital fundraising and
investment of the Company, raising Vilico ownership
to 73.72%. Conducting divestments of non core
businesses.
Information disclosure: To direct the information
disclosure according to the regulations mentioned at
Finance Ministry’s Circular No. 155/2015 / TT-BTC on
information disclosure on the stock market, ensuring
transparency in a timely and accurate manner.
Comply with the law, ensuring the employees
interests: Ensure the strict implementation of the
interests of employees. The Company has fulfilled its tax
obligations to the state budget as stipulated, fully paid
social insurance, health insurance and unemployment
insurance for employees in accordance with the law.
Assessment on activities of the Management
Board by the BOD: The Board assesses that
Management has made remarkable efforts and
fulfilled its assigned tasks. In the context of the difficult
economy, rapidly increasing size of the Company and
the its entire system in short term, with diversified
business lines and investment areas, Management has
managed all divisions to achieve results as above and
has created a good foundation for the development of
the Company and the whole system in the future.
The Board recognizes that all members of Management
have sufficient experience and knowledge related to
their own field and lines of business, with a good sense
of responsibility and the spirit of cooperation and can
continue to implement the tasks assigned by the AGM
and the Board of Directors.

Business and investment results: Approve the

business plan for 2018 as set out by Management,
monitoring the implementation of the 2018 plan
preparing; Plan and control the strategy, development
orientation of the whole company with the goal to
improve the business results and fulfill planned targets.

Based on current strategic position of GTNfoods,

continue to develop towards a target of being a leading
company in safety foodstuffs with sustainable & full
agriculture value chain, on the basis of advantage of
GTNfoods and its subsidiaries, strategic partners
(TAEL Two Partners, PENM Partners, Hanil Feed)
to promote research and development of potential
projects; positively expand the market by improving the
effectiveness of marketing.

Supported subsidiaries in governance, strategy

building, distribution channel development, corporate
restructuring and financial management to maximize
their potential and improve business performance.

Continued to monitor and direct the implementation

of projects for supporting farmers in managing and
planting tea trees, cow herds caring, towards stable
and sustainable development.

85
 2. Activities of the BOD in 2017

Pursuant to the Company’s Charter and Governance
regulations, the Board of Directors would establish an
annual meeting schedule with at least 4 meetings each
year. In addition, the Chairman of the Board of Directors
might convene a regular meeting of the Board at any time
deemed necessary with at least a meeting each quarter. In
addition, in 2017, the Board of Directors collected written
opinions of the Board of Directors’ members. Accordingly,
resolutions/decisions approved in the form of written
opinions were as effective and valid as those approved
by the Board of Directors’ members at meetings normally
convened and organized.

ATTENDANCE OF EACH MEMBER OF THE BOD AT BOD MEETINGS OF THE BOD AS FOLLOWS:

No. MEMBER OF POSITION EFFECTIVE DATE/EXPIRY NUMBER OF THE RATIO OF REASON

THE BOD DATE OF A MEMBER OF BOD’S ATTENDED ATTENDING FOR NOT
THE BOD MEETINGS MEETINGS ATTENDING

1 Ta Van Quyen Chairman 26/04/2016 8/8 100%

2 Michael Louis Member/ 18/01/2016 8/8 100%

Rosen General
Director

3 Nghiem Van Deputy 26/04/2016 8/8 100%

Thang chairman

4 Chew Mei Ying Member 26/04/2016 8/8 100%

5 La Manh Tien Member 26/04/2016 8/8 100%

6 Hoang Manh Member Dismissed on 2/8 25% Resigned on

Cuong 28/03/2017 28/03/2017

7 Nguyen Tri Thien Member Dismissed on 2/8 25% Resigned on

28/03/2017 28/03/2017

8 Nguyen Hong Member Appointed from 6/8 75% Appointed on

Anh 28/03/2017 28/03/2017

9 Lars Kjaer Member Appointed from 6/8 75% Appointed on

28/03/2017 28/03/2017

Accordingly, all the members fully attended the meetings of the Board of Directors. In addition, each meeting of the
Board of Directors was also attended by the Supervisory Board as an observer.

86
3. Resolutions/decisions promulgated by the BOD in 2017

No. RESOLUTION/DECISION No. DATE CONTENT

1 01/2017/NQ-HĐQT
2 03/2017/NQ/HĐQT
3 04/2017/NQ/HĐQT
4 05/2017/NQ/HĐQT
5 06/2017/NQ/HĐQT
6 07/2017/NQ/HĐQT
7 08/2017/NQ-HĐQT
8 09/2017/NQ-HĐQT
9 10/2017/NQ-HĐQT
10 11/2017/NQ-HĐQT
11 12/2017/NQ-HĐQT
12 13/2017/NQ-HĐQT
13 14/2017/NQ-HĐQT
Convene 2017 General meeting of shareholders and
18/01/2017 finally register the implementation of the right to attend
meetings
24/03/2017 Approve the contents & list of proposals to submit to
AGM for consideration, changes in key personnel, report
on current situation and propose 3 year plan- Vinatea.
27/04/2017 Approve the resignation of Mr. Pham Duy Cuong, Chief
Financial Officer of GTNfoods JSC
07/06/2017 Appoinment of auditing company for GTNfoods JSC in
2017
07/06/2017 Approve the plan to engage AUP consultancy contract
10/07/2017 Approve the recruitment of governance consultant;
Approve the list of related parties and information
disclosure on transaction; Recommend a proposal on
ownership over subsidiaries
10/07/2017 Approve the closing of two branches of GTNfoods JSC.
28/07/2017 Approve the appointment of Mr. Nguyen Van Minh as
CFO of GTNfoods JSC.
03/11/2017 Approval of the GTNfoods’s BOD Policy; Approve to
establish a Restructuring Project Team; Approval in
principle of operation orientation of husbandry; Approve
the appointment of personnel
03/11/2017 Approval of appointing Ms. Vu Thi Thu Thuy to be the
person in charge of Corporate Governance
03/11/2017 Approval in principle of GTNfoods’s divestments of
subsidiaries, associates those are classified as non-core
in GTNfoods’s long-term development strategy
03/11/2017 Approval of increasing GTNfoods’s ownership in Vilico
and focusing on dairy industry; Approval in principle to
enable TAEL Partners to research on the project
29/12/2017 Approve to divest the investment of Vilico at non-core
businesses

