TRUE GOLD FEARS NO FIRE - PNJ€¦ · ANNUAL REPORT 2015 TRUE GOLD FEARS NO FIRE 6 Typical Figures of 2015 8 Outstanding Events 11 Vision – Mission – Core Values 13 The Chairwoman’s

ANNUAL REPORT 2015

TRUE GOLD FEARS NO FIRE

In 2015, accepting the difficulty as the control, the challenge as the opportunity, PNJ was always stable and brilliant, showing the strength and bravery to reach new pinnacle. If the challenge time is Fire, the will, the enthusiasm, and the passion are Gold

ANNUAL REPORT 2015

TRUE GOLD FEARS NO FIRE

6 Typical Figures of 20158 Outstanding Events11 Vision – Mission – Core Values13 The Chairwoman’s message

16 Milestones of Establishment & Development

22 PNJ GOLD 23 PNJ SILVER 24 CAO FINE 25 JEMMA 26 Corporate Gifts 27 Diamond, Gemstones, Precious Metals Testing Service

30 Board of Directors 32 Board of Management34 Supervisory Committee 35 Situation of Corporate Governance

42 Report of the Board of Directors46 Report of the Supervisory Committee50 Report of the Board of Management

65 Independent Audit Report66 Consolidated Balance Sheet74 Description of Consolidated Financial Report

108 Significant Achievements112 The journey of firm steps to conquer the top116 The strength of sharing

120 PNJ jewelry Distribution Channel

CONTENTS

OVERVIEW

PRODUCTS & SERVICES

PERSONNEL ORGANIZATION & CORPORATE GOVERNANCE

REPORT OF THE BOARD OF DIRECTORS AND

BOARD OF MANAGEMENT

FINANCIAL REPORT

PNJ’S MILESTONES 2015

DISTRIBUTION CHANNEL

OPERATION HISTORY

newly opened stores

10 years of establishment of PNJ Charity Fund with the total contributed amount over

billion VND

Gross profit was

billion VND1.138

TYPICAL FIGURES OF 2015

Jewelry Shopping Centers in 45 provinces and Cities nationwide

The trading of gold jewelry accounted for

of total revenue

Total revenue was

billion VND

194

6 Annual report PNJ - 2015 Typical numbers 7

OUTSTANDING EVENTS

Received the award “Employer of the Year” - JNA Awards 2015 offered by Jewellery News Asia magazine.

Vietnam most valuable brands, PNJ was the only jewelry company in this List

The Jewelry collection “Spring of Peace” won at the regional selection round of Creative Asean Design Competition 2015.

Top100Vietnam best workplaces

PNJ houses were built by PNJ Charity Fund for the poor nationwide.

Vietnam best listed companies in 2015

consecutive years receiving the title of High Quality Vietnamese Goods

Phoenix Ao Dai made of gold by PNJ was recorded by Vietnam Record Center as “Ao Dai with biggest golden Phoenix icon” and was named to the World Unique Collection recognized by the World Unique Creativity Academy

8 Annual report PNJ - 2015 Outstanding events 9

10 Annual report PNJ - 2015 Vision, Mission, Core Values 11

MISSION

CORE VALUES

BECOMING THE LEADING JEWELRY PROCESSOR

AND RETAILER IN ASIA MARKET AND SECURING

THE NUMBER ONE POSITION IN THE SEGMENT OF

MEDIUM AND HIGH CLASS JEWELRY IN VIETNAM.

HONESTY

QUALITY

RESPONSIBILITY

INNOVATION

CREATIVITY

PNJ BRINGS CUSTOMERS THE PRIDE WITH

SOPHISTICATED, OUTSTANDING, QUALITY

JEWELRY PRODUCTS.

VISION

10 Annual report PNJ - 2015

Dear Valued Shareholders and Partners,

In 2015, we continued to witness the world economy’s picture that has not really been prosperous as expected. The growth rate was only 2.4% according to the World

Bank’s data. The economic growth in many countries of regions remained unequal, unstable and unsustainable. However, according to the evaluation of Bloomberg that the emerging markets in Asia such as Vietnam made a surprise positively. Based on the results of the General Statistics Office of Vietnam announced in late 2015, we can see that the gross domestic product (GDP) in 2015 increased 6.68% compared to that of 2014, the highest increase during the last 5 years. According to the State Bank of Vietnam, the domestic gold market in 2015 was stable, there was balance between the supply and demand, the domestic gold price was not much affected by the factors such as the fluctuation in the world’s gold price and the fluctuation of the exchange rate between USD and VND.

However, the growth figure of Vietnam economy in 2015 did not fully reflect the difficulties faced by domestic companies due to the changes in finance, market; the business activities of the economic sectors were sometimes exposed to the unstable hazards. In the gold jewelry business, the quality management and the equity in trading are always concerned. Until now there is not any organization or mechanism that can manage the transparency of products’ quality as well as the financial obligations of the free gold jewelry market.

Despite of many difficulties, thanks to the internal power and the agility to seize opportunities, PNJ ship was stable overcoming every challenge in such a powerful and confident way, making ‘a year marking PNJ characteristics’ on the way of 27 years of development. We conquered the new milestones and pinnacles, quickly developed the distribution system of products and services nationwide, the reputation of PNJ brand reached the world’s market. All was proved by the results and achievements that PNJ gained in various fields. PNJ excellently achieved and exceeded the targets as compared to the plan: the total revenue was 7,697 billion VND, an increase of 7% compared to that of 2014; the gross profit was 1,138 billion VND, an increase of 44% compared to that of 2014.

The milestone of PNJ in 2015 was the story about the journey of overcoming the challenge, touching the success, consolidating the leading position of PNJ in the market. With 194 Jewelry Shopping Centers in 45 provinces and Cities nationwide by the end of 2015, PNJ currently owns the largest jewelry distribution system in Vietnam. Also in the past year, PNJ was named in the roll of honor of national and international prestigious awards. It was voted as “Top 100 Vietnam best workplaces”; excellently received the award “Employer of the Year” offered by JNA Awards 2015; ranked in the “Top 50 Vietnam most valuable brands”. The Southeast Asia jewelry design award and the jewelry masterpieces of PNJ created strong mark in the market, especially creating the

THE CHAIRWOMAN’S MESSAGE

Affirming the vision “Becoming the leading jewelry manufacturer and retailer in Asia market”

12 Annual report PNJ - 2015 Message from the Chairwoman 13

The Jewelry collection “Spring of Peace” won at the regional selection round of Creative Asean Design Competition 2015.

reputation in Vietnam International Fashion Week 2015. The milestones that PNJ achieved in 2015 continues to strengthen PNJ brand name, affirm the vision “Becoming the leading jewelry manufacturer and retailer in Asia market”.

Especially, the 2015 milestone of PNJ also shown in the promotion of cultural identity “common house”, flexibly applied the 5 core values “Responsibility, Honesty, Quality, Innovation, Creativity” on the business activities as well as the efforts to show the social responsibility. The PNJ humanistic values constantly spread through the community activities with great significance about people’s welfare. Typically, the program of building PNJ houses for the poor nationwide and the achievements of 10 years of PNJ Charity Fund in many practical programs for the community.

To the year 2016, PNJ shall continue with the positive growth and impressive position of 2015, continue to have a positive year ahead. The key measures like investment, selective expansion of retail system throughout the country, market development, improvement of customer service quality, investment in hi-tech jewelry machines and production lines... are the commitments showing the strong ambition for PNJ to implement the orientations and objectives of 2016.

According to experts’ forecasts, in 2016, thanks to the steady growth of the economy of Asia - Pacific and the continuous dominance compared to other regions in the world, the investment activities in the region are very promising. In Vietnam market, the 2016 macroeconomic situation is expected to continue to improve, the total domestic demand gradually increases thanks to the increase in investment and personal consumption. The domestic gold jewelry trading prospect shall grow fast. Especially, thanks to the positive basic factors, the recently signed trade agreements like Trans-Pacific

Partnership (TPP), the establishment of ASEAN Economic Community (AEC) – the worlds’ 7th largest market – since the end of 2015, the domestic potential companies shall take the large opportunity to reach out to the region and the world. These events shall certainly have a significant impact to the market as well as set new challenges for the adaptability of dynamic companies, including PNJ at a large playground full of fierce competition.

2016 is an important year, marking a 28-year milestone of sustainable development of PNJ, and it is the fourth year with vigorous change from the comprehensive restructuring of the Company in the 10-year development strategy (from 2012 to 2022) of PNJ. We all believe that, with the strategy focusing on the core production and trading activities; flexibly deploying the methodical and steady business development solutions; effective finance and risk management together with the professional team full of desire to contribute, PNJ shall continue to speed up for more development. From such prospect, we commit to try to successfully implement the key objectives of 2016 set at the General Meeting of Shareholders to meet the expectations and beliefs from our valued Shareholders, Partners, and Customers.

On behalf of PNJ’s Board of Directors, I would like to thank all valued Shareholders, Partners, Customers and all Employees of PNJ for supporting and companying, joining hand to create success for PNJ in 2015. Let’s hope that PNJ shall promote premises from the success of 2015 to continue to strongly grow, conquer new pinnacles, and continue to shine in 2016 and the following years.

We wish our valued Shareholders, Partners, and Customers health and success!

Chairwoman

Ms. CAO THI NGOC DUNG

14 Annual report PNJ - 2015 Message from the Chairwoman 15

PNJ has a strong development and achieves positive results,promising many surprising feats in 2016.

MILESTONES OF ESTABLISHMENT &

DEVELOPMENT

2009- 2013PNJ’S LISTING MADE PNJ BECOME A

PUBLIC COMPANY

In March 2009, PNJ’s shares were officially listed on HOSE, the charter capital was increased to 400 billion VND. In August 2009 CAO Fashion Co., Ltd. was established. PNJ becamethe jewelry sponsor for the Miss Earth 2010 held in Vietnam.

On 18 October 2012, PNJ Jewelry Enterprise was opened after 18 months of construction. With the total investment of 120 billion VND, the production capacity was over 4 million products / year, PNJ Jewelry Enterprise was evaluated as one of the biggest jewelry processing enterprises in Asia.

Besides, PNJ continued to invest and upgrade the distribution system scale, opened the offices and jewelry centers in Kien Giang, Binh Duong, Bien Hoa, Hanoi, and Da Nang as the largest jewelry stores in these areas. Especially, PNJ officially launched the largest jewelry, diamond and watch center at 52A-52B Nguyen Van Troi street, Phu Nhuan district, Ho Chi Minh City – this was also the head office and the first gold and silver store of PNJ and it was one of the largest jewelry and diamond centers in Vietnam market.______________________________________

2013- 2015 RESTRUCTURING, SUSTAINABLE DEVELOPMENT

2013 was the year marking the significant events in the brand development strategy of PNJ. On 10 September 2013, PNJSilver officially repositioned the brand, launched the new brand identify “Her world is shining” with fashionable purple color and the breakthroughs in product and brand development strategy. At the same time, PNJ gold jewelry brand announced new message “Seeing the Quality in You” to honor the values of “gold”, the noble qualities of women in the modern society on the basis of inheriting harmoniously with the traditional values of Vietnamese women.

Determining the necessity for restructuring the strategy and the operation mechanism for long lasting development, in 2012, PNJ hired foreign consultants to standardize the management system according to the international standards.

In 2015, PNJ opened lots of jewelry centers in the provinces and Cities of Vietnam increasing the total number of jewelry retail stores to 194 nationwide. PNJ position was raised with domestic and foreign prestigious prizes such as Top 50 Vietnam best listed companies in 2015 announced by Forbes magazine; the Jewelry collection “Spring of Peace” won at the regional selection round of Creative Asean Design Competition 2015; the award “Employer of the Year” - JNA Awards 2015 offered by Jewellery News Asia magazine. With steady steps along with achievements, PNJ is gradually realizing the vision: Becoming the leading jewelry processor and retailer in Asia market and securing the number one position in the segment of medium and high class jewelry in Vietnam.

______________________________________

______________________________________

1988-1992ESTABLISHMENT AND IDENTIFICATION OF

DEVELOPMENT STRATEGY

On 28 April 1988, Phu Nhuan Jewelry Trading Store was founded, under the People’s Committee of Phu Nhuan District when the Vietnam Jewelry industry was still young, the market still had many limits… Those were challenges that the 20 first founders must overcome.

In 1992, PNJ was officially named Phu Nhuan Jewelry Company after two times of changing name from Phu Nhuan Jewelry Trading Store and Phu Nhuan Art Jewelry and Foreign Exchange Company, as well as identified the development strategy as a professional jewelry manufacturer and trader. At this period of time, PNJ also expanded its operations by establishing Dong A Bank with the contribution rate of 40%. ______________________________________

1993 - 2000QUICK EXPANSION OF THE DISTRIBUTION

NETWORK AND BUSINESS LINES

In 1994, PNJ Hanoi branch was established, starting the expansion strategy of distribution network at big cities, such as Danang in 1998, Can Tho in 1999, the PNJ distribution network was constantly expanded.

This period was also the stamp of building PNJ as a proffesional brand, PNJ jewelries started to be exported. Only after few years of establishment, PNJ jewelry quickly dominated the market, loved by consumers and initially achieved the typical awards such as the“High Quality Vietnamese Goods”, the Third Class Labor Medal, the Second Class Labor Medal, PNJ was also awarded the Certificate of Quality Management System by DNV organization according to ISO standard.______________________________________

______________________________________

2001 - 2004SPEEDED UP BRAND BUILDING AND

IMPLEMENTED EQUITIZATION

In 2001, PNJSilver was officially launched in order to meet the demand of the young consumers who loved silver jewelries, along with the continuous development PNJ Gold, through big marketing campaigns which was under the the sponsor of the World Gold Council.

On 02 January 2004: PNJ officially implemented equalization, transformed from state-run enterprise into Phu Nhuan Jewelry Joint Stock Company. Also at this period, PNJ was awarded Top 500 Leading Retailers in Asia Pacific and The First Class Labor Medal.

______________________________________

2005 - 2008RE-LAUNCHED AND

DEVELOPED LUXURY BRAND

This was a strong development stage in all aspects of PNJ, especially the development of new brands and products: CAO Fine Jewellery – a luxury jewelry brand was officially launched; PNJSilver re-launched with new images; PNJ was the crown and jewelry sponsor for the Miss Universe 2008 held in Vietnam. On 03 April 2008, in order to celebrate 20 years of establishment and development, PNJ officially announced the new logo which was more professional, modern and worthy images for the new journey.PNJ became one of the 200 largest companies in Vietnam as announced by UNDP and was honored to receive the noble awarded by the President: the Third Class Independence Medal.

______________________________________

18 Annual report PNJ - 2015 Milestones of establishment & development 19

THE MASTERPIECES HAVE BROUGHT A NEW VALUE TO GOLD TO HONOR THE HUMAN BEAUTY.

PRODUCTS AND SERVICES

PNJ SILVER BRAND

Appearing in Vietnam jewelry market in 2001, until now PNJSilver is like a modern young girl always leading the trend with diversified and novel silver jewelry and accessories. With fashionable and dynamic violet pink color, PNJSilver is proud to be an easily identified jewelry brand at many shopping centers in Vietnam, meeting the fashionable jewelry thirst of the youth, the main group of customers that PNJSilver is aiming at.

Each year, PNJSilver always knows how to refresh itself with many lively and interesting aspects. PNJSilver constantly updates the international fashion trends to design new collections, suitable to the modern lifestyles such as “Ngau hung kham pha”, “Ngau hung SHE” or “Destiny” along with the media stories about the young way of life, premature thinking of modern young girls. In addition to the continuous development of fine products like Charm, Elegance, Baby distributed by the system at 100 retail stores nationwide, PNJSilver have been trying and constantly creating to aim at becoming the leading silver jewelry and accessories brand for the young people.

Brand

Products and services 23

PNJ GOLD JEWELRY BRAND

Since its launch in 1988 until now, PNJ Gold Jewelry brand always keeps innovating to continuously launch hundreds of collections with diversified gold materials and abundantgemstones with pioneering breakthrough designs, contributing to honor the beauty, the elegance and rank of Vietnamese consumers. The PNJ gold jewelry products always have a harmonious combination between the elegance and unique, fashion and modern, every detail is designed lively by talented designers and skillful hands of skilled jewelers, to

ensure the high sophistication and high aesthetics to the products, meeting the tastes of every customer.

Especially, with the message of “Seeing the Quality in You”, PNJ raises the value in each jewelry product, to not only adorn the external beauty but also to honor the true values, noble qualities of the owners. The wedding jewelry collections like Hanh Phuc Vang, Hoang Gia, Phuong Hoang, Mystery, Ngoc Bien, Ngu Hanh … takes turn to be launched not only satisfies the beauty but also proves the peak processing ability and affirms the mission of PNJ gold jewelry brand when bringing the proud to customers by fine jewelry with outstanding quality.

Brand


JEMMA BRAND

Being inspired by the fashion accessories trend that is animatedly in the world, Jemma is a high class jewelry and accessories brand launched at the end of 2009. With the development orientation of a high class and modern jewelry, accessories brand, Jemma is a new option bringing the elegance and nobleness to women. All Jemma products are designed in a modern style, updating the latest fashion trends with diversified materials from silver, high class alloy and colorful semi-precious stones to create unique fashion jewelry products, not only showing the class, fine taste but also bringing the pride to the owners.

BrandBrand

CAO FINE JEWELLERY BRAND

Being launched in 2005, CAO Fine Jewellery gradually conquers the high-end consumers by its uniques and differences.

Each creations is crystalized from quintessences of our best designers and craftsmens, both capturing the spirit of mordern times, reinventing the sence of classic with remarkable creations for timeless and effortless beauty.

Cao Fine Jewellery aims to choose the extraordinary stones for its creations. We give our clients the most beautiful and precious stones with special shapes and tones, of the best quality, cut and origin. Each creations are unique about design and quality

The launch of Thu Khoa Huan flagship at the most luxurious shopping area of Saigon in 2013 shows a correct vision and strategy of CAO Fine Jewellery onthe way to conquer the high class customers as well as the direct competition with the currently international jewelry brands in Vietnam.

24 Annual report PNJ - 2015 Products and services 25

Through 20 years of operation in the field of testing service with a team of experienced testing experts who regularly update their knowledge, together with modern equipment and technology, PNJ Lab established by PNJ has been confirming its reputation to domestic and foreign customers. PNJ Lab is one of the leading testing companies in Vietnam market.

The certificates of PNJ Lab are based on the strictest testing standards of the world like the diamond testing based on the standards of GIA – Gemological Institute of America.

PNJ Lab is also one of the few companies licensed by Directorate for Standards and Quality (Ministry of Science

and Technology) to identify the content of gold, gold jewelry, and crafts ... of companies or individuals when there is any dispute.

The existing services of PNJ Lab:

• Testing, consulting on Diamond.• Testing, consulting on gemstones, semi-precious stones.• Testing, consulting on gold, silver, precious metals, colored metals.• Engraving letters on diamond as requested.

Diamond, Gemstones, Precious Metals Testing Service

1. Honor GiftsThe messages and logos create the mark for each company transmitted by PNJ jewelers in such a perfect way helping to keep the long-lasting brand value.

2. Gift CardsGift cards have many kinds of face value, convenient for use, helping the receivers have the opportunity to buy the jewelry products that they like.

3. Jewelry GiftsThe diversity and sophistication in each PNJ jewelry product shall make every one want to own it.

4. Fashion GiftsThe fashion accessories such as belt, brooches, and hairpin ... create the luxury to the owners.

5. Gift MasterpieceThe unique jewelry works like flowers, paintings, bandanna ... are considered as gift masterpieces created by PNJ jewelers according to the request of customers.

6. Gold Bar and RingMade of 9999 gold, the products of PNJ Gold Bar and Ring not only have material value but also have spirit significance when letters or images can be designed on the products.

Corporate Gifts

With the strength of the design ability, processing technology and a team of skillful craftsmen and jewelers, PNJ not only has the jewelry masterpieces honoring the beauty, the pride of women, but also is one of the first brands developing the product line of Gifts for Company.

The Gifts for Company field has 5 major product lines to help the companies have more options to express the appreciation, gratitude or mark a development stage in the history of the brand.

26 Annual report PNJ - 2015 Products and services 27

PERSONNEL ORGANIZATION & CORPORATE GOVERNANCE

TIME MAY TRUE UP LIFELESS STONE INTO BRIGHT GEMSTONES AND DEMONSTRATE THE TRUE VALUES.

