SEEING THE QUALITY IN YOU

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2 ANNUAL REPORT PNJ 2014 CONTENTS VISION MISSION CORE VALUES CHAIRWOMAN'S MESSAGE MILESTONES OF ESTABLISHMENT & DEVELOPMENT CORPORATE REPORT BOARD OF DIRECTORS' REPORT BOARD OF SUPPERVISION REPORT BOARD OF MANAGEMENT REPORT AN OVERVIEW OF VIETNAM ECONOMIC SITUATION AND GOLD MARKET IN BUSINESS PERFORMANCE KEY MISSIONS PERFORMANCE RISK MANAGEMENT FINANCIAL RATIOS SUBSIDIARIES PERFORMANCES CONCLUSION PERSONNEL ORGANIZATION & ENTERPRISE ADMINISTRATION ORGANIZATION CHART BOARD OF DIRECTORS BOARD OF MANAGEMENT BOARD OF SUPERVISION SITUATION CORPORATE GOVERNANCE PRODUCTS & SERVICES BRAND PNJ GOLD JEWELRY BRAND PNJSILVER BRAND CAO FINE JEWELLERY BRAND JEMMA ENTERPRISE CULTURE PNJ CULTURAL IDENTITY 10TH ANNIVERSARY OF PNJ CHARITY FUND A JOURNEY OF LOVE TYPICAL ACTIVITIES FINANCIAL STATEMENTS 2014 PNJ DISTRIBUTION NETWORK 2 3

3 COMPANY INFORMATION Name of company : NHUAN JEWELRY JOINT STOCK COMPANY Abbreviation : PNJ Address : 170E Phan Dang Luu Street, Ward 3, Phu Nhuan District, HCMC Telephone : Fax: pnj@pnj.com.vn Website : Business Registration License : Type of business LEGAL REPRESENTATIVE : Joint stock company : Ms. Cao Thi Ngoc Dung Position: Chairman, Chief Executive Officer CHARTER CAPITAL : 755,970,355,000 (seven fifty five billion, nine seventy million, three hundred fifty five thousand) BUSINESS LINES Manufacturing and trading gold, silver, precious stones, accessories and souvenirs Trading watches and gold bar Testing diamond, gemstone and precious metals House leasing base on Real Estate Business Law

4 ANNUAL REPORT PNJ 2014 VISION BECOMING THE LEADING JEWELRY PROCESSOR AND RETAILER IN ASIA MARKET AND SECURING NUMBER ONE POSITION IN THE SEGMENT OF MEDIUM AND HIGHEND JEWELRY IN VIETNAM MISSION PNJ BRINGS CUSTOMER PRIDE WITH ELEGANT, OUTSTANDING QUALITY JEWELRY PRODUCTS. 6 7

5 ANNUAL REPORT PNJ 2014 CORE VALUES 1. HONESTY Honesty is the leading ethical standard in business and in life that every individual or organization aims to Legal profit and business ethics are the base for every activities Building credibility and transparency to earn trust Consistently fighting against all dishonest actions 2. QUALITY Quality is a solid basis to ensure survival and a measure of every individual or organization s value Always guaranteeing the materials quality to make high quality products Every member commits to accomplish assigned tasks with the best quality and not to deliver substandard products to anyone else. 3. RESPONSIBILITY Taking responsibility as a motivation, a driving force for every activities. Put customers and social benefits into company s. Every individual commits to live responsibly with himself, his family, the company and the community Carrying out excellently every task with voluntary, active, creative and dedicated spirit. Always pioneering in pursuing and realizing difficult tasks with the spirit to win 4. INNOVATION Innovation is the foundation of everlasting development in a company Do not be complacent with achievements. Be open, willing to learn and apply new knowledge, experience and skills. Constantly improving to optimize benefit for the company. 5. CREATIVITY Create to make significant differences and competitive advantages Meeting customers expectation is a base to orient creativity With responsible spirit and passion, every member of the company and the company itself commit to create continuously, offer breakthrough solutions, produce outstanding products and services 8 9