4. Corporate governance orientation in 2018

In 2018, GTNfoods continues to accelerate
restructuring activities for member companies,
creating a professional and effective employment
base, especially emphasizing the role of middle
and senior managers of the company in order to
enhance responsibility for work and work efficiency;
and at the same time, training and nurturing skills for
staffs. In addition, GTNfoods’ leaders also develop
policies on fine and reward for employees, accurately
assessing staff rank, ensure salary, income, bonus
and other treatment regime corresponding to work
performance of each individual in order to nurture
and keep human resources at good capacity and
long-term dedication to the company.
In parallel with the improvement of human
resources, GTNfoods also focuses on building
and standardizing processes for each department
with to be simple andeffective. The company also
studies the application of management software to
production and business activities of the member
companies in order to improve and control the
efficiency of work, focusing on building corporate
culture and great family spirit for each employee.

87
 II. REPORT OF THE SUPERVISORY BOARD
1. Member and structure of the Supervisory Board
The Supervisory Board has three members, all of whom are qualified and capable of carrying out their duties.
Members of the Supervisory Board from time to time in 2017 were as follows:

FULL NAME TITLE EFFECTIVE DATE/EXPIRY DATE OF A MEMBER TIMES OF

OF THE SUPERVISORY BOARD ATTENDING
MEETINGS
Mr. Tran Viet Thang Head of the 26/04/2016 4/4
Supervisory Board
Mr. Pan Mun Kit Member 26/04/2016 4/4

Mrs. Nguyen Thi Thu Member 26/04/2016 4/4

2. Activities of the Supervisory Board

In 2017, the Supervisory Board has supervised the compliance with the regulations on management
and operation of production and business activities of the company in important areas including
strategic control, operation control and financial control.

Attending and contributing ideas at all meetings of the Board

of Directors, inspecting, supervising the implementation of
Resolutions of the General Meeting of Shareholders for the Board
of Directors, the Management Board.

Controlling the compliance with the Charter and Resolutions of

the General Meeting of Shareholders.

Supervising the implementation and information disclosure of the

Company in accordance with regulations of the Law on Securities
and related legal documents.

Reviewing periodic reports prepared by the Management Board,

inspecting GTNFoods’s quarterly, semi-annual and annual financial
reports to assess the truthfulness and appropriateness of financial data.

Evaluating and monitoring the situation of investments in

subsidiaries, associates and other companies in which the Group
invests. Periodically reviewing quarterly, semi-annual and annual
financial reports of these companies to recommend and propose
options for improving the efficiency.

Discussing with auditors about remaining difficulties identified from

audits, reviewing the management of independent auditors and
feedbacks from the board of management of the company.

Organizing meetings of the Supervisory Board in order to

discuss and propose ways to improve the financial capacity and
supervisory activities.

88
In 2017, the Supervisory Board held four (04) official meetings as follows:

MEETING NUMBER OF MAIN AGENDA

ATTENDANTS

Meeting 1 3/3 Reviewing 2016 financial statement, updating operating

24/03/2017 results in Quarter I of 2017, planning work for 2018

Meeting 2 3/3 Review 2017 half - year financial statement, updating and
10/07/2017 evaluating operating results and corporate governance
results of the first 06 months of the Company.

Meeting 3 3/3 Review financial statement for Quarter III of 2017, updating
02/11/2017 and evaluating operating results and corporate governance
results for Quarter III of the Company.

Meeting 4 3/3 Updating and evaluating operating results and corporate

26/12/2017 governance results for Quarter IV of the Company, planning
and reviewing 2017 financial statement

During 2017, the Supervisory Board oversaw the Board of Directors, the General Director and the Management
Board in key aspects: rationality, legality, honesty and caution in the management of production and business
activities of the company. The supervision of the Supervisory Board was carried out through following activities:

a. Appraisal results of 2017 financial statement: The Company’s fiscal year begins on 01/01/ 2017 and
ends on 31/12/ 2017. Based on the audited financial statements of 2017, the Supervisory Board assessed
that the report reflects the financial and business results in 2017 in line with the Vietnamese accounting
standards and system, and regulations on financial management of the company and the State.

Some key indicators in the consolidated financial statements of 2017 of GTN are as follows:

- Consolidated revenue of the Group in 2017 reached
3,781 billion VND, an increase of approximately 2,000
BVND YoY, equivalent to 108% YoY, largely due to the
merger transaction of Vilico. In particular, Moc Chau Milk
contributed 2.466 BVND of net revenue.
- NPAT reached 151.9 billion VND, an increase of 136 billion
VND YoY, equivalent to 855% compared to 2016, NPAT
attributable to parent company shareholders was 40.4
billion, EPS 52.
- As of 31/12/2017, total assets reached 4,802
billion VND and owner’s equity was 3,814 billion,
increasing more than 4 times over the past four
years thanks to M&A activities under the strategy
of becoming a fresh and safety food business, with
a full & sustainable agriculture value chain.
As of 31/12/2017

- By the end of 2017, GTNfoods has actively cut down

nearly 70% of sows herd, accelerating pigs liquidation and total assets reached owner’s equity was

4.802 3.814
stop many non-core businesses, recording a full-year loss
of roughly 40 billion from Pig business. The tea inventory
from the pre-equitization phase was fully provisioned for in
billion VND billion VND
the fourth quarter. Also in Q4/2017, the company stepped
up the provision of non-core assets and in the planed
divestment assets, restructure and reduce personnel costs.
Thus, all the ineffective factors that have resulted in the cost
of GTN have been resolved in 2017 with the objective of not
impacting business performance in 2018.