BOARD OF DIRECTORS

Ms. CAO THI NGOC DUNGChairwoman

• Bachelor of Economics and Commerce, Ho Chi Minh City University of Economics

1988 - 2003: Director of Phu Nhuan Jewelry Company1990: Director of Phu Gia Credit Center1991 - 1992: Director of Phu Nhuan Trading Company1992 - 1997: Chairwoman of Dong A Bank2003 - 2014: Chairwoman of Dong A Real Estate Joint Stock Company2005 - 2011: Chairwoman of Dai Viet Energy Joint Stock CompanyFrom 2004 until now: Chairwoman and General Director of Phu Nhuan Jewelry Joint Stock Company

Ms. NGUYEN THI CUCMember of BOD

• Master of Business Administration, Ho Chi Minh City University of Economics

1988 - 1995: Chief Accountant of Phu Nhuan Jewelry Company1996 - 2003: Vice Director of Phu Nhuan Jewelry Company2007 - 2014: Head of Supervisory Committee, Dong A BankFrom 2004 until now: Member of BOD and standing Vice General Director of Phu Nhuan Jewelry Joint Stock Company

Mr. NGUYEN VU PHANVice Chairman

• Master of Business Administration, Ho Chi Minh City University of Technology

1996 - 1999: Vice Director of Garment Enterprise of Binh Duong Production and Import & Export Company1999 - 2003: Vice Director of Phu Nhuan Jewelry CompanyFrom 2004 until now: Vice Chairman and Vice General Director of Phu Nhuan Jewelry Joint Stock Company

Mr. NGUYEN TUAN QUYNHMember of BOD

• Doctor of Business Administration, Paramount University

2005 - 2007: Member of BOD – Vice General Director of Saigon Gas2007 - 2011: Vice Chairman of Dai Viet Energy Joint Stock Company2007 - 2010: Chairman of Hong Vina Gas Cylinders Co., Ltd.2007 - 2012: Vice General Director of Phu Nhuan Jewelry Joint Stock Company2008 - 18 April 2015: Chairman of Saigon Fuel Joint Stock Company2013 - 01 July 2015: Chairman and General Director of Saigon Fuel Joint Stock CompanyFrom 2012 until now: Vice Chairman of Phuong Nam Culture Joint Stock CompanyFrom 01 July 2015 until now: Vice Chairman and General Director of Alpha Books

Mr. PHAN QUOC CONGMember of BOD

• Doctor of Business Administration (USA)

1995 - 1998: Sales Director, Electrolux Vietnam Company1998 - 2000: Director of consumer products and non-prescription drug (Panadol), Smith Kline Beecham Vietnam Company2000 - 2004: Marketing Director of Nestle Vietnam Company2004 - December 2014: Co-founder of X-man brand and General Director of International Consumer Product Manufacturing Joint Stock CompanyFrom January 2004 to January 2015: Senior Vice Chairman in Southeast Asia of Marico GroupFrom May 2015 until now: Chairman of Saigon Food Joint Stock Company

Ms. PHAM VU THANH GIANGMember of BOD

• Doctor of Finance & Banking, University of Applied Sciences Northwestern Switzerland

2005 - 2006: Staff of Aon VietnamFrom 2007 until now: Investment Director of Mekong Capital

Ms. NGUYEN THI BICH HAMember of BOD

• Master of Business Administration, Vanderbilt University USA

1994 - 1999: Head of Sales Department of Branch of Phu Yen Import Export Company in Ho Chi Minh City2000 - 2001: Vice Director of Saigon No. 1 Joint Stock Company2001 - 2005: Research and Development Director of Dong A Bank2006 - 2008: Vice General Director of Dong A Bank2006 - 2009: Consultant, Member of BOD of Binh Minh Community Development Enterprise2010 - 2012: Senior Consultant of CBAM Business Training and Management SchoolFrom 2013 until now: Vice Director of Center for Research and Consulting on Living Value

30 Annual report PNJ - 2015 Board of Directors 31

BOARD OF MANAGEMENT

Ms. CAO THI NGOC DUNGGeneral Director

• Bachelor of Economics and Commerce, Ho Chi Minh City University of Economics

1988 - 2003: Director of Phu Nhuan Jewelry Company1990: Director of Phu Gia Credit Center 1991 - 1992: Director of Phu Nhuan Trading Company1992 - 1997: Chairwoman of Dong A Bank2003 - 2014: Chairwoman of Dong A Real Estate Joint Stock Company2005 - 2011: Chairwoman of Dai Viet Energy Joint Stock CompanyFrom 2004 until now: Chairwoman and General Director of Phu Nhuan Jewelry Joint Stock Company

Ms. NGUYEN THI CUCVice General Director

• Master of Business Administration, Ho Chi Minh City University of Economics

1988 - 1995: Chief Accountant of Phu Nhuan Jewelry Company1996 - 2003: Vice Director of Phu Nhuan Jewelry Company2007 - 2014: Head of Supervisory Committee, Dong A BankFrom 2004 until now: Member of BOD and standing Vice General Director of Phu Nhuan Jewelry Joint Stock Company

Mr. NGUYEN VU PHANVice General Director

• Master of Business Administration, Ho Chi Minh City University of Technology

1996 - 1999: Vice Director of Garment Enterprise of Binh Duong Production and Import & Export Company 1999 - 2003: Vice Director of Phu Nhuan Jewelry CompanyFrom 2004 until now: Vice Chairman and Vice General Director of Phu Nhuan Jewelry Joint Stock Company

Mr. LE HUU HANHVice General Director

• Bachelor of Chemistry, Ho Chi Minh City University of Technology; Diamond and Gemstone Testing Expert

1992 - 2003:- Director of PNJ Hanoi branch- Vice Head of Sales Department; Head of

Sales Department of Phu Nhuan Jewelry Joint Stock Company

From 2004 until now: Vice General Director of Phu Nhuan Jewelry Joint Stock Company

Ms. PHAM THI MY HANHVice General Director

• Master of Business Administration, National Economics University, Washington State University

1995 - 2003: Vice Head of Research and Marketing Department, Head of Research and Marketing Department of PNJ- Director of Research and Marketing

Department- Director of Cao System Management

Department2009 - 2011: Director of CAO Fashion Co., Ltd.From 2012 until now: Vice General Director of Phu Nhuan Jewelry Joint Stock Company

32 Annual report PNJ - 2015 Management Board 33

THE CORPORATE GOVERNANCE

- Listed company name: PHU NHUAN JEWELRY JOINT STOCK COMPANY-Head Office address: 170E Phan Dang Luu Street, Ward 3, Phu Nhuan District, Ho Chi Minh CityTel: (08) 3995 1703Fax: (08) 3995 1702 Authorized capital: 982,745,770,000 VNDSecurities code: PNJ

ACTIVITIES OF THE BOARD OF DIRECTORS1. Meetings of the Board of Directors:

2. The supervision activity of the Board of Directors (BOD) to the General DirectorSome members of the BOD have attended the weekly, monthly and quarterly briefing meetings. The supervision of Board of Directors to the Management Board is implemented via monthly, quarterly, yearly report on operations.

3. Activities of the subcommittees of the Board of DirectorsAny subcommittees have not been setup by the Board of Directors yet.

No.MEMBERS OF THE BOARD OF DIRECTORS TITLE

NUMBER OF MEETINGS ATTENDED RATIO

REASON FOR BEING ABSENT

1. Cao Thi Ngoc Dung Chairman 36 100%

2. Nguyen Vu Phan Vice Chairman 36 100%

3. Nguyen Thi Cuc Member 36 100%

4. Nguyen Thi Bich Ha Member 34 94%

5. Nguyen Tuan Quynh Member 35 97%

6. Andy Ho (Ho An T) Member 36 100%

7. Pham Vu Thanh Giang Member 36 100%

8. Phan Quoc Cong Member 21 81% Appointed as member of the Board of Directors

on 15/04/2015

SUPERVISORY COMMITTEE

Mr. TRAN VAN DANHead of the Supervisory Committee

• Bachelor of Accounting, University of Commerce

• Bachelor of Business Administration, Ho Chi Minh City University of Technology

The working history at PNJ2012: Head of Production Management Committee, ERP-Xman Project2013: Head of Management Division – Strategy Management Department (Production and Office)2014: Vice Director – Effective Management Department2015: Head of Department – Quality Control Department

Ms. NGUYEN NGOC HUEMember of the Supervisory Committee

• Bachelor of Commerce and Finance, Ho Chi Minh City Finance and Accounting University

1998 - 1999: Chief Accountant of Compunet Company, Ho Chi Minh City2000 - 2010: Head of Accounting and Payment Department of PNJ CompanyFrom 2011 until now: Chief Accountant of PNJ Laboratory Co., Ltd.

The Corporate Governance 3534 Annual report PNJ - 2015

No.NO. OF RESOLUTION/ DECISION DATE CONTENT

20. 832/2015/NQ-HĐQT-CTY 25/06/2015 Agreement on the Report on the performance results to stock issuance for 2014 dividend payment by stock and stock issuance to increase capital stock from owner’s equity.

21. 833/2015/QĐ-HĐQT-CTY 25/06/2015 Decision of the Board of Directors on the increase of authorized capital (form: stock issuance for 2014 dividend payment by stock and stock issuance to increase capital stock from owner’s equity with the quantity of: 22,677,542 ordinary shares)

22. 861/2015/BB-HĐQT-CTY 01/07/2015 Increase of working capital


24. 873/2015/NQ-HĐQT-CTY 07/07/2015 Buy land in Vinh Long town, Vinh Long City, Vinh Long province for building branch head office, trading place and other purposes of PNJ

25. 924/2015/NQ-HĐQT-CTY 17/07/2015 Amendment of the Charter of Phu Nhuan Jewelry Joint Stock Company due to the update of the authorized capital after the stock issuance under the resolution of the 19th Annual General Meeting of Shareholders – year 2015

26. 1009/2015/BB-HĐQT-CTY 05/08/2015 Increase of working capital for jewelry business

27. 1010/2015/BB-HĐQT-CTY 06/08/2015 Borrowing from Bank

28. 1011/2015/BB-HĐQT-CTY 06/08/2015 Adjustment of mortgaged assets for working capital borrowing document for jewelry business

29. 1042/2015/BB-HĐQT-CTY 14/08/2015 Credit limit at bank


31. 1180/2015/BB-HĐQT-CTY 25/08/2015 Report on the operation, production and trading results of July 2015

32. 1266/2015/NQ-HĐQT-CTY 21/09/2015 Change and appointment of chief accountant of CAO Fashion Co., Ltd.

33. 1319/2015/NQ-HĐQT-CTY 01/10/2015 Approval of the Report on the operation situation of the first 9 months of 2015; Approval of the Report on the working capital of PNJ

34. 1424/2015/NQ-HĐQT-CTY 16/10/2015 Approval of the Report on the operation, production and trading situation of the first 9 months of 2015; Approval of the operation, production and trading plan of 2016; Approval of the temporary stop deploying stock issuance plan to existing shareholders to increase the charter capital from 982,745,770,000 VND to 1,179,293,510,000 VND under the resolution of the Board of Directors no. 1319/2015/NQ-HDQT-CTY dated 01/10/2015; Approval of the bond issuance plan of 2015

35. 1505/2015/NQ-HĐQT-CTY 28/10/2015 Full transfer of all shares of PNJ in Saigon M&C Real Estate Joint Stock Company


37. 1673/2015/NQ-HĐQT-CTY 25/11/2015 House lease in Thuan An Town, Binh Duong Province


1. 14/2015/NQ-HĐQT-CTY 06/01/2015 Report on the production and business results of 2014; Report on the implementation of Key Performance Indicators of 2014; Approval of the operation plan of 2015, Balance scorecard of 2015

2. 175/2015/NQ-HĐQT-CTY 12/02/2015 Approval of the organization of the Annual General Meeting of Shareholders 2015 of Phu Nhuan Jewelry Joint Stock Company; Signing of a commercial contract with the organization who is relevant to the members of the Board of Directors



5. 430/2015/NQ-HĐQT-CTY 18/03/2015 Approval of documents submitted at the Annual General Meeting of Shareholders 2015


7. 536/2015/NQ-HĐQT-CTY 14/04/2015 Increase of working capital

8. 543/2015/BB-ĐHĐCĐ-CTY 15/04/2015 Minutes of the 19th Annual General Meeting of Shareholders – year 2015

9. 544/2015/NQ-ĐHĐCĐ-CTY 15/04/2015 Resolution of the 19th Annual General Meeting of Shareholders – year 2015

10. 545/2015/QĐ-ĐHĐCĐ-CTY 15/04/2015 Decision on amending and supplementing the Charter of organization and operation of Phu Nhuan Jewelry Joint Stock Company

11. 600/2015/NQ-HĐQT-CTY 04/05/2015 Establishment of PNJ branch in Dak Nong

12. 602/2015/NQ-HĐQT-CTY 04/05/2015 Selection of the right time for 2014 cash dividend, Stock dividend and bonus share due to the increase in charter capital from owner’s equity

13. 604/2015/NQ-HĐQT-CTY 04/05/2015 Buy a house in Tam Ky City, Quang Nam province with the usage of a branch head office, trading place and other purposes of PNJ

14. 676/2015/NQ-HĐQT-CTY 22/05/2015 The final registration date for implementing the 2014 dividend payment right in cash, dividend payment by stock and bonus stock payment thanks to the increase in capital stock from owner’s equity; Adjustment of the establishment of PNJ branch in Dak Nong


16. 778/2015/NQ-HĐQT-CTY 16/06/2015 Report on the operation, production and trading situation of the first 6 months of 2015; Approval of the action plan of the last 6 months of 2015

17. 780/2015/NQ-HĐQT-CTY 16/06/2015 Selection of auditing company for 2015 fiscal year

18. 828/2015/NQ-HĐQT-CTY 24/06/2015 Appropriation of profit after the fulfillment of tax obligation and other financial obligations of subsidiaries

19. 829/2015/QĐ-HĐQT-CTY 24/06/2015 Decision of the Board of Directors on deduction of profit after the fulfillment of tax obligation and other financial obligations of subsidiaries

THE RESOLUTIONS OF THE BOARD OF DIRECTORS:

36 Annual report PNJ - 2015 The Corporate Governance 37

No. IMPLEMENTED BY

RELATIONSHIP WITH THE COMPANY TRANSACTION CONTENT

1. Dong A Real Estate Joint Stock Company

Relevant party of the member of Board of Directors

Sign a contract to build, renovate, repair, and decorate the interior of office, factory, warehouse, trading system

2. Golden Mark CPM JSC Relevant party of the member of Board of Directors

Sign a consulting, management, and supervision contract

3. Golden Space Corp. Relevant party of the member of Board of Directors

Sign a contract of interior decoration – furniture supply (supply, installation, warranty, repair counters and cabinets) for office, production and trading system

2. Other transactions : (transactions of internal shareholders / major shareholders and relevant parties to the company)

OTHER CONSIDERATIONS:

- Phu Nhuan Jewelry Joint Stock Company changed its Business Registration Certificate no. 0300521758 issued by Ho Chi Minh City Department of Planning and Investment, the first issuance was on 02/01/2004 and the 21st change was made on 10/03/2015; the 22nd change was made on 10/07/2015.

- On 15/07/2015, Phu Nhuan Jewelry Joint Stock Company changed the number of voting right shares (The certificate of securities registration was changed for the fifth time no. 120/2008/GCNCP-VSD-5 dated 13/07/2015 of Vietnam Securities Depository).

- On 12/11/2015, the Company successfully issued corporate bonds.

ON BEHALF OF BOARD OF DIRECTORSCHAIRWOMAN

CAO THI NGOC DUNG


38. 1806/2015/NQ-HĐQT-CTY 15/12/2015 The 1st temporary payment of dividend in cash in 2015

39. 1830/2015/NQ-HĐQT-CTY 18/12/2015 Suspension of the operation of PNJ branch in Vinh Phuc and its subsidiary business locations

40. 1828/2015/NQ-HĐQT-CTY 31/12/2015 Appropriation of profit, bonus and welfare fund of subsidiaries

41. 1929/2015/QĐ-HĐQT-CTY 31/12/2015 Decision of the Board of Directors on the appropriation of profit, bonus and welfare fund of subsidiaries

CHANGE IN LIST OF RELEVANT PARTIES TO THE PUBLIC COMPANY AS STIPULATED IN CLAUSE 34, ARTICLE 6 OF THE LAW ON SECURITIES:

- On 15/04/2015, at the Annual General Meeting of Shareholders in 2015, it was agreed to increase the number of members of the Board of Directors from 7 to 8 people and Mr. Phan Quoc Cong was appointed as member of the Board of Directors for term 3 (2012-2017). His term is the remaining time of term 3.

- On 28/09/2015, Head of Supervisory Committee, Mr. Pham Van Tan resigned due to his personal reasons and the Supervisory Committee nominated Mr. Tran Van Dan as Head of Supervisory Committee until the next General Meeting of Shareholders appoints member of the Supervisory Committee.

TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELEVANT PARTIES:

1. Stock transaction:

No. IMPLEMENTED BY REL

ATIO

NSH

IP

WIT

H IN

TER

NA

L SH

AR

EHO

LDER

/

MA

JOR

SHA

REH

OLD

ER

NU

MBE

R O

F O

WN

ED

STO

CK

S AT

TH

E BE

GIN

NIN

G O

F PE

RIO

D

NU

MBE

R O

F O

WN

ED S

TOC

KS

AT T

HE

END

ING

O

F PE

RIO

D

REA

SON

FO

R IN

CR

EASE

, D

ECR

EASE

(BU

Y,

SELL

, CH

AN

GE,

BO

NU

S)Number of

stocksRatio Number of

stocksRatio

1, Dragon Capital Investment Fund

Major shareholder 3,812,194 5,04% 3,924,400 5,19% Buy and sell

2, Nguyen Thien Tam Relevant party of the member of Board of Directors

7,200 0,01% 0 0% Sell

3, LGM Investments Ltd Major shareholder 3,768,188 4,98% 3,928,188 5,19% Buy

4, Pham Ngoc Lan Relevant Party of Board of Management

80,626 0,08% 72,964 0,07% Sell

38 Annual report PNJ - 2015 The Corporate Governance 39

REPORT OF THE BOARD OF DIRECTORS AND MANAGEMENT BOARD

PURSUE “5 CORE VALUES” IN EVERY ACTION TO CONQUER THE “VISION” OF BECOMING THE LEADER.

The design of products was invested from materials to style and it was more and more diversified. PNJ customers not only trusted in the quality but also being proud of owning an exquisite and unique jewelry product that is not inferior to any famous brand in the world. Besides, the quality of services was also improved, from the consulting to after sale service which helped to enhance customers’ satisfaction.

c. Consolidation and increase of production capacity:Last year, the company imported machines with new modern production process to produce Italian technology product lines; At the same time, the existed production process was continuously reviewed to improve and shorten the processing time.

Combining the technology and training for workers’ skill improvement, now PNJ Jewelry Factory has increased the proportion of high-end products, especially doubled the productivity in some product lines compared to the same period.

Not only increasing the productivity, the wasted cost ratio also decreased significantly and controlled at low level. Currently, the wasted ratio at PNJ Jewelry Factory is at the lowest level compared to its peers in the world. 3. IMPLEMENTATION OF 2015 ANNUAL GENERAL MEETING RESOLUTIONS

Board of Directors, 3rd term (2012 – 2017) officially started on 14 April 2012 according to the Resolution of the Annual General Meeting of Shareholders in 2012.• In 2015, the Board of Directors held 36 periodical meetings,

issued 41 minutes, resolutions, and decisions on implementing the tasks according to the resolutions of the General Meeting of Shareholders / Board of Directors in 2015 as follows:

• Carry out the dividend payment by cash in 2014 (3%), dividend payment by shares (10%) and payment of bonus shares from the increase in owner’s equity (20%).

• Increase the charter capital from 755,970,350,000 VND to 982,745,770,000 VND due to the dividend payment by shares (10%) and payment of bonus shares from the increase in owner’s equity (20%).

• Advance of dividend by cash for the 1st time in 2015 (5%) and extract funds according to Article 5 of the Resolution of the General Meeting of Shareholders.

• Choose Deloitte Vietnam Co., Ltd. as an auditing company the fiscal year of 2015.

• Amend the Charter of organization and operation of Phu Nhuan Jewelry Joint Stock Company to be suitable to the Enterprise Law 2015 and suitable to the operation of the Company.

• On 15 April 2015, the Annual General Meeting of Shareholders 2015 approved to increase the number of the Board of Directors’ members from 7 to 8 people and additionally elected Mr. Phan Quoc Cong to be member of

the Board of Directors, term 3 (2012 – 2017). The term of Mr. Phan Quoc Cong is the remaining time of term 3.

• Dismissal of title of member of the Board of Directors according to personal aspiration of Mr. Andy Ho and Mr. Phan Quoc Cong; at the same time appointed Mr. Le Huu Hanh and Mr. Le Quang Phuc to be members of the Board of Directors of Phu Nhuan Jewelry Joint Stock Company with the term of 5 years and shall submit to the latest General Meeting of Shareholders for approval.

• On 28 September 2015, Head of the Supervisory Committee, Mr. Pham Van Tan resigned because of his personal reasons and the Supervisory Committee nominated Mr. Tran Van Dan to be Head of the Supervisory Committee until a new member of the Supervisory Committee is nominated at the latest General Meeting of Shareholders.

• Successfully issue non-convertible bonds with guaranteed assets.• Dan to be Head of the Supervisory Committee until a new

member of the Supervisory Committee is nominated at the latest General Meeting of Shareholders.

• Successfully issue non-convertible bonds with guaranteed assets.• Although the norms of revenue and business profit exceeded,

due to the extraction of provision for finance investment, PNJ did not carry out the issuance of shares for key leaders and excellent employees according to Article 9 of the Resolution of the General Meeting of Shareholders.

4. ORGANIZATION OF THE BOARD OF DIRECTORS’ MEETINGS

• In 2015, the Board of Directors held 36 meetings; issued 41 minutes, resolutions, and decisions of the Board of Directors of the Company. The meetings were held in accordance with the orders and procedures as stipulated by the Enterprise Law and Charter of the Company.

• The meetings’ minutes of the Board of Directors were fully prepared with the signatures of the attending members of the Board of Directors, ensuring the correct forms as stipulated by law; documents were fully sent to the members of the Board of Directors for reference, and consideration as stipulated in the Charter.

5. THE SUPERVISION RESULTS TO THE CEO AND OTHER MANAGERS

• In 2015, the Board of Directors well implemented the supervision to the management work of the CEO and Managers. The members of the Board of Directors concurrently holding the executive titles in the Management Board took responsibility for attending the periodical meetings of the Management Board. Then, the Board of Directors always clearly knew about the operation situation of the Company and had a good coordination with the Management Board to make the right policy decisions, solve the difficulties, and try to achieve the set plans.

REPORT OF THE BOARD OF DIRECTORS

I. EVALUATION OF THE BOARD OF DIRECTORS ON THE OPERATION OF THE COMPANY IN 2015

According to the set strategy, 2015 was a started year of PNJ’s acceleration stage in both scale and business performance, creating the momentum for a stronger development stage. Last year achievements were the pride and the tremendous momentum for Board of Directors’s efforts in the past years. Although there was unexpected impacts from the investment in Dong A Bank, this event did not affect the core business of PNJ.

1. EVALUATION ON THE BUSINESS RESULTS

In 2015, PNJ was successful in promoting the medium and high class product lines, which is the company’s advantage as compared to its competitors. This product lines not only bringshigher profit but also raise the brand of PNJ in Vietnam and International jewelry market. Besides, the Board of Directors (BOD) had advocated to reduce the proportion of gold bar in the revenue to highlight the role of the core business- jewelry. That was also the reason for continuously improvement of gross profit margin over years, as gold bar was the lowest gross profit margin segment.

In 2015, revenue increased 7%, while gold bar reduced 23%, gold jewelry increased 19%, and silver increased 4%. Gross profit increased 44%, exceeding 17% as planned. All significant norms related to core business operation exceeded the plan. Profit before tax was 200 billion VND, if excluding financial income and provision, net profit before tax reached 514 billion VND, increased of 72% compared to the same period.

Not only reaching the profit target, the Company also successfully completed network expansion target with 48 newly opened and upgraded stores. With the policy of fast retail network expansion, earning market shares, new opened stores mainly had large scale, with strong media investment to quickly dominate the target market.

Comprehensive strategy, together with suitable organizational structure, thorough research on network expansion, as well as the sharp branding strategy, PNJ is firmly on the way to conquer its vision of “Becoming the leading jewelry processor and retailer in

Asia and securing the number one position in medium and high class jewelry segments in Vietnam”.

2. IMPLEMENTATION RESULTS OF THE SET ORIENTATIONS AND STRATEGIESa. Create a platform to achieve outstanding dominance on Human resources and organization:Human resources is identified as a key factor creating the difference and decision on the success of an institution, the Board of Directors established human resources management and training system based on the “Fairness – Reasonableness – Efficiency – Sustainability”.

The salary and bonus policy was based on the performance with KPI for each individual to ensure the fairness to the employee. The capacity evaluation programs were performed periodically to have suitable assigns as well as aspiration for employees. At the same time, to improve the working efficiency and creating the best foundation for sustainable growth , periodical and intensive training programs were also carried out in 2015.

With comprehensive human resources policy, PNJ was proud to be ranked in Top 100 Vietnam best working environment 2015 – announced by Nielsen and Anphabe Vietnam.

b. Strong development of retail network and improvement of customers’ satisfaction, continuously affirming the leading position in the core business field:Not only expanding the distribution network, the company also focused on improving the quality of products and services to improve the customers’ satisfaction.

