1. style and fashion
2. jewelry

2 / PNJ / Annual Report 2 12
h o n o r
t h e
04
MESSAGE FROM THE CHAIRWOMAN
08
OVERALL OUTLOOK OF THE COMPANY
10
The story of brand
t r u e
v a l u e
12Milestone
14
Growth chart
16
Merits and awards
20
BOARD OF DIRECTOR’S REPORT
24
THE SUPERVISORY BOARD’S REPORT
26
BOARD OF MANAGEMENT’S REPORT ON BUSINESS
PEFROMANCE 2012
35
RISK MANAGEMENT
38
DEVELOPMENT ORIENTATION
42
MANAGEMENT ACTIVITIES
44
Organizational structure
46
Board of director profile
50
Board of management profile
52
Board of supervisory profile
56
PNJ CULTURE
57
Corporate culture: “PNJ is our home”
58
Investor relations
60
Pnj heads to the community
62
DISTRIBUTION SYSTEM
64
FINANCIAL STATEMENT 2012
Annual Report 2 12 / PNJ / 3
MESSAGE
FROM
THE CHAIRWOMAN
Dear Valued Shareholders,
With the ongoing recession lingering throughout 2012, not only global powers but the local
economy also continued to struggle with its implications: falling growth rates, severe unemployment situation, lowering purchasing power,
and crippling public debt. Amidst that context,
recent state-enacted policies regarding gold trading were introduced, leaving huge impact on the
operation of many locally based businesses, especially gold traders. The World Gold Council
said global demand for golden jewelries in 2012
declined by 3% while the reduction figure in Vietnam are estimated at 12% for ornaments and
24% for investment demand.
Ms. CAO THI NGOC DUNG
Chairwoman - General Director
In order to successfully cope with the overall uncertainties and instabilities of not only the
economy but the industry, Phu Nhuan Jewelries
Joint Stock Company (PNJ) decided to align its
business operations with a new set of strategies.
Clearly defining the year 2012 as a turning point
for “significant reforms and internal empowerment”, the company concentrated its resources
into restructuring, core production, introduction
of cutting-edge managerial standards, cost-reduction initiatives, efficiency leveraging, and the
development of risk management mechanism. In
the recent year, thanks to these directions, PNJ
became a typical success story for sustainable
development and successfully accomplished all
KPIs agreed upon during the last Annual General
Meeting.
Last year PNJ reached an important milestone
with the erection of a new jewelry processing
plant tripling in size compared to the old one, an
obvious manifestation for the gold trader’s longterm ambition and preparedness for its 10-year
plan. The new manufacturing facilities, featuring a closed production loop, innovative procedures, strict compliance policies, manageable
4 / PNJ / Annual Report 2 12
h o n o r
loss-in-production solutions, have been put into
operation and contributed enormously to initial
increments made unto margin profits earned by
all PNJ existing business divisions.
Identifying HR and Organization Structuring
as two integral elements in the overall project,
PNJ has contracted with a well-acclaimed and
experienced HR consultant agency for the development of an innovative HR compensation plan
and performance review policy. The quality of
PNJ workforce over the past few years have been
significantly elevated thanks to recent valuable
recruits and appointments of multinational talents for senior executive positions.
PNJ has a systematic approach for POS performance review and excellent market research. In
2012 alone, the company opened 2 new trading
gold shops, 11 silver ones and all of these outlets
have succeeded to generate expected revenues.
As of December 31, 2012, PNJ is managing a nationwide network of POS numbering 167 shops.
PNJ finished the year 2012 with impressive business records: consolidated revenue of
6,777.8 billion VND; parent company’s Revenue
of 6,428.4 billion VND (equivalent to 62% fulfillment of target); consolidated net sales of 254.4
billion (equivalent to 96% of targeted sales).
Despite turbulences impacting gold bar trading,
jewelry sales increased by 3% y-o-y, making a
total volume of 3,647 billion VND, ROE standing
at 19.1%. Dividend was reached 23% regarding
2012 AGM resolution.
Hardship and adversities are expected to prolong through 2013 for both macro-economy and
the industry itself since purchasing power especially that for luxuries, has yet to express promising signs. The Board of Directors has requested
that all responsible departments formulate 2013
t h e
t r u e
v a l u e
Business Plan with great care and caution, reviewing strategic goals set for the period of 20122022 so as to make practical decisions. We are
striding ahead with a smart insight in which we
shift our focuses unto core business, efficiency
enhancement, and sustainable development,
cost monitoring, and supply diversity and valueadded benefits for customers as our fundamental
bases. Thus, we are strongly confident that PNJ
will continue to fulfill its commitments in terms of
revenue generation, share expansion, remuneration enhancement, profit growth, corporate equity, and share dividends.
The year 2013 constitutes a significant millstone for PNJ since it will reach its 25th anniversary by then. After a quarter of century in operation, PNJ prides itself for the existing position as
the flagship gold & jewelry brand for Vietnam,
a firm foothold in the mind of customers, and its
readiness for international expansion in foreseeable future. These fruits are not possible without
the enormous efforts and creativity of all PNJ
people, and equally important, the wholehearted
endorsement from all of our respected clients,
shareholders, and partners. Our continuing commitment is to strive our best for the completion
of all targeted business visions so as to stay deserved for your ongoing trust.
On behalf of the Board of Director, I would like
to express my sincerest gratitude towards the authorities, shareholders, partners, clients, and all
employees for your continuing support and contribution in every of our triumphs. I am hopeful
that you will continue your precious endorsement
for the time to come. I wish all the best for good
health, prosperity, and happiness to our shareholders, clients, and partners.
Cao Thi Ngoc Dung
Chairwoman
Annual Report 2 12 / PNJ / 5
6 / PNJ / Annual Report 2 12
h o n o r
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25 YEARS: A REWARDED JOURNEY
OF CREATIVITY
AND RESTLESS ENDEAVOR
Annual Report 2 12 / PNJ / 7
OVERAL OUTLOOK OF VISION,
MISSIONS,
AND CORE VALUES
MISSIONS
PNJ
brings
great
pride
to customers through the
provision of elaborate, delicate,
outstanding jewelry products.
8 / PNJ / Annual Report 2 12
VISION
Becoming the leading jewelry
manufacturer and retailer in
Asia and securing number one
position in all targeted fragments
in Vietnam market.
CORE VALUES
1. Honesty
Honesty is the best policy and
the highest professional code of
moral conduct to which each
individual and organization
should commit:
- Lawful profits and business
morality are the bases for all PNJ
conducts.
Build
confidence
and
transparency in the organization
to win trust
- Declare wars to eliminate any
symptoms of dishonesty.
h o n o r
2. Quality
Quality is the backbone for
survival and the standard
to which the value of each
individual and organization
should be measured.
- Ensure the quality of all
resources for the creation of high
quality products.
- Each individual commits to
carry out his/her duties at the
highest standard of quality to
ensure zero faulty items and
handing out such items to others.
3. Responsibility
Leaning responsibility as the
motivation for all business
conducts.
Place
highest
emphasis on the benefits of
customers, company, and the
community
- Each individual commits to
live in a responsible way with
his/her family, company, and
society
- Execute all tasks excellently in
voluntary, proactive, creative,
and dedicated manners.
- Seek to pioneer in the toughest
tasks with a can-do spirit.
4. Innovation
Innovation is the key to
sustainable development in any
organization
- Do not become arrogant with
past glories. Ready to learn,
ready to listen, ready to apply
something new and acquire
t h e
t r u e
v a l u e
new knowledge, experience, as
well as expertise
- Innovate continuously in order
to leverage benefits for the
organization
5. Creativity
Creativity is the essence to make
a difference and stands out from
the crow
- Meeting customer expectations
is the directive of creativity
Each
individual
and
organization
commits
to
empower creativity without
fails; combining this merit
with the working spirit, sense
of responsibility, and passion
to create new products and
features that truly excel
Annual Report 2 12 / PNJ / 9
THE STORY OF BRAND
PNJ Gold Jewelry
PNJSilver
Officially established in Vietnam since 1989,
PNJ has asserted its leading position as a pioneer
brand in Vietnam jewelry industry through the
exquisite products, various designs and superior
quality. As the first jewelry brand in Vietnam
possessing the extensive distribution system,
PNJ proudly builds a strong consistency of brand
identity, product quality, service and business
policy. These have made PNJ different and
outstanding compared to innumerable brands
joining the retail market, created the peace of
customer’s mind, and protected the interests of
consumers across the country.
Launched in 2001, PNJSilver is the first silver
jewelry brand in Vietnam. Its mission is “Bring
to young customers the modern beauty style, and
be the ideal gift for special occasions”
Nearly 25 years of development, PNJ is
constantly creative to continually bring in
hundreds of diverse collection of gold material,
abundant gemstone and breakthrough design
contributing to the beauty, elegance and class
of Vietnamese consumers. The collections such
as Golden Happiness, ECZ Jewelry (Excellent
Ziconia Cubic), Diamond Jewelry and so on are
testaments to the peak level of craftsmanship
confirming its mission which is “Bring pride to
customers by exquisite jewelry with outstanding
quality.”
10 / PNJ / Annual Report 2 12
To confirm its pioneer position leading the market
with a youthful and modern style, PNJSilver often
introduces new collections following latest trend
and much more marketing communications
towards young consumer.
With the distribution of 130 stores nationwide,
PNJSilver has constantly endeavour to take aim
at being a fashion icon for young customers and
leading fashion jewelry brand with outstanding
quality and reasonable price.
h o n o r
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CAO FINE JEWELLERY
JEMMA
To strengthen its leader position in jewelry
industry in Vietnam, PNJ company has launched
to the market a very high-end jewelry brand
CAO Fine Jewellery in 2005. Consumers choose
premium brands because of the uniqueness
and creativity of design, the elaborateness and
elegance of masterpieces. Especially, CAO Fine
Jewellery provides tailor-made service which
encourage customer create their own style based
on their requirement and preferences of design
- a service that not many brands could always
deliver and satisfy.
Jemma is a jewelry and fashion accessories
brand that was introduced to the market in late
2009. With the mission of “Sparkle the beauty
of modern women by jewelry and fashion accessories”, Jemma has become the first choice
of young customers, especially female officer.
Jemma products not only emphasize the experience & emotion that come with each piece, but
also represent quality, emotion, and mindset of
woman.
Although Cao Fine Jewelry is a young brand, it
has caffirmed its position in the premium market
segment and is capable of competing with
international jewelry brand in Vietnam and the
region.
With 25 years of restless effort and creativity, PNJ has introduced
new jewelry brands that fit in various demand and different taste of
customer. Sharply the brand story has described how PNJ has transformed and professionalized our operation - It’s also the route of
“honoring the true value” whereas every specific brand has their own
true value, unique quality and reflected true decent beaty of our distinguished customer.
Annual Report 2 12 / PNJ / 11
MILESTONES
Established Hanoi
branch - first
branch outside
Ho Chi Minh City,
starting outreach
in big cities
nationwide.
Be voted at
“Vietnamese High
Quality Product”
for the first time.
1998
1994
1988
The Phu Nhuan Gold &
Silver Store, precursor of
PNJ
1992
Upgrading to Phu
Nhuan Jewelry
Company from The
Phu Nhuan Gold
& Silver store then
invested in modern
production line. The
company positioned
itself as a professional
processor and trader
of jewelry products.
Being co-founder of
Đông A bank
12 / PNJ / Annual Report 2 12
1993
First time
introducing
necklace
and molded
jewelries
produced
by Italian
technology
1995
This stage embarked
PNJ’s initial efforts
of brand building
professionally which
was supported by
World Gold Council
(WGC).
Also in this year, PNJ
first time joined Hong
Kong International
Jewelry Exhibition.
The company
received a merit
certification for ISO
Quality Management
System bestowed by
DNV.
2000
h o n o r
2001
PNJ Silver
was officially
launched
Celebrating 15th
anniversary, reached
1000 employees. PNJ
intensified building
corporate culture
named “ We are
family”
2004
t h e
t r u e
v a l u e
2008
Becoming a Joint Stock
company then ranked in
Top 500 Largest Retailer
in Asia Pacific by Singapore based Retail Asia
Magazine.
2005
2007
Officially
launched luxury
brand - Cao Fine
Jewelry.
Repositioning
PNJ Silver.
Being co-founder
of Dong A Land
Initially entering
America market.
PNJ became
one of the
200 biggest
enterprises in
Vietnam as
reported by
UNDP.
On April 3, 2008, PNJ
officially announced
its change of logo,
introducing itself with
a more modern and
professional look.
Becoming the official
jewelry and crown
sponsor for 2008 Miss
Universe hosted by
Vietnam.
2009
Listed in
Hochiminh
stock exchange
(HOSE).
2012
2012
The company
inaugurated new
PNJ Jewelry
Factory - a
largest factory in
Vietnam
Annual Report 2 12 / PNJ / 13
GROWTH CHART
14 / PNJ / Annual Report 2 12
h o n o r
t h e
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v a l u e
10/2012: Inauguration of the PNJ
New factory
Annual Report 2 12 / PNJ / 15
MERITS & AWARDS
2
1
3
1. Award-winner of 16 consecutive Titles of Vietnamese
High-Quality Products
2. Bestowed Title of National Brand by the Government
(2010,2012)
3. PNJ became Top 50 Best-Performing Enterprises in
Vietnam (June 19, 2013)
4. PNJ was voted in Top 500 Asia-Pacific Retailer by Retail
Asia Magazine (Singapore).
5. PNJ received honor for the title of “Gold Quality of
National Brand’’ 2011
6. PNJ became on of 3 Vietnamese enterprises to receive
the award for Quality Product of Asia-Pacific 2011
7. PNJ join the rank of 500 Leading Retailer in Asia-Pacific
16 / PNJ / Annual Report 2 12
h o n o r
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1.NATIONAL BRAND CUP
2.VIETNAMESE GOLDEN STAR CUP
3.QUALITY PRODUCT OF ASIA PACIFIC TROPHY
4.TOP 500 LEADING RETAILER IN ASIA
PACIFIC
5.TOP 50 BEST- PERFORMANING ENTERPRISE IN VIETNAM
4
5
and top 3 biggest retailer in Vietnam (2011)
8. PNJ received certificate and trophy for Vietnamese
High Quality Products in 2006, 2007
9. PNJ received certificate and trophy for Strong Brands in
2006 and 2007
10. PNJ received certificate and trophy for Best Viet Brands
in 2007
11.PNJ received certificate and trophy for Vietnamese
Golden Star Award in 2003, 2005, 2007
12. PNJ received certificate and trophy for Vietnam Record
as “the first enterprise to invest in the most cutting-edge
technologies at the largest production scale in jewelry
processing” (2007)
13.The President of the State awarded PNJ with ThirdClass Labor Medal (June 12, 2008)
14.The President of the State awarded PNJ with First-,
Second-, and Third-Class Labor Medal in 1995, 2000,
and 2003, respectively
15. PNJ was awarded a Flag of Honor for 20th anniversary
(1988-2008) by the People’s Committee of HCMC
Annual Report 2 12 / PNJ / 17
18 / PNJ / Annual Report 2 12
h o n o r
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2012:
THE YEAR OF REFORMS
AND INTERNAL STRENGTH GAIN
Annual Report 2 12 / PNJ / 19
BOARD OF DIRECTOR’S
REPORT
With a foresight that Vietnam economy is stepping into a
transformation with many changes in macroeconomic policies,
contemporaneously affected significantly from the global
economic uncertainty, from the beginning of 2012 Board of
Director determined this time would be a challenging period for
PNJ and other enterprise. To cope with the difficulties from the
business environment and to strengthen the leading enterprise
position in the industry as well as to move to a new development
period, enterprises must have appropriate and flexible strategic
orientation. Two main targets aimed by General Assembly are
increasing operational effectiveness and administrative system
restructuring. In 2012, administrative system restructuring
must be at highest priority in order to maximize the internal
strength and create a solid foundation for a next stronger
development period.
Board as following:
1. O p e r a t i o n a l
Administration: Board
overview 2012:
“The year 2012 is a milestone
of Management and
As expected, Vietnam
on
the
way
to
the
reform
Foreign Consultant are
and global economy
and strategic achievements
directed to conduct
have seen a year full
of
PNJ.”
restructuring project
of difficulties and
and completely build a
fluctuation, gold price
development strategy
fluctuated with large
amplitudes. Besides, new government policies to 2022. Not just stop at gained achievements,
about administrating gold market were also by cooperating with Foreign Consultant to build
one of the factors directly affected PNJ business an appropriate long-term strategy, PNJ initiatively
brings itself to a new level, step by step completes
operations.