89
 b. Results of supervising the compliance with
accounting policies, financial management
policies:
In 2017, the accounting and financial management system
of the company is well implemented, such as strict control
of the use of capital, management and promotion for the
recovery of debt, the importance of the management
accounting works is concentrated, the Management
periodically report the effectiveness of production and
business activities in the BOD meeting. Besides, the review
and finalization, implementation of policy, processes and
regulations are continuously implemented.
c. Supervising activities of the Board of Directors,
the General Director and Management Board:
In 2017, the Supervisory Board attended all meetings of
the Board of Directors, was timely and completely provided
with the Board of Directors’ resolutions and related
documents according to regulations. Accordingly, the
Board of Directors complied and implemented objectives
approved by the General Meeting of Shareholders. BOD
has organized regular and irregular meetings to set out
the right policies in time, leading the Company to the
right direction, contributing to the Company’s business
performance in 2017.
Management Board has strictly implemented the contents
in the Resolutions and Decisions approved by BOD. In
2017, Management Board has attempted to direct and
manage the business operations to ensure compliance
3. Operational orientation in 2018
In 2018, the Supervisory Board will continue to
maintain the supervision of the Board of Directors, the
General Director and the Management Board regularly
and periodically in accordance with the Charter of
the company and the Regulations on operation of
the Supervisory Board. In addition, the Supervisory
Board will continue to improve the way of operation,
strengthen the inspection and supervision of the
production, business and management activities of the
company, namely as follows:
Supervise the compliance with the regimes and
policies of the State; regulations, rules and resolutions
of the General Meeting of Shareholders, the Board
of Directors of GTNfoods Jsc, ensuring publicity and
transparency.
Coordinate with the internal auditors to inspect,
consider annual financial statements, semi-annual
90
with the orientation approved by the BOD, bringing the
Company’s activities into disciplines, contributing to the
efficiency of the Company’s business in 2017.
- Conclusion: The Supervisory Board evaluated the
management of production and business activities
by the Board of Directors, the General Director and
the Management Board in 2017 was implemented
reasonably, effectively and in accordance with regulations
of applicable laws.
d. Inspection at the request of the shareholders:
In 2017, Supervisory Board did not receive any
complaints of shareholders about the mistakes made
by members of the BOD, the Supervisory Board and
the management in their duties time.
e. Evaluation of the cooperation between the
Supervisory board and the Board of Directors, the
Supervisory board:
In 2017, the Supervisory Board has received the cooperation
of the BOD, the General Director, the Management and
other departments in the company with sufficient information
about some problem need for consideration & examination.
The Supervisory Board also made many comments
about the corporate governance of the BOD, the General
Director and the Management, thus contributing to
solve the difficulties.
financial statements and quarterly financial statements
in order to improve the quality of auditing financial
statements;
Monitoring the compliance & implementation
of financial reporting and management reports at
subsidiaries and affiliated companies of GTNfoods.
Monitor the implementation and disclosure of
information of the Company in accordance with current
regulations.
Supervising the coordination between the BOD,
Management Board & Supervisory Board
Improving the effectiveness of the Supervisory
Board, focusing on risk management, focusing on
controlling and detecting significant and potential
risk factors so that the Company can promptly apply
preventive measures.
III. CORPORATE GOVERNANCE REPORT
1. Corporate governance in 2017
In 2017, the company fully and strictly complied with
regulations on corporate governance applicable to
public companies as well as information disclosure on
the securities market.
Continuing encouraging results achieved in 2016 in term
of restructuring and perfecting the governance apparatus,
in 2017 GTNfoods continued to further streamline the
apparatus, distributed human resources reasonably to make
full use of the contribution of each member of the Board of
Directors, thereby strengthening the efficiency of the control
of the Board of Directors, ensured common corporate
governance rules to be applicable to the whole system,
strengthened the attachment between GTNfoods and
relevant parties. Investor relations department of GTNfoods
maintained practical activities and made best efforts in
providing information to shareholders and investors.
Financial statements of GTNfoods were according
to Vietnam Accounting Standards (VAS). Financial
statements of the Group and its subsidiaries were audited
by AASC Auditing Firm Company Limited.

2. Remuneration and benefits of members of Board of Directors,

the Supervisory board and the Management Board
In 2017, the Company paid remuneration to members of The Board of Directors determined salaries, bonuses and
the Board of Directors, members of the Supervisory Board other financial benefits of the General Director and approved
in accordance with Resolutions of Annual General meetings salaries, bonuses of the Deputy General Directors based on
of shareholders. In addition, the Company bought liability a proposal of the General Director.
insurance, health insurance for key leaders in accordance
with the Regulations of the Company.

The Board of Directors and the Supervisory Board didn’t arise remuneration in 2017.
Salaries, bonuses and other benefits of GTNfoods’s Management Board in 2017:
UNIT: VND

STT Member of the Board of Management Salary Bonus

1 Mr. Ta Van Quyen 341,562,000 35,321,000
2 Mr. Michael Louis Rosen 373,152,000 Nil
3 Mr. Nguyen Van Minh Not arise Nil
4 Mr. La Manh Tien 164.500.000 Nil

Share transactions of insiders and related parties:

NUMBER OF SHARES NUMBER OF SHARES REASONS

STT INDIVIDUALS RELATIONSHIP AT THE BEGINNING AT THE ENDING (BUY, SELL,
IN WITH INSIDERS TRANSFER,
TRANSACTION Number of Holding Number of Holding BONUS, ETC)
shares ratio shares ratio

1 Tran Viet Thang Head of the 161.900 0,08% 524.700 0,2%

Supervisory Board
2 Pham Thi Thuy Wife of Mr. Tran 987.896 0,4% 387.896 0,16% Sell
Viet Thang

3 West Ocean Related parties of 60.900.000 24,36% 70.047.880 28,02% Buy

Invest Joint Stock insiders
Company

91
 IV. RISK MANAGEMENT
1. Objectives of risk management
- Timely identifying potential risks that directly affect business operations, achieving strategic objectives. At the same
time, exploiting opportunities, optimizing company’s performance, minimizing negative impacts of these risks on
business operations.

- Strengthening capacity in decision making, planning and prioritizing work based on the thorough understanding of
the business operations, business environment, opportunities and challenges of the enterprise.

- Clearly define the responsibility and risk management, develop a monitoring and reporting mechanism in the Group.