42 Annual report PNJ - 2015 Report of The Board of Directors 43

Unit: million VND

NORMSPERFORMANCE

2015 PLAN 2016 GROWTH (%)

Net revenue 7,697,947 8,781,963 114%Gross profit from goods sale and service supply 1,138,350 1,296,376 114%

Revenue of finance activities 25,203 12,000 48%

Expenses of finance activities 430,803 229,000 53%

In which: Interest expenses 81,049 114,000 141%

Selling expenses 414,552 490,724 118%

G&A expenses 115,421 128,697 111.5%

Net profit from the operating activities 202,776 459,955 227%

Net Profit before tax 200,173 459,955 230%

Net Profit after tax 159,619 361,405 226%

Gross profit / Revenue 15% 15%

Net Profit after tax / Revenue 2% 4%

Dividend 15% 18%

IV. CONCLUSION

According to the development created in 2015, 2016 is expected to be an dynamic year of PNJ, especially the gold jewelry retail activity.

The Board of Directors shall closely supervise to ensure that

• In general, the supervision to the CEO and other managers was regularly and closely maintained, ensuring the stable and safe operation of the company in accordance with the law, to achieve the plan set by the Board of Directors and General Meeting of Shareholders.

II. OPERATION, REMUNERATION AND OPERATION EXPENSES OF THE BOARD OF DIRECTORS

1. HUMAN RESOURCES OF THE BOARD OF DIRECTORS

- On 15 April 2015, the 19th Annual General Meeting of Shareholders – year 2015 was held, the Board of Directors of 3rd term (2012 - 2017) had eight members, in which Ms. Cao Thi Ngoc Dung was Chairwoman and Mr. Nguyen Vu Phan is Vice Chairman of the Board of Directors.

2. OPERATION OF THE BOARD OF DIRECTORS- The members of BOD has the spirit of solidarity, showing

the spirit of high responsibility and well implements the rights, obligations of the members of the BOD as stipulated in the Charter.

- During the term, the BOD had well implemented the Annual General Meeting of Shareholders resolutions, rightly implemented the rights and obligations of the BOD as stipulated in the Charter of the Company and Enterprise Law.

3. OPERATION EXPENSES OF THE BOARD OF DIRECTORS

- Chairman of the Board of Directors is 26,600,000 VND / month- Vice Chairman of the Board of Directors is 20,600,000

VND / month- Member of the Board of Directors is 16,600,000 VND / month

4. SALARY, BONUS OF MEMBERS OF THE BOARD OF DIRECTORS CONCURRENTLY HOLDING THE EXECUTIVE TITLES OF THE COMPANY Currently, PNJ has three members of the Board of Directors concurrently holding the executive titles of the Company:• Chairwoman and CEO was paid 130,000,000 VND /

month and paid the bonus with the amount of 2.5 times of monthly salary.

• Vice Chairman and Vice General Director is paid 79,800,000 VND / month and paid the bonus with the amount of 2.5 times of monthly salary.

• Member of the BOD and Standing Vice General Director is paid 92,500,000 VND / month and paid the bonus with the amount of 2.5 times of monthly salary.

In addition, the PNJ has no member of the Board of Directors concurrently holding the executive title of subsidiaries. The remaining members of the Board of Directors do not manage

the Company and the subsidiaries.

III. PLAN AND ORIENTATION OF THE BOARD OF DIRECTORS IN 2016

2016 shall be a year of effective development from the stores and program launched in 2015. The main objectives set by the Board of Directors to the Management Board are as follows:

1. CREATING THE FOUNDATION FOR SUSTAINABLE DEVELOPMENTFocusing on three main fields:a. Ensuring the quality of human resources:

- Establish and control the individual KPI system associated with the company targets, ensuring the fair evaluation of staff capacity, optimizing the existing human resources.

- Fully and timely supplementing people for retail systems. Ensuring that the Human resources meet the expertise, attitude and skills through the specialize training courses.

b. Evaluation, measurement and improvement of the procedures:

- Enhance the effectiveness of the procedure measurement and improvement, associate the measurement activities, improvement with the operational control of each departments.

- Improve the control of compliance at the units, help the system to have a stable operation and close control under 2 levels.

- Apply the information technology as a lever for the development of operation work, management of the Company through the schedule promotion of projects: Business Intelligence (BI), Management the design – modeling process, tools...

c. Completion and effective operation of SB software:It is a software about integrated report, which help the leaders easily monitoring the changes of each targeted data group.

2. CREATIING OUTSTANDING ADVANTAGES OF PRODUCTION: Includinga. Improving the production capacity: Through the effective control of the production procedure and improve the skills of employees; promote the production of strategic product lines. b. Optimizing new technologies and equipment which was imported in 2015.c. Investing and developing the R&D activities to new products and technologies.

3. IMPROVEMENT OF CUSTOMERS’ SATISFACTIONa. Increase the coverage of retail stores:In 2016, 25 new stores shall be opened, mainly stores selling both gold and silver. With the rapid expansion of network, the company can quickly dominate the market in almost all provinces and Cities nationwide and increase the brand identity level.b. Increase the customers’ satisfaction ratio:

The evaluation reports on the customers’ satisfaction level shall be made to measure the customers’ satisfaction. Besides, many norms about successful purchase rate, rate that customers come back are included in the study plan to have an overview of customers’ attitude to the brand.

4. INCREASE OF FINANCIAL EFFICIENCY

- This is considered as an important objective, quantifying the general efforts relating to the organization structure and development strategy.

- Revenue is expected to increase 15% compared to the same period, in which it focuses on gold jewelry retail group, the gross profit increases 14%.

- The operation expenses continue to increase corresponding to the investment in network development as well as communication promotion and brand advertisement.

- The control of debt norm on owner’s equity, control of the number of inventoried days of goods according to KPI.

- For the financial investment activities, a provision of 115 billion VND shall be extracted to the two investments that are Dong A Bank and DAL. Find opportunity for withdrawal of the investment at Dong A Real Estate Joint Stock Company.

the strategic objectives are going to be implemented by the Management Board as well as ensure the implementation schedule of these objectives. The Board of Directors trusts in the correctness and conformity of the long term strategy which is not only proved in the last years but also continues to effectively promote in the future.

44 Annual report PNJ - 2015 Report of The Board of Directors 45

fully and honestly reflected in the documents of PNJ, suitable to the capacity and charter, regulation, resolution of the General Meeting of Shareholders and the law. The company fully complied with the regulations of the current law on announcing information in the stock market.

- With the performance results of the norms in the financial statements of 2015, the Board of Directors did not have sufficient basis for implementing Article 9 of the resolution of the General Meeting of Shareholders about the issuance of shares according to program selected for the Employees.

2. VERIFICATION OF THE PROFIT DISTRIBUTION PLAN IN 2014For the Statement on Profit Distribution of 2015 of the Board of Directors expected to be submitted to the General Meeting of Shareholders, the Supervisory Committee judged that the distribution profit plan of 2015 ensured the compliance with the law and the charter of PNJ, dividend payment plan of 15% / per face value did not reach 20% of 2015 plan approved by the General Meeting of Shareholders 2015 (less than 5%), the reason was that PNJ had a big provision, this provision was necessary and could reduce in the future, the amount of provision helped PNJ reduce the regular loans to meet the development of the distribution channels and production.

Profit distribution: 170,676,962,249 VNDIn which:• Dividend payment: 15% / per face value:

147,410,802,000 VND.

• Extraction for funds: 19,730,000,000 VND.• Retained earnings: 3,536,160,249 VND.

3. FINANCIAL CONTROL- Since 01 January 2015, the Company has applied Circular no.

200/2014/TT–BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 200”), instructing the accounting system for the companies. Accordingly, some figures in 2014 balance sheet and cash flow statement were reclassified to be suitable to the comparison with this year’s figures.

- The Supervisory Committee has considered the reality about the preparation, collection, keeping documents related to the accounting figures, the financial situation of the company. The Supervisory Committee evaluated the financial statements of 2015 of the Company, considered the auditors’ report of Deloitte Vietnam Co., the Supervisory Committee agreed with figures of the consolidated financial statements of PNJ Group and the audited financial statements of PNJ in 2015.

- In our opinion, the financial situation of PNJ Group in general and PNJ in particular gave a true and fair view on the key aspects in the related documents, followed Vietnamese Accounting Standards, Accounting Regime and the legal regulations related to the preparation and presentation of financial statements.

3.1 The figures on capital and assets as of 31 December 2015 and the business results of PNJ were as follows:

Unit: million VND

PNJ PNJ GROUP

NORMS YEAR 2015

YEAR 2014CIRCULAR

200COMPARISON

15/14 (%) YEAR 2015

YEAR 2014CIRCULAR

200COMPARISON

15/14 (%)

Total assets 2,957,600 2,813,188 105% 2,975,289 2,828,672 105%

Total source of capital 2,957,600 2,813,188 105% 2,975,289 2,828,672 105%

Profit before tax 200,173 326,790 61% 197,323 335,034 59%

Profit after corporate income tax 159,619 256,701 62% 152,303 255,872 60%

REPORT OF THE SUPERVISORY COMMITTEEI. ACTIVITIES OF THE SUPERVISORY COMMITTEE IN 2015

1. Supervise and check the legality and rationality of the activities in the implementation of the business and production plans of 2015 of the Board of Directors and Management Board of according to the 2015 General Meeting of Shareholders resolutions.

2. Check the rationality, honesty and carefulness in the organization of the accounting system. Review the financial statements performed by Deloitte auditing company.

3. Control the safety and efficiency of the information and activities of the system. When PNJ was affected by negative external impacts arising from Dong A Bank, the Supervisory Committee closely monitored the reality with the efforts of the Board of Directors and Management Board in focusing on solving the difficulties, maintaining the growth and prestige of PNJ.

In the year, the Supervisory Committee approved resignation letter of Mr. Pham Van Tan, Head of the Supervisory Committee due to his personal reasons then assigned Mr. Tran Van Dan to be Head of the Committee until the additional election at the next Annual General Meeting. Despite of the personnel change, from time to time, each member of the Supervisory Committee well promoted the independent working capacity, closely coordinated in tasks, fulfilled the tasks of 2015.

II. OPERATION RESULTS

1. SUPERVISION OF THE MANAGEMENT AND OPERATION ACTIVITY OF THE BOARD OF DIRECTORS AND MANAGEMENT BOARDIn 2015, Board of Directors and Management Board led and helped PNJ strongly increase the core resources follow the company’s strategy; being suitable to the potential and challenges of the current market and in the coming years; implemented the resolution of the 2015 AGM, and the important objectives of the term. The Board of Directors and Management Board mainly focused on:

- Research and synchronously deploy the objectives and solutions stipulated in the resolution of the term. Fully deploy the issues stipulated in the resolution of the General Meeting of Shareholders in 2015 to the actual operation of PNJ.

- The strategic vision, mission, and core values were concretized into objectives, targets (annual) of company level, strategic business unit level and functional level strategy. The objectives, targets of the levels have a synchronous attachment, supplementing each other.

- Fully review 7 key factors of the jewelry industry, made decisions, actions in accordance with the market situation, promoted the efficiency of PNJ’s resources with highly competitive ability, thereby; PNJ brand was more trusted by customers and society, increase the resources and competitive ability in the industry, brought the competitive advantage of PNJ to a higher level in Vietnamese market.

The specialized factors about Technology, Production, Marketing, Distribution system, labor skills & creativity, capacity of the organization and other factors that brought the success to PNJ now was synchronously connected and created the new attraction to both in and out of PNJ.

- Closely control the new investments in the production capacity and distribution channels, the investments in 2015 quickly contributed to create the business results in 2015.

- Review the financial structure: In the year, the company made provision for the investment at Dong A Bank regarding to the accounting standards and regulations and at the same time divested at Saigon MC and successfully issued 300 billion bonds tosupplement to working capital for network expansion.

- Profit before tax of the holding company reached 200 billion VND, excluding financial income and provision, the core business profit reached 514 billion VND, increased 72% compared to the same period and exceeding 35% compared to annual target.

- The Supervisory Committee did not realize any unusual sign in the activities of the Board of Directors and the Management Board. The activities of PNJ Company were

- About total assets: 2,975 billion and 289 million VND, increased 5% compared to the same period. Total assets of PNJ was 2,957 billion and 600 million VND, an increase of 5% compared to the same period, the strong increase and decrease were mainly at groups: Inventory increased 16.4%, fixed assets increased 1.2% and the long term financial investment strongly decreased 13% (due to provision).

- Total liabilites: 2,975 billion and 289 million VND, increased 5% compared to the same period. Total source of capital of PNJ was 2,957 billion and 600

million VND, an increase of 5% compared to the same period. The strong increase and decrease were mainly at groups: current debt increased 6%, owner’s equity increased 8.4% and long term debt reduced 59.7% (Due to the loan structure change).

- Owner’s equity: The owner’s equity of PNJ accounted for 98.5% of total owner’s equity of the Group. In 2015, the charter capital of PNJ increased from 755,970,350,000 VND to 982,745,770,000 VND, an increase of 30% compared to the end of 2014 (implementing Article 8 of the Resolution of the General Meeting of Shareholders).

46 Annual report PNJ - 2015 Report of the Supervisory committee 47

- The Supervisory Committee regularly supervised and checked the Company’s information disclosure to ensure that information to shareholders and related parties are complete, accurate, and timely as stipulated by law and meeting the demand on information of the parties. The Supervisory Committee received no requests or claims from shareholders in 2015.

III. CONCLUSION – SUGGESTION

The strategy for the whole term of the Board of Directors is well executing by BOM and Managers , the organization of activities of the Efficiency Management Department has helped the BOD to closely monitoring strategy implementation.

The impact of the restructuring strategies for term 2012 – 2017 has decided on the development of PNJ in the next coming years. Some strategies with norms exceeding the expectation but there is still a long distance to reach PNJ’s expectation. In the context of PNJ and the general situation of the industry as well as the macroeconomic factors, the Supervisory Committee suggests to the BOD and BOM with following contents:

1. Suggestion to the Board of DirectorsThe Board of Directors should maintain the focus on leadership and provide resources for PNJ to achieve the strategic objectives about establishing the foundation and backbone for the company operation; including:

- Complete the organization structure and human resources; Take the priority for training employees of sales, marketing and design departments.

- - Invest, connect, integrate the intelligent management information system (SB); ensure the safety to the information system (including copyright), review the plan to respond to potential major incidents.

- Select and develop the retail network; increase the number of new stores at potential markets, adjust the business scale of the existing stores according to market signals and demand. Strongly invest in developing other sales channels. Evaluate the market entry opportunities in TPP, control the market development strategy about the demand and financial results.

- Develop the production and supply capacity: continue investing in the research and development resources of new products – new technology, review the backward integration strategy to put the input supply source regularly to become the new advantage to the company (high value: stones, secondary materials ...).

- Continue to lead and enrich the cultural characteristics of PNJ as a responsible and creative company for humans and better living environment.

2. Suggestion to the Board of Management:- Systematize the risk management policies, review the risk

response plans.- Improve the management efficiency of the supply chain

about: sales forecasts, ordering, improvement of the system connection of production warehouse – supply – stores, reduce over a half of the intermediary inventory costs and at the stores.

- Improve the cost estimates. Carry out the internal audit according to majors or functional areas, starting with the Information Technology field (slowly meet the development demand of the company). Apply the measurement techniques and improve the process increasing the effectiveness of each major process of PNJ.

- Research to supplement new products / services to more effectively develop the retail system.

- Research the separation strategy of independent accounting companies and give the self-determination right to the companies with independent accounting and give the self-determination right to the strategic companies.

Above is the supervisory report of PNJ in 2015 of the Supervisory Committee, we would like to submit to the Annual General Meeting of Shareholders.

The Supervisory Committee would like to express our gratitude to the value Shareholders, Board of Directors, Management Board, companies directly under PNJ for your trust and cooperation. The Supervisory Committee hopes to continue having close cooperation in the future.

Unit: million VND

PNJ GROUP PNJ

NO. NORMS 2014 2015 2015-2014 2014 2015 2015-2014

1 Net Profit After Tax/ Equity (ROE) 19.74% 10.92% -8.82% 20.27% 11.63% -8.64%

2 Net Profit After Tax / Charter Capital (1) 33.85% 15.50% -18.35% 33.96% 16.24% -17.71%

3 Net Profit After Tax / Assets (ROA) 8.85% 5.12% -3.93% 9.55% 5.53% -4.02%

4 Net Profit After Tax / Net Revenue 2.78% 1.98% -0.80% 3.57% 2.08% -1.48%

5 Gross Profit / Net Revenue (2) 9.67% 15.18% 5.51% 10.98% 14.85% 3.87%

6 Total Assets Turnover (3) 3.18 2.66 -0.52 2.68 2.66 -0.02

7 Inventory Turnover (4) 6.58 3.43 -2.59 4.86 3.46 -1.87

8 Fixed Assets Turnover (5) 19.85 16.44 -3.43 16.22 16.37 0.16

9 Debts / Total Assets 54.16% 53.14% -1.02% 54.97% 53.58% -1.39%

10 Current ratio 1.30 1.51 0.21 1.28 1.50 0.22

11 Quick ratio (6) 0.10 0.09 -0.01 0.10 0.09 -0.19

Note: (1) The charter capital is calculated on a weighted average.(2) It is calculated separately for activities of goods sale and service supply.(3) (Net revenue from goods sale and service supply) / (Total assets on average).(4) Average inventory(5) Average fixed asset(6) If it is considered the characteristics of the inventory, the quick ratio may consists of the majority of the inventoried

gold, so in reality this ratio might be higher than the reported one.

Excluding the provision for devaluation of financial investment, in our opinion, the evaluation norms of the core business activity effectiveness of PNJ and PNJ Group in 2015 were safe and tended to be better, this was the achievement of the strategic restructure process of the term resolved by the General Meeting of Shareholders.

4. EVALUATION OF THE COORDINATION BETWEEN THE SUPERVISORY COMMITTEE AND BOARD OF DIRECTORS, GENERAL DIRECTOR AND SHAREHOLDERS

- On the principle of full compliance with the stipulations of the internal Regulation, the Company’s Charter and the regulations of law, for the benefits of the Company, of

the shareholders and related parties. In 2015, there was a close coordination between Supervisory Committee and Board of Directors as well as CEO and other Managers,; the Supervisory Committee received the favorable condition in every activity.

- The Supervisory Committee regularly supervised and checked the Company’s information disclosure to ensure that information to shareholders and related parties are complete, accurate, and timely as stipulated by law and meeting the demand on information of the parties. The Supervisory Committee received no requests or claims from shareholders in 2015.

48 Annual report PNJ - 2015 Report of the Supervisory committee 49

It is not only promoted by the macroeconomic growth, the jewelry shopping demand is derived from the culture of “Gold reserve” from this generation to the other, and this is an important factor stimulating the sustainable development of the Vietnamese jewelry industry. The factors advantageous for the growth potential of the jewelry industry in general and PNJ in particular are:

a. Abundant source of customersVietnam is a country with more than 90 million people, with 70% of the population aged from 15 to 64, being in the working and consuming age. In which 51% of the population is female, creating an abundant force of jewelry shopping.

b. The gold jewelry consumption per capita is low compared to that of other countries in the regionAccording to calculation from the figures of the World Gold Council (WGC), the gold jewelry value per capita of Vietnam Nam in 2015 was 6.2 USD, only equal to 60% of Malaysia and 7% of Singapore. Besides, the consumption ratio of gold jewelry of Vietnam compared to the total gold consumption only accounted for 25%, while this rate in other countries in the region was over 50% (except Thailand: 14%).

Although Vietnam is one of 15 countries with most gold consumption in the world, the majority of people in Vietnam still have the habit of buying gold bar for speculation rather than for beauty. However, along with the stability of the economy, the trend to change from buying gold bar to gold jewelry is significantly occurring.

The amount of gold jewelry consumed in Vietnam continued to increase during the last 3 years, whereas the amount of gold bar strongly decreased respectively 33% and 15% in 2014 and 2015. This is the inevitable trend, suitable with the general development process of the country and it is also the forecasted potential of the domestic jewelry industry.

c. It is an industry that needs the Government’s concernUnderstanding the enormous potential of the industry,

Gold consumption / person (USD)Gold jewelry consumption / total gold consumption

GOLD JEWELRY CONSUMPTION / PERSON IN 2015 (USD)

Indo

nesia

Indi

a

5.7 6.2 6.7 10.2 19.0 20.9

85.7

263.9

Vie

tnam

Tha

iland

Chi

na

Mal

aysia

Hon

g K

ong

Sing

apor

e

97%

67%80%77%

54%

14%25%

66%

the Government is always concerned to create conditions for jewelry companies to have a favorable trading environment. One of the recent actions from the Government was Circular no. 22/2013/TT–BKHCN stipulating the quality of gold jewelry, which was valid from 01 June 2014. That the Circular no. 22 was issued contributes to increase the awareness of Vietnamese consumers on the quality of gold jewelry products. Besides, the production and circulation of gold jewelry is strictly controlled, ensuring the quality of gold jewelry products circulated in the market and creating the advantages for big and reputable brands.

d. The current Vietnamese jewelry market The current Vietnamese jewelry market is highly fragmented with the majority of market share belonging to small companies who invested limitedly in brand as well as long term orientation. Meanwhile, customers are more and more fastidious, so the demand on prestigious brand is considered to be indispensable, especially when the Vietnam’s economy is developing rapidly as present.

Therefore, PNJ emerges as a pioneer, creating a difference in brand and quickly has a firm foothold in the market. With the premise of brand prestige and large scale production, PNJ succeeds in the development of extensive network nationwide, then PNJ rapidly increases its market shares for several years. PNJ has proven the correctness of its long term vision by impressive growth figures and it is willing for the acceleration stage in the future.

The PNJ’s retail market share is now estimated to be 25%, increased 4% compared to the same period which left its rivals far behind. Not only that, PNJ is also evaluated to be not inferior to any company in the region from the production scale, products’ quality to the design andquality of service.

(Source: World Bank)

REPORT OF THE BOARD OF MANAGEMENT

VIETNAM JEWELRY MARKET – BIG OPPORTUNITY FOR LEADING BRANDS

In 2015, Vietnam was considered as a rare bright spot in bleak general picture of emerging countries as maintaining the stable growth, and controlling the inflation rate at a low level. (According to “Vietnam 2015 Economic Update Report”- ANZ).

The GDP of Vietnam to 2015 achieved 31 consecutive years of growth, which was only lower than the record of 39 years of China (Source: World Bank).

GDP per capita (USD) 2014CAGR (2010-2014)

AVERAGE GDP PER CAPITA

Indi

a

1,582 2,0525,977 7,590

11,307

40,170

56,285

Vie

tnam

Tha

iland

Chi

na

Mal

aysia

Hon

g K

ong

Sing

apor

e

3% 3%

11%

5% 4%4%

9%

GDPCPI (**)

GDP & CPI GROWTH OF VIETNAM OF THE YEARS

2010 2011 2012 2013 2014 2015

8.6%

18.2%

10.0%

6.6%5.4%

5.6%6.7%

0.6%

4.7%5.8%6.5%

4.1%

Compared with other countries in Southeast Asia and some countries with similar culture of gold consumption, the average growth of GDP per capita of Vietnam always belonged to the leading group, and it was forecasted to continue to grow rapidly in the future.

Along with the general development of the economy, demand for beauty and beyond this demand is to show personal social status, are increasingly interested by Vietnamese consumers. Therefore, Vietnam is now considered to be an attractive market for the medium and high class retail brands, in which the gold jewelry brands cannot be excluded.