For many objective and subjective reasons, 2012 the target to be the leading jewelry company in
operational result was not as expected, mainly due Asia - Pacific area. According to that, the key
to the decline of gold bar revenue. However, this target currently is increasing competitive capacity,
is not a key business of PNJ because of occupying strengthening and developing the workforce,
a low percentage in profit, so although its revenue increasing the effectiveness of business and
just was at 63% of plan, profit was affected manufacturing activities.
insignificantly. Unconsolidated profit after taxes The BOD approved the strategic orientation, new
and consolidated profit after taxes achieved 95% operational structure more appropriate with new
development period. Continuing hiring consulting
and 96% of plan respectively.
Difficult economic situation is one of the main experts to rebuild the salary system (pay structure,
reasons for goods consumption declining. In other compensation plan) combining with reward policy
hand, according to the orientation agreed by the to attract and keep the high qualified personals.
Board, this year will be focused on restructuring, The changes initially get positive responses and
a start for company’s strategic changes. Details increase employees’ working effectiveness.
relating to main activities are directed by the Manufacturing: completed and started to operate
20 / PNJ / Annual Report 2 12
h o n o r
the new jewelry workshop which is one of the
largest jewelry workshops in the region. Ready
for a strongly developing and expanding period in
near future.
Applying modern IT platform in administration,
combining with industrialized and closed
manufacturing process to increase operational
effectiveness of the workshop.
Business and system expansion: Directing to
analyze business effectiveness of each range of
product and sell positions.
Establishing
administrative
department,
researching and expanding the retail system,
operating professionally with target bringing the
optimize effectiveness for the distribution system.
Applying new marketing strategy, more flexible
and closer to the market situation. Regularly
assessing the effectiveness of outlined strategies
and conducting appropriate changes.
Investment: Besides opening the new jewelry
workshop, PNJ Phu Nhuan Jewelry Centre
Building project was also completed. This is the
largest jewelry centre in the country, contributing
to prove the position and high class of PNJ brand.
Divestment from Dai Viet Gas company helped
earn 40 billion VND profit, initially decreasing in
financial investment.
2. Shareholders Meeting resolution conducting
2012 and Board of Directors meetings organizing:
The new Board of Directors officially started the
term of 2012 - 2017 on April 14, 2012 according
to Annual Shareholder Meeting Resolution 2012.
In 2012, Board of Directors organized 36
periodical meetings, issued 39 resolutions,
approved important contents and conducted tasks
of the 2012 Shareholders Meeting resolution as
following:
- Paid 5% cash dividend for the 3rd time of 2011
and reserved funds following section 7th of the
Resolution.
- Advanced 10% cash dividend for the 1st time of
2012.
t h e
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-Chose Ernst & Young as auditor for 2012
financial year.
-Issued bonus shares to existing shareholders,
quantity 11,999,828 shares in par value. Not
yet issued individually to strategic partners
and company’s staff due to unfavorable market
condition.
-Amended Company Organizing and Operating
Charters as suggestion of HCMC Securities
Exchange, appropriate with standard charters and
actual situation of company.
-Used surplus fund and development fund to
completely build the new jewelry workshop at
Duong Quang Ham Street, Go Vap District as
scheme approved at Shareholders Meeting.
3. Board of Directors’ strategy orientation of
company operation in 2013:
Realizing 2013 is still a hard year; PNJ needs to
conduct the restructuring project thoroughly as
soon as possible and quickly bring into play the
company’s available advantages. Focusing on
developing core businesses (jewelry manufacturing
and business), accelerating the expanding of
market share to both wholesale and retail channel.
With appropriate development strategies, Board of
Directors expects satisfactory operational results
with revenue growing by 21% and gross profit
growing by 18%.
To accomplish planned targets, Board of Directions
orients detailed strategy for main activities of
company in 2013 as following:
-Administration: Accelerating the conducting
next steps of strategic project, perfecting the
administrative system by the new operational
structure. Supplementing management vacancies,
at the same time assessing and replacing
inappropriate vacancies. Focusing on training
programs, developing young and dynamic
managers.
Board of Directors will closely supervise and
assess operational results via planned targets.
-Manufacturing: Bringing into play the new
jewelry workshop’s ability.
Annual Report 2 12 / PNJ / 21
Improving administration according to new
manufacturing process with the target of
maximizing
industrialization.
Constantly
researching, studying the newest jewelry crafting
method combining with scientific management
process to enhance product quality, reduce cost
and lost. Supplying fully requirements of business
department with a competitive and appropriate
22 / PNJ / Annual Report 2 12
cost.
-
Business: Developing through expanding
distribution system, enhancing customer service
quality to increase trade frequency.
Building solutions to maximize revenue per each
business usable area unit. Applying marketing and
media strategies focally and effectively. Constantly
and regularly assessing to bring new solutions
h o n o r
timely.
- Controlling: being focally improved, perfecting
risk management process, both market risk and
policy risk. At the same time, ensuring to abide
orientations and regulations of the Board.
-Investment: quickly completing and starting to
operate “Thu Khoa Huan Touring Mall Center”
project, contributing to bring PNJ brand closer to
t h e
t r u e
v a l u e
international tourists.
Supervising, assessing and delivering effective
exit solution for current investments.
With the enthusiasm and constant effort, Board
of Directors willing to build up the company and
believes PNJ will develop more and more strongly
in the future.
Annual Report 2 12 / PNJ / 23
EXECUTIVE REPORT
FROM
THE SUPERVISORY BOARD
The
Supervisory
Board
conducted its functional
roles of governance control within its designated
areas and responsibilities,
with detailed report for
2012 operations as bellows:
1. BOARD OF DIRECTORS’ OPERATIONS
- The Board of Directors fulfilled its role in executing
all action items having been previously agreed upon
in 2012 Board of Directors’ Resolution. In addition,
the Board specified implementation strategies for
the achievement of principal goals and targets as
supposed for its current tenure.
- The Board of Directors came up with significantly
accurate insights of market conditions when
proposing key performance factors (KPIs) to achieve
in 2012. Besides, the Board of Directors provided
great extents of assistance and support to the Board
of Management and contributed remarkably to the
24 / PNJ / Annual Report 2 12
capturing of substantial profits for PNJ within the
context of a fast-moving and complicated market
situation.
- All resolutions adopted by the Board of Directors
indeed bore much resemblance to reality as well as
with existing market forecasts. They proved fitted
with current PNJ internal powers and external
impacting factors. In the light of these practical
resolutions, the Board of Management carried out
PNJ operations and gained considerable advantage
for the company.
-The Board of Directors, each member of which
carried out operations with respect to his/her
delegated tasks, placed the sole emphasis on
corporate and shareholder benefits as its permanent
and unchanging vision.
-Each member of the Board expressed his/
her passionate, responsible, and wholehearted
professional behaviors, all for the common benefits
reserved by PNJ. The Board executed its task list in
the way that ensured strict obedience with internal
regulations and existing laws.
2. BOARD OF MANAGEMENT’S OPERATIONS
h o n o r
The Board of Management conducted successfully
all resolutions of general meetings as well as those
passed by the Board of Directors. Furthermore,
it played an active role in effective and timely
organizational restructuring for long-term perspective
of sustainable growth.
a. Administrative - Human Resources
- The Board of Management concentrated its efforts
on the development of a quality talent pond, resource
planning, key staff retention for long-term career
contribution, and execution of HR standardization
and performance review project, which is featured
by the introduction of a KPI system for PNJ people
with consultancy from Hay Group.
-The Board of Management conducted training
sessions to enhance staff awareness of PNJ core
values and their positive influences. It also helped
to timely take in a number of key staff members who
were properly trained to fill up important vacancies
at the company.
- The Board of Management properly oversaw all of
the company’s expansion and maintenance plans,
including construction and fixing of warehouses and
outlet stores in order to provide immediate responses
to growing production and sales demands while
ensuring economical uses of investment resources
and safety conducts.
b. Production
-The Board of Management successfully put into
use another large-scaled modern jewelry processing
plant in which different lines of production were
logically positioned and strengthened with cuttingedge technologies of the industry. As a result,
new production facilities enabled the company
to formulate a reasonable production plan while
opening up more opportunities for production cycle
shortening and efficient risk management.
- The Board of Management successfully enhanced
several production-related factors such as Cost of
Production Monitoring, Loss in Production Reduction
(resulting in Price Cuts), Product Competitiveness,
and so on.
c. Sales
- The Board of Management helped to expand the
network of PNJ outlets in a cautious way basing
t h e
t r u e
v a l u e
upon carefully conducted market researches. It
also contributed in the promotion of customer care
quality, successful introduction of new inventory &
display solutions, and rapid growth of wholesale
channel, flexible price policy, and effective risk
management.
- The Board of Management was proactive in brand
promotion and management. It also assisted strongly
in the brand-based categorization of products and
spearheaded the jewelry demand line nationally.
d. Accounting - Investing - Finance
-PNJ financial health was maintained in good
condition, which was clearly indicated by some
its critical performances on some aspects and the
company’s compliance with existing Vietnamese
legal duties governing accounting industry and
internal charters of itself.
-Internal supervisory and independent auditing
operations, which were objectively carried out,
helped make available reliable financial reports and
audit letters.
-Close inspection of financial investments was
assured while the case of investment capital
transferal of Dai Viet Energy Company brought in
40,250,000,000 dong for PNJ.
3. SUPERVISORY BOARD’S OPERATION PLAN IN
2013
The Supervisory Board will assume its responsibilities
with shareholders and the company in order to fulfill
its roles as regulated by existing laws, Company
Charters, and the Operation Regulations of itself. The
Board is supposed to execute its general actions in
2013 as bellows:
- Corporate financial watch; legal validity check for
all movements made by the Board of Directors, the
Board of Management, and other executive in the org
chart. Monitoring of all coordinative efforts between
the Supervisory Board with the Board of Directors,
the Board of Management, and shareholders.
- Progress follow-up for all resolutions approved by
AGMs, internal decisions and directives ordered
by the Board of Directors. Supervision of internal
regulation compliance
-Other functions and duties in adherence with
existing laws and internal rules of PNJ.
Annual Report 2 12 / PNJ / 25
BOARD OF MANAGEMENT
REPORT
ON BUSINESS PEFROMANCE 2012
2012 - The year of reforms
and internal strength
gain. The starting year
to restructure the
administrative system in
order to premise for a
new period of strong and
sustainable development,
focusing in jewelry
manufacturing and
selling - are core business
and advantages of PNJ.
2012 is the first year to
begin to restructure the
administrative system in
order to premise for a
new period of strong and
sustainable development,
focusing in jewelry
manufacturing and
selling - are core business
and advantages of PNJ.
I. VIETNAM MACROECONOMIC AND GOLD
MARKET OVERVIEW 2012
2012 was a hard year for the world and
26 / PNJ / Annual Report 2 12
Vietnam. The European sovereign-debt crisis still
has not solved thoroughly; political conflicts in
the Middle East and disputes in island areas once
again contribute to hinder the recovery of global
economy. Beside common difficulties of the world,
Vietnam also has to face with specific problems:
-CPI has only risen 6.81% compared to the
18.13% growth rate of 2011. CPI rised essentially
because of the rising in price level of governmentregulated fields such as health services, education
and effect of electric and fuel price increasing.
Purchasing power and consumer confidence
decreasing are also the reason.
-From early 2012, the Government reset the
target of focusing more on controlling inflation
instead of economic growth. 2012’s GDP growth
rate is 5.03%, lower significantly than 6% of plan.
This is also the lowest growth rate in the recent
20 years, just higher than 4.8% of 1999 - the year
severely affected by the Asian financial crisis.
In particular about the gold jewelry market,
global consumer demand in 2012 decreased 3%,
corresponding to the decreased rate of 12% of
Vietnam market (source: WGC Q4/2012 report).
Moreover, changes in macroeconomic policies
also affected significantly to consumers and firms
in gold industry.
Besides challenges in business environment,
2012 is a pivotal year in 10-year strategy in order
to premise to bring PNJ to a new level, develop
more strongly and more sustainably, and approach
to the international corporate standard. The
h o n o r
company has focused resources on the corporate
restructuring project. About the business operating
result, gross consolidated revenue reached VND
6,777.8 billion. Parent company’s revenue reached
VND 6,428.4 billion (equivalent to 62% of plan)
and consolidated profit after tax reached VND
254.4 billion (equivalent to 96% of plan). Gold
t h e
t r u e
v a l u e
bar business’s revenue declined dramatically due
to the effect of macroeconomic policies, the main
reason of the declining revenue, yet, this part has
a low profit margin, contributed only 4.5% to gross
profit. Core business is gold jewelry business,
which has still developed stably with revenue of
VND 3,647 billion, raised by 3%.
II. OVERVIEW OF THE IMPLEMENTATION OF THE PLAN OBJECTIVES:
Unit: billion VND
No
Items
Plan of 2012
Implementation of 2012 % Implementation/ Plan
Total Revenue
Charter Capital
Profit before tax (non-consolidated)
Profit after tax (non-consolidated)
Profit before tax (consolidated)
Profit after tax (consolidated)
Dividend
III. REVENUE AND PROFIT BY BRAND
REVENUE STRUCTURE
PROFIT STRUCTURE
Gold Jewelry
Gold bar
Silver bar
Other
Annual Report 2 12 / PNJ / 27
57
1 | PNJ Gold
total
revenue
74
gross
profit
Unit: billion VND
Plan
% Increase/
Decrease
% Implementation/
Plan
Revenue
Gross Profit
a. Revenue:
With 3 main sale channels such as: wholesale,
retail and export, which contributed 55%, 43%
and 2% of percentages respectively to PNJ Gold
brand revenue.
In 2012, wholesale segment was a highlight for
getting over the general downtrend of the market, reached the growth rate of 8%, the highest
among channels. The next was retail segment,
maintained the revenue compared to 2011.
Beside the advantage of a strong brand, PNJ goes
beyond the competitors and this swimming upstream result is the crystallization of the tireless
efforts of entire company’s Board of Management
and staff.
Realizing 2012 is the year of multi-faceted
problems, turning advantages into profit requires
flexible management in business policies. Board
of Management regularly assessed market situation and issued newer and more appropriate sale
policies and new marketing strategies with each
market situation. Hence, while most fashion and
luxury goods industries being declined in revenue, gold jewelry revenue of PNJ still grew stably.
Export segment, in particularly, due to the lasting
predicament of European and American market,
affected severely to business activities of large
jewelry companies, which are PNJ’s clients.
However, with the company efforts, PNJ hasn’t
only kept traditional customers but also received
many orders from new customers. In the end of
2012 and the early of 2013, number of orders
28 / PNJ / Annual Report 2 12
increased, promising a more dynamic 2013.
b. Distribution system:
Total PNJ Gold stores nationwide counted until
December 31st 2012 are 57, increasing 2 stores
compared to that of the end of 2011.
c. Gross profit: grew 9%, higher than revenue
growth rate
Quick increasing profit somewhat reflects the
result of company restructuring. Despite official
application from Q3/2012, new administrative
model began to reduce cost, improve profit margin from 10.6% in 2011 to 11.2% in 2012.
Thanks to the change of management procedure
in manufacturing combining with scientifically
general cost management method, profit margin
of almost sale channels increased: wholesale segment grew 15%, retail segment grew 10%.
In August and September of 2012, jewelry workshop was moved from headquarter at Phan Dang
Luu street to Duong Quang Ham street, Go Vap
District with usable area of nearly 12,000 m2,
3 times larger than the old workshop. Although
the manufacturing was interrupted, a new spacious and larger size workshop is needed for PNJ
nowadays development and demand for the next
10 years plan.
With the large manufacturing area, closed manufacturing model is applied thoroughly, waste
costs are reduced significantly, contributing to
raise profit margin of most sale channels.
h o n o r
t h e
t r u e
v a l u e
2,42 18,84
2 | PNJ Silver
occupied
revenue
gross
profit
Unit: billion VND
Plan
% Increase/
Decrease
% Implementation/
Plan
Revenue
Gross Profit
a. Revenue:
90% revenue came from domestic market and
10% from export business activities. In domestic market, there are 2 main important areas in
HCMC and Northern area (includes Hanoi and
neighbor provinces) with revenue ratios are 64%
and 21%, respectively.
PNJ Silver products are fashion jewelry goods
with target customers are students and medium
income young adults. Economic downturn has
affected greatly these people’s income, so the
shopping habits are also changed.
Latest report of Nielsen Vietnam shows that 63%
of surveyed customers cut down expenditure for
fashion goods in 2012. Customers focused only
on essential products and considered expending
more carefully.