2. Risk management model:

Approach
Scope of risk methodology Coverage Implementation
mem

Supervisory Board
Strategies Subsidiaries
&
Risk management coverage

Assess Affiliates

Board of Directors
Operation

Business
Improve model

Finance
Board of Management

Monitor
Operational
processes
Compliance
Departmental heads

92
3. Risk management process

CONTEXT SETUP

RISK EVALUATION

1. Identify risks

2. Evaluate, analyze risks

3. Measure degree of impact

COMMUNICATION SUPERVISE
& RISKS
CONSULT 4. Risk rating

RISK RESPONSES

RISK TREATMENTS

a. Identifying and prioritizing:

Key risks Ranking

Specific risks of business sector High

Branding risks High

Market risks Average

Risks in operation and corporate governance Average

Legal risks Low

Liquidity risks Low

93
 b. Risk analysis and risk management methodology:
b.1. Strategic risks
Strategic risks are the risks that comes from the Board
of Director’s decisions related to enterprise’s objectives.
Basically, strategic risks are the risks of not reaching
objectives set by the enterprise:
- Business risks: the risks that come from the Management
decisions about products or services provided by the
enterprise. Including risks are associated with the development
and marketing of products or services; economic risks that
affect on the turnover and cost of products and risks arising
from technological changes affecting on the quantity of
produced and sold products.
- Non-business risks: the risks are not derived from products
or services. For example, risks are associated with long-term
financing sources. The level of strategic risks is attached
to the whole enterprise in terms of context and not only
influenced by the board of management’s decisions. The
actions of competitors will affect on the risk levels in product
markets and the development of technology will quickly lead
to outdated manufacturing processes or products.
Risk mitigation measures: To mitigate strategic
risks, GTNfoods establishs detailed strategic plans and
communicates with stakeholders. The list of strategic
projects are approved, implemented and strictly
supervised.
94
b.2. Specific risks of each business
sector
In the business fields of dairy products, wine, tea bags and pig
farming, GTNfoods faces specific risks of animal husbandry
and cultivation such as: weather risks, natural disasters,
epidemic disease risks, breeding risks, marketing risks, etc
- Agricultural risks:
+ Risks of natural disasters, unfavorable weather: Risks
of natural disasters, unfavorable weather are one of the most
affecting factors for livestock and crops. GTNfoods’ raw
material zones have extremely favorable natural conditions
and climate but the global climate change has made the
weather become more severe, increasing the risk of floods,
droughts or frost.
Risk mitigation measures: To overcome this risk,
GTNfoods has been expanding breeding, raw material zones
for the dairy cow herds and tea plantation to many localities
such as Son La, Phu Tho, Yen Bai provinces, etc, maintaining
sufficient raw material reserves for production and business
activities.
+ Product consumption market risks: Product
consumption market risks occurs when the enterprise loses
existing consumption markets or the products are unable
to penetrate target markets. For dairy products, Moc Chau
Milk target on the mass market with competitive prices with
competitors in the industry. However, the current market is
concentrated mainly in the rural North and North Central of
Vietnam. In the coming years, the objectives are maintaining
strong position in rural provinces in the North while focus more
on urban markets, such as Hanoi, Hai Phong, ect in which
there is fierce competition among many big competitors. The
risk of consumption markets is the failure of product strategy
and market penetration strategy, which is due to wrong
consumer insight orientations and fierce competition between
strong players in the industry.
For Vinatea’s tea products, the desire is to develop branded
tea products, which directly access to consumers instead of
only commodity tea as before. Penetrating to new markets
with strong competitors is a big challenge for Vinatea as
consumers are becoming more and more knowledgeable
and choosy while the market is flooded with fragmented
different tea brands.
Risk mitigation measures: To deal with this risk, GTNfoods
has started to survey, research the market, consumers’
demands and applied advanced technologies to the milk and
tea productions to achieve better quality and more diversified
products. In addition, appropriate marketing and sales
strategy are being studied for application.
- Risk of agricultural land fund: Land is an important
resource for every country, especially land for
agricultural purposes which is to ensure food security
for the country. However, the area of agricultural land in
Vietnam is fragmented and scattered due to cultivation
characteristics of the people and being increasingly
narrowed by the process of strong urbanization,
industrialization in recent times.
For core businesses of GNTfoods are tea and milk,
land funds for the production of raw material zones
become increasingly important. Moc Chau is a special
and naturally favored land area suitable for developing
dairy cow herds and tea cultivation. GTNfoods has a
large land fund, with dairy cow herd’s breeding area
of 1,040 hectares and tea cultivation area of 4,700
hectares. The company is continuing to expand the
raw material zones to the adjacent areas of Son La,
Phu Tho, Yen Bai provinces, etc. At present, the
agricultural land risk of the company is low.
Risk mitigation measures: To cope with the land
area risk, the company actively cooperates with
the province to restructure plantation and animal
husbandry areas of the farmers, maintains and
optimizes the value chain from raw materials, feed,
breeding and producing good quality products.
- Risks of foodstuffs industry: GTNfoods’s
foodstuffs sector focuses on the following key
products: Milk, Tea from subsidiaries and Wine from
affiliate. Major risks that much affect on the production
and business include: the risk of fluctuations in input
material prices, the risk of fluctuations in consumer
demands, the risk of losing market share due to the
high competition in the industry.
+ Risk of fluctuations in input material prices:
GTNfoods has a large raw material zone with stable
price, quality and quantity of raw materials due to the
close-knit linkage between the company, the locality
and farmer households. Owning a large bank land and
long-term contracting land and contractual agreement
of raw material supply with households help GTNfoods
to be proactive in its own material sources, especially
not to be dominated, depended by general inflation
situation. GTNfoods’s risk of fluctuations in input
material prices is at low level.
Risk mitigation measures: To minimize the risk of
fluctuations in input material prices, GTNfoods
continues to maintain the current land and production
model and at the same time expands the main raw
material zones to the nearby areas in Son La province.
Long-term agreements of land cultivation and breeding
with farming families will maintain the initiative of
GTNfoods, not only in the price of input raw materials
but also in the competitive product price compared to
strong competitors in the market.
- Risk of market’s demand fluctuations and
competitive pressure: The competitive pressure
in the consumer goods market in general and the
foodstuffs market in particular in Vietnam is increasing
due to the presence of many international big
companies and potential domestic enterprises. Along
with the development of the economy, the demands
for food of Vietnamese consumers is changing rapidly
and towards clean, high quality products which are
good for health and convenient. With consumer
and market research, competititors have constantly
changed, improved their product strategy to be more
suitable to the actual needs of customers. GTNfoods
owns long-standing and well-known brands in the
market; however, in the past, the marketing strategies
of subsidiaries, under state-owned management,
are slow-changing compared to other competitors.
Though the spectacular growth of the economy in the
past few years has led to the steady development of
consumer goods, especially foodstuffs sector, which
has helped GTNfoods’ brands temporarily stand firm
in the market. The risk of market’s demand fluctuations
and competitive pressure result in lost market share,
reduced turnover is relatively clear.
Risk mitigation measures: To mitigate the risk of
market demand fluctuations, GTNfoods has started to
assess and research periodically to explore consumer
demands, hence, having a strategy of focusing on
product development, creating stronger competitive
advantage for the company. In addition to promoting
R&D activities, GTNfoods improves marketing such
as more innovative TVC, repositioning products,
launching new packages and boosting the brand story
to bring products closer to consumers. At the same
time, the company will start to restructure existing
distribution channels and expand in new markets
such as Hanoi and other big cities, towards modern
distribution channels.
95