50 Annual report PNJ - 2015 Operation Management business report 51

Year 2015 has closed the first stage of 10-year development strategy with special events and impressive achievements in all aspects of PNJ. If 2013 – 2014 was the period of building up and consolidating management system as well as distribution network expansion, 2015 was the year to promote the strength from this innovation.

BUSINESS RESULTS OF 2015 – PERFORMANCE VS PLAN

Note: Among 48 new stores, there were 18 upgraded stores and 5 closed stores

Due to the influence from the provisions for financial investment, the profit before tax of the whole year of the Company recorded 200 billion VND, decreased 39% compared to the same period and it only reached 54% of the annual plan.

Excluding provision and income from received dividend, the profit before tax of core business of 2015 reached 514 billion VND, an increase of 72% compared to the same period. This growth rate not only reflected the impressive results of core business, but also showed the cost management effectiveness when the total operation costs only accounted for 53% of gross profit instead of 62% of the same period 2014. In which, the selling expenses increased 33% compared to the same period, aligned with network expansion speed and it was much lower than the growth of gross profit.

The maintaining of the growth of NPBT of the core business activities in 2014 and 2015 was 50% and 72%, the Board of Directors and Management Board has affirmed the correctness in the strategic orientation, and this was also the big achievement of the restructure process, paving the way for a stronger and more drastic new development stage.

NORMS PLAN 2015PERFORMANCE

2015PERFORMANCE

2014+ / - %

Yoy PERFORMANCE

/ PLAN (%)

Total revenue 8,227,568 7,697,947 7,213,329 7% 94%Gross profit from goods sale and service supply 976,516 1,138,350 790,172 44% 117%

Revenue for financial activities 12,000 25,203 48,071 -48% 210%

Financial activities expenses 112,000 430,803 95,054 353% 385%

Selling expenses 373,676 414,552 310,940 33% 111%

Corporate management expenses 122,714 115,421 105,944 9% 94%

Net profit from business activity 380,126 202,776 326,306 -38% 53%

Total profit before tax 380,126 200,173 326,791 -39% 53%

Profit after tax 300,000 159,619 256,571 -38% 53%

Development of retail system 35 48 18 67% 137%

Not only exceeding the revenue and gross profit target, the company also successfully completed the network expansion plan with 37% excess to the annual target. In addition, PNJ was honored to be the first and only Vietnamese Jewelry Company walking abreast with famous companies in the Asia about the size, reputation as well as important contributions to the jewelry industry of Vietnam, it was honored by the JNA prestigious award.

PROFIT BEFORE TAX OF CORE BUSINESS OUT OF TOTAL PROFIT BEFORE TAX STRUCTURE

Core business activitiesFinancial income

2011

50.6

2012

108

2013

40.8

2014

40.8

-313.8

2015

TOTAL REVENUE (BILLION VND)

• Revenue increase of 7%• Jewelry revenue increase of 18%

Total revenueRevenue from Jewelry

2011

17,355

6,4287,604 7,213 7,698

6,036

2012 2013 2014 2015

3,7115,275

4,2973,8053,805

The number of stores excluding CAO Stores

• The number of stores increases 16 % compared to the same period

2011

132145

2012

148

2013

165

2014

190

2015

NUMBER OF RETAIL STORES

• Gross profit increase of 44%%• Jewelry gross profit increase of 46%• Jewelry profit accounting for 99% of

Total gross profit

Total gross profitJewelry gross profit

550638 600

790

1,138

508507574

760

1,122

2011 2012 2013 2014 2015

GROSS PROFIT (BILLION VND)

With the great potential from the market and the available advantages, PNJ will certainly continue to strongly develop. And the most important thing is that the company has fully equipped from the strategic orientation

to the management system to be able to easily turn the advantages from the market into the growth launching platform at present and in the future.


The gross profit of the jewelry business activities accounted for 99% of the total gross profit of 2015, increasing from 79% in 2011. It can be said that the current growth rate of gross profit was also the growth rate of the core business activities – jewelry.

The business result of 2015 once again affirmed the strong message committed by the Management Board in the previous years: “PNJ shall focus on the strong development of core business activities, maintain its role as a pioneer, the leading jewelry brand in Vietnam”. With the consistency to pursue the set objectives and strategies, the achievements in 2015, especially the retail segment was not only the pride but also the motivation to the managers and employees of PNJ contributing for stronger development stage.

1. GOLD JEWELRY (PNJ GOLD): increased 19% of revenue and 43% of gross profit thanks to the focus on retail segment, network expansion, investment and production of high class product lines to replace the imported products.

The development of 3 sales channels including retail, wholesale and export brought many advantages to PNJ. However, retail was always identified as the key business activity, concentrating many resources and being the long term development objective of the company. The proportion of retail revenue accounted for 55% of the total revenue of Gold Jewelry (the proportion in 2014 was 45%) and it was expected to continue to increase in the future.

1.1 The retail of Gold Jewelry:In 2015, the retail activity had a superior growth about revenue and the success in the orientation change to the development of medium and high class product lines.

The retail revenue of gold jewelry increased 45%, in which the current stores increased 21% compared to the same period.

Supported by the general recovery of Vietnam’s jewelry market, but it was undeniable that PNJ Gold Jewelry gained impressive result, much exceeding the average growth rate of the industry. This was not only the result of a foundation firmly built and strengthened for several years, but also the reflection of the strategic changes in the development objective of the company. Instead of focusing on all product segments, since 2014, PNJ Gold has emphasized the development objective of “being the leading medium and high class jewelry brand of Vietnam”. This was one of the main reasons making the retail revenue increase in such an impressive way in 2014 and 2015, especially same store sales always maintained at over 20% growth rate.

The changes helped PNJ Gold maintain the great growth rate and immediately accelerate when the market tended to recover:

• Diversified marketing strategy aiming at modern customers:PNJ used to aimed at traditional customers with the identify image full of Asian characteristics, now the messages and images were used in such a diversified way and arranged according to customer channels, taste... to optimize the marketing campaigns effectiveness.

Images of PNJ’ s brand ambassadors were fitted to the brand characteristics which was loved by customers (about the brand as well as the brand’s representative). There was not only changes in image, but also the careful selection of communication channels has helped to earn the highest effectiveness for each program. Besides traditional channels, the online channels were invested and developed, at the same time we cooperated with domestic and foreign prestige brands to increase brand identity.

The PR – Marketing campaigns focused on medium and high class product lines in accordance with the strategic objective proposed by the Management Board.

Retail gold jewelry (billion VND)Growth

RETAIL REVENUE OF GOLD JEWELRY

2015

3,240

2014

2,230

2013

1,609

2012

1,550

2011

50,6

13%

-2%

4%

39%

45%

THE STRUCTURE OF REVENUE AND GROSS PROFIT REFLECTED THE STRONG GROWTH OF CORE BUSINESS

Revenue in 2015 reached 7,698 billion VND, an increase of 7% compared to that of 2014. However, the jewelry group brought 99% of gross profit of the company, an increase of 18%; the gross profit exceeded the norms of the year’s plan.

77.7%Gold jewelry

2.1%Silver jewelry

19.9%Good bar

0.4%Others

REVENUE ACCORDING TO TYPE OF

PRODUCT 2015

88%Gold jewelry

10%Silver jewelry

1%Good bar

1%Others

GROSS PROFIT OF TYPE OF PRODUCT 2015

In the period from 2011 to 2015, there was a clear change to the revenue structure. The revenue proportion of gold jewelry was 21% (2011) and it continuously increased, by the end of 2015, it accounted for 80% of the total revenue. This structure change explained the unstable growth of the total revenue, even it was lower than the previous years, but the gross profit still strongly increased, specially in 2015 the growth rate reached 43% compared to the same period.


• Norms about the current solvency were significantly improved compared to the same period, mainly thanks to the inventory increase and reduction of the loan. The strong cash flow from business activities contributed to supplement to the working capital and help the company not depending on the loan although the inventory increased to 461 billion VND, equivalent to 28% compared to the same period. By the end of 2015, the rate of liability / equity of PNJ was 1.15 times, there was a reduction compared to the rate of 1.22 times of the same period of 2014.

• There was increase to the inventory days, reflecting the change in the revenue structure when the jewelry group increasingly accounted for high proportion. This was an inevitable trend of the Retail Company in general and jewelry in particular. The inventory days of each channel were strictly controlled and were in the lower level compared to its peers in the world.

THE FINANCIAL NORMS

NORMS UNIT 2015

2015 (EXCLUDING

FINANCIAL EXPENSES) 2014

Solvency ratios

Current ratio Time 1.50x 1.29x

Debt on owner’s equity Time 1.15x 1.22x

Inventory turnover Turnover 3 4

Inventory days Day 104 74

Operation efficiency ratios

Gross profit margin / net revenue (GPM) % 14.8% 10.9%

Net profit / revenue (ROS) % 2% 6.7% 3.5%

Net profit / total assets (ROA) % 5.5% 17.8% 9.5%

Net profit / owner’s equity (ROE) % 12% 38.9% 20%

• The change in the structure of product lines as well as the sales channels brought high gross profit ratios of 1.5 times compared to the same period and it shall continue to grow in the coming years.

• Though achieving impressive results about revenue and gross profit, the norms of net profit in 2015 reduced compared to the same period due to the impact from the financial provision costs. If the financial provision costs were excluded, ROS, ROA and ROE had an outstanding growth compared to the same period. In which, ROE reached 38.9%, an increase of 18.9% compared to 20% in 2014. These operation efficiency ratios clearly reflected the acceleration in the core business activities of the Company.

• Product quality and design were the top priorityPNJ always led the domestic fashion trend with unique collections both in style and processing technology.

In 2015, many large collections were launched with hundreds of designs and A Guinness record was established, confirming the superior advantage of creative capacity, products’ quality as well as processing techniques of PNJ.

Not only being outstanding in the domestic market, the designs of PNJ were welcomed by international markets, proven by the first prize of national design in the contest of ASEAN jewelry design 2015.

Apart from the design, products’ quality was considered as the prerequisite factor creating the difference and reputation of PNJ brand compared to its competitors. The raw materials for production was carefully selected from big partners, modern technology, combined with a team of skilled craftsmen were the factors making PNJ jewelry products trusted by customers during the past years.

• Standardization of service quality – focus on people: Besides the products’ quality, the company gradually normalized service quality from consulting stage to after sale service.

To meet the network expansion speed from 20 to 40 stores each year, which required a huge the workforce supplement of 200 to 400 employees for the whole system. So the standardization of the service quality at all stores and branches was a major challenge for most of retail companies and PNJ was not an exception. However, by establishing the recruitment and training procedure in such an appropriate way and completing the KPI measurement standard for each individual, the company was successful in establishing a professional staff with even quality for the whole system.

PNJ Standards – the service quality standard established based on the international standards, focusing on customers, providing enjoyable experience to customers from the time coming to PNJ stores to the time customers own PNJ products, was highly appreciated by domestic and foreign customers as well as partners.

• Acceleration of the network development:Although it was planned to open 35 new stores in 2015, doubled the new stores opened in 2014, it was realized that this

was the favorable time for promoting the network expansion, the Management Board decided to open 48 new stores at 25 provinces and Cities nationwide, exceeding 37% of the plan. By the end of 2015, the whole system had 194 stores, including 125 gold stores, 65 silver stores and 4 CAO stores.

Last year was considered as the starting stage of the recovery of the general economy and the retail sector in particular, so many domestic and foreign brands were very active in competing and searching good locations. In this context, PNJ still succeeded in maintaining the stable network development speed and it increased over the years thanks to the advantages from the evaluation process of standardized selling points, combined with the foundation about human resources and strong management system built and strengthened for over the last 2 years.

1.2 Wholesale business activities: 2015 was an unfavorable year for wholesale business when the revenue decreased 3% compared to the same period. From the impact of reducing the demand on gold bars of the gold market, more and more companies were established specializing in trading jewelry with flexible business mode, and increasingly fiercer competition, although the revenue of the company decreased, the gross profit increased 35% compared to the same period.

1.3 Export: Being similar to the retail segment, currently, the export channel much focused on the high class product lines with high processing price instead of spreading many product lines as before. This orientation brought the export activities the growth rate of 25% of the profit, although the revenue only increased 3% compared to the same period.

2. SILVER JEWELRY: the revenue increased 4%, but the gross profit increased 17% thanks to the pursuing on the high class product lines with high gross profit ratio.

In 2015, PNJ Silver launched many unique product lines, using new materials such as semi–precious stones, pearls combined with the interesting story, topic, then it attracted the concern of the young customers. After rebranding, PNJ Silver had changed brand image and brought a certain business result. The revenue maintained positive growth speed over the years, thought it has not reached expectation, it showed a positive change of the brand.

Along with the efforts, PNJ Silver is believed to be quickly successful in attracting fastidious customers and achieved the high growth rate of revenue and gross profit.


dynamic, professional, and inspiring working environment for employees. The typical achievements gained last year were as follows:

• Complete the capacity dictionary for each position of employees.

• There was a comprehensive evaluation process about capacity of employees to assign suitably and create opportunities for the employees to promote their full capacity.

• There was a good treatment policy, attracting and retaining talents: The salary and bonus policy was considered annually to ensure the suitability and competitiveness compared to the general market.

• Training was considered as an important activity helping to develop and improve the capacity of employees. The training programs were designed periodically or unexpectedly according to the company’s demand, and there was evaluation plan of the training program for improvement in the next periods.

• Create a professional and solidary working environment, the company’s core value was considered as a striving objective for each individual.

3. BRAND WITH INTERNATIONAL STATURENot only a successful year in domestic, PNJ also confirmed its reputation in international market when becoming the only brand representing Vietnamese jewelry industry to be honored at the big and prestigious awards in the region.

• Within JNA Award 2015, PNJ has passed the caliber companies like Chow Tai Fook, Golden Dew, Pandora ... to win the award “Employer of the Year”. This award honors companies with impressive development in recent years, and had many contributions to jewelry industry of the country.

• Also in 2015, the products and designs of PNJ were honored at the ASEAN Design Award, honoring the creativity and skilled processing techniques of the employees of PNJ.

• Not only that, even in the domestic market, PNJ presented the jewelry masterpiece “Phoenix Dress” – a new Guinness record – to the international friends within Vietnam International Fashion Week. This was also the focus of the Fashion Week, creating a deep impression to the domestic and foreign fashionista.

This masterpiece was made from 24 taels with more than 2,000 sophisticated details made by 30 jewelry artisans of PNJ for 240 hours, it was made entirely by the manual method.

With the vision of “Becoming one of the leading jewelry companies in Asia market”, with the achievements, PNJ was proud to initially achieve its vision, create the prerequisite for stronger development steps in the future.

4. RISK MANAGEMENTRisk management to the quality of products and services:To ensure that the product sold to consumers with best quality, PNJ built a close quality control process controlled by PNJL (PNJL was licensed by Directorate for Standards and Quality for identifying the gold content). The production stage was focused on investment in both technology and workmanship of jewelry artisans: the Management Board regularly updated the modern technology trends of the world, and sent experts for training at the famous markets about jewelry processing such as Italy, Germany.... to apply and improve the production process.

For the team of jewelers, the training courses and competitions were held regularly to evaluate their capacity. Through these courses and competitions, the Company could find outstanding employees timely encouragement and support.

FINANCIAL INVESTMENT AND THE OPERATION OF SUBSIDIARIES

The book value of the current financial investment of PNJ was 166 billion VND, accounting for 34% of the initial investment value.

THE OPERATION OF THE SUBSIDIARIES Cao Fine Jewelry: Its charter capital was 10 billion VND, the revenue of the whole year was100 billion VND, an increase of 144% compared to the same period, profit after tax was 10 billion VND. Though no new stores were opened, by its efforts, the growth rate of CAO was doubled compared to the same period. Realizing that this was the right time to strengthen the high class jewelry product lines, the Management Board strongly promoted the brand identity strategy as well as launched many Marketing programs aiming at luxury segment. The achieved result was the great motivation for the Management Board as well as all employees of CAO in the way of conquering the high class jewelry market in Vietnam.

PNJ Laboratory Co., Ltd. (PNJL): its charter capital was also 10 billion VND, the revenue of PNJL was 14 billion VND, increased 25% compared to the same period. Profit after tax was 6 billion VND, increased 23% compared to the same period.

It can be said that 2015 was a year full of success in all aspect of PNJ, not only the increase in revenue and profit from the business of the holding company, but also the outstanding growth of PNJL and CAO, significantly contributed to the cosolidated result.

1. PRODUCTION CAPACITYThe production capacity was strongly invested both in quantity and quality to bring more sophisticated products to consumers.

With the strength of technology and skillful goldsmiths, PNJ always led the market about product quality as well as production capacity. Understanding the importance of production, Board of Management always had the investment strategy to further improve the capacity of PNJ Jewelry Factory.• About the technology: in 2015, the company continued to

invest in modern machines to produce new product lines and shorten processing time.

• The quality of human resources: apart from the internal training programs, the senior staff of the Factory has attended training courses abroad to update modern processing techniques from leading experts in Europe. At the same time, the Factory also officially received the technology transfer from Italian partners, including intensive training programs about production techniques.

• Production capacity: Every year, Jewelry Enterprise of PNJ produced over 2 millions of products for both retail and wholesale business. In which the high-end products like diamond and gem-set jewelry required high processing workmanship as well as longer time production because it is passed more stages than. However, with the appropriate investment strategy, in 2015, the Factory has increased 75% of high-end jewelry capacity, this is also the key product lines of the company in the future.

2. FOCUS ON INVESTING IN HUMAN RESOURCESThe human resources was recognized as the superior advantage of the company during the past years, and especially reflected in 2015. In 2015, PNJ was honored to be selected as Top 100 Vietnam best working environment (evaluated by Nielsen & Anphabe).

• With the orientation of considering human as the foundation for development, the Management Board established a

DONG A BANK

395

311

84 9230 62

DONG A REAL ESTATE

Total investment capitalProvisionRemaining value

THE FINANCIAL INVESTMENT VALUE OF PNJ AS OF 31 DECEMBER 2015

FACTORS CREATING THE SUCCESS AND THE SUSTAINABLE DEVELOPMENT OF PNJ IN 2015


Risk management to financeCredit risk:The Company had suitable credit policies and regularly supervised the fit situation to evaluate whether the Company suffered from any credit risk or not.

The debt / equity ratio was controlled at a safe rate and it tended to decrease. The risk of gold price fluctuation:PNJ controlled the average price of input and output in such a flexible way, helping the company to control the gross profit ratio at stable rate, according to the market demand and production costs instead of raw material price fluctuation.

The focus on the brand strengths and the difference in design also helped the company create higher surplus for the products, and limit the risk of price fluctuation.

Along with the orientation strongly focusing on the medium and high class segment, with the main product lines of diamond and gemstone, the gold proportion to the gold product value was likely to reduce because gemstone often had high value. Gemstone was also considered to have a more stable price cost price than gold.

CONCLUSION

The year 2015 ended with impressive achievements, we can confirm the achieved objectives as follows:

Becoming the leading jewelry processor and retailer in Asia market and securing the number one position in the segment of medium and high class jewelry in Vietnam.

PNJ shall continue to develop in the coming years.

Risk management to the quality of human resourcesPNJ recruits from 200 to 300 new employees every year for Jewelry Enterprise and the retail system nationwide. To ensure the equal quality and meet the standards of staff, the Company worked with many professional consultants to complete the process of recruitment, training and capacity evaluation of Employees. After nearly two years of application, this process has shown the high efficiency when after the probation period, all new employees meet the expected results.

Not only applied to new employees, during the time of working, the company always has appropriate training programs to improve the capacity of both old and new employees.

The 360–degree capacity evaluation was begun in the mid 2015 to help the Management Board have a comprehensive view about the workforce to have an appropriate development strategy. Besides, this project also helped employees to judge their strengths and weaknesses to have orientation for appropriate capacity practice.

Risk management to brain drainBeing the leading company in the industry and famous for good training policy, that the employees of PNJ are always welcomed by its rivals is inevitable. To limit the risk of brain drain, the Company has had attractive salary and bonus policy, ensuring the competitiveness and equality to the employees. This policy is considered at the end of every year to ensure the suitability for the next year.

The Management Board always cared for the spiritual life of employees, through the union activities, family festivals, … At jewelry enterprise, the company has invested the amusement park, library, area for having a break for workers. In addition, at the office of the Company there is gymnasium to serve the demand of staff.

The corporate culture is also an important factor retaining employees: PNJ is like a big family where the members not only work but also have a close friendship, they jointly try for the common objective. With the corporate culture of “big family”, the working environment at PNJ is really an inspiring place to help employees to best promote their capacity.


FINANCIAL REPORT

HONESTY IS THE MEASUREMENT OF THE TRANSPARENCY IN EVERY ACTION, A LEADING ETHICS STANDARD THAT PNJ COMMITS TO AIM AT.

Financial report 63

STATEMENT OF THE BOARD OF DIRECTORS

The Board of Directors of Phu Nhuan Jewelry Joint Stock Company (the “Parent Company”) and subsidiaries (the Parent Company and its subsidiaries are collectively referred to as the “Company”) presents this report together with the Company’s consolidated financial statements for the year ended 31 December 2015.

THE BOARDS OF MANAGEMENT AND DIRECTORS The members of the Boards of Management and Directors of the Company who held office during the year and to the date of this report are as follows:

BOARD OF DIRECTORS’ STATEMENT OF RESPONSIBILITYThe Board of Directors of the Company is responsible for preparing the consolidated financial statements, which give a true and fair view of the consolidated financial position of the Company and of its consolidated results and consolidated cash flows for the year in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. In preparing these consolidated financial statements, the Board of Directors is required to:

BOARD OF DIRECTORS

Ms. Cao Thi Ngoc Dung Chairwoman

Mr. Nguyen Vu Phan Vice Chairman

Ms. Nguyen Thi Cuc Member

Mr. Nguyen Tuan Quynh Member

Ms. Nguyen Thi Bich Ha Member

Ms. Pham Vu Thanh Giang MemberMr. Andy Ho Member

Mr. Pham Quoc Cong(appointed on 15 April 2015) Member

BOARD OF MANAGEMENT

Ms. Cao Thi Ngoc Dung General Director

Mr. Le Huu Hanh Deputy General Director

Ms. Nguyen Thi Cuc Deputy General Director

Mr. Nguyen Vu Phan Deputy General Director

Ms. Pham Thi My Hanh Deputy General Director

• Select suitable accounting policies and then apply them consistently;

• Make judgments and estimates that are reasonable and prudent;

• State whether applicable accounting principles have been followed, subject to any material departures disclosed and ex-plained in the consolidated financial statements;

• Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

• Design and implement an effective internal control system for the purpose of properly preparing and presenting the consolidated financial statements so as to minimize errors and frauds.

The Board of Directors is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the consolidated financial position of the Company and that the consolidated financial statements comply with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. The Board of Directors is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.

The Board of Directors confirms that the Company has complied with the above requirements in preparing these consolidated financial statements.