Facing with great challenges from the business environment, Board of Management has
observed closely, issued reasonable distribution
system expansion plans combining with attractive marketing, PR and promotion plans in order
to raise demand, attract customer, which resulted in gaining satisfactory results last year.
inevitably affected.
c. Distribution system:
Last year PNJ opened 11 stores, which concentrated in HCMC and northern provinces. As of
December 31st, 2012, there are 88 PNJ Silver
stores in nationwide.
b. Gross profit:
To stimulate demand and attract customers, promotion programs are necessary. Many promotion
events with discount rate up to 20-30% attracted
a lot of customers.
This is also a way for PNJ to share the difficulties with customers; therefore gross profit was
Annual Report 2 12 / PNJ / 29
occupied
revenue
3 | Gold bar
gross
profit
Unit: billion VND
% Increase/
Decrease
Plan
% Implementation/
Plan
Revenue
Gross Profit
Gold bar business was considered as an unpredictable activity due to high sensitivity with
macroeconomic policies. Last year, the policy
of tightening manufacturing and selling gold
bar activities (Government Decree 24/NĐ-CP)
made many people worried about owning gold
bar hence making the business investment demand declined. According to WGC Q4/2012
report, gold demand for investment last year in
Vietnam market declined 24%, particularly in
Q4 declined 38%.
However, because of low marginal profit, this
business activity contributed insignificantly to
total profit, only 4.7% of company’s 2012 gross
profit.
Gross profit: marginal profit was relatively stable, total absolute value declined 67% corresponding to revenue decrease rate of 70%.
4 | Other business activities
0,25 2,17
occupied
revenue
gross
profit
Unit: billion VND
Plan
% Increase/
Decrease
% Implementation/
Plan
Revenue
Gross Profit
Concerning with other services and
watches distribution of PNJ, contributed
30 / PNJ / Annual Report 2 12
insignificantly to revenue and profit of the
company.
h o n o r
t h e
t r u e
v a l u e
2012 marked a renewal process with the completion of a
larger and more modern jewelry workshop, completion of
strategic consultant project and beginning to restructure
the administrative system to increase the effectiveness of
financial management.
IV. TYPICAL FINANCIAL RATIOS
1. Liquidity:
Quick Ratio and Current Ratio were always at
safe level and Current Ratio is always higher than
1. Liquidity Ratios partly reflected the specific of
a jewelry enterprise in which loans are virtually
transformed into inventory - which occupies a
large percentage in total short-term assets.
Quick Ratio is approximately equal to 0.5.
However, the difference between PNJ and
other jewelry companies was the high liquidity
of inventory. More than 95% of inventory was
gold products - a special kind of product that
has higher liquidity than other common goods,
especially in Vietnam market.
Company’s debt situation was controlled well
and appropriately. Budget department always
dynamically looked for sources of equity at lowest
cost. Company’s capital structure was always
approximately equal to 1, lower than the average
level of the industry showing the stability and
caution in PNJ’s financial management model.
2. Profitability:
Despite the decline in revenue and profit,
profitability indicators increased outstandingly.
The percentage decrease of gold bar and increase
of gold jewelry which has much higher marginal
profit in revenue were the main reasons of the
profit improvement to the company.
Percentage of gold bar and 24K gold in revenue
reduced from 79% in 2011 to 41% in 2012,
resulted in increasing strongly the percentage of
gold jewelry in revenue (from 20.4% to 57%).
Changing in revenue structure helped raised the
gross profit 132%, reached 8.6%. Profit before
taxes/ net revenue and Profit after taxes/ net
revenue ratio also grew 2.5 times.
Profitability ratios’ growing is an inevitable trend
of PNJ’s future when gold and silver jewelry
business are bringing into play advantages and
affirming the role of a core business of PNJ.
Profit after taxes on total assets ratio grew slightly.
In particularly, Profit after taxes / equity ratio
decreased due to the raising equity from VND
600 billion to 720 billion from capital reserves
in Q4.
Annual Report 2 12 / PNJ / 31
V. INVESTMENT ACTIVITIES
In 2012, PNJ conducted divestment from its
subsidiary company named Dai Viet and earned
VND 40.2 billion profit. Until December 31st,
2012 total investments in subsidiaries and
financial investment activities of PNJ were 764
billion VND, decreased 4% compared to the
same period in 2011.
Investment activities did not have many changes.
The total dividend earned in 2012 was VND
67.5 billion, mainly relating to investments in
EAB, SFC and Que Huong.
*Subsidiaries’ business activities
-CAO Fashion Ltd. Co.: VND 10 billion of
charter capital; 2012 revenue reached VND 73
billion, decreased 12% compared to 2011 (VND
No. Name
I
Subsidiaries 83 billion). Until late 2012, distribution system of
CAO consisted of 23 stores, remained the same
with 2011.
- PNJ Laboratory Company Ltd.: VND 10 billion
of charter capital; 2012 revenue reached VND
6.9 billion; profit after taxes reached VND 972
million.
VI. KEY MISSIONS IMPLEMENTATION
Instead of targeting an impressive growth in shortterm, the restructuring of PNJ and performance
improvement are considered as core basis for
strong and sustainable growth in the future by
the Board of Management.
With orientation of increasing value-added
in long-term for shareholders, in 2012 after
finishing the strategic consultant project, Board of
% Ownership
31/12/2012
31/12/2011
20,00090,000
Vinagas
-
-
70,000
CAO Fashion
100%
10,000
10,000
PNJ Laboratory 100%
10,000
10,000
II
Joint venture Conpany
230,475 230,475
SFC
49.99%
138,609
Dong A Land
30.62%
91,866
III
Others
513,242474745
Que Huong Liberty
2.6%
42,500
42,500
Dong A Bank
7.7%
395,272
356,775
Sai Gon M&C
5%
65,380
65,380
Hoang Minh Giam
10,090
10,090
IV
Reservation
(43,341)(34,178)
TOTAL
32 / PNJ / Annual Report 2 12
720,376
138,609
91,866
761,042
h o n o r
Management and all staff of PNJ have embarked
in restructuring the company in accordance with
the approved plan.
1. Manufacturing Activities
On 18/10/2012, new jewelry workshop was
officially inaugurated with investment equity of
nearly 120 billion VND, total usable area up to
12,500m2, which was one of the largest jewelry
workshops in Asia. Official opening of the new
jewelry workshop is not only an affirmation for
the position of a leading enterprise in the industry;
it also marks a new step of PNJ development on
the way to the top.
Although the new jewelry workshop only
operated in the last 4 months of 2012, it achieved
many satisfactory results.
- Reducing operational cost; closed manufacturing
procedure; increasing industrialized contents in
manufacturing, hence reducing manufacturing
cost and waste. Also, contributing to increasing
gross profit
-
Carrying on applying ERP system, a
manufacturing module, to ease the managing
process.
-Spacious working environment, convenient
common activities and resting space makes
employees
feel
comfortable,
increasing
productivity.
-In 2012, many training classes to increase
working standard and awareness about change,
working quality self-control were organized,
helped increasing workshop workforce quality.
Despite determining the relocation of workshop
is necessary, the progress of production and sales
due to production interruptions during the two
months of relocation was inevitable affected.
This is also one of the causes for slow growth in
revenue in 2012.
t h e
t r u e
v a l u e
2. Administrative - Human Resources
Being one of the key goals in the company
restructuring strategy, Administrative and Human
resources activities in 2012 were improved a lot
on the way to become an international standard
company model.
-With the consultancy of strategic consultant
company, new management model was
approved and applied in 2012. Implementing
new layout, re-appointing leadership positions
and suitable job titles. Recruiting more personnel
having long time experience working in
senior management positions in multinational
companies, contributing to the quality of human
resources.
-
Ratifying cooperation project with HAY
GROUP workforce consultant to build a job
description and assessing each position table,
onward to build a set of capacity dictionary.
Initially applying new KPIs in achievements
management.
-Going on conducting awareness raising about
change and core values program of company on
all staff.
With high effort in restructuring and making PNJ
developing far further, Board of Management
considered workforce quality improving is a
prerequisite factor to build and operate the
system effectively. 2013 is premised with
stronger reorganizing to bring into play people
strength in PNJ operation system.
3. Distribution system developing
Until 31/12/2012, PNJ and CAO store system has
167 stores, including 57 PNJ Gold stores, 88 PNJ
Silver stores and 22 CAO & Jemma stores.
System expanse was assessed carefully, focusing
on the quality instead of the quantity of stores. In
2012, the company opened 2 PNJ Gold stores
Annual Report 2 12 / PNJ / 33
and 11 PNJ Silver stores. Thanks to carefully
researching, almost newly opened stores reached
expected revenue and operated effectively.
relating personnel can use ERP proficiently in
tasks, information accessing thus becomes more
accurate and quick.
4. Financial management and IT
Management activities are pushed up;
Management accounting and Financial analysis
Department are developed.
In 2012, all PNJ staff has strived to build a
strategy for 10-year (From 2012 to 2022), carried
on restructuring, enhanced professionalism,
strived in all manufacturing and business
activities. Although sales and profits PNJ did
not achieve as plan, but revenue and operating
profit in the core jewelry gold business still grew
over the same period proving the internal value
within the brand value of PNJ.
Table of financial indicators about profitability,
liquidity and operational capacity is tailored for
each sale channel and each product range so
supervision can be more closely. Many modern
measurement methods are applied to count
frequency of successful deal, inventory turnover…
ERP - Xman management program was built
completely last year which was a big advantage
for company’s management activities. Almost
34 / PNJ / Annual Report 2 12
h o n o r
t h e
t r u e
v a l u e
RISK
MANAGEMENT
Facing with risks in corporate operation is inevitable. Understanding the nature and characteristic of risk is the key
to prevent and deal with risk, ensure a sustainable development. With broad experience in jewelry field, PNJ’s Board of
Management aware that: “building risk management system
for entire manufacturing and business activities and constantly improving the system which means self-building
great strengths for the company.”
1. RISK MANAGEMENT IN BUSINESS
STRATEGY
From the early days of the company, Board of
Management saw the strong development
potential of jewelry industry in Vietnam and
global market when customers demand more and
more increasing. Long-term strategy was issued
with main targets: building a credible brand,
capability to spread throughout every province
in Vietnam, and reaching out to global market.
-To achieve this objective, must first build an
appropriate business standard, this is becoming
a both jewelry manufacturing and business
enterprise. This model allows PNJ manage product
quality strictly, take the initiative in management
and increase value for shareholders. By the end
of 2012, yield production and consumption
per year reached over 2 million products. The
company continues to maintain the position as a
jewelry manufacturing and retailing company in
Vietnam for many years.
-
Appropriate business strategy for each
development stage.
oFocus on brand building based on five core
values: credibility - quality - responsibility creativity - innovation.
oTake the initiative in training skilled workforce.
Every year, beside training programs, PNJ also
organizes competitions to motivate the staff to
always self-train.
oConstantly improve manufacturing process
oStrategies to expand the distribution system are
researched carefully, closely followed the market
development. Efficiency is the top priority. In
2012, all 14 newly opened stores achieved sales
expectations just after 2 to 3 months of operation.
Despite being stable with the position of a
leading enterprise, beyond other business rivals,
Board of Management doesn’t therefore cease
to learn. In late 2011, PNJ signed a consultant
contract with strategic consultant partner to
complete development plan for the next 10
years. With many years experience working
with leading jewelry companies in the world,
consultant company has come up with specific
strategy for each stage and plan to re-evaluate
after each stage of implementation.
2. BUSINESS ENVIRONMENT RISK
Political risk: This is said to be the most
unpredictable risk that has a major impact
on business performance of the company.
The company always follows the guidelines
and policies of the Government to develop
appropriate action plans
In 2012, the Government decree of 24/ND-CP
(applied from 25/05/2012) stated that Central
Bank monopoly in producing gold bar, affecting
the business of gold bar including the PNJ, but
did not affect the main product of the company
Annual Report 2 12 / PNJ / 35
- jewelry gold. To meet
customer demand, the
company has flexibly
launched
packed
smooth ring products,
ensuring that people buy
gold rings not to worry
about the quality.
The
gold
market
management
policies
focus
on
gold,
particularly jewelry gold
is considered a mere
commodity and has
always been encouraged
to develop by the
Government. Especially
products with prestigious
brands like PNJ.
Risk of gold price fluctuations affect the
company’s input costs:
oPNJ has a team of experienced analysts to
predict gold price trend, not misdirects into
speculation, but focuses on the hedge risks tools.
*To minimize the risk of fluctuations in raw
material prices, partially PNJ borrow gold from
the bank in order to ensure the balance between
inventory and gold loans.
* On the other hand volatility is calculated safely
with relatively stable margin.
Risk of supply and demand:
*Always research, evaluate new markets in
order to expand the system, increases revenue.
*Always strengthen, enhance brand value,
increase market share.
*Appropriate marketing strategy with each
customer segment. In each region PNJ also has
distinct strategies to better suit customer tastes
here.
36 / PNJ / Annual Report 2 12
3. FINANCIAL RISK
Liquidity risk:
As indicated in the
financial
indicators,
ratio of PNJ debt/capital
quite balanced is at
safe levels, expressing
caution in the view of
Board of Management.
Risk
of
capital
expenditure:
control well interest
rate of loans. Review all
bank and bank products
to ensure the lowest
interest. In 2012, VND
interest rate on average
is 10%.
4. RISK IN COMPLIANCE WITH PROCESS AND
REGULATION
-Every activity of PNJ complies with rigorous
process, always under assessment control and
continuous improvement after ISO 9001.
- With ERP software, the control becomes easier.
All management processes are gradually being
standardized and automated.
-Internal control department is responsible for
checking compliance with the regulations of
PNJ as well as the implementation of provisions
and policies of the Government. In addition to
the inspection, periodic assessment, the control
department also conducts spot checks.
T
hÔoNnVoI N
r H tGhI Áe T tR Ịr Đ
u ÍeC H
v a
TH
l Ự
uC
e
FOCUS ON
CORE BUSINESS FOR
SUSTAINABLE GROWTH
Annual Report 2 12 / PNJ / 37
DEVELOPMENT
ORIENTATION
I.An extremely scientific administrative model
empowered by staff experience and passion
PNJ is now a common roof for 1,000 skillful
goldsmiths and a strong workforce of experienced
managers in various disciplines such as
production, marketing, finance, etc. Many of PNJ
staff members have been part of the company
since its earliest start-up days.
The company is applying ISO-9001 and
the environmentally-friendly ISO-14001 in
production lines and management systems which
are underpinned by the mantra of ‘Correcting,
Prevention, and Continuous Improvement and
closely examined for promptly adjustments
to ensure adaptability with the company’s
advancements and maximum HR capacity
utilization.
2. A trustworthy and strong brand name favored
by mass consumers:
Thanks to the profound awareness and focus
on reliability, quality, and responsibility, PNJ
has taken for itself a firm standing as a ‘firstcomes-to-mind’ brand amongst clients, which is
manifested by its customer-voted position as the
#1 jewelry brand in Vietnam. Moreover, it is also
acclaimed by the government as National Brand.
In the international marketplace, PNJ is now
confirming its foothold as one of 3 Vietnamese
enterprises to be bestowed the 2011 ‘Quality
Product of Pacific-Asia’ Award and listed in top
500 greatest retailers of the region.
These honorable prizes and customer confidence
are the fruits of PNJ people’s relentless labor and
dedication, which offers the company a huge
competitive advantage and a foundation for the
path to come.
3. A large-scaled production facility featuring
one-stop innovative technologies:
38 / PNJ / Annual Report 2 12
PNJ is well aware of the indispensable importance
of high-tech, thus it has invested strongly in R&D
and actively learn from experience of jewelry
powers such as Thailand, India, Hong Kong,
Germany, etc. When the automated system
becomes more and more advanced, the company
gains dubious advantage over its competitors.
PNJ products, therefore, are much favored and
stand out from existing supplies thanks to their
consistent quality, diverse patterns, intricacy,
and elaboration. In addition, the cutting-edge
technologies really work as they help PNJ to
substantially cut down on and manage material
loss in production, and eventually, increase profit
margins.
The facility expansion enables PNJ to accelerate
its production and boost its capacity to 4 million
pieces of product per year, making it the biggest
producer of jewelry products in local market,
leaving far behind its competitors, and joining
the rank of the leading jewelry producer of
the world. Not only does the new facility
help to cater the growing demands locally but
also allow the company to win trust from keyprofile clients who are confident to place large
orders of international standard and intricate
customization inquiries with PNJ.
4. Efficient distribution network and large
coverage:
PNJ is known not only as the leader of jewelry
retailers but also as one of the 3 biggest retailers
of all industries in Vietnam.
PNJ new outlets and storehouses have been
trading very well and 100 percent of new POS
inaugurated over the past few years have reached
break-even after only 1 year in full operation.
