Chapter 2: FINANCIAL STATEMENT ANALYSIS IN PHU NHUAN JEWELRY JOINT

STOCK COMPANY IN THE PERIOD OF 2017-2019

2.1 Overview of Phu Nhuan Jewelry Joint Stock Company
2.1.1 Establishment and Development
Basic information about the company:
- Name of company: PHU NHUAN JEWELRY JOINT STOCK COMPANY
- Abbreviation: PNJ
- Head office : 170E Phan Dang Luu Street, Ward 3, Phu Nhuan District, Ho Chi
Minh City
- Tel.: 08. 39951703 – 08. 39951706
- Fax: 08.39951702
- Email: [email protected]
- Tax code: 0300521758
- Type of business : Joint Stock Company
- Legal representative : Mrs. CAO THI NGOC DUNG
- Registered capital : VND 599.991.420.000
- Charter capital : VND 2.252.935.850.000

Phu Nhuan Jewelry Joint Stock Company (Tax Identification Number: 0300521758)
was founded under the People’s Committee of Phu Nhuan District in 1988. The
permatureness of VietNam jewelry industry and the limitations of the market are
the major challenges that the first 20 people founded the PNJ have to pass. In 1992,
PNJ offically named Phu Nhuan Jewelry Joint Stock Company after twice renaming.
PNJ’s strategy is to become a professional jeweler. At the time, PNJ also expand the
business by founding the Dong A bank with 40% equity ratio.
In1994, PNJ Hanoi branch establishment, which is the start of the strategy to expand
branches around Vietnam later such as Da Nang branch opened in 1998, Can Tho
branch opened in 1999. This period also states the performances of PNJ in term of
professional branding. Not only spreading nationwide, PNJ also exports to foreign
markets. After a few years since its founding, PNJ jewelry brand dominate the
market quickly, consumers trust and its prestige with honors and awards achieved
Certification of Vietnam Quality.
In 2001, the brand PNJSilver officially launches to meet the needs of young
people.Besides, PNJ continues to develop PNJ gold jewelry with really big marketing
campaigns sponsored by the World Gold Council. Moreover, PNJ is awarded Top 500
Retailed Asia Pacific and First labor medal.
In 2007, PNJ is ranked Top 200 Largest Enterprises in Vietnam by United Nations
Development Program and awarded the Third Independence Medal by the
President. In this state, PNJ earns the strong development on al aspects, especially
in term of branding and developing new products. PNJ re-launches PNJ Silver with
new look and launches a premium trademark Cao-FINE Jewelry. Moreover, PNJ is
the sponsor for Miss Univers 2008 in term of jewels and crown. On 04/2008, PNJ
officially changed the new logo to celebrate the 20 th anniversary of the
establishment and development. The new branch identify is more professional
image, more modern to meet the challenge in the next journey.
In 2009, PNJ share is officially listed at HOSE, which increases its charter capital to
VND 400 billion. On 08/2009 Company Limited fashion CAO was establishment with
the addition of watch trading business from world-renowned brands in the PNJ
branch system. PNJ is recognized as the national brand by the Government and
awarded the prize of National Quality. In addition, PNJ is one of three Vietnamese
companies awarded the prize of APQ in 2010. On 03/2011, PNJ start the
construction of the most modern jewelry factory in Vietnam.
Determined the need to restructures operations apparatus for Sustainable
Development, in 2012, PNJ hires foreigns consultants to standards and then PNJ
starts using the new jewelry factory after 18 months under construction. In 2013,
PNJ open the biggest center in Vietnam for jewelry,diamond and watch in Ho Chi
Minh city. Until 2014, PNJ open a series of jewelry center in many countries with
nearly 200 branches in Vietnam.Superior business results of 2014 is the success of
restructuring to develop and conserve.
With 32 years of experiences in the field of processing and retailing jewelry made of
gold, sliver and gemstones, Phu Nhuan Jewelry Joint Stock Company has been
constantly developing, becoing one of the largest jewelry manufactures and retailers
In VietNam with famous brands, such as PNJ Silver, PNJ Gold, CAO FINE Jewelry and
Jemma. Not only that, PNJ is also the pioneer in exporting Vietnamese jewelry to in
ternationl market. Currently, PNJ Company has nearly 6000 employees with a
wholesale system,a nd more than 300 retail stores spread across the country. PNJ
Company has a production capacity of over 4 million products per year, is
considered one of the largest jewelry manufacturing factories in Aisa with a staff of
more than 1,200 employees.
2.1.2 Type of business:
The company is producing the following items:
- Business activities for gold, silver, precious metals, precious and semi-
precious stones, jewelry, precious metal raw materials, handicrafts and fine
art, fashion items and fashion accessories.
 - Production and processing jewelry. Production of ferrous metals and precious
metals, gold bars.
- Sales of machinery and equipment of jewelry sector.
- Diamonds and gemstones testing services. Inspection services of gold, silver,
other precious metals, semi-precious stones.
- Pawn service.
- Foreign currency exchange, receipt and payment of foreign currency service.
- Trading in real estate.
- Trading in restaurants and other related services.
- Trading in motorbikes, cars and other related services.
- Transporting by road.
- Vocational service.
2.1.3 Organizational chart
The Company is organized, managed and it operated under the mode including:
1. The general Meeting of Shareholders
2. Board of Directors
3. Supervisory Committee
4. General Director
Chart 1:
 General
Meeting of
Shareholders