For and on behalf of the Board of Directors,

Cao Thi Ngoc Dung General Director

01 March 2016

INDEPENDENT AUDIT REPORT

To: The shareholders, Boards of Management and Directors of Phu Nhuan Jewelry Joint Stock Company

We have audited the consolidated financial statements of Phu Nhuan Jewelry Joint Stock Company and subsidiaries (the “Company”), prepared on 01 March 2016 as set out from page 05 to page 35, which comprise the consolidated balance sheet as at 31 December 2015, and the consolidated statement of income, and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to consolidated financial reporting and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial

statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINIONIn our opinion, the consolidated financial statements give a true and fair view of in all material respects, the consolidated financial position of the Company as at 31 December 2015, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to consolidated financial reporting.

OTHER MATTERThe Company’s consolidated financial statements for the year ended 31 December 2014 were reviewed and audited by another audit company. The independent auditors’ report dated 30 March 2015 expressed an unqualified opinion.

Nguyen Trong TheAuditorAudit Practising Registration Certificate No. 2649-2013-001-1

Vo Thai HoaDeputy General DirectorAudit Practising Registration Certificate No. 0138-2013-001-1

01 March 2016, Ho Chi Minh City, S.R. Vietnam

Deloitte Vietnam Company Limited18th Floor, Times Square BuildingNo. 22-36 Nguyen Hue Street, District 1, Ho Chi Minh City

Tel: +84 8 3 9100 751Fax: +84 8 3 9100 750Email: [email protected]


Financial report 65

CONSOLIDATED BALANCE SHEET

Unit: VND

CODES ASSETS NOTES 31/12/2015 31/12/2014

100 A. CURRENT ASSETS 2,265,184,856,056 1,817,347,382,578110 I. Cash and cash equivalents 37,884,639,212 37,706,071,196

111 1. Cash 5 37,884,639,212 37,706,071,196

120 II. Short-term financial investments 6 65,000,000 65,000,000

123 1. Held-to-maturity investments 65,000,000 65,000,000

130 III. Short-term receivables 47,171,239,844 71,969,484,744

131 1. Short-term trade receivables 7 29,214,405,782 43,282,823,370

132 2. Short-term advances to suppliers 9,292,551,705 16,213,997,161

136 3. Other short-term receivables 8 8,138,613,714 19,358,762,187

137 4. Short-term doubtful debts (35,327,600) (7,787,546,259)

139 5. Deficits in assets awaiting solution 9 560,996,243 901,448,285

140 IV. Inventories 10 2,135,224,563,617 1,672,014,861,001

141 1. Inventories 2,135,224,563,617 1,672,014,861,001

150 V. Other short-term assets 44,839,413,383 35,591,965,637

151 1. Short-term prepayments 11 43,731,216,274 27,279,143,455

152 2. Value added tax deductibles - 3,659,558,376

153 3. Taxes and other receivables from the State budget 12 1,108,197,109 4,653,263,806

200 B. NON-CURRENT ASSETS 710,104,580,011 1,011,324,758,771210 I. Long-term receivables 21,217,170,462 13,588,573,996

216 1. Other long-term receivables 8 21,217,170,462 13,588,573,996

220 II. Fixed assets 486,102,562,173 451,729,266,255

221 1. Tangible fixed assets 13 193,732,606,001 160,479,587,999

222 - Cost 326,471,653,080 265,520,614,214

223 - Accumulated depreciation (132,739,047,079) (105,041,026,215)

227 2. Intangible assets 14 292,369,956,172 291,249,678,256

228 - Cost 295,745,366,571 293,121,956,571

229 - Accumulated depreciation (3,375,410,399) (1,872,278,315)

240 III. Long-term assets in progress 6,279,408,722 739,090,200

242 1. Long-term construction in progress 15 6,279,408,722 739,090,200

As at 31 December 2015 Form B 01-DN/HN

Unit: VND

CODES ASSETS NOTES 31/12/2015 31/12/2014

250 IV. Long-term financial investments 166,666,261,924 531,799,217,588252 1. Investments in associates 16 81,974,511,924 81,456,342,588

253 2. Equity invesments in other entities 17 395,271,613,400 460,651,988,400

254 3. Provision for impairment of long-term financial investments 6 (310,579,863,400) (10,309,113,400)

260 V. Other long-term assets 29,839,176,730 13,468,610,732

261 1. Long-term prepayments 11 27,342,224,660 12,547,147,880

262 2. Deferred tax assets 18 2,496,952,070 921,462,852

270 TOTAL ASSETS (270=100+200) 2,975,289,436,067 2,828,672,141,349

Unit: VND

CODES RESOURCES 31/12/2015 31/12/2014

300 C. LIABILITIES 1,580,939,890,550 1,532,149,329,780310 I. Current liabilities 1,501,707,663,181 1,394,564,947,680

311 1. Short-term trade payables 19 191,247,911,541 143,580,370,644

312 2. Short-term advances from customers 20,139,296,256 10,577,252,253

313 3. Taxes and amounts payable to the State budget 12 30,738,737,942 45,893,557,644

314 4. Payables to employees 17,885,744,572 27,640,951,586

315 5. Short-term accrued expenses 5,022,483,042 7,218,467,510

319 6. Other current payables 20 29,031,191,004 20,701,786,581

320 7. Short-term loans 21 1,189,260,458,896 1,131,686,128,041

322 8. Bonus and welfare funds 18,381,839,928 7,266,433,421

330 II. Long-term liabilities 79,232,227,369 137,584,382,100

337 1. Other long-term payables 20 403,668,000 455,382,100

338 2. Long-term loans 22 72,388,000,000 137,129,000,000

342 3. Long-term provisions 23 6,440,559,369 -

400 D. EQUITY 1,394,349,545,517 1,296,522,811,569410 I. Owners’ equity 24 1,394,349,545,517 1,296,522,811,569

411 1. Owners’ contributed capital 982,745,770,000 755,970,350,000

411a - Ordinary shares carrying voting rights 982,745,770,000 755,970,350,000

412 2. Share premium - 105,021,650,000

CONSOLIDATED BALANCE SHEET (Cont.)

As at 31 December 2015 Form B 01-DN/HN


Financial report 67

Unit: VND

CODES RESOURCES 31/12/2015 31/12/2014

415 3. Treasury shares (7,090,000) (7,090,000)418 4. Investment and development fund 219,647,610,783 232,805,050,783

421 5. Retained earnings 191,963,254,734 202,732,850,786

421a - Retained earnings accumulated to the prior year end 39,660,441,986 37,575,928,291

421b - Retained earnings of the current year 152,302,812,748 165,156,922,495

440 TOTAL RESOURCES (440=300+400) 2,975,289,436,067 2,828,672,141,349

Duong Quang Hai Preparer

Dang Thi Lai Chief Accountant

Cao Thi Ngoc Dung General Director

01 March 2016

Unit: VND

CODES ITEMS NOTES 2015 2014

01 1. Gross revenue from goods sold and services rendered 7,741,445,592,122 9,297,810,872,56502 2. Deductions 33,092,915,485 98,592,775,013

10 3. Net revenue from goods sold and services rendered (10=01-02) 27 7,708,352,676,637 9,199,218,097,552

11 4. Cost of goods sold and services rendered 28 6,537,985,006,949 8,309,982,541,638

20 5. Gross profit from goods sold and services rendered (20=10-11) 1,170,367,669,688 889,235,555,914

21 6. Financial income 30 1,327,860,382 18,739,496,430

22 7. Financial expenses 31 430,803,003,461 90,254,654,225

23 In which: Interest expense 81,048,729,469 79,682,197,799

25 8. Selling expenses 32 423,930,312,468 354,954,031,945

26 9. General and administration expenses 33 117,548,223,185 129,618,733,552

30 10. Operating profit (30=20+(21-22)-(25+26)) 199,413,990,956 333,147,632,622

31 11. Other income 1,626,760,778 2,661,863,738

32 12. Other expenses 4,235,541,568 1,579,562,479

40 13. (Loss)/profit from other activities (40=31-32) (2,608,780,790) 1,082,301,259

45 14. Profit from associates 16 518,169,336 803,613,002

50 15. Accounting profit before tax (50=30+40+45) 197,323,379,502 335,033,546,883

51 16. Current corporate income tax expense 34 46,596,055,972 79,455,050,132

52 17. Deferred corporate income tax 18 (1,575,489,218) (293,307,944)

60 18. Profit after corporate income tax (60=50-51-52) 152,302,812,748 255,871,804,695

Attributable to:

61 - Non-controlling interest - 13,376,498,721

62 - The Parent Company’s shareholders 152,302,812,748 242,495,305,974

70 19. Basic earnings per share 35 1,347 2,144

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED BALANCE SHEET (Cont.)

As at 31 December 2015 For the year ended 31 December 2015Form B 01-DN/HN Form B 02-DN/HN

Duong Quang HaiPreparer

Dang Thi LaiChief Accountant

Cao Thi Ngoc DungGeneral Director01 March 2016


CONSOLIDATED CASH FLOW STATEMENT CONSOLIDATED CASH FLOW STATEMENT (Cont.)For the year ended 31 December 2015 For the year ended 31 December 2015

Unit: VND

CODES ITEMS 2015 2014

I, CASH FLOWS FROM OPERATING ACTIVITIES

01 1, Profit before tax 197,323,379,502 335,033,546,883

2, Adjustments for:

02 Depreciation and amortization 30,451,035,779 31,011,683,393

03 Provisions 292,518,531,341 468,396,300

04 Foreign exchange loss arising from translating foreign currency items 286,018,688 -

05 Loss/(Gain) from investing activities 38,178,084,255 (16,087,701,495)

06 Interest expense 81,048,729,469 79,682,197,799

08 3, Operating profit before movements in working capital 639,805,779,034 430,108,122,880

09 Decrease/(Increase) in account receivables 31,791,940,883 (21,705,446,742)

10 Increase in inventories (463,209,702,616) (627,182,836,856)

11 Increase in account payables 65,513,478,444 76,335,837,103

12 Increase in prepaid expenses (31,247,149,599) (6,200,444,610)

14 Interest paid (80,553,486,249) (79,682,197,799)

15 Corporate income tax paid (67,771,689,466) (79,187,348,685)

17 Other cash outflows (20,624,506,660) (45,574,805,295)

20 Net cash generated by/(used in) operating activities 73,704,663,771 (353,089,120,004)

II, CASH FLOWS FROM INVESTING ACTIVITIES

21 1, Acquisition of fixed assets and other long-term assets (70,364,650,219) (34,530,888,745)

22 2, Proceeds from disposal of fixed assets 301,946,364 642,272,726

24 3, Cash recovered from lending, selling debt instruments of other entities 26,152,150,000 9,149,322,084

27 4, Interest earned 230,025,045 21,718,529,735

30 Net cash used in investing activities (43,680,528,810) (3,020,764,200)

Form B 03-DN/HN Form B 03-DN/HN

Unit: VND

CODES ITEMS 2015 2014

III. CASH FLOWS FROM FINANCING ACTIVITIES

33 1. Proceeds from borrowings 4.745.829.672.583 6.042.963.679.870

34 2. Repayments of borrowings (4.752.996.341.728) (5.915.061.935.454)

36 3. Dividends paid (22.678.897.800) (241.907.534.200)

40 Net cash used in financing activities (29.845.566.945) (114.005.789.784)

50 Net increase/(decrease) incash(50=20+30+40) 178.568.016 (470.115.673.988)

60 Cash at the beginning of the year 37.706.071.196 507.821.745.184

70 Cash at the end of the year (70=50+60) 37.884.639.212 37.706.071.196



Cao Thi Ngoc DungGeneral Director

01 March 2016

68 Annual report PNJ - 2015 Financial report 69

DESCRIPTION OF CONSOLIDATED FINANCIAL REPORT


DESCRIPTION OF CONSOLIDATED FINANCIAL REPORT

1. GENERAL INFORMATION Phu Nhuan Jewelry Joint Stock Company (the “Parent

Company”) was incorporated as a joint stock company under the Business Registration Certificate No. 0300521758 dated 2 January 2004 issued by the Department of Planning and Investment of Ho Chi Minh City, as amended.

The Company has been listed on the Ho Chi Minh City Stock Exchange (“HOSE”) since 23 March 2009 pursuant to the Decision No.129/ĐKNY issued by the General Director of HOSE on 26 December 2008.

The number of employees as at 31 December 2015 was 3,274 (as at 31 December 2014: 2,494).

Operating industry and principal activities The Company’s principal activities are to trade gold, silver,

jewelry and gemstones, and to import and export jewelry in gold, silver and gemstones.

Normal production and business cycle The Company’s normal production and business cycle is

carried out for a time period of 12 months or less.

The Company’s structure The Parent Company’s head office is located at 170 Phan

Dang Luu Street, Ward 3, Phu Nhuan District, Ho Chi Minh City, Vietnam. In addition, the Company also has one hundred and ninety-four (194) retail shops located in various provinces and cities in Vietnam.

As at 31 December 2015, the Company’s subsidiaries and associates were:• CAO Fashion Company Limited – Subsiadiary• PNJ Laboratory Company Limited – Subsiadiary• Dong A Land Joint Stock Company– Associate

As at 31 December 2015, the Company also had fourty one (41) branches located in various provinces and cities in Vietnam, in which, the big branches were:• Branch of Phu Nhuan Jewelry Joint Stock Company-

Bien Hoa Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Hue City• Branch of Phu Nhuan Jewelry Joint Stock Company-

Vinh Long Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Nha Trang Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Da Nang Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Ha Noi Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Can Tho Branch• Branch of Phu Nhuan Jewelry Joint Stock Company-

Tay Nguyen Branch

Disclosure of information comparability in the consolidated financial statements

As stated in Note 3, since 1 January 2015, the Company has adopted Circular No. 200/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 200”) guiding the accounting regime for enterprises and Circular No. 202/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 202”) guiding the preparation and presentation of consolidated financial statements. Circular 200 supersedes the regulations for accounting regime promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance. Circular 202 supersedes section XIII in Circular No. 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance guiding the preparation and presentation of consolidated financial statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries”. However, the adoption of such circulars does not have significant impact on the comparability of the figures in the Company’s consolidated financial statements.

2. ACCOUNTING CONVENTION AND FINANCIAL YEAR

Accounting convention The accompanying consolidated financial statements,

expressed in Vietnam Dong (“VND”), are prepared under the historical cost convention and in accordance with Vietnamese

These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements

For the year ended 31 December 2015 Form B 09-DN/HN

Financial statements 73

DESCRIPTION OF CONSOLIDATED FINANCIAL REPORT (Cont.)

Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting.

The accompanying consolidated financial statements are not intended to present the financial position, consolidated results of operations and consolidated cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam.

Financial year The Company’s financial year begins on 1 January and ends

on 31 December.

3. ADOPTION OF NEW ACCOUNTING GUIDANCE New guidance on accounting regime for enterprises On 22 December 2014, the Ministry of Finance issued

Circular No. 200/2014/TT-BTC (“Circular 200”) guiding the accounting regime for enterprises and Circular No. 202/2014/TT-BTC (Circular 202) guiding the preparation and presentation of consolidated financial statements. These circulars are effective for financial years beginning on or after 01 January 2015. Circular 200 supersedes the regulations for accounting regime promulgated under Decision No. 15/2006/QD-BTC dated 20 March 2006 issued by the Ministry of Finance and Circular No. 244/2009/TT-BTC dated 31 December 2009 issued by the Ministry of Finance. Circular 202 will supersede section XIII in Circular No. 161/2007/TT-BTC dated 31 December 2007 of the Ministry of Finance guiding the preparation and presentation of consolidated financial statements in accordance with Vietnamese Accounting Standard No. 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries”. The Board of Directors has adopted Circular 200 in the preparation and presentation of the consolidated financial statements for the year ended 31 December 2015.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies, which have been adopted by the Company in the preparation of these consolidated financial statements, are as follows:

Estimates The preparation of financial statements in conformity with

Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting requires the Board of Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the financial year. Although these accounting estimates are based on the Board of Directors’ best knowledge, actual results may differ from those estimates.

Basis of consolidation The consolidated financial statements incorporate the

financial statements of the Parent Company and enterprises controlled by the Parent Company (its subsidiaries) up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Parent Company.

Intragroup transactions and balances are eliminated in full on consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the parent’s ownership interests in them. Non-controlling interests consist of the amount of those non-controlling interests at the date of the original business combination (see below) and the non-controlling interests’ share of changes in equity since the date of the combination. Losses in subsidiaries are respectively attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.




Business combinations On acquisition, the assets and liabilities and contingent

liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired is credited to profit and loss in the period of acquisition.

The non-controlling interests are initially measured at the non-controlling shareholders’ proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Investments in associates An associate is an entity over which the Parent Company has

significant influence and that is neither a subsidiary nor an interest in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Interests in associates are carried in the consolidated balance sheet at cost as adjusted by post-acquisition changes in the Parent Company’s share of the net assets of the associate. Losses of an associate in excess of the Parent Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate) are not recognised.

Where a group entity transacts with an associate of the Parent Company, unrealised profits and losses are eliminated to the extent of the Parent Company’s interest in the relevant associate.

Financial instruments Initial recognition

Financial assets: At the date of initial recognition, financial assets are recognised at cost plus transaction costs that are directly attributable to the acquisition of the financial assets. Financial assets of the Company comprise cash, trade and other receivables, deposits and financial investments.

Financial liabilities: At the date of initial recognition financial

liabilities are recognised at cost plus transaction costs that are directly attributable to the issue of the financial liabilities. Financial liabilities of the Company comprise trade and other payables, accrued expenses and borrowings.

Subsequent measurement after initial recognition

Currently, there are no requirements for the subsequent measurement of the financial instruments after initial recognition.

Cash Cash comprise cash on hand and demand deposits.

Financial investments Trading securities

Trading securities are those the Company holds for trading purpose. Trading securities are recognised from the date the Company obtains the ownership of those securities and initially measured at the fair value of payments made at the transaction date plus directly attributable transaction costs.

In subsequent periods, investments in trading securities are measured at cost less provision for impairment of such investments.

Provision for impairment of investments in trading securities is made in accordance with prevailing accounting regulations.

Held-to-maturity investments Held-to-maturity investments comprise investments that

the Company has the positive intent or ability to hold to maturity, including term deposits (commercial bills), bonds, preference shares which the issuer shall redeem at a certain date in the future, loans held to maturity to earn periodic interest and other held-to-maturity investments.

Held-to-maturity investments are recognised on a trade date basis and are initially measured at acquisition price plus directly attributable transaction costs. Post-acquisition interest income from held-to-maturity investments is recognised in the consolidated income statement on accrual basis. Pre-acquisition interest is deducted from the cost of such investments at the acquisition date.





Held-to-maturity investments are measured at cost less provision for doubtful debts.

Provision for doubtful debts relating to held-to-maturity investments is made in accordance with prevailing accounting regulations.

Other long-term investments Other long-term investments are investments in other entities

which the Company owns less than 20% voting rights and does not have significant influence, with maturity over 1 year. Other long-term investments are recorded at the starting date of acquisition and the initial value are determined based on the cost and other cost related to the investments. In the next fiscal years, the other long-term investments are determined at cost less the impairment of investments.

Provisions for impairment of investments Provisions for impairment of investments in subsidiaries, joint

ventures and associates are made in accordance with Circular No. 228/2009/TT-BTC dated 7 December 2009 issued by the Ministry of Finance on “Guiding the appropriation and use of provisions for devaluation of inventories, loss of financial investments, bad debts and warranty for products, goods and construction works at enterprises”, Circular No. 89/2013/TT-BTC dated 28 June 2013 by the Ministry of Finance amending and supplementing Circular No. 228/2009/TT-BTC and prevailing accounting regulations.

Receivables Receivables represent the amounts recoverable from

customers or other debtors and are stated at book value less provision for doubtful debts.

Provision for doubtful debts is made for receivables that are overdue for six months or more, or when the debtor is in dissolution, in bankruptcy, or is experiencing similar difficulties and so may be unable to repay the debt.

Inventories Inventories are stated at the lower of cost and net realisable

value. Cost comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average

method. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

The evaluation of necessary provision for inventory obsolescence follows current prevailing accounting regulations which allow provisions to be made for obsolete, damaged, or sub-standard inventories and for those which have costs higher than net realisable values as at the consolidated balance sheet date.

Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less accumulated

depreciation. The costs of purchased tangible fixed assets comprise their purchase prices and any directly attributable costs of bringing the assets to their working condition and location for their intended use.

Tangible fixed assets are depreciated using the straight-line method over their estimated useful lives as follows:

Loss or gain resulting from sales and disposals of tangible fixed assets is the difference between profit from sales or disposals of assets and their residual values and is recognised in the consolidated income statement.

Leasing Leases where substantially all the rewards and risks of

ownership of assets remain with the leasing company are accounted for as operating leases. Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant lease.

Intangible assets and amortisation Intangible assets represents the value of computer software

that is stated at cost less accumulated amortisation and is amortized on the straight-line basis over their estimated useful lives of 3 years.

YearsBuildings and structures 03 - 25

Machinery and equipment 03 - 15

Motor vehicles 04 - 10

Office equipment 03 - 08





Land use rights are recorded as an intangible asset in the consolidated balance sheet when the Company received the certificate of land use rights. The history cost of the land use rights comprises all directly attributable costs of bringing the land lot to the condition available for intended use and is not amortized because the land use rights have long usage time.

Construction in progress Properties in the course of construction for selling, are carried

at cost. Cost includes land use rights and construction cost for trade centers and stores in accordance with the Company’s accounting policy. Depreciation of these assets is applied on the same basis as other assets, commences when the assets are ready for their intended use.

Prepayments Prepayments include short-term prepayments or long-term

prepayments in the consolidated balance sheet and are amortised over the period for which the amounts are paid or the period in which economic benefits are generated in relation to these expenses.

Long-term prepaid expenses comprise:• Prepaid rental which includes land and shop rental prepaid for

many years under operating leases contracts and is amortized over the lease term;

• Tools and comsumables with large value issued in use which can be used for more than one year; and

• Others which are amortized to the consolidated income statement over 2 to 3 years.

Straight bond issued The Company issues straight bonds for long-term loan

purposes to finance capital’s projects. Carrying value of straight bonds is recorded on net basis, equal to bonds’ nominal amount.

Borrowing costs Interest expense includes interest and other costs incurred

related to the loans of the Company and is recorded to the expenses incurred during the year.

Revenue recognition Revenue from the sale of goods is recognised when all five

(5) following conditions are satisfied:

(a) the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

(b) the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably; (d) it is probable that the economic benefits associated with the

transaction will flow to the Company; and (e) the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

Revenue of a transaction involving the rendering of services is recognised when the outcome of such transactions can be measured reliably. Where a transaction involving the rendering of services is attributable to several years, revenue is recognised in each period by reference to the percentage of completion of the transaction at the consolidated balance sheet date of that year. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied:

(a) the amount of revenue can be measured reliably; (b) it is probable that the economic benefits associated with

the transaction will flow to the Company; (c) the percentage of completion of the transaction at the

consolidated balance sheet date can be measured reliably; and (d) the costs incurred for the transaction and the costs to

complete the transaction can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable interest rate.

Dividend income from investments is recognised when the Company’s right to receive payment has been established.