By the end of 2012, PNJ had 167 outlets across
Vietnam and it is expected that the presence
of PNJ retail POS will be doubled in the next 5
years in order to meet the fast-growing demands.
h o n o r
1. Standardization and coordination of proper
& efficient Human Resources Management
System.
2. IT System upgrading to ensure adequate
support for all business and managerial
operations
3. Innovation and execution of a properly
developed & manageable procedure system in
good coordination with the new management
system
4. Ensuring adequate and competitively-priced
availability to cater demands from all business
partners
5. Achievement of all KPIs for business outputs,
as follows:
Total Gross Revenue for 2013: 7.798 billion
dong (21% increase) in which:
Gold Jewelry Revenue
4.394
billion
dong (20% increase)
Silver Jewelry Revenue
174 billion dong
(12% increase)
Gold Bar Revenue
3.230 billion dong (24%
increase)
Gross Profit
650 billion dong (18%
increase)
Financial Income
65 billion dong
(equivalent to 56%)
Profit before Tax (non-consolidated)
280
billion dong (equivalent to 100%)
Profit after Tax
226
billion
dong
(equivalent to 100%)
Consolidated Profit before Tax 296 billion dong
(equivalent to 95%)
Consolidated Profit after Tax 241,25 billion
dong (equivalent to 95%)
Dividend
20 %
t h e
t r u e
v a l u e
D E V E L O P M E N T
ORIENTATION
THE
YEAR
2013
MARKS
PNJ’S 25TH ANNIVERSARY
AND IT IS ALSO ANOTHER
MILESTONE EN ROUTE TO
THE COMPANY’S STRATEGIC
VISIONS
FOR
2022:
BECOMING THE LEADING
JEWELRY PROCESSOR AND
RETAILER IN ASIA MARKET
WHILE STAYING ON TOP
IN ALL TARGETED MARKET
FRAGMENTS LOCALLY. 2013
BUSINESS PLAN HAS BEEN
FORMULATED UPON THE
BASES
OF
COMPETITIVE
ADVANTAGE ANALYSIS AND
REFERENCES TO MACROECONOMY
PERFORMANCE
WITH 5 CRITICAL OBJECTIVES
AS FOLLOW.
II. SOLUTIONS TO ACHIEVE CRITICAL GOALS
OF THE YEAR
1. Objective 1: Standardization and Coordination
of proper & efficient HR Management System
The most critical mission in building a profound
base for sustainable strategic framework lies
in the correct positioning and analysis of
existing HR competencies, quality, strengths,
professionalism, etc. compared to the actual
expectations.
-Finalization of the organizational framework
Annual Report 2 12 / PNJ / 39
in consistency with the model as approved by
the Board of Director, fill up executive vacancies,
final JDs for each position according to the new
HR standard package, opening of new training
courses for staff awareness and expertise
promotion.
-Formulation and Implementation of a better
remuneration policy which is competitive and
suitable with current marketplace situation
in order to enhance staff retention and talent
recruitment. Application of KPIs in HR
supervision and performance review.
- Promotion of internal communications and indepth awareness of corporate culture amongst all
staff members.
2. Objective 2: IT System upgrading to ensure
adequate support for all business and managerial
operations
-Proposing a proper & cost-efficient schedule
for system upgrade correlating with the overall
business development strategies
-Coordinative application of ERP in financial
management and business administration.
Finalization of production-friendly ERP, en route
to ERP for company-wide administrative system.
-Training for ERP utilization to all relevant
staff members (office & sales), commitment of
full coverage of ERP amongst executives and
managers.
3. Objective 3: Innovation and execution of a
properly developed & manageable procedure
40 / PNJ / Annual Report 2 12
system in good coordination with the new
management system
- Development of Execution of Actions for
Performance Control Department. Recruitment
of additional staff members who will be supposed
to work closely with other functional departments
in the formulation, standardization, compliance
check, and management of operation procedures
in a way that ensures compatibility with all
strategic missions and implementation realities.
- Engineering a quality testing system in order to
ensure the efficiency of new procedures and their
benefits brought to all departments’ business and
production activities, introduction of reasonable
solutions for adjustments and bettering of current
procedures.
4. Objective 4: Ensuring adequate and
competitively-priced availability to cater
demands from all business partners
This target will be realized by a number of
solutions agreed upon amongst functional
relevant departments and the production:
-Formulation of administrative system and
managerial procedures for PNJ Procession Plant,
introduction of a manufacturing model that
ensures a high level of automation and empowers
production QC and performance monitoring.
- Innovation of some critical industrial procedures
so as to increase productivity and efficiency.
-Boosting of R&D actions for new products;
formulation of key-production strategies
- Sourcing of good-quality supplies so as to cater
h o n o r
all demands.
-Sufficient procurement to cater production
demands with competitively priced materials
-Supervision of proper inter-outlet or intersection goods delivery so as to maximizing the
effectiveness of goods production
-
Enhancement
of
professionalism
and
promptness of production and business supporting
services
5. Objective 5: Revenues and Earnings
For those 2013 objectives to come true, all
concerned departments are liable to conduct
their detailed operations in timely and effective
manners so as to enhance overall appeals to
potential clients, seek for more sales leads
and actual sales ratio, gaining more per-client
purchasing power, sales cost reduction, and
ultimately contribute to increase profit margin
for the company.
- Promotion of brand awareness and perception
amongst clients towards PNJ, most especially
its key brands; Planning and running of wellfocused marketing campaigns suitable for brands
in their respective market locations.
- Fostering standard PNJ service culture and wellinvested customer care campaigns; enhancement
of customer loyalty and brand loyalty.
-
Expansion and upgrading of distribution
networks and retailing systems, most especially
regional branches and minor ones; increasing
focus on wholesale and export sales. Targeted to
open 6 gold stores and 8 for silver.
t h e
t r u e
v a l u e
- Providence of an adjustable and real-time price
policy to gain more competitive advantages for
ensure sales revenues.
-Supervision of capital cycles and availability
at best-performing outlets. Close inspection and
tightening of capital cost as well as expenses for
sales and managerial operations
- Inauguration of a new tourism Thu Khoa Huan
outlet;
For each brand, specific campaign will be
applied to enhance brand strength:
- Investment for re-positioning schemes towards
PNJSilver brand;
- Re-positioning for CAO và Jemma;
- Investment for machinery purchase for facilities
expansion and quality increments;
-Follow-up and review of the portfolio and
liquidate all inefficient investments.
Annual Report 2 12 / PNJ / 41
42 / PNJ / Annual Report 2 12
h o n o r
t h e
t r u e
v a l u e
SCIENTIFIC AND TRANSPARENT
MANAGEMENT SYSTEM HAS CREATED
OUTSTANDING SUCCEED FOR PNJ
Annual Report 2 12 / PNJ / 43
PNJ’S ORGANIZATION CHART
BOARD OF SUPERVISION
BOARD OF DIRECTORS OFFICE
REPRESENTATIVE MANAGERS (ISO)
DEPUTY DIRECTOR
DEPUTY DIRECTOR
NORTHERN BRANCH
MARKETING DEPARTMENT
CENTRAL BRANCH
EXPORT DEPARTMENT
WESTERN BRANCH
RETAIL SALE DEPARTMENT
WHOLESALE DEPARTMENT
SUPPLY DEPARTMENT
44 / PNJ / Annual Report 2 12
h o n o r
t h e
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v a l u e
GENERAL SHAREHOLDER COUNCIL
BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER (CEO)
DEPUTY DIRECTOR
(PERMANENT)
DEPUTY DIRECTOR
FINANCE AND ACCOUNTING
DEPARTMENT
PNJ JEWELRY FACTORY
INDUSTRIAL COST CONTROLLING
DEPARTMENT
EFFICIENCY MANAGEMENT
DEPARTMENT
ADMINISTRATIVE
DEPARTMENT
DESIGN DEPARTMENT
IT DEPARTMENT
HUMAN RESOURCE
DEPARTMENT
STRATEGY DEPARTMENT
Annual Report 2 12 / PNJ / 45
BOARD OF DIRECTORS
46 / PNJ / Annual Report 2 12
h o n o r
Mrs.CAO THI NGOC DUNG
CHAIRWOMAN
Year of birth: 1957
Nationality: Vietnam
Professional skills: Bachelor
of Industrial Commercial
Economics (University of
Economics Hochiminh city)
EMPLOYMENT HISTORY
1984-1985: Deputy Manager
of Planning department, Phu
Nhuan Synthesis Company
1985-1987: Planning Manager
of Phu Nhuan Agricultural Foods
Company
1988-2003: General Manager of
Phu Nhuan Jewelry Company
1990:General Manager of Phu
Gia Credit Center
1991-1992: General Manager of
Phu Nhuan Trading Company
1992-1997: Chairwoman of
Dong A bank
2003-present: Chairwoman of
Dong A Land
2005-2011: Chairwoman of Dai
Viet Energy JSC
2004-present: ChairwomanCEO of Phu Nhuan Jewelry JSC
Nhuận
t h e
t r u e
v a l u e
Mr. NGUYEN VU PHAN
VICE CHAIRMAN
Year of birth: 1956
Nationality: Vietnam
Professional skills:
*MBA of University of
Technology Hochiminh City
*Forging and Mechanical
Engineer, University of
Technology Ha Noi
EMPLOYMENT HISTORY
1978-1985: Head of Technical
Department, Caric Factory
1985-1987: Technical Officer
of Synthetic Equipment
Company (Hochiminh Industrial
Department)
1987-1996: Technical Officer
of New Technology Company
(COTEC), Vietnam Scientific
Institution, Hochiminh Branch
1996-1999: Deputy Manager of
Garment factory, Binh Duong
Manufacturing and ImportExport Company
1999-2003: Deputy Manager of
Phu Nhuan Jewelry Company
2004-present: Vice Chairman
and Deputy Director of Phu
Nhuan Jewelry JSC
Annual Report 2 12 / PNJ / 47
Mrs. NGUYEN THI CUC
MEMBER OF BOD
Year of birth: 1960
Nationality: Vietnam
Professional skills: MBA,
University of Economics
Hochiminh City
EMPLOYMENT HISTORY
1983-1988: Officer of Statistic
and Planning Department, Phu
Nhuan District
1988-1995: Chief Accountant of
Phu Nhuan Jewelry Company
1996-2003: Deputy Manager of
Phu Nhuan Jewelry Company
2004- present: BOD member
and Deputy Director of Phu
Nhuan Jewelry JSC
2007- present: Head of Dong A
Bank ‘s Board of supervision
48 / PNJ / Annual Report 2 12
Mr. NGUYEN TUAN QUYNH
MEMBER OF BOD
Year of birth: 1972
Nationality: Vietnam
Professional skills:
*PhD Degree in Business
Administration, Paramount
University
*MBA of Hochiminh City Open
University.
*Bachelor of Business
Administration, University of
Economics Hochiminh City
EMPLOYMENT HISTORY
1994- 2005:
*Assistant CEO, Deputy sale
manager of Gas Saigon Petro
*BOD Member of Sai Gon Phu
Yen oil and gas JSC
*BOD Member of Sai Gon Nghe
An oil and gas JSC
2005-2007: Deputy Director of
Saigon Gas
2007-2012: Deputy Director of
Phu Nhuan Jewelry JSC
2007-2011: Vice Chairman of
Dai Viet Energy JSC
2007-2010: Chairman of Hong
Vina Gas Company
2007- Present: Chairman of
Doanh Chu Investment and
Training JSC
2008- Present: Chairman of
Saigon Fuel JSC
h o n o r
Mr. ANDY HO
MEMBER OF BOD
Year of birth: 1972
Nationality: America
Professional skills:
*MBA of Massachusetts Institute
of Technology
*Bachelor of Accounting,
Colorado University
EMPLOYMENT HISTORY
2000 - 2004: Investment
Manager at Dell Computer Corp
(America)
2004 - 2007: Investment
Manager at Prudential Fund
Management
2007 - Present: Head of Vina
Capital representative office
MRS. PHAM VU THANH GIANG
MEMBER OF BOD
Year of birth: 1983
Nationality: Vietnam
Professional skills:
*Master of banking and finance,
University of Applied Sciences,
Northwestern Switzerland.
*Bachelor of Banking and
Finance, Banking University, Ho
ChiMinh City
EMPLOYMENT HISTORY
2005-2006: AON Vietnam Staff
2007-present: Investment
Manager, Mekong Capital
t h e
t r u e
v a l u e
MRS. NGUYEN THI BICH HA
MEMBER OF BOD
Year of birth: 1969
Nationality: Vietnam
Professional skills:
*MBA, Vanderbilt University,
USA
*Applied economics in policy
analysis Certificate, Fulbright
Program, Vietnam
*Bachelor of Foreign Trade, University of Economics Hochiminh
City
EMPLOYMENT HISTORY
1992-1999: Sale manager of
Phu Yen Import- Export company, Hochiminh Branch
2001-2008: Deputy Manager of
Dong A Bank
2006-2009: Consultant, BOD
member of Binh Minh Community Development
2010- present: Executive Consultant of College of Business
Administration and Management
Annual Report 2 12 / PNJ / 49
BOARD
OF MANAGEMENT
Mrs.CAO THI NGOC DUNG
GENERAL DIRECTOR
Year of birth: 1957
Nationality: Vietnam
Professional skills: Bachelor
of Industrial Commercial
Economics (University of
Economics Hochiminh city)
EMPLOYMENT HISTORY
1984-1985: Deputy Manager
of Planning department, Phu
Nhuan Synthesis Company
1985-1987: Planning Manager
of Phu Nhuan Agricultural Foods
Company
1988-2003: General Manager of
Phu Nhuan Jewelry Company
1990:General Manager of Phu
Gia Credit Center
1991-1992: General Manager of
Phu Nhuan Trading Company
1992-1997: Chairwoman of
Dong A bank
2003-present: Chairwoman of
Dong A Land
2005-2011: Chairwoman of Dai
Viet Energy JSC
2004-present: ChairwomanCEO of Phu Nhuan Jewelry JSC
Nhuận
50 / PNJ / Annual Report 2 12
Mr. NGUYEN VU PHAN
VICE GENERAL DIRECTOR
Year of birth: 1956
Nationality: Vietnam
Professional skills:
*MBA of University of
Technology Hochiminh City
*Forging and Mechanical
Engineer, University of
Technology Ha Noi
EMPLOYMENT HISTORY
1978-1985: Head of Technical
Department, Caric Factory
1985-1987: Technical Officer
of Synthetic Equipment
Company (Hochiminh Industrial
Department)
1987-1996: Technical Officer
of New Technology Company
(COTEC), Vietnam Scientific
Institution, Hochiminh Branch
1996-1999: Deputy Manager of
Garment factory, Binh Duong
Manufacturing and ImportExport Company
1999-2003: Deputy Manager of
Phu Nhuan Jewelry Company
2004-present: Vice Chairman
and Deputy Director of Phu
Nhuan Jewelry JSC
h o n o r
Mrs. NGUYEN THI CUC
DEPUTY DIRECTOR
Year of birth: 1960
Nationality: Vietnam
Professional skills: MBA,
University of Economics
Hochiminh City
EMPLOYMENT HISTORY
1983-1988: Officer of Statistic
and Planning Department, Phu
Nhuan District
1988-1995: Chief Accountant of
Phu Nhuan Jewelry Company
1996-2003: Deputy Manager of
Phu Nhuan Jewelry Company
2004- present: BOD member
and Deputy Director of Phu
Nhuan Jewelry JSC
2007- present: Head of Dong A
Bank ‘s Board of supervision
MRS. PHAM THI MY HANH
DEPUTY DIRECTOR
Year of birth: 1970
Nationality: Vietnam
Professional skills:
*MBA, National Economics
University
Washington
University
*Bachelor of Foreign Language,
University of Social Sciences and
Humananities Hochiminh City
*Bachelor
of
Bussiness
Administration, University of
Economics Hochiminh City
EMPLOYMENT HISTORY
1993-1994: Staff of Sales
Department, Phu Nhuan Jewelry
Company
1994-1995: Secretory - Toba
Investment
1995-2003: Sale Satf, CEO
assistant,
Deputy
Manager
then Manager of Research and
Marketing Department, Phu
Nhuan Jewelry Company
2004-2009: Manager of Research
andMarketing
Department,
Manager of CAO brand
2009- 2011: Manager of CAO
Limited company
2012 - present : Deputy Director
of Phu Nhuan Jewelry JSC
t h e
t r u e
v a l u e
Mr. LE HUU HANH
DEPUTY DIRECTOR
Year of birth: 1963
Nationality: Vietnam
Professional skills:
*Bachelor
of
Chemistry,
University
of
Technology
Hochiminh City
*Gemstone and Diamond Testing
Expert
EMPLOYMENT HISTORY
1983 -1988: Technical Staff of
No.4 Printing company
1988-1992: Sale staff of General
Services Company, Go Vap
District
1992-2003: Sale staff, Manager
of Hanoi Branch, Sale Deputy
Manager, Sale manager of Phu
Nhuan Jewelry Company
2004-present: Deputy director of
Phu Nhuan Jewelry JSC
Annual Report 2 12 / PNJ / 51
BOARD OF SUPERVISION
MR. PHAM VAN TAN
Head of Board of Supervision
Year of birth: 1960
Nationality: Vietnam
Professional skills:
*Bachelor
of
Industrial
Commercial
Economics
(University
of
Economics
Hochiminh city)
*Bachelor of Political Economy,
National political institution Journalism and Communication
Department
MR. TRAN VAN DAN
Member of Board of Supervision
Year of birth: 1974
Nationality: Vietnam
Professional skills:
*Bachelor
of
Accounting,
Commercial University
*Bachelor
of
Business
Administration,
Hochiminh
University
of
Technology
(HUTECH)
*Chief accountant certificate,
Hochiminh National University
EMPLOYMENT HISTORY
1982 - 1989: Assistant in
Teaching and administration
department,
University
of
Economics Hochiminh city.