b.3 Branding risk
Brand risk is the losses and damages of the company’s
value due to changes in customer perception
that seriously affect the demand for services and
products. The risks of false rumors negatively impact
the company’s reputation, undermining the trust of
customers, shareholders, partners and the community
in the company, leading to massive financial losses.
Risk mitigation measures: Brand management is one
of the key tasks of enterprises. GTNfoods has begun to
develop regulations on brand risk management through
corporate governance and risk management systems.
b.4 Financial risk:
b.4.1 Market risk
Market risk is the factors that can affect the business
results of the company, caused by changes in the
market, such as interest rates, share prices, commodity
prices, etc.
- Risks of interest rate: At present, the company’s
debt is low with its debt/total asset proportion of 0.2,
so the company does not bear a high interest rate risk.
- Risks of finished goods price: This is a risk that
occurs when the price of finished products reduces
sharply, making the company to not achieve the
expected turnover.
Risk mitigation measures: The Company has
minimized risks by receiving timely market information
related to the production and business activities of
GTNfoods in order to determine the right time and
reasonable inventory.
96
- Exchange rate risk: Exchange rate risk is the risk
that the fair value of future cash flows calculated in
plans, financial scenario will be fluctuated due to the
impact of exchange rate changes, making GTNfoods to
face exchange rate risk related to its import and export
activities.
Risk mitigation measures: Among GTNfoods’
subsidiaries and affiliates, import-export activities are
mainly carried out at Vinatea, which is engaged in tea
export. While Vinatea uses domestic raw materials,
controls the price, thus the export will be more profitable
because the exchange rate usually tends to increase.
In addition, GTNfoods is still proactive in anticipating
risk fluctuations by planning time of export and import
in reasonably way in terms of FX rate.
b.4.2 Liquidity risk
Liquidity risk occurs when GTNfoods has difficulty in
meeting its financial obligations due to lack of funds.
Liquidity risk of the Company mainly comes from
different maturity dates of financial assets and liabilities.
The company assesses that liquidity risk at a low
level as the company always plans to manage cash
flows effectively as well as maintain a healthy financial
situation in the parent company and its subsidiaries:
Vilico, Vinatea, Moc Chau Milk, etc. To prevent this risk,
the Company manages cash flows closely, maintain
reasonable cash balance and deposits in each stage
of entity level, mobilize other financial sources to ensure
timely necessary funds, maintain solvency indexes at
a healthy level and a reasonable, balanced leverage
ratio. Every week, cash flow reports of GTNfoods
are prepared and reported timely by the relevant
departments to Management.
V. SHARES AND SHAREHOLDER RELATIONS
1. Shares information
Share price, transaction volume, share movements in 2017

- Share price at 30/12/2016: VND 16,600/share

- Share price at 29/12/2017: VND 16,200/share

Cơ cấu cổ đông tại ngày 31/12/2017

Domestic shareholders Foreign shareholders

No. List of Number of % Number of Number of % Number of
shareholders shares ownership shareholders shares ownership shareholders
held held

1 Large shareholders 70.047.880 28,02% 1 69.999.990 28% 2

2 Other shareholders 62.701.837 25,08% 1.061 47.250.293 18,9% 48

Total 132.749.717 53,1% 1.062 117.250.283 46,9% 50

No. Subject Number Ownership Number Shareholder

of ratio of structure
shares (%) shareholders

Organization Individual

1 State shareholders - - - - -

2 Founding shareholders/ - - - - -
FDI shareholders

3 Large shareholders 140.047.870 56,02% 3 3 -

- Domestic 70.047.880 28,02% 1 1 -

- Foreign 69.999.990 28% 2 2 -

4 The company’s - - - - -
trade union

5 Treasury shares - - - - -

6 Shareholders owning - - - - -
preferred shares (if any)

7 Other shareholders 109.952.130 43,98% 1.109 48 1.061

- Domestic 62.701.837 25,08% 1.061 25 1.036

- Foreign 47.250.293 18,9% 48 23 25

TOTAL 250.000.000 100% 1.112 51 1.061

In - Domestic 132.749.717 53,1% 1.062 26 1.036

which
- Foreign 117.250.283 46,9% 50 25 25

97
 Information about big shareholders

SHAREHOLDERS SHARES OWNERSHIP RATIO

West Ocean Invest Joint Stock Company 70.047.880 28,02%

Tael Two Partners Ltd 55.000.000 22%
PENM IV Germany GmbH & Co. KG 14.999.990 6%

Information about restricted shares until 31/12/2017:

RESTRICTED SHARES* FREE TRANSFER SHARES TOTAL

Total 0 250.000.000 250.000.000

Holding ratio 0% 100% 100%

* Transfer restriction shares from two private placements for increasing chartered capital in 2016 with the
restriction period in one year from the date of completion in accordance with Securities Law and other current
legal regulations. As of 18/11/2017, the transfer restriction expired and allowed the shares to be transfered freely
according to corresponding regulations .