Severance allowance payable The severance allowance for employees is accrued at the end of

each reporting period for all employees having worked at the Company for full 12 months and above. Working time serving as the basis for calculating severance allowance shall be the total actual working time subtracting the time when the employees have made unemployment insurance contributions as prescribed by law, and the working time when severance allowance has been paid to the employees. The allowance made for each year of service equals to a half of an average




monthly salary under the Vietnamese Labour Code, Social Insurance Code and relevant guiding documents. The average monthly salary used for calculation of severance allowance shall be adjusted to be the average of the 6 consecutive months nearest to the date of the financial statements at the end of each financial year. The increase or decrease in the accrued amount shall be recorded in the income statement.

Foreign currencies The Company applies the method of recording foreign

exchange differences in accordance with Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates” and Circular 200/2014/TT-BTC (“Circular 200”) guiding accouting regime for enterprises. Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. The balances of monetary items denominated in foreign currencies as at the consolidated balance sheet date are retranslated at the exchange rates on the same date. Exchange differences arising from the translation of these accounts are recognised in the consolidated income statement. Unrealised exchange gains as at the consolidated balance sheet date are not treated as part of distributable profit to shareholders.

Payable provisions Payable provisions are recognised when the Company has a

present obligation as a result of a past event, and it is probable that the Company will be required to settle that obligation. Provisions are measured at the management’s best estimate of the expenditure required to settle the obligation as at the balance sheet date.

Taxation Income tax expense represents the sum of the tax currently

payable and deferred tax

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other periods (including loss carried forward, if any) and it further excludes items that are never taxable or deductible.

Deferred tax is recognised on significant differences between

carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using balance sheet liability method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Company intends to settle its current tax assets and liabilities on a net basis.

The determination of the tax currently payable is based on the current interpretation of tax regulations. However, these regulations are subject to periodic variation and their ultimate determination depends on the results of the tax authorities’ examinations.

Other taxes are paid in accordance with the prevailing tax laws in Vietnam.






31/12/2015VND

31/12/2014VND

Cash on hand 25,879,052,458 29,251,327,486 Cash in bank 9,926,639,754 6,653,427,710

Cash in transit 2,078,947,000 1,801,316,000

37,884,639,212 37,706,071,196

5. CASH

As at 31 December 2014, cash equivalents which are gold are reclassified to inventories in accordance with guidance of Circular No. 200/2014/TT-BTC of the Ministry of

Finance dated 22 December 2014 with an amount of VND 234,599,264,879.



Financial statements 79 3

1/12

/201

5V

ND

31/

12/2

014

VN

D

CO

STPR

OVI

SIO

NFA

IR V

ALU

EC

OST

PRO

VISI

ON

FAIR

VAL

UE

a. H

eld-to

-mat

urity

inve

stmen

ts65

,000,0

00-

65,00

0,000

65,00

0,000

-65

,000,0

00 Sh

ort-t

erm

- Ti

me d

eposi

t65

,000,0

00-

65,00

0,000

65,00

0,000

-65

,000,0

00b.

Inve

stmen

ts in

oth

er en

tities

- Inv

estm

ents

in o

ther

entit

ies39

5,271

,613,4

00(3

10,57

9,863

,400)

84,69

1,750

,000

460,6

51,98

8,400

(10,3

09,11

3,400

)45

0,342

,875,0

00

Don

g A Jo

int St

ock C

omm

ercial

Ban

k (“D

AB”)

(*)

395,2

71,61

3,400

(310

,579,8

63,40

0)84

,691,7

50,00

039

5,271

,613,4

00

(10,3

09,11

3,400

)38

4,962

,500,0

00

Sai G

on M

&C

Real

Estat

e Join

t Stoc

k Com

pany

--

-65

,380,3

75,00

0-

65,38

0,375

,000

395,3

36,61

3,400

(310

,579,8

63,40

0)84

,756,7

50,00

046

0,716

,988,4

00(1

0,309

,113,4

00)

450,4

07,87

5,000

6. F

INA

NC

IAL

INV

EST

MEN

TS

Sign

ifica

nt in

tra-g

roup

tran

sact

ions

dur

ing t

he ye

ar (N

ote 3

8).



7. SHORT-TERM TRADE RECEIVABLES

8. OTHER RECEIVABLES

9. DEFICITS IN ASSSETS AWAITING SOLUTION

(*) On 14 August 2015, the State Bank of Vietnam decided to put Dong A Joint Stock Commercial Bank under special control. However, the Board of Directors believes that the Company

31/12/2015VND

31/12/2014VND

Total Gaz Vietnam Limited 362,078,769 13,274,137,702 FH Trautz GmBh 6,531,852,825 4,084,326,480

Others 22,320,474,188 25,924,359,188

29,214,405,782 43,282,823,370

31/12/2015VND

31/12/2014VND

a. Short-term receivables - Advances to employees 1,050,979,825 644,633,055 - Others 7,087,633,889 18,714,129,132

8,138,613,714 19,358,762,187

b. Long-term receivables

- Long-term deposits to rent the stores 21,217,170,462 13,588,573,996

21,217,170,462 13,588,573,996

31/12/2015VND

31/12/2014VND

QUANTITY AMOUNT QUANTITY AMOUNT

Gold (3,75 gram) 161.83 485,490,600 149.99 499,999,998Others - 75,505,643 - 401,448,287

161,83 560,996,243 149,99 901,448,285

made provision for impairment of investments in this bank fully and in accordance with current accounting regulations as at the consolidated balance sheet date.




10. INVENTORIES

11. PREPAYMENTS

31/12/2015VND

31/12/2014VND

Goods in transit 9,502,592,792 608,973,823Raw materials 91,664,955,905 100,732,561,181Tools and supplies 20,813,328,324 19,923,350,233

Works in progress 131,664,308,110 147,201,507,351

Finished goods 134,240,935,308 129,280,128,300

Merchandise 1,736,881,061,410 1,258,766,029,857

Goods on consignment 10,457,381,768 15,502,310,256

2,135,224,563,617 1,672,014,861,001

31/12/2015VND

31/12/2014VND

(a) Short-term prepayments- Stores rental 4,854,961,022 3,361,387,270 - Tools and supplies 32,298,885,139 15,041,864,775

- Others 6,577,370,113 8,875,891,410

43,731,216,274 27,279,143,455

b) Long-term prepayments- Office and Stores renovation cost 14,769,074,483 4,158,587,626

- Stores rental 3,341,918,467 3,198,215,073

- Tools and supplies 9,231,231,710 5,190,345,181

27,342,224,660 12,547,147,880

As at 31 December 2015, inventories of VND 465,916,000,000 (as at 31 December 2014: VND 570,000,000,000) were used as

collateral for short-term loans obtained from commercial banks (Note 21).






12. TAXES AND OTHER RECEIVABLES FROM/ PAYABLES TO THE STATE BUDGET

01/01/2015

RECEIVABLE/PAYABLE DURING

THE YEAR

RECEIVED/PAID DURING

THE YEAR 31/12/2015

VND VND VND VND

a. Receivables- Value added tax 4,525,720,813 (42,238,028,172) 38,595,803,733 883,496,374 - Import-export tax 53,542,993 (5,228,858,091) 5,363,199,865 187,884,767

- Others 74,000,000 (3,000,094,965) 2,962,910,933 36,815,968

4,653,263,806 (50,466,981,228) 46,921,914,531 1,108,197,109

b. Payables

- Value added tax 12,952,051,210 125,536,247,521 (119,661,326,281) 18,826,972,450

- Corporate income tax 32,257,181,576 46,551,388,848 (67,771,689,466) 11,036,880,958

- Personal income tax 684,324,858 8,542,584,405 (8,352,024,729) 874,884,534

- Others - 523,721,605 (523,721,605) -

45,893,557,644 181,153,942,379 (196,308,762,081) 30,738,737,942




13. I

NC

REA

SES,

DEC

REA

SES

IN T

AN

GIB

LE F

IXED

ASS

ETS

BUIL

DIN

GS A

ND

ST

RUC

TURE

SM

ACH

INER

Y AN

D

EQU

IPM

ENT

OFF

ICE

EQU

IPM

ENT

MO

TOR

VEH

ICLE

STO

TAL

VND

VND

VND

VND

VND

CO

ST

As at

01/0

1/20

15 12

0,558

,292,9

8211

6,999

,453,3

5417

,525,4

13,91

710

,437,4

53,96

126

5,520

,614,2

14

Addi

tions

4,888

,027,5

22 3

4,843

,593,2

88 17

,925,9

29,88

7 4

,543,3

71,00

062

,200,9

21,69

7D

ispos

als -

- (7

04,94

9,195

)(5

44,93

3,636

) (1

,249,8

82,83

1)

As at

31/1

2/20

15 12

5,446

,320,5

0415

1,843

,046,6

4234

,746,3

94,60

9 14

,435,8

91,32

5 32

6,471

,653,0

80

AC

CU

MU

LAT

ED D

EPR

ECIA

TIO

N

As at

01/0

1/20

1516

,299,4

05,45

770

,228,3

30,29

813

,423,8

56,71

85,0

89,43

3,742

105,0

41,02

6,215

Cha

rge f

or th

e yea

r5,3

06,50

3,177

15,31

8,148

,789

7,299

,515,6

851,0

23,73

6,044

28,94

7,903

,695

Disp

osals

-

-

(704

,949,1

95)

(544

,933,6

36)

(1,24

9,882

,831)

As at

31/1

2/20

1521

,605,9

08,63

485

,546,4

79,08

720

,018,4

23,20

8 5,

568,2

36,15

013

2,739

,047,0

79N

ET B

OO

K V

ALU

EA

s at 3

1/12

/201

510

3,84

0,41

1,87

066

,296

,567

,555

14,7

27,9

71,4

018,

867,

655,

175

193,

732,

606,

001

As a

t 01/

01/2

015

104,

258,

887,

525

46,7

71,1

23,0

564,

101,

557,

199

5,34

8,02

0,21

916

0,47

9,58

7,99

9

Th

e cos

t of t

angi

ble fi

xed

asse

ts as

at 31

Dec

embe

r 201

5 com

prise

s ful

ly de

prec

iated

fixed

asse

ts wh

ich ar

e stil

l in us

e with

the t

otal

amou

nt o

f VN

D 61

,407,0

21,45

0

(as a

t 31 D

ecem

ber 2

014:

VN

D 45

,923,2

25,78

1).



14. INCREASES, DECREASES IN INTANGIBLE ASSETS

15. CONSTRUCTION IN PROGRESS

16. INVESTMENTS IN ASSOCIATES

LAND USE RIGHTS

COMPUTERSOFTWARE TOTAL

VND VND VND

COST

As at 01/01/2015 285,183,268,988 7,938,687,583 293,121,956,571Additions 2,623,410,000 - 2,623,410,000

As at 31/12/2015 287,806,678,988 7,938,687,583 295,745,366,571

ACCUMULATED AMORTIZATION

As at 01/01/2015 - 1,872,278,315 1,872,278,315

Charge for the year - 1,503,132,084 1,503,132,084

As at 31/12/2015 - 3,375,410,399 3,375,410,399

NET BOOK VALUE

As at 31/12/2015 287,806,678,988 4,563,277,184 292,369,956,172

As at 01/01/2015 285,183,268,988 6,066,409,268 291,249,678,256

As presented in Note 21 and 22, the value of land use rights used as collateral for the loans in commercial banks as at 31 December 2015 is VND 106,543,452,000 (as at 31 December 2014: VND 106,543,452,000).

31/12/2015VND

31/12/2014VND

Store at Sunrise city mall 5,540,318,522 -Construction expense of stores 739,090,200 739,090,200

6,279,408,722 739,090,200

31/12/2015VND

31/12/2014VND

Investments in associates 91,866,300,000 91,866,300,000 Share of post-acquisition loss (9,891,788,076) (10,409,957,412)

81,974,511,924 81,456,342,588

The cost of intangible assets as at 31 December 2015 comprises fully depreciated fixed assets which are still in use with the total amount of VND 1,112,471,613 (as at 31 December 2014: Nil).




Dong A Land Joint Stock Company (“DAL”) was established in Ho Chi Minh City with the charter capital of VND 300,000,000,000 according to the Business Registration Certificate No. 4103001739 issued by the Department of Planning and Investment of Ho Chi Minh City dated 24 July

Summary of financial information about associates is as follow:

Detailed information about these companies as at 31 December 2015 was as follow:

17. EQUITY INVESTMENTS IN OTHER ENTITIES

31/12/2015VND

31/12/2014VND

Total assets 1,191,136,152,238 1,128,023,303,265 Total liabilities 915,363,429,773 856,081,601,592

Net assets 275,772,722,465 271,941,701,673

Parent Company’s share of associates’ net assets 84,441,607,619 83,268,549,052

2015VND

2014VND

Net revenue 42,611,150,530 104,623,587,893Net profit 1,692,141,742 2,624,470,941

Parent Company’s share of associates’ net profit 518,169,336 803,613,002

31/12/2015VND

31/12/2014VND

Dong A Joint Stock Commercial Bank (“DAB”) 395,271,613,400 395,271,613,400Sai Gon M&C Real Estate Joint Stock Company - 65,380,375,000

395,271,613,400 460,651,988,400

COMPANY NAME

PLACE OF INCORPORATION AND OPERATION

PROPORTION OF

OWNERSHIP INTEREST (%)

PROPORTION OF VOTING

POWER HELD(%)

PRINCIPAL ACTIVITY

Dong A Joint Stock Commercial Bank (“DAB”) Ho Chi Minh City 7.69 7.69

Business operations related

to financial activities, banking

2003. Total equity of the Company is VND 91,866,300,000, equivalent to 30.62% of total capital. The principal activities of DAL are providing design services, project management, building service, providing advisory services and real estate agents, business and home decoration.






ACCRUALS AND OTHER PROVISIONS

VND

As at 1 January 2014 628,154,908Credit to the income statement 293,307,944

As at 31 December 2014 921,462,852

Credit to the income statement 1,575,489,218As at 31 December 2015 2,496,952,070

18. DEFERRED TAX The deferred tax assets recorded by the Company and changes

of these items in this year and prior years are as follow:

19. SHORT-TERM TRADE PAYABLES

AMOUNTVND

31/12/2015 AMOUNT ABLE

TO BE PAID OFF VND

AMOUNTVND

31/12/2014 AMOUNT ABLE

TO BE PAID OFF VND

Forte Jewellery (HK) Limited Company 13,580,648,775 13,580,648,775 18,437,084,070 18,437,084,070Sherenuj Fareast Limited Company 12,596,607,000 12,596,607,000 - -

Other suppliers 165,070,655,766 165,070,655,766 125,143,286,574 125,143,286,574

191,247,911,541 191,247,911,541 143,580,370,644 143,580,370,644




20. OTHER PAYABLES

31/12/2015VND

31/12/2014VND

a) Current payables 29,031,191,004 20,701,786,581- Surpluses in assets awaiting solution 666,637,223 -

- Trade union fee 2,679,311,205 4,912,336,783

- Social insurance 8,131,384 -

- Health insurance 309,565 198,471,280

- Unemployment insurance 615,766 272,373,838

- Payables to Board of Management fund 803,029,644 804,402,000

- Payables to Board of Directors fund 6,071,220,092 6,653,120,092

- Payables to Trade union fund 4,241,530,139 4,276,739,004

- Dividends payable 8,318,214,645 18,824,540

- Others 6,242,191,341 3,565,519,044

b) Long-term payables 403,668,000 455,382,100

- Others 403,668,000 455,382,100

29,434,859,004 21,157,168,681






AM

OU

NT

VN

D

1/1/

2015

A

MO

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BLE

TO B

E PA

ID O

FF

VN

D

IN T

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AM

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BE

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ND

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ND

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cial Jo

int S

tock

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k20

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00

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00,00

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(

418,3

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)-

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ank

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ndus

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de 1

38,45

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122,8

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--

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C B

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0

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0,000

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0,000

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-

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l Com

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--

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nam

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n C

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l Jo

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--

ANZ

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(Viet

nam

) Lim

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--

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79,80

0,000

(165

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0)-

-

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Join

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--

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0,000

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6

21. S

HO

RT-T

ERM

LO

AN

S


Details of short-term loans at commercial banks with floating interest rates to accommodate the Company’s working capital are presented as follows:

(*) At 09 November 2015, the Company entered into the contract with Orient Commercial Joint Stock Bank (“OCB”) relating to the issue of 300,000 bonds at par value (1,000,000/bond) to restructure the short-term loan and invest in the expansion of the Company’s stores with 14,530,017 the Company’s stocks as collateral asset. The period of the bond is 01 year from 12 November 2015 to 12 November 2016 with

BANK NAME 31/12/2015

VND MATURITY DATEINTEREST

%/P.A COLLATERAL

Vietnam Joint StockCommercial Bank for Industry and Trade

31,000,000,000 From 04 February 2016 to 05 February 2016

5.0 Inventories

Joint Stock Company Bank for Foreign trade 279,947,647,855 From 07 March 2016

to 28 June 2016 5.5 Unsecured Loan

Southeast Asia Commercial Joint Stock Bank 100,000,000,000 From 08 March 2016

to 25 March 2016 7.0

Inventories, Land use rights and land-based

assets at 123 Hung Vuong, Hai Chau

II Ward, Hai Chau District, Da Nang

CTBC Bank Company Limit-ed - Ho Chi Minh Branch 65,669,000,000 From 19 April 2016

to 24 May 2016 6.0 - 6.4 Inventories with the

value up to USD 2,000,000

Shinhan Bank Vietnam Limited 60,000,000,000 From 20 January 2016

to 02 March 2016 5.3 - 5.6 Inventories

Military Commercial Joint Stock Bank 60,267,509,526 From 09 January 2016

to 29 February 2016 5.0 Unsecured Loan

Orient Commercial Joint Stock Bank 300,000,000,000 12 November 2016 8.5 The Company’s

Stock (*)

Other individuals 265,572,301,515 From 31 December 2015 to 30 December 2016 3.0 - 9.0 Unsecured Loan

Current portion of long-term loans (see Note 23) 26,804,000,000

1,189,260,458,896

fixed interest rate at 8.5% per annum. The shares are pledged by the Company including 9,498,714 shares of Ms. Cao Thi Ngoc Dung - General Director, 623,996 PNJ shares of Ms. Nguyen Thi Cuc - Deputy General Director, 748,800 PNJ shares of Mr. Le Huu Hanh - Deputy General Director , 1,610,106 PNJ shares of PNJ Trade Union and 2,048,401 PNJ shares of Mrs. Pham Thuy Lan Anh - Shareholder.





Te

rms a

nd co

nditi

ons o

f the

loan

s and

oth

er lo

ng-te

rm d

ebt b

alanc

e are

det

ailed

as fo

llows

:

22.

LON

G-T

ERM

LO

AN

S

AM

OU

NT

VN

D

01/0

1/20

15

AM

OU

NT

ABL

E TO

BE

PAID

OFF

V

ND

IN T

HER

YEA

R A

MO

UN

TV

ND

31/1

2/20

15

AM

OU

NT

ABL

E TO

BE

PAID

OFF

VN

DIN

CR

EASE

VN

DD

ECR

EASE

VN

D

Don

g A Jo

int S

tock

Com

mer

cial B

ank

78,12

8,000

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78,12

8,000

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34,71

0,000

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(86

,468,0

00,00

0)26

,370,0

00,00

0 26

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0 As

ia C

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l Join

t Sto

ck B

ank

59,00

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59,00

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215,7

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28,75

7,000

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46,01

8,000

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46,01

8,000

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er in

divid

uals

--

6,00

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(6,00

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--

137

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137,

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256,

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(321

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)72

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31/

12/2

015

VN

DIN

TER

EST %

M

ATU

RIT

Y D

ATE

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LLAT

ERAL

Don

g A Jo

int S

tock

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mer

cial B

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41,66

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6%20

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Land

use

righ

ts an

d lan

d-ba

sed

asse

ts at

52A+

52B

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yen

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St

reet

, Phu

Nhu

an D

istric

t, Ho

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h C

ity (H

CM

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59A

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D

ang

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Phu

Nhu

an D

istric

t, H

CM

C; 5

77 N

guye

n Ki

em, P

hu

Nhu

an D

istric

t, HC

MC

; 174

Le Th

anh T

on, D

istric

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City

Asia

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mer

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nd us

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ts at

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8 and

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Thu K

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uan

Stre

et, D

istric

t 1,

Ho

Chi

Min

h C

ityIn

whi

ch:

Cur

rent

porti

on o

f long

-term

liabi

lities

(26,8

04,00

0,000

)

72,

388,

000,

000


31/12/2015VND

31/12/2014VND

On demand or within one year 26,804,000,000 10,045,000,000 In the second year 28,194,000,000 78,128,000,000

In the third to fifth year inclusive 44,194,000,000 59,001,000,000

99,192,000,000 147,174,000,000

Less: Amount due for settlement within 12 months (shown under Note 21) 26,804,000,000 10,045,000,000

Amount due for settlement after 12 months 72,388,000,000 137,129,000,000

Long-term liabilities are redeemable as the following schedule:

23. LONG-TERM PROVISIONS Long-term provision was the severance allowance for

employees accrued at the end of each reporting period for all employees who have worked at the Company before 31 December 2008.





24. O

WN

ERS’

EQ

UIT

Y

OW

NER

S’

CO

NT

RIB

UT

ED

CA

PITA

LV

ND

SHA

RE

PREM

IUM

TR

EASU

RY

SHA

RES

VN

D

INV

EST

MEN

T

AN

D

DEV

ELO

PMEN

T

FUN

DV

ND

RET

AIN

ED

EAR

NIN

GS

VN

DTO

TAL

VN

D

Balan

ce as

at 01

/01/

2014

75

5,970

,350,0

00

105,0

21,65

0,000

(7,09

0,000

)18

3,705

,050,7

83 2

73,53

0,620

,443

1,318

,220,5

81,22

6 Pr

ofit fo

r the

year

--

--

242,4

95,30

5,974

242,4

95,30

5,974

Divi

dend

s dec

lared

-

--

-(1

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2,652

,000)

(151

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52,00

0)Ad

vanc

ed 1s

t tim

e divi

dend

s-

--

-(9

0,714

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00)

(90,7

14,88

2,200

)Pr

ofit a

ppro

priat

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--

-49

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-Tr

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r to b

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and w

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e fun

ds-

--

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31)

(22

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lanc

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at 0

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575

5,97

0,35

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0 1

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2,80

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0,78

3 2

02,7

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86 1

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se 2

26,77

5,420

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(105

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0)-

(46,1

57,44

0,000

) (7

5,596

,330,0

00)

-Pr

ofit fo

r the

year

--

--

152,3

02,81

2,748

152,3

02,81

2,748

Divi

dend

decla

red

--

--

(22,6

78,89

7,800

) (2

2,678

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00)

Profi

t app

ropr

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n-

--

33,00

0,000

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(33,0

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)-

Tran

sfer t

o bon

us an

d welf

are f

unds

--

--

(26,7

97,18

1,000

)(2

6,797

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00)

Oth

er pr

ofit a

ppro

priat

ion

--

--

(5,00

0,000

,000)

(5,00

0,000

,000)

Bala

nce

as at

31/

12/2

015

982

,745

,770

,000

- (

7,09

0,00

0) 2

19,6

47,6

10,7

8319

1,96

3,25

4,73

41,

394,

349,

545,

517


Shares - Ordinary shares

Owners’ contributed capital As at 31 December 2015, the owners’ contributed capital

was fully contributed by the shareholders as follows:

31/12/2015NUMBER OF

SHARES

31/12/2014NUMBER OF

SHARES

Shares issued and fully paid 98,274,577 75,597,035 Ordinary shares 98,274,577 75,597,035

Treasury shares (709) (709)

Ordinary shares (709) (709)

Shares in circulation 98,273,868 75,596,326

Ordinary shares 98,273,868 75,596,326

An ordinary share has par value of VND 10,000.