1989 - 1992: In charge of Sale
and Administration, SJC Jewelry
Factory
1992 - 2010: Manager, Branch
manager, Deputy Director of
Dong A Bank
2010- 2012: BOD consultant of
International Cominucation Net
(IN-COMNET)
EMPLOYMENT HISTORY
1997- present: have experienced
in Phu Nhuan Jewelry JSC as:
Worker then head of Quality
Division
Deputy Manager of Quality
Control Department
Manager of Quality Control
department
Deputy
manager
of
Manufacturing Department
Deputy manager of Technical
Quality Department
Manager of Technical Jewelry
Process
Deputy manager of PNJ Jewelry
Factory
52 / PNJ / Annual Report 2 12
MRS. NGUYEN NGOC HUE
Member of Board of Supervision
Year of birth: 1965
Nationality: Vietnam
Professional skills:
*Bachelor
of
Commercial
Finance, Finance and Accouting
University, Hochiminh City
*Certificate
of
Accounting
& Finance of Import- Export
activities, Foreign Trade College
*Certificate of Chief accountant
training course, Ministry of
finance.
EMPLOYMENT HISTORY
1988-1991: General accountant,
Codimex Company Vung Tau
1991 - 1994: Chief accountant,
Canadian Hotel, Vung Tau
1994 - 1997: Chief Accountant,
Giao Chau Company, Vung Tau
1997
1998:
General
Accountant, Duhacom, HCM
City
1998 - 1999: Chief Accountant
of Compunet Company, HCMC
2000 - 2010: Head of Payment
Division of PNJ
2011 - present: Chief accountant
of PNJ Laboratory Limited
Company.
h o n o r
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MANAGERIAL
STRUCTURES
I. BOARD OF DIRECTORS, BOARD OF MANAGEMENT, SUPERVISORY
BOARD
- On April 14, 2012, the 2012 Annual General Meeting elected these people to serve as the Board
of Directors, term 3 (2012-2017):
1.
Ms. Cao Thi Ngoc Dung
Chairwoman of the Board
2.
Mr. Nguyen Vu Phan
Vice Chairman of the Board
3.
Ms. Nguyen Thi Cuc
Executive Member
4.
Mr. Nguyen Tuan Quynh
Executive Member
New member
5.
Ms. Nguyen Thi Bich Ha
Executive Member
New member
6.
Ms. Pham Vu Thanh Giang
Executive Member
New member
7.
Mr. Ho An T (Andy Ho)
Executive Member
New member
-On April 14, 2012, the 2012 Annual General Meeting elected these people to serve as the
Supervisory Board, term 3 (2012-2017):
1.
Mr. Pham Van Tan
Head of Supervisory Board
New member
2.
Mr. Tran Van Dan
Executive Member
3.
Ms. Nguyen Ngoc Hue
Executive Member
New member
- On March 26, 2012, the Board of Directors approved the appointment of Ms. Pham Thi My Hanh
as Deputy Director of Phu Nhuan Jewelry Join Stock Company, with her office starting from April
1, 2012.
- On July 20, 2012, the Board of Directors approved the resignation of Mr. Nguyen Tuan Quynh
from the position of Deputy Director.
- Starting from April 14, 2012, these people will no longer serve as Board of Directors since their
tenure elapsed.
1.
Mr. Bui Viet
Executive Member
2.
Ms. Truong Nguyen Thien Kim Head of Supervisory Board, term 2
3.
Mr. Vo Nhu To
Executive Member of Supervisory Board, term 2
II. SHAREHOLDERS & AMENDMENTS TO EQUITY OWNERSHIP
(ACCORDING TO THE LIST OF SHAREHOLDERS AS OF 18/03/2013):
1. Name of stocks
Code of stocks
Number of shares
Type of stocks
: Stock of Phu Nhuan Jewelry Join Stock Company
: PNJ
: 71.997.835 shares
: common shares
Annual Report 2 12 / PNJ / 53
2. Equity breakdowns according to ownership
ĐVT: 1.000 VNĐ
National shareholders
Foreign shareholders
Total
Item
Amount
(thousand VND)
Ratio
(%)
Total equity ownership
367.189.010
51,00
352.789.340
49,00
State shareholders
0
0,00
0
0,00
0
0,00
Founding shareholders
0
0,00
0
0,00
0
0,00
Shareholders with 5%
or above ownership
73.067.040
10,15
49.667.860
6,90
122.734.900
Foreign shareholders
Total
Amount
(thousand VND)
National shareholders
Item
Amount
Ratio
(thousand VND) (%)
Ratio
(%)
Amount
(thousand VND)
Ratio
(%)
Amount
(thousand VND)
Ratio
(%)
719.978.350 100,00
17,05
Amount
Ratio
(thousand VND) (%)
Shareholders with 1-5%
ownership
108.978.260
15,14
251.251.200
30,86
360.229.460
50,03
Shareholders with under
1% ownership
185.136.620
25,71
51.870.280
8,93
237.006.900
32,92
Treasury Stock
7.0900,00
0
0,00
7.090
0,00
3. List of shareholders with 5% or above ownership in Chartered Capital
No
Shareholder
Address
Number of Percentage of
shares
ownership (%)
1
Cao Thi Ngoc Dung
82/138 Ly Chinh Thang,
W.8, D.3, HCMC
7.306.704
10,15
2
Vietnam Azalea
Fund Limited
Floor 8, Capital Palace Tower,
6 Thai Van Lung, D.1, HCMC
4.966.786
6,90
TOTAL
12.273.490
17,05
4. Amendments & increments of Chartered Capital in 2012
- Enlistments and transactions of additional shares (pursuant to Decision no. 149/2012/QĐ-SGDHCM
dated October 1, 2012 by HOSE) at HOSE.
- Type of stocks: common shares
- Code of stocks
: PNJ
- Par value
: VND 10.000
- Amount
: 11.998.693 shares
- Total listed value of stocks : VND 119.986.930.000
- Valid date of enlistments
: 03/10/2012
- official date of transaction : 09/10/2012
- Increments to Chartered Capital
- Prior amendments
: VND 599.991.420.000
- Post-amendments
: VND 719.978.350.000
54 / PNJ / Annual Report 2 12
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III. C.TRANSACTIONS MADE BY INTERNAL SHAREHOLDERS
AND AFFILIATIONS
1. Stock transactions:
No
Transacted by
Relationship
Opening number of
with internal
shares
shareholders/Maj
Number of Ratio
or shareholders
shares
Closing number of
shares
Number of
shares
Ratio
Reasons for
increments or
reduction (buying,
selling,
transferrable,
bonus...)
Dong A Banking
& Securities Ltd
Co.
Affiliations
with the OD
(Mr. Bui Viet)
Buying
Dong A Capital
Management &
Securities Ltd. Co.
Affiliations
with the OD
(Mr. Bui Viet)
Buying &
selling
Deutsche Bank
Aktiengesellschaft
và Deutsche Asset
Management
Major
Shareholder
Buying &
selling
Route One
Investment Company
(including: Route One
Fund I L.P., Route
One Fund II L.P. and
Route One Offshore
Master Fund L.P.)
Major
Shareholder
Buying
2. Other transactions: (made by internal shareholders/ major shareholders and
affiliates).
Relationship with internal shareholders/Major shareholders
No
Transacted by
Affiliation
Content
Dong A Banking &
Securities Ltd Co.
Affiliate of the BOD
Contract of Consultancy &
Holding of 2012 AGM
Dong A Real Estate Join
Stock Company.
Affiliate of the BOD
Commercial Contract of
Construction
Gold Standard
Consultancy & Project
Management Company.
Affiliate of the BOD
Commercial Contract of
Consultancy & Construction
Supervision
Gold Space Interior Design
Join Stock Company
Affiliate of the BOD
Commercial Contract of Interior
Design
IV. COMPENSATION, BONUSES, REMUNERATION FOR THE BOARD OF
DIRECTORS & SUPERSORY BOARD
1. Board of Directors:
Chairman of the Board
Vice Chairman of the Board
Executive Member
2. Supervisory Board:
Head of Supervisory Board
Executive Member
20.000.000 dong/month
14.000.000 dong/month
10.000.000 dong/month
8.000.000 dong/month
Annual Report 2 12 / PNJ / 55
PNJ’S
CULTURE
56 / PNJ / Annual Report 2 12
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CORPORATE CULTURE:
“PNJ IS OUR HOME”
1.
Team-building activity at Ho Coc - 2013
2.
Arts Festival - 2012
3 & 4. Out door activities of sales force at Hoc Mon
1
2
3
4
Corporate culture is paid specially attention to
and invested by PNJ. During 25 years of development with the culture named “PNJ is our
home”, PNJ has established good traditional values, giving prominence to Humaneness - Righteousness - Propriety - Knowledge - Integrity, and
the strong jewelry production and trading company in Vietnam.
Team-building and entertainment activities are
held frequently which help connecting all staffs,
improving their work efficiency and passion
head to the common development of the company. Community and social activities have been
supported by active involvement of the staff,
which shows clearly the social responsibility of
people in PNJ.
To build the strong, sustainable and solid houses,
the most important is the quality of foundation.
For PNJ house, such of foundation is people, the
specific corporate culture. The company has established the culture of “PNJ is our home”, where
each member is very faithful, solidary and compassionate. All employees are encouraged to improve their academic, professional and managerial skills through training courses both in-house
and out-sourced. Their effort in improving their
competence and contributing to the organization
would be fairly awarded with bonuses, and promotion.
The culture is to create the corporate character,
to bring the outstanding competitive advantages
and resources, to attract the talents and to stabilize the organization. PNJ will conserve and
develop its cultural values, be ready for the next
developmental processes.
Annual Report 2 12 / PNJ / 57
INVESTOR RELATIONS
IN 2012
58 / PNJ / Annual Report 2 12
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Investor relations board welcomed more than 80 domestic and foreign investors visit and work at the
headquarters of PNJ in 2012. In addition PNJ also attended major conferences which bring together
many investors organized by Viet Capital Securities,
Dragon Capital, SSI Securities, and Kim Eng Securities.
Investor relations
board welcomed
more than
80
domestic and
foreign investors
visit and work at
the headquarters
of PNJ in 2012
Compared to 2011, 2012 IR activities are invested more methodically.
- During 2012, PNJ has added personnel in charge of investor relations depart
ment.
-Update the information on changes in the operation of PNJ through e-mail,
press releases, and website.
- Complete IR activity plan for 2013.
Thanks to the orientation about ensuring transparency and timely disclosure, IR
activities has brought a more comprehensive picture of PNJ’s situation for the
investors.
In the future the company will hold more activities connecting with investors to
increase the effectiveness of investor relations.
Annual Report 2 12 / PNJ / 59
PNJ HEADS
TO THE COMMUNITY
With
the
business’s
philosophy
of
“Consolidate customer and social benefit
into company’s profit”, in many years,
beside business activities, PNJ always cares
and tries to fulfill missions
for community through
meaningful
programs,
contributing to raise the
social responsibility of
the company in taking
care of future generations,
families under social
policy (involved in the
Resistance in war, victims
of Agent Orange,…), the
poor, the unfortunate, … These activities are
built and organized on the foundation of 1 in
5 core value of PNJ which is Responsibility
and this can be considered as an era for every
act of PNJ, showing the traditional beauty of
Vietnamese and PNJ culture.
For the future generation
Acutely aware of the important role of young
generation - future owners of the country,
PNJ always has the highest priority for caring
and supporting for the development of young
talents. For 13 consecutive years (2000 2013), PNJ has funded over 2000 scholarships
for poor students that fond of learning in Phu
Nhuan district; PNJ also spent hundreds
of scholarships each year for high schools
such as Nguyen Duc Canh scholarship,
Tran Van On scholarship, University of
Economics scholarship; financing for longterm scholarship program SFT (The Saigon
Times - PNJ), DEF scholarship Fund and
education fund, caring for the spiritual life
of the poor workers by Association of High-
60 / PNJ / Annual Report 2 12
Quality Vietnamese
Product
Business
club
established;
participating actively
in
social
action
programs of University
of Economics Ho
Chi
Minh
City,
University of Law,
RMIT University... In
addition, each year PNJ spend hundreds of
gifts including notebooks, books, briefcases,
hats, raincoats... for poor students in
remote areas across the country with the
desire to care for and support so those
students can get better living conditions,
h o n o r
contributing to fulfill
the task of educating
and fostering future
owners of the country.
Intensive
social
activities
As
a
typical
representative
of
social businesses, a
pioneer in conducting the policy of economic
growth associated with the sustainable
development of the social community.
Throughout recent years, PNJ has always
leaded in the field of relieving people hit
by natural disasters, floods, caring for the
t h e
t r u e
v a l u e
poor in Tet holidays, participating actively
in health activities such as blood donation,
medical care for the poor, caring for poor
disable children, building house for the
poor and protecting the
environment ....
With deep sympathy for
those have less fortunate
circumstance
in
the
society, PNJ has organized
many practical charity
events,
helping
the
unfortunate reducing the
burden of both material
and spiritual life. Every
year, a lot of company charitable gifts are
given to people with difficult circumstances
across the country; besides PNJ also
cooperates with local Medical Centers, the
Red Cross and Hospitals organizing several
free examinations, giving away medicines
and gifts to thousands of poor people in
Tay Nguyen and Mekong Delta provinces;
collaboration with Eye Hospital organizing
free eye surgery for 800 poor blind with total
cost of 400 million VND in Dong Thap, Vinh
Long, Nghe An. .
In recent years, PNJ has often organized
gifts donating activities for the poor in many
provinces in the country; free loving houses
and gratitude houses to be built with the
desire bringing a stable and warmer life
to less fortunate life in the society. These
activities are organized with the participation
of a large number of PNJ staff, has become a
traditional culture with bold imprint of PNJ,
showing the spirit of solidarity, always giving
a hand for community of PNJ.
Annual Report 2 12 / PNJ / 61
DISTRIBUTION
SYSTEM
PNJ
62 / PNJ / Annual Report 2 12
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The company has distribution system nationwide
Ho chi minh
Ha noi
Vinh phuc
Hai duong
Nam dinh
Ha tinh
Da nang
Quang ngai
Binh dinh
Thanh hoa
Hue
Nha trang
Phan thiet
Pleiku
Buôn ma thuot
Lam dong
Da lat
Binh duong
Tay ninh
Binh duong
Bien hoa
Ba ria vung tau
Vung tau
Long an
Tien giang
Ben tre
Vinh long
Can tho
Soc trang
Long xuyen
Bac lieu
Kien giang
Tra vinh
PNJ’s export markets
Annual Report 2 12 / PNJ / 63
FINANCIAL
STATEMENT
2012
64 / PNJ / Annual Report 2 12
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THE COMPANY
Phu Nhuan Jewelry Joint Stock Company (“the Company”) is a shareholding company incorporated
under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 0300521758
issued by the Department of Planning and Investment of Ho Chi Minh City on 2 January 2004, as
amended.
The Company was officially listed on the Ho Chi Minh City Stock Exchange (“HOSE”) from 23 March
2009 pursuant to Decision No. 129/DKNY issued by the General Director of HOSE on 26 December
2008.
The Company’s principal activities are to trade gold, silver, jewelry and gemstones, to import and
export jewelry in gold, silver and gemstones.
The Company’s registered head office is located at 170E Phan Dang Luu Street, Phu Nhuan District,
Ho Chi Minh City, Vietnam. The Company has one hundred and thirty one (131) retail shops located
in various provinces in Vietnam.