History of chartered capital increases

Summary of capital increases

Date Charter capital before change Charter capital after change

(VND billion) (VND billion)

30/05/2011 80

20/01/2013 80 680

26/03/2015 680 748

26/01/2016 748 1.500

18/11/2016 1.500 2.500

98
 Shareholder structure of GTNfoods

Other shareholders
23%
28%

Financial institutions 9%

2%
3% 22%
3%
4%
6%

Capital Transition Process (Billion VND)

2.500
2.500

2.000

1.500
1.500

1.000
680 748

500
80
0
30/05/2011 20/01/2013 26/03/2015 26/01/2016 18/11/2016

99
 - GTNfoods Joint Stock Company established on May 30th,
2011 with chartered capital of VND 80 billion specializes in
industrial bamboo production, infrastructure construction,
minerals, building materials, plastics, agricultural products
and food.
- On January 20th,2013, the Company increased
its chartered capital from VND 80 billion to VND 680
billion through offering shares to existing shareholders
in accordance with the Annual General Meeting of
Shareholders’ resolution No. 01/2013/NQ/ĐHĐCĐ/ĐV.
- On March 26th, 2015, pursuant to 2015 Annual General
Meeting of Shareholders’ Resolution dated May 8th,2015,
Resolution No. 04/2015/NQ-HĐQT of the Board of Directors,
the Company decided to implement the dividend payment
plan of 2014 for the shareholders in the form of share based
payment with ratio of 10:1 to increase the charted capital from
VND 680 billion to VND 748 billion.
- On May 08th, 2015, the Company’s Annual General
Meetings of Shareholders adopted the share placement plan
to increase the chartered capital from VND 748 billion to VND
1,500 billion. On January 26th, 2016, the Company finished
this capital increase.
- On April 26th, 2014, the Company’s Annual General
Meetings of Shareholders adopted the private placement
plan to increase the chartered capital from VND 1,500 billion
to VND 2,500 billion and to change the Company name into
“GTNfoods Joint Stock Company”. On November 18th, 2016,
the Company finished this private placement to increase the
chartered capital to VND 2,500 billion.

Ownership of internal shareholders:

Number of shares Number of shares

No. Name of institutional Position at the beginning of the year at the ending of the year
/individual Number of Holding Number of Holding
shares ratio shares ratio

1 Ta Van Quyen BOD Chairman 100.000 0,04% 100.000 0,04%

2 Nghiem Van Thang BOD Members 100.000 0,04% 100.000 0,04%
3 Chew May Ying BOD Members 100.000 0,04% 100.000 0,04%
4 Lars Kjaer BOD Members 0 0% 0 0%
5 La Manh Tien BOD Members 100.000 0,04% 100.000 0,04%
6 Michael Louis Rosen BOD Members 7.150.000 2,86% 7.150.000 2,86%
7 Nguyen Hong Anh BOD Members 100.000 0,04% 100.000 0,04%
8 Nguyen Van Minh Chief Financial Officer 0 0% 0 0%
9 Tran Viet Thang Chief of the 161.900 0,08% 524.700 0,2%
Supervisory board
10 Pan Mun Kit Member of the 50.000 0,02% 50.000 0,02%
Supervisory board
11 Nguyen Thi Thu Member of the 0 0% 0 0%
Supervisory board
12 Hoang Manh Cuong Chief accountant 10.000 0,004% 10.000 0,004%

Transactions of internal persons and related persons:

Number of shares Number of shares

No. Transactor Relationship with at the beginning of the year at the ending of the year
insiders Number of Holding Number of Holding
shares ratio shares ratio

1 Tran Viet Thang 161.900 0,08% 524.700 0,2%

2 Pham Thi Thuy Wife of Mr. Tran 987.896 0,4% 387.896 0,16%
Viet Thang
3 West Ocean Invest Related parties of 60.900.000 24,36% 70.047.880 28,02%
Joint Stock Company insiders

100
2. Shareholders and Investors Relation in 2017

2.1 Activities in 2017 2.3 Action Plan in 2018

In 2017, the Investor Relation Department had more In order to improve the performance of investor relations
than 120 meetings with shareholders, institutional and and to ensure the rights and interests of shareholders and
individual investors. Details are as follows: investors, GTNfoods commits to:

- Individual shareholders: 10 meetings - Comply with regulations of applicable laws on information

- Institutional shareholders: 40 meetings disclosure, ensure fairness and transparency for all interested
- Investors: 70 meetings parties;

Quarterly, GTNfoods updates the main information related to
the production and business performance, highlights events
to shareholders and investors; provides information about
the compliance with the regulations of applicable laws,
ensuring fairness and transparency for all concerned parties.
Particularly, Moc Chau Milk, a subsidiary of GTNfoods
successfully organized the 14th Moc Chau Miss Cow
Festival in October, 2017. This was not only a meaningful
festival to honour dairy farming but also an opportunity to
introduce the full and sustainable agricultural value chain of
Moc Chau Milk to shareholders and investors.
- Always create the most flexible and convenient conditions
for shareholders and investors to contact and communicate
with the Company;
- Regularly exchange and update the production and
business states of the Company to shareholders and
investors;
- Always arrange full-time staffs to receive and answer
questions and concerns of shareholders and investors.
2.4 Some typical events in 2018

In 2017, the company organized more than 20 roadshows - 15th CLSA Asean Forum in Bangkok (07/03/2018 -
visiting production system of factories, farms, raw material 09/03/2018);
zones of Moc Chau Milk and Vinatea for domestic and
foreign shareholders, investors. - Celebrating the 60th anniversary of Moc Chau Dairy Cattle
Breeding Joint Stock Company (08/04/1958 - 08/04/2018);
The company also actively participated in investor
conferences which are held in Vietnam, South Korea, Hong - 2018 General Annual Meeting of Shareholders: expected
Kong, Japan, Singapore, Thailand and USA to meet and to be held at the end of April, 2018;
introduce GTNfoods’s development prospects to domestic
and international shareholders and investors. - The 15th Miss Cow Moc Chau Festival: expected to be
held in October, 2018;
2.2 Main contents are interested by Shareholders and
Investors - 25th CLSA Investor’s Forum in Hong Kong (10/09/2018 -
14/09/2018).
Through contacts and meetings with shareholders,
individual and institutional investors, the Company recorded
key concerns by the stakeholders:

- Factors having negative and positive impacts on the

production and business of the Company in 2017

- Development prospects of core businesses of Milk and Tea

- Results through each period of restructuring and the

orientations in the next years

- The development strategy of GTNfoods in the domestic

market (for milk) and the foreign market (for tea)

- Dividend policy of the Company

- The Company’s relationship with Large Shareholders and

conflicts of interest (if any).