CONTRIBUTED CAPITAL PER BUSINESS REGISTRATION

CERTIFICATE 31/12/2015 31/12/2014

VND % VND VND

Cao Thi Ngoc Dung 99,667,140,000 10.14% 99,667,140,000 76,667,040,000Nguyen Thi Cuc 9,424,960,000 0.96% 9,424,960,000 7,249,980,000

Nguyen Vu Phan 8,969,960,000 0.91% 8,969,960,000 6,899,980,000

Other shareholders 864,683,710,000 87.99% 864,683,710,000 665,153,350,000

Total 982,745,770,000 100% 982,745,770,000 755,970,350,000

According to the Resolution of the Annual General Meeting of Shareholders No. 544/2015/NQ-ĐHĐCĐ-CTY dated 15 April 2015, the Shareholders approved the plan to distribute 2014 profit as below:

- 2014 dividends of VND 188,990,819,000 including VND

90,714,882,200 advanced in 2014, VND 75,596,330,000 paid by bonus shares and VND 22,678,897,800 paid in cash. The declared dividends were paid in cash with an amount of VND 22,678,897,800 during the year.

- Distribution to Investment and development fund, bonus

and, welfare funds and other funds with the amounts

of VND 33,000,000,000; VND 26,797,181,000, VND 5,000,000 respectively.

- The Shareholders also approved the issuance plan of

22,677,542 additional shares, in which 7,559,633 shares equivalent to VND 75,596,330,000 were used to pay dividends in 2014 and 15,119,265 shares equivalent to VND 151,192,650,000 were from owner’s equity.

As at 31 December 2015, the Company has been in completing

increasing the owners’ equity. The increase in capital was approved by Ho Chi Minh City Stock Exchange under Decision No. 288/QD-SGDHCM dated 17 July 2015.





25. OFF BALANCE SHEET ITEMS

Foreign currencies:

UNIT 31/12/2015 31/12/2014

United States Dollar USD 68,831 8,382Australia Dollar AUD 519 30,006

Singapore Dollar SGD 174 -

Consignment goods for sale, goods held under trust, pledged, mortgaged goods

Phu Nhuan Jewelry Joint Stock Company is receiving the

2015 VND

Ho Van MyBui Minh Ky 4,247,179,715

Others 662,043,0534,909,222,768

pledged, mortgaged gold jewelry and precious stones at 31 December 2015 with the value of VND 3,302,900,000 (as at 31 December 2014: VND 2,554,300,000).

26. BUSINESS AND GEOGRAPHICAL SEGMENTS The principal activity of the Company is to trade gold, silver,

jewelry and gemstones. Additionally, the other activities mainly are trading accessories, jewellery inspection services. Revenue from the other operating activities merely accounts for an immaterial rate in the total revenue, for year ended 31 December 2015 it is 1% (2014: 26%). Revenue and cost of sales from operating activities are presented in Note 27 and Note 28 of the Notes to the consolidated financial

statements. In respect of geographical segments, the Company merely operates within Vietnam (export activites take up 0.03% of total revenue). Accordingly, the Board of Directors assessed and believed that no segment reporting in the consolidated financial statements for the year ended 31 December 2015 was in accordance with Vietnamese Accounting Standard No. 28 - “Segment Reporting” and the Company’s current operating situation.

Bad debts written off During the year, the Board of Directors has evaluated the

recoverability and writen-off bad debts following:




2015 VND

2014 VND

Sales of goods, silver and jewelry 7,823,457,981,256 7,293,513,471,782 Sales of fuel - 1,968,961,904,427

Rendering services 23,491,258,304 20,613,001,351

Sales of accessories 19,285,807,269 14,722,495,005

Value added tax applying direct method (124,789,454,707) (82,202,300,786)

7,741,445,592,122 9,215,608,571,779

Sales returned (33,092,915,485) (16,390,474,227) 7,708,352,676,637 9,199,218,097,552

28. COST OF GOODS SOLD AND SERVICES RENDERED

29. PRODUCTION AND OPERATING COST BY NATURE

2015VND

2014VND

Cost of goods, silver and jewelry 6,520,722,575,159 6,406,635,018,755 Cost of fuel - 1,889,614,030,755

Cost of services rendered 4,027,952,554 3,393,999,670

Cost of accessories 13,234,479,236 10,339,492,458

6,537,985,006,949 8,309,982,541,638

2015VND

2014VND

Raw materials 5,944,441,220,235 8,318,149,954,817Labour cost 374,547,137,576 196,647,826,741

Depreciation and amortisation 30,451,035,779 31,011,683,393

Outside services expenses 54,414,467,861 45,085,470,406

Other monetary expenses 103,729,636,789 7,691,926,404


6,716,071,186,637 8,694,131,696,950

27. NET REVENUE FROM GOODS SOLD AND SERVICES RENDERED






30. FINANCIAL INCOME

2015VND

2014VND

Dividends received - 8,422,164,000Interest income 230,025,045 9,907,458,935

Realized foreign exchange gain 1,081,780,830 409,104,517

Others 16,054,507 768,978

1,327,860,382 18,739,496,430

31. FINANCIAL EXPENSE

32. SELLING EXPENSE

2015VND

2014VND

Interest expense 81,048,729,469 79,682,197,799Provision for impairment of investments 300,270,750,000 7,949,553,178

Loss from disposal of investments 39,228,225,000 -

Foreign exchange loss 9,253,442,646 964,406,647

Others 1,001,856,346 1,658,496,601

430,803,003,461 90,254,654,225

2015VND

2014VND

Management materials 21,656,836,175 10,290,686,002Management staff 180,521,472,970 141,725,007,574

Office supplies 28,524,688,354 19,952,029,634


Out-sourced services 93,457,335,542 92,462,542,845


423,930,312,468 354,954,031,945




33. GENERAL AND ADMINATION EXPENSE

2015VND

2014VND

Management materials 134,424,660 120,760,100 Management staff 66,302,994,075 68,719,031,778

Office supplies 5,294,172,298 4,970,040,568


Taxes , fees and charges 260,977,200 167,344,953

Out-sourced services 5,627,138,663 4,073,426,517


117,548,223,185 129,618,733,552

34. CURRENT CORPORATE INCOME TAX EXPENSE

2015VND

2014VND

Corporate income tax expenseCorporate income tax based on taxable profit in the current period 46,596,055,972 79,455,050,132

46,596,055,972 79,455,050,132

Deferred corporate income tax expense

Deferred corporate income tax expense incurred from taxable temporary differences (1,575,489,218) (293,307,944)

(1,575,489,218) (293,307,944)

The Company is obliged to pay corporate income tax at the rate of 22% of its assessable income.






36. OPERATING LEASE COMMITMENTS

2015VND

2014VND

Earnings for the purposes of calculating basic earnings per share 152,302,812,748 242,495,305,974 Estimated management bonus and welfare fund; funds for board of management (19,970,696,275) (31,797,181,000)

Earnings for the purpose of calculating basic earnings per share 132,332,116,473 210,698,124,974

Weighted average number of ordinary shares for the purpose of calculating basic earnings per share 98,273,868 98,273,868

Basis earnings per share 1,347 2,144

2015VND

2014VND

Minimumleasepaymentsunderoperatingleasesrecognisedin the consolidated income statement for the year 68,388,253,744 37,340,047,682

WEIGHTED AVERAGE NUMBER OF ORDINARY

Under the financial statements for the year ended 31 Decemebr 2014 75,596,326

Change of increasing shares from retained earnings of previous year 22,677,542

Adjusted amount 98,273,868

At the consolidated balance sheet date, the Company had outstanding commitments under non-cancellable operating leases, which fall due as follows:

31/12/2015VND

31/12/2014VND

Within one year 61,519,354,281 50,895,130,269In the second to fifth year inclusive 162,681,151,732 120,774,255,680

After five years 84,933,286,000 61,506,640,000

309,133,792,013 233,176,025,949

Operating lease mainly includes rental related to 194 stores which are currently operating in Vietnam.

35. BASIC EARNINGS PER SHARE The calculation of the basic earnings per share attributable to

the ordinary equity holders of the Company is based on the


data as below and the certain reclassification has been made to the prior year’s figures in accordance with the guidance of Circular 200 to enhance their comparability with the current year’s presentation:

In 2015, the Company has issued 22,677,542 shares, increased owners’ capital from other owners’ equity and retained earnings led to a retrospective adjustment to the weighted average

number of ordinary shares of the year ended 31 December 2014 as following:



37. FINANCIAL INSTRUMENTS Capital risk management The Company manages its capital to ensure that the Company

will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt

(borrowings as disclosed in Note 21 and 22, offset by cash) and shareholders’ equity (comprising owners’ contributed capital, reserves and retained earnings).

Significant accounting policies Details of the significant accounting policies and methods

adopted (including the criteria for recognition, the bases

31/12/2015VND

31/12/2014VND

Borrowings 1,261,648,458,896 1,268,815,128,041Less: Cash (37,884,639,212) (37,706,071,196)

Net debt 1,223,763,819,684 1,231,109,056,845

Equity 1,394,349,545,517 1,296,522,811,569

Net debt to equity ratio 0.88 0.95

Categories of financial instruments CARRYING AMOUNTS31/12/2015

VND31/12/2014

VND

Financial assetsCash 37,884,639,212 37,706,071,196

Trade and other receivables 37,317,691,896 54,854,039,298

Short-term financial investments 65,000,000 65,000,000

Long-term financial investments 84,691,750,000 450,342,875,000

Deposits 21,217,170,462 13,588,573,996

181,176,251,570 556,556,559,490

Financial liabilities

Borrowings 1,261,648,458,896 1,268,815,128,041

Trade and other payables 212,364,555,900 164,718,714,785

Accrued expenses 5,022,483,042 7,218,467,510

1,479,035,497,838 1,440,752,310,336

of measurement, and the bases for recognition of income and expenses) for each class of financial asset and financial liability are disclosed in Note 4.

Gearing ratio

The gearing ratio of the Company as at the consolidated balance sheet date was as follows:






The Company has not assessed fair value of its financial assets and liabilities as at the consolidated balance sheet date since there are no comprehensive guidance under Circular No. 210/2009/TT-BTC issued by the Ministry of Finance on 6 November 2009 (“Circular 210”) and other relevant prevailing regulations to determine fair value of these financial assets and liabilities. While Circular 210 refers to the application of International Financial Reporting Standards (“IFRS”) on presentation and disclosures of financial instruments, it did not adopt the equivalent guidance for the recognition and measurement of financial instruments, including application of fair value, in accordance with IFRS.

Financial risk management objectives The Company has set up risk management system to identify and

assess the risks exposed by the Company and designed control policies and procedures to manage those risks at an acceptable level.

Risk management system is reviewed on a regular basis to reflect changes in market conditions and the Company’s operations.

Financial risks include market risk (including foreign currency

risk and interest rate risk), credit risk and liquidity risk.

Market risk The Company’s activities expose it primarily to the financial

risks of changes in foreign currency exchange rates and interest rates. The Company does not hedge these risk exposures due to the lack of active market for the trading activities of financial instruments.

Foreign currency risk management The Company undertakes certain transactions denominated

in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are as follows:

ASSETS LIABILITIES

31/12/2015 31/12/2014 31/12/2015 31/12/2014

VND VND VND VND

United States Dollar (USD) 11,531,962,091 10,281,528,188 27,715,094,254 124,890,783,407Australia Dollar (AUD) 17,660 543,430,896 1,469,232,815 543,153,309

Hong Kong Dollar (HKD) - 2,825,400 - -

Euro (EUR) 817,969,786 1,200,157,800 258,738,849 34,954,365,219

Singapore Dollar (SGD) 2,900,352 - - -

Foreign currency sensitivity analysis

The Company is mainly exposed to United States Dollar and Euro.

The sensitivity rate used when analyzing foreign currency sensitivity is 5% which is assessed to have significant effect on monetary items denominated in foreign currency at the year end by the Board of Directors.

For a 5% increase/decrease in the USD and EUR against

VND, the profit before tax for the year ended 31 December 2015 would have decreased/increased by the amounts of VND 781,617,144 (2014: VND 7,418,017,982) respectively.

Interest rate risk management

The Company has significant interest rate risks arising from interest bearing loans which are arranged. The risk is managed by the Company by maintaining an appropriate level of borrowings and analysing market competition to enjoy favourable interest rates from appropriate lenders.




31/12/2015LESS THAN 1 YEAR

VNDFROM 1- 5 YEARS

VNDTOTAL

VND

Cash 37,884,639,212 - 37,884,639,212Trade and other receivables 37,317,691,896 - 37,317,691,896

Short-term financial investments 65,000,000 - 65,000,000

Long-term financial investments - 84,691,750,000 84,691,750,000

Deposits - 21,217,170,462 21,217,170,462

75,267,331,108 105,908,920,462 181,176,251,570

Borrowings 1,189,260,458,896 72,388,000,000 1,261,648,458,896

Trade and other payables 211,960,887,900 403,668,000 212,364,555,900

Accrued expenses 5,022,483,042 - 5,022,483,042

1,406,243,829,838 72,791,668,000 1,479,035,497,838

Net liquidity gap (1,330,976,498,730) 33,117,252,462 (1,297,859,246,268)

Interest rate sensitivity

The loan’s sensitivity to interest rate changes which may arise at an appropriate level is presented in the following table. Assuming all other variables were held constant, if interest rates applicable to floating interest bearing loans had been 200 basis points higher/lower, the Company’s profit before tax for the year ended 31 December 2015 would have decreased/increased by VND 19,352,969,178 (2014: VND 25,376,302,560).

Credit risk Credit risk refers to the risk that counterparty will default

on its contractual obligations resulting in financial loss to the Company. The Company has a credit policy in place and the exposure to credit risk is monitored on an on-going basis. The Company does not have any significant credit risk exposure to any counterparty because receivables consist of a large number of customers, spread across diverse industries.

Liquidity risk management The purpose of liquidity risk management is to ensure the

availability of funds to meet present and future financial obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in any period is kept to manageable levels relative to the amount of funds that the Company believes can generate within that period. The Company policy is to regularly monitor current and expected liquidity requirements to ensure that the Company maintains sufficient reserves of cash, borrowings and adequate committed funding from its shareholders to meet its liquidity requirements in the short and longer term.

The following table details the Company’s remaining contractual maturity for its non-derivative financial assets and financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial assets and undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.






31/12/2014LESS THAN 1 YEAR

VNDFROM 1- 5 YEARS

VNDTOTAL

VND

Cash 37,706,071,196 - 37,706,071,196Trade and other receivables 54,854,039,298 - 54,854,039,298

Short-term financial investments 65,000,000 - 65,000,000

Long-term financial investments - 450,342,875,000 450,342,875,000

Deposits - 13,588,573,996 13,588,573,996

92,625,110,494 463,931,448,996 556,556,559,490

Borrowings 1,131,686,128,041 137,129,000,000 1,268,815,128,041

Trade and other payables 164,263,332,685 455,382,100 164,718,714,785

Accrued expenses 7,218,467,510 - 7,218,467,510

1,303,167,928,236 137,584,382,100 1,440,752,310,336

Net liquidity gap (1,210,542,817,742) 326,347,066,896 (884,195,750,846)

The Board of Directors assessed the liquidity risk at low level because the Company has a quantity of inventories of gold and jewelery with a high value and high liquidity. The

Board of Directors believes that the Company will be able to generate sufficient funds to meet its financial obligations as and when they fall due.

38. RELATED PARTY TRANSACTIONS AND BALANCES

List of related parties:

RELATED PARTIES RELATIONSHIP

Dong A Land Joint Stock Company Associate Dong A Joint Stock Commercial Bank Related party

2015VND

2014VND

Purchase of goods and servicesDong A Joint Stock Commercial Bank 423,080,075 436,992,956 Dong A Land Joint Stock Company 3,499,947,727 5,313,662,665

Dividends received

Dong A Joint Stock Commercial Bank - 7,699,250,000Purchase of land use rights

Dong A Joint Stock Commercial Bank 6,500,000,000 -

During the year, the Company entered into the following significant transactions with its related parties:




Significant related party balances as at the consolidated balance sheet date were as follows:

31/12/2015VND

31/12/2014VND

Short-term trade payableDong A Land Joint Stock Company - 204,864,518 Long-term loan

Dong A Joint Stock Commercial Bank 41,660,000,000 78,128,000,000

Remuneration paid to the Company’s Board of Directors and Board of Management during the year was as follows:

2015VND

2014VND

Salaries and bonus 7,314,937,003 8,445,600,000

39. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Supplemental non-cash disclosures Interest paid includes an amount of VND 3,751,936,495,

representing the interst expense incurred in 2014 and excludes VND 4,247,179,715, representing the interst expense incurred during the year that has not yet been paid. Consequently, increase in accounts payable have been adjusted by the same amount.

Cash outflows for dividends during the year include VND

22,678,897,800, representing the dividends incurred in 2014 and exclude VND 75,596,330,000, representing dividends incurred in the year used to increase the capital.

40. COMPARATIVE FIGURES As stated in Note 3, since 1 January 2015, the Company

has adopted Circular No. 200/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 200”) guiding the accounting regime for enterprises and Circular No. 202/2014/TT-BTC issued by the Ministry of Finance on 22 December 2014 (“Circular 202”) guiding the preparation and presentation of consolidated financial statements. Accordingly, certain figures of the consolidated balance sheet, the consolidated income statement and consolidated cash flow statement of the previous year are reclassified to be adopted to be comparability of the figures of the current year.

For the year ended 31 December 2015


Form B 09-DN/HN




CONSOLIDATED BALANCE SHEET

CODES ASSETS

REPORTED AMOUNT

31/12/2014

RECLASSIFICATION

BASED ON CIRCULAR 200

AMOUNT AFTER RECLASSIFICATION

AS AT 31/12/2014

100 A - CURRENT ASSETS 2,166,580,633,869 - 2,166,580,633,869110 I. Cash and cash equivalents 234,599,264,879 (234,599,264,879) -

112 1. Cash equivalents 234,599,264,879 (234,599,264,879) -

120 II. Short-term receivable - 65,000,000 65,000,000

123 1. Held to maturity investments - 65,000,000 65,000,000

130 III. Short-term receivables 19,615,577,417 644,633,055 20,260,210,472

136 1. Other receivables (*) 19,615,577,417 (256,815,230) 19,358,762,187

139 2. Deficits in assets awaiting solution - 901,448,285 901,448,285

140 IV. Inventories 1,437,415,596,122 234,599,264,879 1,672,014,861,001

141 1. Inventories 1,437,415,596,122 234,599,264,879 1,672,014,861,001

150 V. Other short-term assets 14,233,207,051 (14,233,207,051) -

155 1. Other short term assets (*) 14,233,207,051 (14,233,207,051) -

200 B - NON-CURRENT ASSETS - 13,588,573,996 13,588,573,996

210 I. Long-term receivables - 13,588,573,996 13,588,573,996

216 1. Other long-term receivables - 13,588,573,996 13,588,573,996

250 I. Long-term financial investments 460,716,988,400 (65,000,000) 460,651,988,400

253 1. Equity invesments in other entities 460,716,988,400 (65,000,000) 460,651,988,400

RESOURCES

300 C - LIABILITIES 1,269,998,653,409 - 1,268,815,128,041

310 I. Current liabilities 1,131,686,128,041 - 1,131,686,128,041

311 1. Short-term loans and liabilities (*) 1,131,686,128,041 (1,131,686,128,041) -

320 2. Short-term loans - 1,131,686,128,041 1,131,686,128,041

330 II. Long-term liabilities 138,312,525,368 - 137,129,000,000

337 1. Long-term loans and liabilities (*) 137,129,000,000 (137,129,000,000) -

338 2. Long-term loans (*) - 137,129,000,000 137,129,000,000

400 D - EQUITY 232,805,050,783 - 232,805,050,783

410 I. Owners’ equity 232,805,050,783 - 232,805,050,783

415 1. Financial reserve fund 66,734,153,783 (66,734,153,783) -

418 2. Investment and development fund 166,070,897,000 66,734,153,783 232,805,050,783

(*) These items were disclosed in the consolidated financial statements for the year ended 31 December 2014 under different codes from those in the consolidated financial statements for the year ended 31 December 2015.




CONSOLIDATED INCOME STATEMENT

CONSOLIDATED CASH FLOW STATEMENT

CODES ITEMS

REPORTED AMOUNT YEAR

ENDED 2014

RECLASSIFICATION UNDER CIRCULAR

200


FOR 2014

31 Other income 2,668,838,792 (6,975,054) 2,661,863,73832 Other expenses 1,586,537,533 (6,975,054) 1,579,562,479

70 Basic earnings per share 3,208 (1,064) 2,144

CODES

REPORTED AMOUNT YEAR

ENDED 2014

RECLASSIFICATION UNDER CIRCULAR

200


FOR 2014

I, CASH FLOWS FROM OPERATING ACTIVITIES

09 Increase in receivables 7,375,121,156 (29,080,567,898) (21,705,446,742)

10 Increase in inventories (200,616,510,016) (426,566,326,840) (627,182,836,856)

17 Other cash outflows (16,901,659,736) (28,673,145,559) (45,574,805,295)

20 Net cash used in operating activities (89,466,539,837) (263,622,580,167) (353,089,120,004)

50 Net decrease in cash (35,309,851,585) (434,805,822,403) (470,115,673,988)

60 Cash at the beginning of the year 507,821,745,184 - 507,821,745,184

70 Cash at the end of the year 472,511,893,599 (434,805,822,403) 37,706,071,196



Cao Thi Ngoc DungGeneral Director

01 March 2016






BEFORE 2015

1. National Gold Quality Award 2011

2. National Brand 2009 – 2011 – 2013

3. High Quality Vietnamese Goods Award for 19 consecutive years

4. Asia Pacific Quality Award 2011

5. Top 50 companies with the most effective business in Vietnam

6. Top 500 leading Retailers in Asia Pacific and Top 3 leading Retailers in Vietnam 2003 – 2012

7. The only jewelry company of Vietnam ranked the 16th in top 500 largest jewelry production and trading companies in the world announced by Plimsoll (UK) in 2012.