BOARD OF DIRECTORS
Members of the Board of Directors during the year and at the date of this report are:
Mrs. Cao Thi Ngoc Dung
Mr. Nguyen Vu Phan
Mrs. Nguyen Thi Cuc
Mr. Nguyen Tuan Quynh
Mrs. Nguyen Thi Bich Ha
Mr. Andy Ho
Mrs. Pham Vu Thanh Giang
Chairwoman
Vice Chairman
Member
Member
Member
Member
Member
ppointed on 14 April 2012
ppointed on 14 April 2012
appointed on 14 April 2012
appointed on 14 April 2012
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Mr. Pham Van Tan
Mrs. Nguyen Ngoc Hue Mr. Tran Van Dan
Head of the Board of Supervision
Member
Member
Annual Report 2 12 / PNJ / 65
MANAGEMENT
Members of the Management during the year and at the date of this report are:
Mrs. Cao Thi Ngoc Dung
Mr. Nguyen Vu Phan
Mrs. Nguyen Thi Cuc
Mr. Nguyen Tuan Quynh
Mrs. Nguyen Thi Bich Ha
Mr. Andy Ho
Mrs. Pham Vu Thanh Giang
Chairwoman
Vice Chairman
Member
Member
Member
Member
Member
ppointed on 14 April 2012
ppointed on 14 April 2012
appointed on 14 April 2012
appointed on 14 April 2012
BOARD OF SUPERVISION
Members of the Board of Supervision during the year and at the date of this report are:
Mrs. Cao Thi Ngoc Dung
Mr. Le Huu Hanh
Mrs. Nguyen Thi Cuc
Mr. Nguyen Tuan Quynh
Mr. Nguyen Vu Phan
Mrs. Pham Thi My Hanh
General Director
Deputy General Director
Deputy General Director
Deputy General Director
Deputy General Director
Deputy General Director
appointed on 1 April 2012
LEGAL REPRESENTATIVE
The legal representative of the Company during the year and at the date of this report is Mrs. Cao Thi
Ngoc Dung.
AUDITORS
The auditor of the Company is Ernst & Young Vietnam Limited.
Management of Phu Nhuan Jewelry Joint Stock Company (“the Company”) is pleased to present its
report and the consolidated financial statements of the Company and its subsidiaries (“the Group”)
for the year ended 31 December 2012.
MANAGEMENT’S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
Management is responsible for the consolidated financial statements of each financial year which
give a true and fair view of the consolidated state of affairs of the Group and of the consolidated
results of its operations and its consolidated cash flows for the year. In preparing those consolidated
financial statements, management is required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
-state whether applicable accounting standards have been followed, subject to any material
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departures disclosed and explained in the consolidated financial statements; and
- prepare the consolidated financial statements on the going concern basis unless it is inappropriate
to presume that the Group will continue its business.
Management is responsible for ensuring that proper accounting records are kept which disclose,
with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure
that the accounting records comply with the applied accounting system. It is also responsible for
safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Management confirmed that it has complied with the above requirements in preparing the
accompanying consolidated financial statements.
STATEMENT BY MANAGEMENT
Management does hereby state that, in its opinion, the accompanying consolidated financial
statements which give a true and fair view of the consolidated financial position of the Group as at
31 December 2012 and of the consolidated results of its operations and its consolidated cash flows
for the year then ended in accordance with the Vietnamese Accounting Standards and System and
comply with relevant statutory requirements.
For and on behalf of management:
Cao Thi Ngoc Dung
General Director
Annual Report 2 12 / PNJ / 67
INDEPENDENT AUDITORS’ REPORT
To:
The Shareholders of Phu Nhuan Jewelry Joint Stock Company
We have audited the consolidated financial statements of Phu Nhuan Jewelry Joint Stock Company
(“the Company”) and its subsidiaries (collectively referred to as “the Group”) as set out on pages 4
to 48 which comprise the consolidated balance sheet as at 31 December 2012, and the consolidated income statement and the consolidated cash flow statement for the year then ended and the
notes thereto.
The preparation and presentation of these consolidated financial statements are the responsibility
of the Group’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
Basis of opinion
We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by the Group’s management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audit provides a reasonable basis for our
opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated
financial position of the Group as at 31 December 2012, and of the consolidated results of its
operations and its consolidated cash flows for the year in accordance with the Vietnamese
Accounting Standards and System and comply with the relevant statutory requirements.
Ernst & Young Vietnam Limited
Mai Viet Hung Tran
Deputy General Director
Certificate No. D.0048/KTV
Ho Chi Minh City, Vietnam
15 March 2013
68 / PNJ / Annual Report 2 12
Le Quang Minh
Auditor
Certificate No. 0426/KTV
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CONSOLIDATED CASHFLOW STATEMENT for the year ended 31 December 2012
Code
ASSETS
Notes
31 December 2012
31 December 2011
A. CURRENT ASSETS
I. Cash and cash
equivalents
1. Cash
2. Cash equivalents
II. Short-term investment
1. Short-term investment
III. Current accounts
receivable
1. Trade receivables
2. Advances to suppliers
3. Other receivables
4. Provision for doubtful debts
IV. Inventories
1. Inventories
V. Other current assets
1. Short-term prepaid expenses
2. Value-added tax
deductible
3.Tax & other receivables from
the State
4. Other current assets
B. NON-CURRENT ASSETS
I. Fixed assets
1. Tangible fixed assets
Cost Accumulated
depreciation
2. Intangible fixed assets
Cost Accumulated
amortization
3. Construction in
progress
II. Long-term
investments
1. Investments in associates
2. Other long-term investments
3. Provision for long-term
investments
III. Other long-term assets
1. Long-term prepaid expenses
2. Deferred
tax assets
3. Other long-term assets
TOTAL ASSETS
Annual Report 2 12 / PNJ / 69
CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2012
Code
RESOURCES
Notes
Ending balance
Beginning balance
A. LIABILITIES
I. Current liabilities
1. Short-term loans
2. Trade payables
3. Advances from customers
4. Statutory
obligations
5. Payables to employees
6. Accrued expenses
7. Other
payables
8. Bonus and welfare fund
II. Non-current liabilities
1. Other long-term liabilities
2. Long-term loans
3. Provision for severance allowance
B. OWNERS’ EQUIT
I. Capital
1. Share capital
2. Share premium
3. Treasury shares
4. Investment and development fund
5. Financial reserve fund
6. Undistributed earnings
C. MINORITY INTEREST
TOTAL LIABILITIES & OWNERS’ EQUITY
OFF BALANCE SHEET ITEM
ITEM
Ending balance
Ending balance
Beginning balance
Foreign currencies:
- United States dollar (“US$”)
- Australian dollar (“AUD”)
- Gold taels
Dang Thi Lai
Chief Accountant
15 March 2013
70 / PNJ / Annual Report 2 12
Cao Thi Ngoc Dung
General Director
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CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2012
Code
ITEMS
Notes
Current year
Previous year
1. Revenue from sale of goods and
rendering of services
2. Deductions
3. Net revenue from sale of goods and
rendering of services
4. Cost of goods sold and services
rendered
5. Gross profit from sale of goods and
rendering of services
6. Finance income
7. Finance expenses
- In which: Interest expense
8. Selling expenses
9. General and administrative expenses
10. Operating
profit
11. Other income
12. Other expenses
13. Other profit
14. Share of profit of associates
15. Profit before tax
16. Current corporate income tax expense
17. Deferred income tax income
18.Net profit after tax Attributable to:
18.1 Minority interests
18.2 Equity holders of
the Company
19. Basic earnings per share
(VND/share)
Dang Thi Lai
Chief Accountant
Cao Thi Ngoc Dung
General Director
15 March 2013
Annual Report 2 12 / PNJ / 71
CONSOLIDATED CASHFLOW STATEMENT for the year ended 31 December 2012
Code
ITEMS
I. CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Depreciation and amortization
Provisions
Unrealised foreign exchange
Profits from investing activities
Interest expense
Operating profit before changes in
working capital
Increase in receivables
Decrease (increase) in inventories
Decrease in payables
Decrease in prepaid expenses
Interest paid
Corporate income tax paid
Other cash outflows from
operating activities
Net cash flows from (used in)
operating activities
II. CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase and construction of
fixed assets
Proceeds from disposals of
fixed assets
Bank term deposit
Payments for investments in
other
entities
Proceeds from sale of investments in
other entities
Interest and dividends received
Net cash flows used in investing
activities
72 / PNJ / Annual Report 2 12
Notes
Current year
Previous year
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CONSOLIDATED CASHFLOW STATEMENT for the year ended 31 December 2012
Code
ITEMS
Notes
Current year
Previous year
III.CASH FLOWS FROM FINANCING ACTIVITIES
Drawdown of
borrowings
Repayment of borrowings
Dividends paid to minority
interest
Dividends paid
Net cash flows (used in) from
financing activities
Net (decrease) increase in cash
and cash equivalents
Cash and cash equivalents at
beginning of year
Impact of exchange rate
fluctuation
Cash and cash equivalents at end
of year
Dang Thi Lai
Chief Accountant
Cao Thi Ngoc Dung
General Director
15 March 2013
Annual Report 2 12 / PNJ / 73
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. CORPORATE INFORMATION
Phu Nhuan Jewelry Joint Stock Company (“the Company”) is a shareholding company incorporated
under the Law on Enterprise of Vietnam pursuant to Business Registration Certificate No. 0300521758
issued by the Department of Planning and Investment of Ho Chi Minh City on 2 January 2004, as
amended.
The Company was officially listed on the Ho Chi Minh City Stock Exchange (“HOSE”) from 23 March
2009 pursuant to Decision No. 129/DKNY issued by the General Director of HOSE on 26 December
2008.
The principal activities of the Company and its subsidiaries (“the Group”) are to trade gold, silver,
jewelry and gemstones, to import and export jewelry in gold, silver and gemstones, to trade gasoline,
gas cookers, to product and trade fashion products, silver and gold jewelery, and to provide jewelery
inspection and consultancy services.
The Company’s registered head office is located at 170E Phan Dang Luu Street, Phu Nhuan District,
Ho Chi Minh City, Vietnam. In addition, the Company has one hundred and thirty one (131) retail
shops located in various provinces in Vietnam.
The number of the Group’s employees as at 31 December 2012 was 2,762 (31 December 2011:
2,745).
CORPORATE STRUCTURE
The Company’s corporate structure includes three subsidiaries, in which:
Dai Viet Energy Joint Stock Company (“DVC”) is a shareholding company established in accordance
with Business Registration Certificate No. 4103007071 issued by the Department of Planning and
Investment of Ho Chi Minh City on 21 June 2007. DVC’s registered head office is located at Lot A87/I,
Street 5, Vinh Loc Industrial Park, Ba Diem Ward, Hoc Mon District, Ho Chi Minh City, Vietnam.
DVC’s principal activities are to trade gasoline, gas cookers, machinery and equipment oil and gas
industry, to provide transportation services, and to trade oil, lubricant and petrol-chemical products.
As at 30 June 2012 the Company holds 70% ownership interest of DVC.
On 21 December 2011, the Company entered into a share transfer agreement (“the agreement”)
with Totalgaz Vietnam Limited (”Totalgaz”) to dispose all its shares in DVC. Both parties signed the
Completion Minutes on 29 June 2012 upon the completion of certain perquisites of the agreement.
However, the transfer price has not been finalised and still subject to the independent assessment
report on DVC’s net assets.
CAO Fashion Company Limited (“CFC”), a one-member limited liability company, was established
in accordance with Business Registration Certificate No. 0309279212 issued by the Department
of Planning and Investment of Ho Chi Minh City on 14 August 2009. CFC’s registered head office
is located at 170E Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. CFC’s
principal activities are to produce and trade fashion products, silver and gold jewelery, and arts and
crafts products, and to import and export art and craft products.
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PNJ Laboratory Company Limited (“PLC”), a one-member limited liability company, was established
in accordance with Business Registration Certificate No. 0310521330 issued by the Department of
Planning and Investment of Ho Chi Minh City on 16 December 2010. PLC’s registered head office
is located at 205 Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. PLC’s
principal activities are to provide jewelery inspection and consultancy services.
2. BASIS OF PREPARATION
2.1 ACCOUNTING STANDARDS AND SYSTEM
The consolidated financial statements of the Group, expressed in Vietnam dong (“VND”), are prepared
in accordance with the Vietnamese Accounting System and Vietnamese Accounting Standard No. 27
- Financial Reporting and other Vietnamese Accounting Standards (“VAS”) issued by the Ministry of
Finance as per:
- Decision No. 149/2001/QD-BTC dated 31 December 2001 on the Issuance and Promulgation of
Four Vietnamese Accounting Standards (Series 1);
- Decision No. 165/2002/QD-BTC dated 31 December 2002 on the Issuance and Promulgation of
Six Vietnamese Accounting Standards (Series 2);
- Decision No. 234/2003/QD-BTC dated 30 December 2003 on the Issuance and Promulgation of
Six Vietnamese Accounting Standards (Series 3);
- Decision No. 12/2005/QD-BTC dated 15 February 2005 on the Issuance and Promulgation of Six
Vietnamese Accounting Standards (Series 4); and
- Decision No. 100/2005/QD-BTC dated 28 December 2005 on the Issuance and Promulgation of
Four Vietnamese Accounting Standards (Series 5).
Accordingly, the accompanying consolidated balance sheet, consolidated income statement,
consolidated cash flow statement and related notes, including their utilisation are not designed for
those who are not informed about Vietnam’s accounting principles, procedures and practices and
furthermore are not intended to present the financial position and results of operations and cash flows
in accordance with accounting principles and practices generally accepted in countries other than
Vietnam.
2.2 APPLIED ACCOUNTING DOCUMENTATION SYSTEM
The Group’s applied accounting documentation system is the General Journal system.
2.3 FISCAL YEAR
The Group’s fiscal year applicable for the preparation of its consolidated financial statement starts on
1 January and ends on 31 December.
2.4 ACCOUNTING CURRENCY
The Group maintains its accounting records in VND.
2.5 BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries for the year ended 31 December 2012.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group
obtains control, and continued to be consolidated until the date that such control ceases.
The financial statements of the subsidiaries are prepared for the same reporting year as the Company,
using consistent accounting policies.
Annual Report 2 12 / PNJ / 75
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
All intra-company balances, income and expenses and unrealised gains or losses resulting from intracompany transactions are eliminated in full.
Minority interests represent the portion of profit or loss and net assets not held by the Group and are
presented separately in the consolidated income statement and within equity in the consolidated
balance sheet, separately from parent shareholders’ equity.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The accounting policies adopted by the Group in preparation of the financial statements are consistent
with those followed in the preparation of the Group’s financial statements for the year ended 31
December 2011 except for the change in the accounting policy in relation to foreign currency
transactions.
Effects of Changes in Foreign Exchange Rates
For the year ended 31 December 2012, the Group adopts Circular No. 179/2012/TT-BTC providing
guidance on recognition, measurement, treatment for foreign exchange differences issued by the
Ministry of Finance on 24 October 2012 (“Circular 179”) in addition to Vietnamese Accounting
Standard No. 10 - Effects of Changes in Foreign Exchange Rates (the “VAS 10”) adopted in prior years.
Following Circular 179, at the end of the year, monetary assets and liabilities denominated in foreign
currencies are translated into VND/US$ using buying exchange rate announced by the commercial
bank where the Group maintains bank accounts. In 2011, inter-bank exchange rates ruling at the
balance sheet date was used for this translation.
Circular 179 is applied from 2012 on prospective basis. Impacts of the change from using inter-bank
exchange rate to buying exchange rate announced by the commercial bank for the year end translation
to the financial statement as at and for the year ended 31 December 2012 is not material as a whole.
3.2 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, cash at banks, gold and short-term, highly liquid
investments with an original maturity of less than three months that are readily convertible into
known amounts of cash and that are subject to an insignificant risk of change in value.
3.3 RECEIVABLES
Receivables are presented in the consolidated financial statements at the carrying amounts due from
customers and other debtors, along with the provision for doubtful debts.
The provision for doubtful debts represents the estimated loss due to non-payment arising on
receivables that were outstanding at the balance sheet date. Increases and decreases to the provision
balance are recorded as general and administration expense in the consolidated income statement.
3.4 INVENTORIES
Inventories are stated at the lower of cost incurred in bringing each product to its present location and
condition, and net realisable value.
Net realisable value represents the estimated selling price in the ordinary course of business less the
estimated costs to complete and the estimated costs necessary to make the sale.