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102
SUSTAINABLE DEVELOPMENT

103
 In long-term development strategy, GTNfoods not only focuses on profit growth but also heighten the role of
sustainable development strategy. GTNfoods’ activities are geared towards diversity, real value and sustainability
for stakeholders, including the Company, its subsidiaries and affiliates, investors, supply chains, environment and
society. Linking the sustainable development strategy of GTNfoods to the common national sustainability goals is
the guideline for GTNfoods’ action plan.

HUMAN: Maximize the personnel factor as the subject, the main resource ENVIRONMENT: use thriftily
and the goal of sustainable development, in order to meet the spiritual and effectively natural resources,
needs of all people classes. Create conditions for all communities in especially non-renewable
the society to have equal opportunity to develop, to access common resources. Preserve and improve
resources, to participate in, to contribute and to benefit, create material the living environment; build a
foundations, knowledge and good culture for future generations. learning society; Build an eco-
friendly lifestyle, produce and
consume sustainably

POLITIC: Sustainable SCIENCE AND TECHNOLOGY: SOCIETY: Closely, sensibly

development is the career of
the whole Party and people,
authorities, ministries, localities,
agencies, enterprises, social
organizations, communities and
each citizen.
Is the foundation and motivation
for sustainable developmen.
Modern, clean and environment
friendly technologies should be
prioritized for widespread use in
manufacturing industries.
and harmoniously combine the
economic development with the
social development and natural
resources and environment
protection. Ensure national
defense and security as well as
social order and safety.

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17 sustainable development goals of Vietnam until 2030 corresponding
to the United Nations sustainable development objectives

1 NO Terminate to all forms of 2 ZERO Eradicate hunger, ensure food

POVERTY HUNGER
poverty everywhere security, improve nutrition and
promote sustainable agricultural
development

3 GOOD HEALTH Ensure healthy life and increase 4 QUALITY Ensure quality, fair, inclusive
AND WELL-BEING welfare for people of all ages EDUCATION education and promote lifelong
learning opportunities for all
people

5 GENDER Achieve gender equality, improve 6 CLEAN WATER Ensure adequate and sustainable
EQUALITY rights and create opportunities for AND SANITATION management of water resources
women and girls and sanitation for all people

7 AFFORDABLE Ensure access to sustainable, 8 DECENT WORK Ensure sustainable,

AND CLEAN reliable and affordable energy AND ECONOMIC comprehensive and continuous
ENERGY GROWTH
sources for all people economic growth; Create
adequate jobs, productive jobs
and good jobs for everyone

9 INDUSTRY, Building high-resilience 10 REDUCED Reduce social inequality

INNOVATION
AND INFRASTRUCTURE
infrastructure, promoting inclusive INEQUALITIES

0
and sustainable industrialization,
0
1 and enhance innovation
0
0
1

11 SUSTAINABLE Develop sustainable rural and urban 12 RESPONSIBLE Ensure sustainable production
CITIES AND areas with resilience, ensure a safe CONSUMPTION and consumption
COMMUNITIES
living and working environment, AND PRODUCTION
reasonably distribute population and
labor by regions

13 CLIMATE Timely, effectively respond to 14 LIFE Implement conservation and

ACTION climate change and natural BLOW WATER sustainable use of oceans, seas and
disasters marine resources for sustainable
development

Implement sustainable forest Promote peaceful, democratic,

15 LIFE
ON LAND development and protection,
biodiversity conservation, ecosystem
service development, anti-
desertification, deterioration prevention
and restoration of land resources
16 PEACE, JUSTICE
equitable, civilized society for
AND STRONG
INSTITUTIONS sustainable development, provid
access to justice for all people;
establish effective, accountable and
participant institutions at all levels

17 PARTNERSHIPS Strengthen implementation methods

FOR THE GOALS and promote global partnerships for
sustainable development. Promote
peaceful, democratic, equitable,
civilized society, develop effective
institutions with accountability and
participation at all levels
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 Opportunities and challenges for GTNfoods
Despite initial difficulties during implementation, GTNfoods has gradually changed in a positive, professional tendency
and become increasingly appropriate to those new contexts above. Difficulties and challenges in the context which
requiring sustainable development have also opened up new opportunities for GTNfoods:

- “Green” and sustainable development orientations have created opportunities for GTNfoods to diversify its products,
especially cleaner, better products for public health. At the same time, they are the core of balancing between business
growth of the enterprise and social development and environmental protection.

- Rapid science and technology development has provided GTNfoods with opportunities to improve production
technology on a large scale, to learn and apply the global technological application to green growth.

- Contribute to solving local employment problems and poverty alleviation according to the core businesses of GTNFoods
root in localities including Moc Chau and surrounding Son La areas, create jobs for many generations of local labor. At
the same time, the development orientation of a clean food company also directly addresses public health issues in the
context that unknown origin food, antibiotic resistance or toxic substances has not been strictly controlled in Vietnam.

Sustainable growth model

GTNfood’s sustainable economic growth goals are always linked to environmental protection and social responsibility.
These are the three foundation factors for the company’s development in the coming years. Linking economic growth
to the environment and society shall ensure long-term interests of the stakeholders, thence towards the sustainable
development of the enterprise.