Board of Supervisory
Directors Committee

General
Director

Vice general Director of Vice general Project

Vice general Director of human
Director of Technology&Po resource&marketin management
Director of sales duction Unit
finance g

Sale Accounting Quality control Marketing

Department Department Department Department

Human
Gold sales PNJ Jewelry
IT Department Resource
Department Factory
Department

Import/Export Internal control Adminstration

Department Department Department

Designing
ERP Data Group
Department

- General Meeting of Shareholders: The General Meeting of Shareholders

includes all shareholders with voting right, it is the highest deciding body of
the Company, having the following rights and obligations.

- Board of Directors: The Board of Directors is the management body of the

Company, it has full right to be in the name of the Company to make decision,
implement the rights and obligations of the Company that are not under the
authority of the General Meeting of Shareholders.
- Supervisory Committee: Consists of 03 members elected by the General
Meeting of Shareholders by cumulative voting method, in which 02 members
must permanently reside in Vietnam. The Supervisory Committee’s members
must have the following standards and conditions of company.

- General Director: The General Director of the Company is appointed and

dismissed by the Board of Directors and he is assigned the necessary rights to
implement the tasks of the General Director. General Director is not
necessarily the shareholder of the Company and it can be the member of the
Board of Directors.

- Director of Sales: is one of the highest positions in the sales industry. The
Sales Director is responsible for organizing, managing as well as being
responsible for all business operations of the company.

- Director of Finance: the person who manages finances such as researching,

analyzing and handling corporate financial relationships; developing financial
plans; exploiting and effectively using capital sources, warning of risks to
businesses through financial analysis and making reliable forecasts in the
future.

- Director of Techonology & Production: the person who control quality of

production and factory.

- Director of Human Resource & Marketing: The HR manager is the person who
ensures the smooth and effective human resource management,best serve
for corporate business goals, and marketing activities.

- Project management Unit: who are designated by organizations, companies to

lead a project, who are responsible for accomplishing set goals from start to
implementation and end.

- Sale Department is to engage in a variety of activities to promote the

customer purchase of a product or the client engagement of service.

- Import/Export Department improves efficiency and productivity profitability.

Proven methods and tools exist to achieve this objective in an effective way.

- Designing Department oversees various creative and design project for an

organization.
- Accounting Department: be responsible for all finanacial revenues and
expenditures of the company, ensure full costs for activities of salaries,
bonues,purchase of machinery, materials,… and make a receipt for all
expenses incurred as well as accurate date export and import according to the
company’s regulations.

- Human Resource Department include labour law agreement, recruiting, staff

training and development, payroll, record-keeping and employee
associations.

- Adminstration Department includes all communication nodes and command

centers; every such node and center has a standby for failure redundancy. The
jurisdiction of AD also includes whole Foundation's financial operations, like
disposition of funds, accountancy, budget planning etc.

- Internal Control Department’s function is, famong other things, to ensure the
efficiency and profitability of operations, the reliability of information, and
adhering to rules and regulations. Internal control is a part of day-to-day
management and company administration.

- IT Department is responsible for providing the infrastructure for automation.

It implements the governance for the use of network and operating systems,
and it assists the operational units by providing them the functionality they
need.

- ERP Data Department is the integrated management of main business

processes, often in real time and mediated by software and technology.ERP is
usually referred to as a category of business management software-typically a
suite of integrated applications-that an organization can use to collect, store,
manage, and interpret data from many business activities.

- Quality control Department is responsible of monitoring and ensuring

that each stage of production is followed by all the necessary
procedures for safe use of machinery and that each product coming
out of the production process, complies with
all standards and specifications that have been defined so to ensure
a smooth and trouble free operation. Beside, The quality control
department is also responsible for the proper maintenance of all
production machinery and installation vehicles .
2.1.4 Business orientation of Phu Nhuan Jewelry Joint Stock Company toward 2030
To complete the business and development goals in the coming time, Board of
Directors (BOD) continues consistently with 4 strategic orientations which have
been based on the foundation of strategy model “ Home of Success”. OBD offers the
orientations for the as below:
- Firstly, PNJ will conquer sustainable growth target through growth drivers
such as continuous improvement and innovation to penetrate the market,
focusing on restructuring th product portfolio, introducing new and various
product lines to the market, speeding up new businesss ventures.

- In parallel with sustainable growth, solidifying the capability foundation and

developing in depth core key strengths are vital tasks to help PNJ continously
“ Refresh itself”, becoming the creatve pioneer, making great leap forward in
order to firmly establish its leading position in the market and advancing to
the international level.

- Thirdly, PNJ also pays great attention to asset enrichment in addition to

sustainable growth anf capabilities development.

- With the changes and evolvement o the business context as well as Vietnam
and in global markets, PNJ requires thoughtful preparations and be ready for
a long-term vision. Some actions are as follows restructuring the
organizational structure and operating model of the headquarter, retailing
operation model. Then,improving corporate governance and management
mechanisms. Finally, developing a capital raising plan to supplement for new
invesment.