The perpetual method is used to record inventories, which are valued as follows:
Merchandises and consumables, and raw materials - cost of purchase on a weighted average basis.
Finished goods and work-in process - cost of direct materials and labour plus attributable manufacturing
overheads based on the normal operating capacity on a weighted average basis.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.4 INVENTORIES (CONTINUED)
Provision for obsolete inventories
An inventory provision is created for the estimated loss arising due to the impairment of value (through
diminution, damage, obsolescence, etc.) of merchandise goods, raw materials, finished goods, and
other inventories owned by the Group, based on appropriate evidence of impairment available at the
balance sheet date.
Increases and decreases to the provision balance are recorded into the cost of goods sold account in
the consolidated income statement.
3.5 FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation and amortization.
The cost of a fixed asset comprises its purchase price and any directly attributable costs of bringing
the fixed asset to working condition for its intended use.
Expenditures for additions, improvements and renewals are capitalised and expenditures for
maintenance and repairs are charged to the consolidated income statement as incurred.
When fixed assets are sold or retired, their cost and accumulated depreciation or amortization are
removed from the consolidated balance sheet and any gain or loss resulting from their disposal is
included in the consolidated income statement.
Land use rights
Land use right is recorded as an intangible fixed asset on the consolidated balance sheet when
the Group obtained the land use right certificates. The costs of land use right comprise all directly
attributable costs of bringing the land to the condition available for intended use and is not amortized
due to having indefinite useful life.
3.6 DEPRECIATION AND AMORTIZATION
Depreciation of tangible fixed assets and amortization of intangible fixed assets are calculated on a
straight-line basis over the estimated useful life of each asset as follows:
Buildings and structures
Machinery and equipment
Motor vehicles
Office equipment
Computer software 3 - 25 years
3 - 15 years
4 - 10 years
3 - 8 years
3 years
The useful life of the fixed assets and depreciation rates are reviewed periodically to ensure that the
method and the period of the depreciation and amortization are consistent with the expected pattern
of economic benefits that will be derived from the use of fixed assets.
3.7 BORROWING COSTS
Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds and are recorded as expense during the year in which they are incurred. 3.8 PREPAID EXPENSES
Prepaid expenses are reported as short-term or long-term prepaid expenses on the consolidated
balance sheet and are amortized over the year for which the amounts are paid or the period in which
Annual Report 2 12 / PNJ / 77
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
economic benefits are generated in relation to these expenses.
The following types of expenses are recorded as long-term prepaid expense and are amortised to the
consolidated income statement.
- Prepaid rental includes land and retail shop rental prepaid for many years under operating lease
contracts and are amortized over the lease term;
- Tools and consumables with large value issued in use and can be used for more than one year;
- Gas cylinders are considered as tools, and are amortised on a straight line basic over 10 years; and
- Others are amortized to the consolidated income statement over 2 to 3 years.
3.9 INVESTMENTS IN ASSOCIATES
The Group’s investment in its associate is accounted for using the equity method of accounting. An
associate is an entity in which the Group has significant influence that is neither subsidiaries nor joint
ventures. The Group generally deems they have significant influence if they have from 20% or above
of the voting rights.
Under the equity method, the investment is carried in the consolidated balance sheet at cost plus
post acquisition changes in the Group’s share of net assets of the associates. Goodwill arising on
acquisition of the associate is included in the carrying amount of the investment and is amortized over
a 10-year period. The consolidated income statement reflects the share of the post-acquisition results
of operation of the associate.
The share of post-acquisition profit (loss) of the associates is presented on face of the consolidated
income statement and its share of post-acquisition movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
Dividend/profit sharing receivable from associates reduces the carrying amount of the investment.
The financial statements of the associates are prepared for the same reporting year as the Group.
Where necessary, adjustments are made to bring the accounting policies in line with those of the
Group.
3.10 OTHER INVESTMENTS
Other investments are stated at their acquisition costs. Provision is made for any diminution in value
of the marketable investments at the balance sheet date representing the excess of the acquisition cost
over the market value at that date in accordance with the guidance under Circular No. 228/2009/TTBTC issued by the Ministry of Finance on 7 December 2009. Increases and decreases to the provision
balance are recorded as finance expense in the consolidated income statement.
3.11 PAYABLES AND ACCRUALS
Payables and accruals are recognised for amounts to be paid in the future for goods and services
received, whether or not billed to the Group.
3.12 PROVISION FOR SEVERANCE PAY
The severance pay to employee is accrued at the end of each reporting year for all employees who
have more than 12 months in service up to 31 December 2008 at the rate of one-half of the average
monthly salary for each year of service up to 31 December 2008 in accordance with the Labour Code,
the Law on Social Insurance and related implementing guidance. Commencing 1 January 2009, the
average monthly salary used in this calculation will be revised at the end of each reporting year
following the average monthly salary of the year up to the balance sheet date. Any changes to the
accrued amount will be taken to the consolidated income statement.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
This accrued severance pay is used to settle the termination allowance to be paid to employee upon
termination of their labour contract following Article 42 of the Labour Code.
3.13 FOREIGN CURRENCY TRANSACTIONS
The Group follows the guidance under VAS 10 in relation to foreign currency transactions as applied
consistently in prior years. In addition to VAS 10, starting from the financial year 2012, the Group
adopts Circular 179 in relation to foreign currency transaction which impacts are presented in Note
3.1.
Transactions in currencies other than the Group’s reporting currency of VND are recorded at the
exchange rates ruling at the date of the transaction. At the end of the year, monetary assets and
liabilities denominated in foreign currencies are translated at buying exchange rate announced by the
commercial bank where the Group maintains bank accounts at the balance sheet date. All realised
and unrealised foreign exchange differences are taken to the income statement.
3.14 TREASURY SHARES
Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted
from equity. No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of
the Group’s own equity instruments.
3.15 APPROPRIATION OF NET PROFITS
Net profit after tax is available for appropriation to shareholders after approval in the shareholders’
meeting, and after making appropriation to reserve funds in accordance with the Group’s Charter and
Vietnam’s regulatory requirements.
The Group maintains the following reserve funds which are appropriated from the Group’s net profit
as proposed by the Board of Directors and subject to approval by shareholders at the annual general
meeting.
- Financial reserve fund
This fund is set aside to protect the Group’s normal operations from business risks or losses, or to
prepare for unforeseen losses or damages for objective reasons and force majeure, such as fire,
economic and financial turmoil of the country or elsewhere.
- Investment and development fund
This fund is set aside for use in the Group’s expansion of its operation or in-depth investments.
- Bonus and welfare fund
This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and
improvement of the employees’ benefits and is recognised as a liability.
3.16 BASIC EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit after tax for the year attributable
to ordinary shareholders of the Company by the weighted average number of ordinary shares
outstanding during the year.
3.17 REVENUE RECOGNITION
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable, excluding trade discount, rebate and sales return. The following
specific recognition criteria must also be met before revenue is recognised:
Annual Report 2 12 / PNJ / 79
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed
to the buyer, usually upon the delivery of the goods.
Rendering of services
Revenue is recognised when the service has been rendered.
Interest
Revenue is recognised as the interest accrues (taking into account the effective yield on the asset)
unless collectability is in doubt.
Dividends
Income is recognised when the Group’s entitlement as an investor to receive the dividend is
established.
3.18 TAXATION
Current income tax
Current income tax assets and liabilities for the current and prior years are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted as at the balance sheet date.
Current income tax is charged or credited to the consolidated income statement, except when it
relates to items recognised directly to equity, in which case the current income tax is also dealt with
in equity.
Current income tax assets and liabilities are offset when there is a legally enforceable right for the
Group to offset current income tax assets against current income tax liabilities and when the Group
intends to settle its current income tax assets and liabilities on a net basis.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except where the
deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
which at the time of the related transaction affects neither the accounting profit nor taxable profit or
loss.
Deferred income tax assets are recognised for all deductible temporary differences, carried forward
unused tax credit and unused tax losses, to the extent that it is probable that taxable profit will be
available against which deductible temporary differences, carried forward unused tax credit and
unused tax losses can be utilised, except where the deferred income tax asset in respect of deductible
temporary difference which arises from the initial recognition of an asset or liability which at the time
of the related transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all
or part of the deferred income tax asset to be utilised. Previously unrecognised deferred income tax
assets are re-assessed at each balance sheet date and are recognised to the extent that it has become
80 / PNJ / Annual Report 2 12
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
probable that future taxable profit will allow the deferred income tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realised or the liability is settled based on tax rates and tax laws that have
been enacted at the balance sheet date.
Deferred income tax is charged or credited to the consolidated income statement, except when it
relates to items recognised directly to equity, in which case the deferred income tax is also dealt with
in the equity account.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right for the
Group to offset current income tax assets against current income tax liabilities and when they relate
to income taxes levied by the same taxation authority on either the same taxable entity or when the
Group intends either settle current income tax liabilities and assets on a net basis or to realise the
assets and settle the liabilities simultaneously, in each future year in which significant amounts of
deferred income tax liabilities or assets are expected to be settled or recovered.
3.19 FINANCIAL INSTRUMENTS
Financial instruments - initial recognition and presentation
Financial assets
Financial assets within the scope of Circular No. 210/2009/TT-BTC issued by the Ministry of Finance
on 6 November 2009, providing guidance for the adoption in Vietnam of the International Financial
Reporting Standards on presentation and disclosures of financial instruments (“Circular 210”) are
classified, for disclosures in the notes to the consolidated financial statements, as financial assets at
fair value through profit or loss, held-to-maturity investments, loans and receivables or available-forsale financial assets as appropriate. The Group determines the classification of its financial assets at
initial recognition.
All financial assets are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial assets include cash, cash equivalents and short-term deposits, trade and other
receivables.
Financial liabilities
Financial liabilities within the scope of Circular 210 are classified, for disclosures in the notes to the
consolidated financial statements, as financial liabilities at fair value through profit or loss or financial
liabilities measured at amortised cost as appropriate. The Group determines the classification of its
financial liabilities at initial recognition.
All financial liabilities are recognised initially at cost plus directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, and loans.
Financial instruments - subsequent re-measurement
No subsequent re-measurement of financial instruments is currently required.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated
balance sheet if, and only if, there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, or to realise the assets and settle the
liabilities simultaneously.
Annual Report 2 12 / PNJ / 81
4. CASH AND CASH EQUIVALENTS
Ending balance
Beginning balance
Cash on hand
Cash at banks
Cash in transit
Cash equivalents
TOTAL
Cash equivalents represent gold taels that are readily convertible into known amounts of cash and
that are subject to an insignificant risk of change in value.
5. TRADE RECEIVABLES
Ending balance
Beginning balance
Due from third parties
Provision for doubtful debts
TOTAL
6. OTHER RECEIVABLES
Ending balance
Beginning balance
Due from third parties
Due from related parties (Note 28)
TOTAL
Provision for doubtful debts
TOTAL
7. PROVISION FOR DOUBTFUL DEBTS
Current year
Provision for doubtful debts at beginning of year
Add: Provision created during the year
Less: Reversal of provision during the year
Provision for doubtful debts at end of year
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8. INVENTORIES
Ending balance
Beginning balance
Ending balance
Beginning balance
Merchandise inventories
Finished goods
Goods on consignment
Raw materials
Work in process
Tools and suppliers
Goods in transits
9. TANGIBLE FIXED ASSETS
10. INTANGIBLE FIXED ASSETS
Buildings
and structures
Machinery
and equipment
Office
equipment
Motor
vehicles
Total
Cost:
As at 31 December 2011
Newly purchased/
constructed
Disposed
As at 31 December 2012
Accumulated
depreciation:
As at 31 December 2011
Depreciation for the year
Disposed
As at 31 December 2012
Net carrying amount:
As at 31 December 2011
As at 31 December 2012
The buildings and machineries with their respective carrying amounts of VND 15,982,368,023 and VND 8,991,674,750
were pledged to obtain loans from commercial banks (Note 21).
Annual Report 2 12 / PNJ / 83
11. INTANGIBLE FIXED ASSETS
Indefinite
land use right
Computer
software
Total
Cost:
Beginning balance
Addition
Decrease from disposal of
a subsidiary
Ending balance
Accumulated amortization:
Beginning balance
Amortization for the year
Decrease from disposal of a
subsidiary
Ending balance
Cost:
Beginning balance
Ending balance
Land use right with the carrying amount of VND 166,099,851,738 was pledged to obtain loans from commercial banks (Note 20).
12. CONSTRUCTION IN PROGRESS
Ending balance
Duong Quang Ham factory project
Silver and gold jewelry center
Thu Khoa Huan commercial shopping center
TOTAL
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13. LONG - TERM INVESTMENTS
13.1 INVESTMENTS IN ASSOCIATES
Name
Ending balance
Cost of
investment
% of
interest
Beginning balance
Cost of
investment
% of
interest
Saigon Fuel Joint Stock
Company
Dong A Land Joint Stock
Company
TOTAL
Ending balance
Beginning balance
Cost of investment in associates
Accumulated share in post-acquisition profit
of the associate
Dividends received
Saigon Fuel Joint Stock Company (“SFC”) is a shareholding company established in accordance
with Business Registration Certificate No. 0300631013 issued by the Department of Planning
and Investment of Ho Chi Minh City on 20 June 2000. SFC’s registered head office is located at
1A Pham Ngoc Thach Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam. SFC’s
principal activities are to trade oil and gas products, to trade tools, supplies and machineries for
oil and gas, to produce and trade agriculture products, to import, produce and trade wooden
products; and to provide transportation service, rental and construction services.
Dong A Land Joint Stock Company (“DAL”), is a shareholding company established in
accordance with Business Registration Certificate No. 4103001739 issued by the Department of
Planning and Investment of Ho Chi Minh City on 24 July 2003. DAL’s registered head office is
located at 43R/12, Ho Van Hue Street, Ward 9, Phu Nhuan District, Ho Chi Minh City, Vietnam.
DAL’s principal activities are to provide design services, project management, construction
services, to provide real estate consulting services and real estate agency, and to trade houses and
interior products.
Annual Report 2 12 / PNJ / 85
13.2 OTHER LONG-TERM INVESTMENTS
Name
Ending balance
Number
of shares
Beginning balance
Cost of
investment VND
Number
of shares
Cost of
investment VND
Dong A Joint Stock
Commercial Bank (DAB) (i)
Saigon M&C Real Estate Joint
Stock Company
Que huong Liberty Joint Stock
Company
Hoang Minh Giam project (ii)
Others
TOTAL
Provision for long-term
investments
NET
(i) DAB’s shares were pledged to obtain loans from commercial banks (Note 21).
(ii) This represents the Group’s advance under Business Cooperation Contract with Vietnam Festival Travel
Company Limited and Dong A Land Joint Stock Company to develop a real estate project located at 8 Hoang
Minh Giam Street, Phu Nhuan District, Ho Chi Minh City, Vietnam.
13.3 OTHER LONG-TERM INVESTMENTS
Current year
Previous year
Current year
Previous year
Provision for long-term investments at beginning
of year
Less: Reversal of provision
during the year
Provision for long-term investments at
end of year
14. LONG TERM PREPAID EXPENSES
Gasoline cylinders
Land rental (*)
Consulting services fee
Office and retail shop renovation cost
Retail shop rental
Other
TOTAL
149,792,511,796
29,670,699,997
2,956,937,434
6,208,349,863
188,628,499,090
(*) This represents leased land lot located at Street 5, Vinh Loc Industrial Park, Hoc Mon District, Ho Chi
Minh City, and was pledged to obtain loans from commercial banks (Notes 14 and 21).
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15. SHORT - TERM LOANS
Ending balance
Beginning balance
Short-term loans from banks
Short-term loans from individuals
Current portion of long-term loan (Note 21)
TOTAL
Details of short-term loans from banks are as follows:
Bank
Ending balance
VND
Maturity date
Purpose
Interest
rate
Military Commercial
Joint Stock Bank –
Northern Sai Gon
Branch
From 25
December 2012
to 27 Feb 2013
To finance
working
capital
10% p.a
Unsecured
Vietnam Jointstock
Commercial Bank for
Industry and Trade –
Ho Chi Minh Branch
From 29
October 2012 to
19 March 2013
To finance
working
capital
9.5% p.a.
Unsecured
Vietnam Export Import
Commercial Joint
Stock Bank - Main
transaction office No.1
From 13
September 2012
to 10 Jan 2013
To finance
working
capital
9% p.a.
The
Group's
DAB
shares
Bank for Foreign Trade
of Vietnam – Ho Chi
Minh Branch
From 3
October 2012
to 26 March
2013
To finance
working
capital
From 9.8
p.a % to
10.5%
p.a.