GRI standard based reports

GTNfoods’ reports are based on GRI standards set out below:

SUSTAINABLE ECONOMIC GROWTH: TOWARDS COMMUNITY AND SOCIETY:

8 DECENT WORK GRI 201: Economic performance 8 DECENT WORK Treatment for employees and
AND ECONOMIC AND ECONOMIC
GROWTH GRI 202: Market presence GROWTH sustainable employment
GRI 203: Indirect economic impacts GRI 401: Employment
GRI 204: Procurement practices

16 PEACE, JUSTICE
AND STRONG GRI 205: Anti corruption 3 GOOD HEALTH GRI 403: Occupational health and safety
AND WELL-BEING
INSTITUTIONS
GRI 206: Anti competitive behavior GRI 416: Customer health and safety

Human rights
10 REDUCED
GRI 406: No discrimination
INEQUALITIES GRI 407: Freedom of association and collective
bargaining
ENVIRONMENTAL PROTECTION: GRI 408: Child labor
GRI 409: Forced or compulsory labor

7 AFFORDABLE 12 RESPONSIBLE Society

AND CLEAN
ENERGY GRI 302: Energy
CONSUMPTION
AND PRODUCTION GRI 205: Anti-corruption
GRI 206: Anti competitive behavior
GRI 413: Local community

GRI 305, 306: Emission, 17 PARTNERSHIPS Product liability

FOR THE GOALS
effluents and waste GRI 416: Customer health and safety
GRI 307: Environmental GRI 417: Marketing and labeling
compliance

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I. SUMMARY OF FIGURES AND TYPICAL
ACTIVITIES IN 2017
In 2017, Moc Chau Milk, GTNfoods’ subsidiary had very specific activities aimed at bringing benefits
to the community, especially in Moc Chau, Son La:
1. GTNfoods & subsidiaries
participated in programs launched
by the locality, contributed
various types of support funds
to the province such as: Flood
prevention fund, Gratitude
fund, Children protection fund,
Humanitarian fund, Poverty
alleviation fund, etc and other
social and charitable activities.
2. The company paid attention
to commending and rewarding
children of employees in the
company with outstanding
learning achievements. In 2010,
Moc Chau Milk has donated
VND 187.5 million to children
in order to encourage them to
strive in the future.
3. In addition to activities for the
internal staffs, the company also
has visited families of martyrs and
wounded soldiers, supported the
traditional and historic education
center to organize activities to
express gratitude families of martyrs
and wounded soldiers with amount
of nearly VND 10 million.
4. Implementation of the green
Moc Chau - school milk program.
Provided over 3000 children in 10
kindergartens to use milk for free
monthly. In 2018, Moc Chau Milk
provided more than 62 tons of milk
and more than 3.1 tons of sugar
to the school milk program with
amount of nearly VND 1.2 billion.
5. Moc Chau Milk also has
supported Muong La’s people
suffering from floods with total
amount of VND 130 million,
donated funds for the poor, such
as building gratitude houses for
compatriots of Moc Chau district
with amount of VND 520 million
to build 25 gratitude houses.
6. Supported Lao PDR with
grass cutting machines and
disinfectants equivalent to VND
125.4 million, and assigned
staffs to transfer technology for
production.
7. Supported: Performing Arts
Festival of Farm town People’s
Committee, Tea festival of Moc
Chau plateau, Moc Chau tea
picking festival, Cultural week
of Moc Chau ethnic group with
total amount of VND 180 million.
8. Environmental protection: Moc
Chau Milk invested to upgrade
the wastewater treatment system
based on microbiological technology
of both milk processing factories,
in order to ensure the quality of
wastewater in accordance with
regulations; signed periodic
hazardous waste treatment
contracts with standard treatment
facilities. In addition, the company
actively propagated to farming
households, to implement solid
waste and liquid waste treatment
according to biotechnology standard
of the Institute of Environmental
Research for Agriculture
Countryside.
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 II. VISION, SUSTAINABLE DEVELOPMENT STRATEGY
OF GTNFOODS IN 2018-2020 PERIOD

1. Sustainable economic growth

At the end of 2017, GTNfoods completed its ecosystem including clean food products made from full and sustainable
agricultural value chains, which initially realized the goal of becoming a leading clean food enterprise in Vietnam. In the
coming years, the company will continue to increase dominant ownership in its subsidiaries with strengths, potentialities
in the food industry. At the same time, GTNfoods will promote restructuring and strong investment in core businesses
by strategically leveraging existing strengths, identifying potentialities and needs of the market, enhancing the brand
positioning, towards sustainable economic growth for Milk and Tea and Wine. In addition, GTNfoods would invest on
human resource training and corporate culture building to boost the working performance and spirit. Improving competitive
advantages and strengthening the power of communication and branding is the key to bring GTNfoods’ products closer
to consumers and at the same time create a leverage for business growth for the enterprise.

Exploring Vietnam’s mountains as raw material zones, especially Moc Chau, GTNfoods always aims to create more jobs
for local people generations, contributing to the even development of the local economy at present and in the future.

With its economic growth goals, GTNfoods directly contributes to the national economic growth goals and the
Government’s social security goals.

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 3. Environmental protection

Climate change is a matter of global concern due to the

severe change of climate in the last few decades. It not only
causes human and property losses immediately after natural
disasters but it also has a serious impact on food security in
the long-term. Vietnam is one of the countries most severely
affected by climate change and is also a country suffered
from other negative impacts of deforestation, environmental
pollution and resource depletion.

In order to protect the environment, GTNfoods is step by

step creating awareness of the thrifty and efficient use of
energy, especially Electricity and Water for the employees
to utilize and create the highest labor efficiency per unit of
consumed energy. GTNfoods pays attention to increase
the use of recycled products, continuously upgrade the
production lines, minimizeing environment polluting activities.
Especially, in the past time GTNfoods has cut down and
strictly controlled the use of toxic pesticides, turned the
2. Contribution to the social tea production process into a clean process, achieved RA
development sustainable agriculture certificates for main tea plantation,
certificates for Good Agricultural Practices in Viet Nam -
With the spirit of economic development associated with VIETGAP for crop products for most tea plantation areas.
the common development of the whole society, GTNfoods
is significantly contributing to narrowing the wealth and
poverty gap of the localities where our raw material zones
stay. GTNfoods focuses on supporting living conditions
for difficult rural areas, such as supporting poor children
and primary schools with milk. In 2018, GTNfoods plans to
build an Education fund to encourage poor children to go
to school which would improve their lives and their families
in the future. In addition, the company will continuously
implement relief activities in flood-affected areas, difficult
remote areas of the North and the Central, Vietnam.

In addition to corporate social responsibility, GTNfoods is

increasingly improving the quality of working environment,
income and living conditions for the employees in order
to ensure long-term benefits and attachment of the
employees. The company always maintains a fund for
training, building corporate culture and improving the
performance valuation system.

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