8. Powerful Brand Award

9. The best Vietnamese Brand Award in 2007

10. Vietnam Gold Star Award in 2003 – 2013

11. PNJ was established the Vietnam record “The first company investing in the most modern and big jewelry production technology in Vietnam – 2007

12. The Third Class Independence Medal (12 June 2008)

13. The First, Second and Third Class Labor Medals, (2003, 2000 and 1995)

14. The Government’s Emulation Flag (2002)

15. Emulation Flag for 20 years of construction and development (1988 – 2008)

16. Emulation Flag “Powerful Grassroots Level Party Organization” (1995 – 1999)

17. The Third Class Labor Medal

SIGNIFICANT ACHIEVEMENTS

Asia Pacific Quality Award Top 50 best listed companies Employer of the Year Award – JNA Awards

2015

Excellent Leader Top 100 Vietnam best workplaces

National BrandTop 500 leading Retailers in Asia Pacific

YEAR 2015

1. High Quality Vietnamese Goods Award 2015 (1/2015)

2. Top 100 Vietnam best workplaces in 2014 held by the professional community network of management level Anphabe.com coordinated with Nielsen market research company (3/2015)

3. Human Resources Director of PNJ – Nguyen Thi Ngoc Minh – won the Human Resources Director Award in 2015 announced by Towers Watson Vietnam Consulting Company (3/2015)

4. Top 50 best listed companies in Vietnam 2015 announced by Forbes magazine (17 August 2015)

5. The Jewelry collection “Spring of Peace” won at the regional selection round of Creative Asean Design Competition 2015

6. The award “Employer of the Year” - JNA Awards 2015 offered by Jewellery News Asia magazine (20 September 2015)

7. Top 500 leading Retailers in Asia Pacific 2015 selected by Retail Asia Publishing (9/2015).

8. Top 50 greatest value Brands in Vietnam 2015 announced by Brand Finance (UK): PNJ was ranked the 20th and the only jewelry company in this list (10/2015).

9. Phoenix Dress made of PNJ gold was recorded by Vietnam Record Center as “Vietnamese dress with biggest gold Phoenix icon” and was named to the World Unique Collection recognized by the World Unique Creativity Academy (11/2015)

LEADERSHIP AWARD

1. Ms. Cao Thi Ngoc Dung – General Director of PNJ was awarded the First Class Labor Medal

2. Ms. Cao Thi Ngoc Dung – General Director of PNJ was the only female entrepreneur in Top 5 entrepreneurs awarded the Ernst & Young International Award, EY Entrepreneur of the Year.

3. Ms. Cao Thi Ngoc Dung – General Director of PNJ received the 50 pioneers award selected by VNExpress (16 October 2012)

4. Ms. Cao Thi Ngoc Dung – General Director of PNJ was one of 10 most successful female entrepreneurs in 2013 selected by Forbes Magazine

5. Ms. Cao Thi Ngoc Dung – General Director of PNJ received the 50 company directors award selected by Nhip Cau Dau Tu

18. Emulation Flag “Powerful and Excellent Grassroots Level Union” (2003)

19. Powerful Grassroots Level Union (1997 – 2001)

20. The Annual Report of 2012 was evaluated as the TOP 50 best annual reports (7/2012)

21. Certificate of Merit from the Prime Minister on the occasion of 25 years of establishment (09/2013)

22. PNJ was established the record about the biggest golden bandanna in Vietnam (10 November 2013)

23. PNJ sponsored national gifts and exclusive Jewelry for Vietnamese representative to attend the Miss Universe 2013

24. Certificate of Merit from Minister of Science & Technology about the application of innovation in the production and business activities.

Typical achievements 107106 Annual report PNJ - 2015

SIGNIFICANT ACHIEVEMENTS

THE EFFORTS IS LIKE THE UNDERGROUND WATER SOURCE, SILENTLY MAKING THE EARTH’S SURFACE LUXURIANT

THE JOURNEY OF FIRM STEPS TO

CONQUER THE TOPReached the milestone of 194 elegant stores in 45 provinces and cities nationwide; honored in the Top 100 Vietnam best workplaces by Anphabe and Nielsen; the only jewelry company representing Vietnam to receive the prestigious award “Employer of the Year” awarded by JNA Awards 2015 are the significant milestones of PNJ in 2015.

With the exploit of spectacularly conquering the new pinnacles, PNJ is rising to join in the list of big companies of the Continent specializing in jewelry manufacturing and trading.

PNJ OWNS THE LARGEST JEWELRY DISTRIBUTION SYSTEM IN VIETNAM

2015 marked the strong development of the retail distribution system of PNJ, with the opening and putting into operation of 48 new stores, reached 140% of the plan. By the end of 2015, PNJ had 194 stores with effective business in 45 provinces and Cities nationwide, with the united identity image, luxury sales space, creating the comfort to customers.

With the development speed of convenient product and service distribution system as present, PNJ shall continue to maximize the route for retail network expansion in 2016. The Jewelry Centers with PNJ brand located at favorable positions in the crowded fashion centers of big cities of the country is the affirmation of the leading jewelry company position in Vietnam.

HUMAN RESOURCES IS THE CORE OF STRENGTH

“PNJ’s greatest assets is the corporate culture, the strength of PNJ warrior team”. It is this philosophy that connects over 3,500 people at PNJ and forms a firm bloc. With a team of professional and skillful human resources, the intelligent strategic planning policies in the restructure stage, it actually creates a new momentum to turn the human resources into a “golden resource” at PNJ.

If PNJ is considered as a house, the human resources is the

PNJ’s greatest Assets is the corporate culture, the strength of PNJ Warrior team

foundation of such house. During the time of 27 years of development, PNJ builds a solid and strong foundation for the PNJ house to be firm, beautiful and it sustainably develops through the challenge and time. This is the premise for forming the soft structure “general house” – considered as the unique cultural identity of PNJ – always promotes PNJ team to be ready to devote for the company, contributing to create the position, sustainable strength of PNJ in the context of fierce competition in the market.

Furthermore, PNJ is always the place inspiring the creative ideas with breakthrough characteristics. This is explained from the company’s characteristics that pursue the mission of honoring the people’s beauty. The cultural environment is full

of humanity aiming to human, open, friendly and harmonious between the benefits. This is a flourish land sprouting, blooming the great achievements. The professional and inspiring working environment for all members has created a launching platform for the success and spectacular growth

of PNJ during the last nearly three decades. At the ceremony honoring the “Top 100 Vietnam best workplaces in 2014” held by Anphabe and Nielsen on 05 March 2015, PNJ was honored to be ranked in the top 20 Vietnamese companies in this list and ranked the 41st in the top 100 selected companies.

The journey of firm steps to conquer the top 111110 Annual report PNJ - 2015

THE DOMESTIC AND INTERNATIONAL PRIZES CREATING MORE STRENGTH TO THE BRAND

In 2015, the convincing shine of PNJ in the market put PNJ brand to a new pinnacle and contributed to honor the Vietnamese jewelry industry on the way entering the world market.

At the honoring ceremony solemnly held at Regal Airport Hotel, Hong Kong on 20 September 2015, PNJ was the first jewelry company of Vietnam excellently received the “Employer of the Year” award of JNA Awards 2015 – it is compared as “Oscar award of the Asian jewelry industry”. It was held and selected by JNA ( Jewellery News Asia) through an independent, explicit and close board of judges, the “Employer of the Year” award was the most important category of JNA Awards given to companies with comprehensively outstanding achievements from production, retail to activities aiming at developing human and society’s responsibility.

In October, Brand Finance (UK) announced a list of Vietnam top 502 brands in 2015. In that list, PNJ was ranked the 20th, it was the only jewelry company in this list. At another remarkable event in August 2015, PNJ was honored by Vietnam Forbes magazine the Top 50 listed companies of Vietnam in 2015.

Apart from the awards about the brand, PNJ’s strength is also shown by excellent processing ability recognized by the domestic and foreign markets. The most prominent event is the jewelry collection with the theme of “Spring of Peace” of PNJ won at the regional selection round of Creative Asean Design Competition 2015 held by the EU-ASEAN Project on the Protection of Intellectual Property Rights (ECAP III) in September 2015. Thanks to the skillful jewelers of PNJ, the gems and pearls are blown into the Spring of Peace jewelry masterpiece, conveying an optimistic message about a better world.

JNA award is really a valuable recognition for PNJ’s efforts during the time of realizing the vision of becoming the leading jewelry processor and retailer in Asia market.

The journey of firm steps to conquer the top 113112 Annual report PNJ - 2015

THE STRENGTH OF SHARING

The tireless activities for the community at PNJ show that PNJ not only pursues the mission of honoring the human’s beauty but also contributes to make life better and better. The houses donated by PNJ to people who seem to lose the opportunity of owning a house is like a magic journey of the fairy tale in real life.

114 Annual report PNJ - 2015 The strength of sharing 115

PNJ houses donated to people seemed to be that they almost lose the opportunity “to live and work in peace and contentment” is like a magic journey of the real fairy tale of daily life.

PNJ HOUSE: FAIRY TALE OF DAILY LIFE Only during the last 4 months of 2015, 25 PNJ houses were built nationwide, bringing great happiness about a peaceful place for the poor in Ho Chi Minh City, the Central Highlands, the West, the South East, and the North.

The journey of PNJ houses shall continue in 2016 with at least 50 new houses built to donate to families with difficult circumstances across the country. To be able to build these houses, PNJ Charity Fund appeals to the contribution of employees as well as partners and customers for “Pink Brick” program with the message “With every 1,000 VND, you contribute a brick to build the houses for the poor nationwide”, the events, birthdays or Tet holidays celebration at PNJ become more meaningful when all gifts are now contributed to the “Pink Brick” .

The houses donated by PNJ to people who seem to lose the opportunity of owning a house is like a magic journey of the fairy tale in real life.

A 10-YEAR JOURNEY OF PNJ CHARITY FUND

Together with the objective for business development and improvement of the employee living standard, PNJ positively implements the activities of the society and community. These activities not only show the social responsibility of the Company but also evoke the spirit for community, the compassion of all members of PNJ house. With the business philosophy of “the community’s benefits and customers’ benefits are one of the company’s benefits”, during 27 years of operation, PNJ has always excellently shown the company’s responsibility to the society. On that foundation, established since 2005, PNJ Charity Fund has been effectively managed. To 2015, after 10 years of operation, PNJ Charity Fund contributed to the society over 25 billion VND, to jointly improve the lives of the poor and encourage the future talents for the country.

The diversified activities of PNJ Charity Fund have been deployed in many big programs with practical social meaning such as house donation to the poor; scholarships to poor students; offering the poor illness treatment and gifts; contribution to the Association for Poor Patients; financing the crafts villages, helping the poor to do business; relieving the people suffering from natural disasters; building concrete bridges in the countryside and the rural areas; supporting Truong Sa – Hoang Sa fishermen ...

116 Annual report PNJ - 2015 The strength of sharing 117

DISTRIBUTION CHANNEL

HO CHI MINH CITYDistrict 1: PNJ Jewelry Center, 174 Le Thanh Ton Tel: (08) 382 48276PNJ Jewelry Center, 292 Hai Ba Trung Tel: (08) 382 09457Vincom Dong Khoi (1st Floor) Tel: (08) 399 39123Parkson Saigon Tourist, 35Bis–45 Le Thanh Ton Tel: (08) 352 10299Nowzone, Ground Floor, 235 Nguyen Van Cu Tel: (08) 393 81486Co.opmart, 189C Cong Quynh Tel: (08) 392 55020Phu Nhuan District:PNJ Jewelry Center, 52A–52B Nguyen Van Troi Tel: (08) 384 43839PNJ Jewelry Center, 159 Phan Dang Luu Tel: (08) 384 43636Co.opmart, 571 Nguyen Kiem Tel: (08) 399 72467Big C Hoang Van Thu, 202B Hoang Van Thu Tel: (08) 384 75176District 2: Parkson Cantavil, Hanoi Highway Tel: (08) 374 02104Vincom Thao Dien Tel: (08) 389 89889District 3: PNJ Jewelry Center, 666 Nguyen Dinh Chieu Tel: (08) 383 09023PNJ Jewelry Center, 123 CMT8 Tel: (08) 352 62825Co.opmart, 168 Nguyen Dinh Chieu Tel: (08) 393 02382District 5: PNJ Jewelry Center, 7 An Duong Vuong Tel: (08) 383 02957Parkson 126 Hung Vuong Tel: (08) 222 20443District 6: PNJ Jewelry Center, 255A – 255B Hau Giang Tel: (08) 396 95630PNJ Jewelry Center, Ba Hom Tel: (08) 375 59240District 7: Lotte Mart, 469 Nguyen Huu Tho Tel: (08) 377 19600Vivo City Shopping Center, 01–K2A SC Vivo City Tel: (08) 377 60261District 9: Co.opmart, Hanoi Highway, 191 Quang Trung Tel: (08) 373 09606District 10: Big C Mien Dong, 138A To Hien Thanh Tel: (08) 386 83698District 11: PNJ Jewelry Center, 71 Ong Ich Khiem Tel: (08) 396 30151Tan Binh District: PNJ Jewelry Center, 300 Hoang Van Thu Tel: (08) 381 21469PNJ Jewelry Center, 510 Ly Thuong Kiet Tel: (08) 397 18967PNJ Jewelry Center, 230B Le Van Sy Tel: (08) 399 13772PNJ Jewelry Center, 923–925 CMT8 Tel: (08) 397 78232PNJ Jewelry Center, 304 Truong Chinh Tel: (08) 384 25019PNJ Jewelry Center, 142 Au Co Tel: (08) 997 44619TTKH PNJ, 3/27 Quang Trung Tel: (08) 3710 2208Tan Son Nhat International Airport, International Terminal Tan Phu District: PNJ Jewelry Center, 237 Nguyen Son Tel: (08) 397 22375PNJ Jewelry Center, 206–208 Tan Huong Tel: (08) 355 91119Big C Phu Thanh, 53 Nguyen Son Tel: (08) 222 64463Big C Pandora, 1/1 Truong Chinh Tel: (08) 543 86566AEON Shopping Center, No. 30 Bo Bao Tan Thang Tel: (08) 384 70588Binh Tan District: Big C An Lac Tel: (08) 375 62523Go Vap District: PNJ Jewelry Center, 362A Nguyen Van Nghi Tel: (08) 389 54597PNJ Jewelry Center, 21/3 Quang Trung Tel: (08) 358 94324PNJ Jewelry Center, 403 Thong Nhat Tel: (08) 389 48530Vincom, 190 Quang Trung Tel: (08) 389 41417Vincom Go Vap, 12 Phan Van Tri, Ward 7Binh Thanh District: PNJ Jewelry Center, 127A Dinh Tien Hoang Tel: (08) 384 18456PNJ Jewelry Center, 60 Xo Viet Nghe Tinh Tel: (08) 351 44002Pearl Plaza Shopping Center,

561A Dien Bien Phu, Ward 25 Tel: (08) 389 83848Thu Duc District: PNJ Jewelry Center, 141 Vo Van Ngan Tel: (08) 372 25494Co.opXtra, Highway 1A, Linh Trung ward Tel: (08) 372 45550Vincom Thu Duc, 216 Vo Van Ngan Tel: (08) 372 23409Hoc Mon: PNJ Jewelry Center, 143/6 Nguyen Ai Thu Tel: (08) 371 80336PNJ Jewelry Center, 3/27 Quang Trung Tel: (08) 371 02208Cu Chi: Co.opmart Cu Chi, 357 Highway 22 Tel: (08) 379 02362 HANOI AND THE NORTHHai Ba Trung District: PNJ Jewelry Center, 6A Tran Nhan Tong Tel: (04) 627 80072Vincom, 191 Ba Trieu Tel: (04) 222 00204Hoan Kiem District: PNJ Jewelry Center, 83 Hang Gai Tel: (04) 392 89270Cau Giay District: PNJ Jewelry Center, 334 Cau Giay Tel: (04) 379 39360Big C Thang Long, 222 Tran Duy Hung Tel: (04) 378 31511Dong Da District: PNJ Jewelry Center, 129 Chua Boc Tel: (04) 356 42024PNJ Jewelry Center, 243 Xa Dan, O Cho Dua ward Tel: (04) 356 42024Thanh Xuan District: Vincom, 172 Nguyen Trai Tel: (04) 666 45830Long Bien District: Aeon Long Bien, No. 8 Co Linh street Tel: (04) 629 55811Ba Dinh District: Vincom, 54A Nguyen Chi Thanh Tel: (04) 629 55811HAI PHONG18A Lach Tray, Hai Phong Tel: (031) 383 3328Parkson – Thuy Duong Plaza Tel: (031) 372 2898Big C Hai Phong, 1st floor, Le Hong Phong Tel: (031) 372 2980___________________________________________________________________________________

THE CENTRALHUEPNJ Jewelry Center, 10 Hung Vuong Tel: (054) 384 7588Co.opmart Hue, 06 Tran Hung Dao, Phu Hoa ward Tel: (054) 357 2025DA NANGPNJ Jewelry Center, 70–72 Tran Phu Tel: (0511) 381 8667PNJ Jewelry Center, 123 Hung Vuong Tel: (0511) 381 8638PNJ Jewelry Center, 359 Phan Chu Trinh Tel: (0511) 366 4588PNJ Jewelry Center, 691 Ton Duc Thang, Lien Chieu District Tel: (0511) 361 8588Big C Da Nang, 225 Hung Vuong Tel: (0511) 369 2036Vincom Da Nang Tel: (0511) 398 1588Da Nang International AirportQUANG NAMPNJ Jewelry Center, 633 Hai Ba Trung Tel: (0510) 391 9588PNJ Jewelry Center, 461 Phan Chu Trinh, Tam Ky Tel: (0510) 391 9588QUANG NGAI: PNJ Jewelry Center, 36 Hung Vuong Tel: (055) 372 2588 QUY NHON: 334–336 Tran Hung Dao Tel: (056) 381 2590 Big C, Green Urban Area, Vung Chua Tel: (056) 364 6588___________________________________________________________________________________

THE SOUTH EASTBIEN HOAPNJ Jewelry Center, 97 street 30/4 Tel: (061) 391 6819 PNJ Jewelry Center, 437 Pham Van Thuan, Tam Hiep Tel: (061) 381 2848

Big C Bien Hoa, Long Binh Tan ward Tel: (061) 393 3177Vincom Bien Hoa, 1096 Pham Van Thuan Tel: (061) 368 0034 BINH DUONGPNJ Jewelry Center, 3A Hung Vuong Tel: (0650) 385 5560 PNJ Jewelry Center, 459 Binh Duong Avenue Tel: (0650) 629 0266 AEON Binh Duong, Highway 13, Vinh Phu Tel: (0650) 652 2608 BINH PHUOCPNJ Jewelry Center, 874 Phu Rieng Do Tel: (0651) 386 5665 BA RIACo.opmart Ba Ria, Nguyen Huu Tho Tel: (064) 373 9377VUNG TAUPNJ Jewelry Center, 380 Le Hong Phong Tel: (064) 385 5000 Co.opmart Vung Tau, 36 Nguyen Thai Hoc Tel: (064) 357 6234 TAY NINHPNJ Jewelry Center, 877CMT8 Tel: (066) 363 1838 Co.opmart Tay Ninh, 576 CMT8, ward 3, Tay Ninh City Tel: (066) 392 2247___________________________________________________________________________________

CENTRAL HIGHLANDS & COASTAL AREASNHA TRANGPNJ Jewelry Center, 19A Quang Trung Tel: (058) 382 5889BINH THUANPNJ Jewelry Center, 40 Nguyen Thi Minh Khai Tel: (062) 653 5123Co.opmart, 01 Nguyen Tat Thanh, Phan Thiet City Tel: (062) 653 5123LAM DONGCo.opmart, Thap Nuoc, Tran Phu Tel: (063) 375 7979PNJ Jewelry Center, 08 Hoa Binh zone, Da Lat City Tel: (063) 351 0863DAK LAKPNJ Jewelry Center, C1–C2 Dien Bien Phu, Buôn Ma Thuot Tel: (0500) 356 8989 Co.opmart, BM Thuot, 71 Nguyen Tat Thanh Tel: (0500) 395 8997 GIA LAIPNJ Jewelry Center, 14 Hoang Van Thu, Pleiku City Tel: (059) 382 5888Co.opmart Gia Lai, 21 CMT8 Tel: (059) 222 2477DAK NONGCo.opmart street 23/3 Nghia Thanh ward Tel: (0501) 355 8889

___________________________________________________________________________________

THE SOUTHWEST CAN THOPNJ Jewelry Center, 46 Ngo Quyen Tel: (0710) 381 1783

Sense City Can Tho, 01 Hoa Binh Avenue Tel: (0710) 381 5305 PNJ Jewelry Center, 178 Tran Hung Dao, An Nghiep ward Tel: (0710) 381 9875 LONG ANPNJ Jewelry Center, 51 Truong Dinh Tel: (0723) 550 330Co.opmart Long An, Tan An City Tel: (0723) 526 171TIEN GIANGCo.opmart, 5 Ap Bac, My Tho City Tel: (073) 386 7881PNJ Jewelry Center, No. 188 Ap Bac, My Tho City Tel: (073) 385 3703BEN TRECo.opmart, 26A Tran Quoc Tuan Tel: (075) 355 4300PNJ Jewelry Center, 58–62C Dong Khoi Avenue, Ben Tre Tel: (075) 356 1890 T22 – Ground Floor of Sense City, 26 Tran Quoc Tuan Tel: (075) 355 4300AN GIANGPNJ Jewelry Center, 63 Hai Ba Trung Tel: (076) 394 4168Co.opmart Long Xuyen, 12 Nguyen Hue Tel: (076) 394 0018 L1–05B, Ground Floor Vincom Long Xuyen Tel: (076) 629 5386 KIEN GIANGPNJ Jewelry Center, 38 Hoang Hoa Tham Tel: (077) 396 2824 VINH LONGPNJ Jewelry Center, 1F Hoang Thai Hieu Tel: (070) 383 5111 Co.opmart Vinh Long, 26 street 3/2 Tel: (070) 383 6729 SOC TRANGCounter 5, Co.opmart Soc Trang Tel: (079) 364 0979 BAC LIEUPNJ Jewelry Center, 165–167 Tran Phu Tel: (0781) 396 9995 DONG THAPPNJ Jewelry Center, 86 Nguyen Hue Tel: (0673) 650 650PNJ Jewelry Center, 124 Hung Vuong, Hamlet 1, Ward 2 Tel: (0673) 688 866CA MAUPNJ Jewelry Center, 4A Hung Vuong Tel: (0780) 365 1666

___________________________________________________________________________________

By the end of 2015, the whole system had 194 stores including 123 gold jewelry shops (standalone and sharing stores), 65 standalone silver jewelry stores, 4 Cao Fine Jewellery stores

118 Annual report PNJ - 2015 Distribution channel 119

vinh phucha noiquang ninhhai duonghai phongnam dinhthanh hoavinhha tinh

hueda nangquang namquang ngaigia laibinh đinhdak nongdak laknha trangda latbao locphan thietvung tauba riatra vinh

binh phuocbien hoa

binh duongtay ninh

ho chi minhtien giang

long andong thap

ben trean giang

vinh longcan tho

soc trangkien giang

bac lieuca mau

PNJ JEWELRY DISTRIBUTION CHANNEL

Come to mountain to select stone for gold testing, right testing how much also buy

Folk-Song

Designed by Brand

lab 03/2016

PHU NHUAN JEWELRY JOINT STOCK COMPANY (PNJ)170E Phan Dang Luu Street, Ward 3, Phu Nhuan District, HCMC

Phone: 08 3995 1703 - Fax: 08 3995 1702www.pnj.com.vn

Documents

TRUE GOLD FEARS NO FIRE - PNJ€¦ · ANNUAL REPORT 2015 TRUE GOLD FEARS NO FIRE 6 Typical Figures of 2015 8 Outstanding Events 11 Vision – Mission – Core Values 13 The Chairwoman’s