Unsecured
From 27 November 2012
to 3 Mar 2013
To finance
working capital
6% p.a
Unsecured
From 25 April
2012 to 29 April
2013
To finance
working
capital
6.5% p.a.
The Group's
DAB
shares
Asia Commercial Joint
Stock Bank – Main
transaction office
Description of
Collateral
Details of individuals loans are as follows:
Individuals –
in VND
From 31 Aug 2012
to 29 Dec 2013
To finance From 8% p.a to
working capital
14% p.a.
Unsecured
Annual Report 2 12 / PNJ / 87
16. TRADE PAYABLES
Ending balance
Beginning balance
Ending balance
Beginning balance
Due to third parties
Due to related parties (Note 29)
TOTAL
17. STATUTORY OBLIGATIONS
Corporate income tax
(Note 27.2)
Value-added tax
Others
TOTAL
18. ACCRUED EXPENSES
Ending balance
Beginning balance
Interest expense
Retail shop rental
Advertising and promotion
Others
TOTAL
19. OTHER PAYABLES
Ending balance
Trade union fee
Social and health insurance
Dividends payable
Payable to related parties
Deposits received from transfer of shares
Others
TOTAL
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20. LONG-TERM LOANS
Ending balance
Beginning balance
Loans from banks
In which
Current portion of long-term loans (Note 15)
Non-current portion
864,902,111,223
134,243,356,496
730,658,754,727
Details of the long-term loans from the banks are as follows:
Banks
Maturity
date
Purpose
Interest
Description
of Collateral
29 April
2013
To finance
working
capital
4.2%
p.a.
The Group’s
DAB shares
7 June
2013
To finance
working
capital
7.0%
p.a.
Machinery
and
equipment
Dong A
Commercial Joint
Stock Bank
29 April
2015
To finance
working
capital
4%
p.a.
Land use right of l
and lot located at
577 Nguyen Kiem
Street, Ward 9,
Phu Nhuan Dist.;
52A- 52B Nguyen
Van Troi Street,
Ward 15, Phu
Nhuan Dist., and
174 Le Thanh Ton
Street, Ben Thanh
Ward , Dist. 1,
building and
structures
Land use rights of
land lot located at
18-20 Thu Khoa
Huan Street, Ben
Thanh Ward, Dist.
1
Saigon Thuong Tin
Commercial Joint
Stock Bank – Sai
Gon Branch
29 April
2013
To finance
working
capital
4.2%
p.a.
Land use rights
of land lot
located at 18 20 Thu Khoa
Huan Street,
Ben Thanh
Ward, Dist. 1
Asia Commercial
Joint Stock Bank –
Main Transaction
office
Ending balance
VND
TOTAL
Annual Report 2 12 / PNJ / 89
21. OWNERS’ EQUITY
21.1 MOVEMENTS IN OWNERS’ EQUITY
Share
capital
Share
premium
Treasury Investment and Financial Undistributed
shares development fund reserve fund
earnings
Total
For the year ended 31 December 2011:
As at 1 January 2011
Net profit
for the year
Profit
appropriation
Dividend
declared
As at 31 December 2011
For the year ended 31 December 2012:
As at 1January 2012
Net profit for
the year
Dividend
declared
Profit
appropriation
Transfer to bonus
and welfare fund
45,000,000,000 12,085,000,000
133,324,145,351
133,324,145,351
(29,999,216,500
(29,999,216,500)
(62,785,000,000)
(5,700,000,000)
As at 31 December 2012
21.2 CAPITAL TRANSACTIONS WITH OWNERS AND DISTRIBUTION OF DIVIDENDS
Current year
Contributed capital
Beginning balance
Increase
Ending balance
Dividends paid
Dividends declared
90 / PNJ / Annual Report 2 12
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21.3 SHARES – ORDINARY SHARES
Current year
Previous year
Number of shares
Number of shares
Shares authorised to be issued
Shares issued and fully paid
Ordinary shares
Treasury shares
Ordinary shares
Shares in circulation
Ordinary shares
21.4 BASIC EARNINGS PER SHARE
The following table shows the income and share data used in the basic earnings per share
calculations:
Current year
Previous year
Net profit attributable to ordinary equity
holders of the parent
Weighted average number of ordinary shares
Basic earnings per share (VND/share)
There have been no dilutive potential
ordinary shares during the year and up to the
date of these consolidated financial
statements.
Annual Report 2 12 / PNJ / 91
22. REVENUE
22.1 REVENUE FROM SALE OF GOODS AND RENDERING OF SERVICES
Current year
Previous year
Current year
Previous year
Gross revenue
Of which:
Sale of gold, silver and gemstone
Sale of accessories
Sale of gasoline and gas cylinders
Laboratory
Less
Sales discount
Sales returns
Indirect tax
Net revenues
Of which:
Sale of gold, silver and gemstone
Sale of accessories
Rendering of services
Sale of gasoline and gas cylinders
22.2 FINANCE INCOME
Dividends earned
Gains on disposal of DVC
Interest income
Foreign exchange gains
Others
TOTAL
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23. COST OF GOODS SOLD AND SERVICES RENDERED
Current year
Previous year
Cost of gold, silver and gemstone
Cost of gasoline and gas cylinders
Cost of accessories
Cost of laboratory
TOTAL
24. FINANCE EXPENSES
Current year
Previous year
Current year
Previous year
Cost of gold, silver and gemstone
Cost of gasoline and gas cylinders
Cost of accessories
Cost of laboratory
TOTAL
25. OTHER INCOME AND EXPENSES
Other income
Proceeds from disposal of land lease contract
Proceeds from disposal of tangible fixed assets
Proceeds from transfer of retail gas distribution system
Others
Other expenses
Net book value of disposed fixed assets
Net book value of disposed land lease contract
Others
NET
Annual Report 2 12 / PNJ / 93
26. PRODUCTION AND OPERATING COSTS
Current year
Previous year
Raw materials
Labour costs
Depreciation and amortization
Expenses for external services
Others
TOTAL
27. CORPORATE INCOME TAX
The Group has the obligation to pay corporate income tax ("CIT") at the rate of 25% of taxable profits.
The tax returns filed by Group are subject to examination by the tax authorities. As the application of tax
laws and regulations is susceptible to varying interpretations, the amounts reported in the consolidated
financial statements could change at a later date upon final determination by the tax authorities.
27.1 CIT EXPENSE
Current year
Previous year
Current CIT expense
Adjustment for under accrual of tax from prior years
TOTAL
27.2 CURRENT CIT
The current tax payable is based on taxable profit for the year. The taxable profit of the Group for the year
differs from the profit as reported in the consolidated income statement because it excludes items of
income or expense that are taxable or deductible in other years and it further excludes items that are not
taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted at balance sheet date.
A reconciliation between the profit before tax on the consolidated income statement and taxable profit is
presented below:
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t h e
t r u e
v a l u e
Previous year
Profit before tax
Adjustments:
Non-deductible expenses
Change in accrued expense
Dividends earned
Disposal its subsidiary
Reversal provision from associates
Share of profits of associates
Change in severance allowance
Unrealised profit
Unrealised foreign exchange gains
Others
Estimated current
taxable profit
Estimated current CIT
Adjustment for under accrual of tax from prior years
CIT payable at beginning of year
CIT paid during the year
CIT payable at end of year
27.3 DEFERRED CIT
The following are the deferred tax assets and liabilities recognized by the Group, and the movements
thereon, during the current and prior reporting year.
Consolidated
balance sheet
Ending balance
Beginning balance
Consolidated
income statement
Current year
Previous year
Unrealised profit
Severance allowance
Accrued expense
Unrealised foreign
exchange gains
Deferred
tax assets
Net deferred income tax income credit to consolidated
income statement
Annual Report 2 12 / PNJ / 95
28. TRANSACTIONS WITH RELATED PARTIES
Significant transactions with related parties during the year were as follows:
Related parties
Relationship
Nature of
transactions
Dong A Joint Stock
Commercial Bank
Related party
Dividends
Associate
Construction service
Related party
Dividend received
Dong A Land Joint Stock Company
Que huong Liberty Joint Stock
Company
Amount
Remuneration to members of the Board of Directors and Management:
Current year
Previous year
Salaries and bonus
The outstanding balances due from and due to related parties as at 31 December 2012 were as follows:
Related parties
Relationship
Nature of transactions
Related party
Dividend
Related party
Service rendering
Other receivable
Dong A Joint Stock
Commercial Bank
Trade payable
Dong A Land Joint Stock
Company
Dong A Joint Stock Commercial
Bank
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Service rendering
Receivable (Payable)
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29. OPERATING LEASE COMMITMENTS
The Group leases outlets under operating lease arrangements. Future rental amounts due under such
operating leases after 31 December 2012 were as follows:
Ending balance
Beginning balance
Within 1 year
From 1 to 5 years
Over 5 years
TOTAL
30. SEGMENT INFORMATION
The primary segment reporting format is determined to be business segments as the Group’s risks and rates
of return are affected predominantly by differences in the products and services produced. The operating
businesses are organized and managed separately according to the nature of the products and services
provided, with each segment representing a strategic business unit that offers different products and serves
different markets.
The Group is principally engaged in trading gold, silver, jewelry, accessories and gemstone; trading gasoline
and gas cylinders; and provision of jewelry inspection service.
Transfer prices between business segments are set on an arm’s length basis in a manner similar to
transactions with third parties. Segment revenue, segment expense and segment results include transfers
between business segments. Those transfers are eliminated in preparation of consolidated financial
statements.
The Group operates in one geographical segment which is Vietnam.
Annual Report 2 12 / PNJ / 97
98 / PNJ / Annual Report 2 12
Total liabilities
Segment liabilities
Unallocated liabilities
Total assets
Assets and liabilities
Segment assets
Unallocated assets
Net profit for the year
Net profit before CIT
CIT expense
Finance income
Finance expenses
Other profit
Unallocated expenses
Results
Segment gross profit
Total revenue
Sales deduction
Revenue
Sales to external
customers
For the year ended 31 December 2012:
Gold, silver and gemstone
Accessories
Gasoline and
gas cylinders
Laboratory
The following tables present revenue and profit and certain assets and liabilities information regarding the Group’s business segment.
Elimination
Tota
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
30. SEGMENT INFORMATION
Accessories
Gasoline and
gas cylinders
Gemstone
inspection services
Elimination
Total
t h e
Total liabilities
Segment liabilities
Unallocated liabilities
Total assets
Assets and liabilities
Segment assets
Unallocated assets
Net profit for the year
Unallocated expenses
Finance income
Finance expenses
Other profit
Net profit before CIT
CIT expense
Results
Segment gross profit
Total revenue
Revenue
Sales to external
customers
Sales deduction
For the year ended 31 December 2011:
Gold, silver
and gemstone
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
30. SEGMENT INFORMATION (continued)
Annual Report 2 12 / PNJ / 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
31. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial liabilities are loans and borrowings, trade and other payables. The main
purpose of these financial liabilities is to finance the Group’s operation. The Group has trade and other
receivables, cash, cash equivalents and short-term deposits that arise directly from its operations. The
Group does not hold or issue any derivative financial instruments
The Group is exposed to market risk, credit risk and liquidity risk.
Risk management is integral to the whole business of the Group. The Group has a system of controls in
place to create an acceptable balance between the cost of risks occurring and the cost of managing the
risks. The management continually monitors the Group's risk management process to ensure that an
appropriate balance between risk and control is achieved.
Management reviews and agrees policies for managing each of these risks which are summarized below.
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk,
commodity price risk and other price risk, such as equity price risk. Financial instruments affected by
market risk include loans and borrowings.
The sensitivity analyses in the following sections relate to the position as at 31 December 2011 and 31
December 2012.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s exposure to market risk for changes in interest rate
relates primarily to the Group’s long-term debt obligations with floating interest rates.
The Group manages interest rate risk by looking at the competitive structure of the market to obtain rates
which are favourable for its purposes within its risk management limits.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of loans and borrowings.
With all other variables held constant, the Group’s profit before tax is affected through the impact on
floating rate borrowings as follows:
100 / PNJ / Annual Report 2 12
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Increase/decrease
in basis points
Effect on
profit before tax
For the year ended 31 December 2012
Gold
Gold
For the year ended 31 December 2011
VND
USD
Gold
VND
USD
Gold
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates and gold rate. The Group’s exposure to the risk of changes in
foreign exchange rates relates primarily to the Group’s operating activities.
Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in the US$ and gold
exchange rates with all other variables held constant, of the Group’s profit before tax (due to changes in the
fair value of monetary assets and liabilities).
Change in
USD rate
Change in
gold rate
Effect on
profit before tax
For the year ended 31 December 2012
For the year ended 31 December 2011
Annual Report 2 12 / PNJ / 101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The Group’s exposure to foreign currency changes for all other currencies is not material.
Equity price risk
The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty
about future values of the investment securities. The Group manages equity price risk by placing a limit on
equity investments. The Group’s Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to listed and unlisted equity securities at fair value was VND
459,811,208,567 (31 December 2011: VND 430,477,435,045). A decrease of 5% in the value of the listed
and unlisted securities could have an impact of approximately VND 22,990,560,428 (31 December 2011:
VND 21,523,871,752) on the Group’s profit before tax, depending on whether or not the decline is
significant or prolonged. An increase of 5% in the value of the listed and unlisted securities would increase
Group’s profit before tax by VND 21,523,871,752 (31 December 2011: VND 21,523,871,752).
Commodity price risk
The Group exposes to commodity price risk in relation to purchase of certain commodities. The Group
manages its commodity price risk by keeping close watch on relevant information and situation of
commodity market in order to properly manage timing of purchases, production plans and inventories level.
The Group does not employ any derivative financial instruments to hedge its commodity price risk
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities
(primarily for trade receivables) and from its financing activities, including deposits with banks, foreign
exchange transactions and other financial
instruments.
Trade receivables
Customer credit risk is managed by the Group based on its established policy, procedures and control
relating to customer credit risk management. The Group’s exposure to credit risk in relation with receivables
is mainly influenced by the individual characteristics of each customer. Most of the Group’s sales are cash
sale which are not exposured to the credit risk.
Outstanding customer receivables are regularly monitored, for trade receivables from foreign customers, the
Group’s recoverability is guaranteed by a third bank. The requirement for impairment is analyzed at each
reporting date on an individual basis for major clients. In view of the aforementioned and the fact that the
Group’s trade receivables relate to a large number of diversified customers, there is no significant
concentration of credit risk.
Bank deposits
The Group's bank balances are mainly maintained with well-known banks in Vietnam. Credit risk from
balances with banks is managed in accordance with the Group’s policy. The Group’s maximum exposure to
102 / PNJ / Annual Report 2 12
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
credit risk for the components of the consolidated balance sheet at each reporting dates are the carrying
amounts as illustrated in Note 4. The Group evaluates the concentration of credit risk in respect to bank
deposit as low.
Liquidity risk
The liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligation due to
shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of maturities of
financial assets and liabilities.
The Group monitors its liquidity risk by maintain a level of cash and bank loans deemed adequate by
management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments:
Less than 1 year
From 2 to 5 years
TotaL
31 December 2012
Loans
Trade payables
Other payables and
accrued expenses
TOTAL
31 December 2011
Loans
Trade payables
Other payables and
accrued expenses
TOTAL
Collateral
The Group has pledged its fixed assets with the value of VND 182,820,156,215, and the Group’s DAB
shares amounting to VND 330,000,000,000 in order to fulfil the collateral requirements for the loans
obtained from commercial banks (Notes 15 and 20).
The Group did not hold any collateral at 31 December 2012 and 31 December 2011.
Annual Report 2 12 / PNJ / 103
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TOTAL
Financial assets
Other long-term investments
Short-term deposit
Trade receivables
Other receivables
Cash and cash
equivalents
Cost
Ending balance
Provision
Carrying amount
Cost
Beginning balance
Provision
Ending balance
Beginning balance
Fair value
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
32. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
32. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The fair value of the financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following method and assumption were used to estimate the fair values:
- Cash, cash in bank, cash equivalents and short-term deposits, trade and other receivables, trade and other
payables and other current liabilities approximate their carrying amounts largely due to the short-term
maturities of these instruments.
- The fair value of loans from banks is estimated by discounting future cash flows using rates currently
available for debts for debt on similar terms, credit risk and remaining maturities. As at 31 December 2012,
the carrying amounts of such borrowings, are not materially different from their calculated fair values.
33. EVENTS AFTER THE BALANCE SHEET DATE
There have been no significant events occurring after the balance sheet date which would require
adjustments or disclosures to be made in the consolidated financial statements.
Duong Quang Hai
Preparer
Dang Thi Lai
Chief Accountant
Cao Thi Ngoc Dung
General Director
25 March 2013
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