6 Ms CAO THỊ NGỌC DUNG, The chairwoman and CEO of PNJ CHAIRWOMAN S MESSAGE Dear Value Shareholders, 2014 has passed with many ups, downs and challenges for world and Vietnam economics. However, there have been many signals showing that Vietnam economy gradually recovered with positive figures, such as: GDP growth reached 5.98%, CPI reached 4.09% a relative low figure in the last 10 years but there was no sign of deflation. According to a report of the World Gold Council, world gold jewelry market s demand in 2014 has deeply declined in most major markets. Total estimated value of jewelry consumed in Vietnam has declined 8%, but output yields has grown 4% compared to 2013 which is a good growing sign of the jewelry industry. World gold price has fallen unprecedentedly last year, which attracted consumers to buy more gold jewelry. Changes in gold business operations managing policies have certain influences to the domestic gold market and have strong impacts to the operation of companies. After more than a year determining to implement Circular 22 on managing jewelry quality of Government agencies, Vietnam gold jewelry market is expected to be transparent and this is an opportunity for wellknown companies with modern, large scale production and broad retail stores system as PNJ to rapidly develop market, capture the love and trust of customers marked the third year of 10 year development strategy ( ) of PNJ with the mission of completing first phase of the comprehensive restructuring. PNJ has accomplished 2014 tasks with impressive results, all criterias reached or exceeded targets: gross consolidated sales reached billion ; gross profit reached 790 billion, rose 32% over the same period and exceeded yearly plan by 17%; earnings before tax reached 326 billion, rose 36% over the same period and exceed yearly plan by 18%, consolidated earnings after tax reached 255 billion, ensured the 2014 dividend payoff is 15% in cash and 30% in share. To achieve these results, Board of Directors has closely directed the implementation of short and longterm plans which related to production and business operations, implementation of General Meeting of Shareholders resolutions, ensuring the operation is in accordance with proposed strategy, which are: Improving the efficiency of manpower by training, coaching, building breakthrough remuneration policies; completing the organizational structure under the new development model, assigning additional junior senior manager staff. Raising customers satisfaction through regularly launching new jewelry collections which suit customer tastes or lead the trend; superior quality products with advanced processing techniques and skillful workers; assuring quality with committed standards by strict controlling procedures in every stage of the supply chain; focusing on building customer care programs to maintain sustainable relations; building appropriate marketing programs and providing useful information to customers; regularly organizing training courses to enhance customer service skills of the consultant staffs. Strengthening current sales system under PNJ standards and developing new stores according to network development plan approved by Board of Directors, ready for an even more extensive PNJ jewelry retail chain development. Restructuring jewelry workshops to increase the productivity by 35% over 2013; increasing the industrialized level in production, reducing wastage and increasing labor productivity to boost marginal profit of sales sector. In 2015, a new phase of the longterm development strategy has been established and pursued, PNJ continues to set itself new peaks to conquer the Vision of "Becoming the Asia's leading jewelry company, ranking Number 1 in the medium and highend jewelry segment in Vietnam" with following goals: PNJ is recognized as a leading jewelry brand in the middle and highend segment in the last few years. PNJ has also constantly improved the image and value to be on a par with international brands in the region. About the product strategy, PNJ will still pursue

7 the path of leading the market and heading toward customers. With a business organizing model which is active from designing, processing and distributing, PNJ can fully meet the diverse needs of the market and build unique marks through commercial or limited jewelry collections. Continuing to launch diversified and unique products, focusing on the product types which are likely to bring higher margins. Constantly improving the manpower s quality, prevailing in human and organization by arranging and operating the organization by function blocks; building attractive and fair remuneration policy; regularly training to improve employees capacity; motivating and encouraging creative thinking, supporting positive and optimism thinking, and building sustainable corporate culture. Keep developing the retail system intensively under PNJ Standards and constantly learning from managing experiences of world s leading retailers to enhance operational efficiency of each store. Beside, PNJ will focus on developing product lines for the young customer, promoting ecommerce channel, facilitating customer to interact more through online channels to build PNJ image an innovative, creative and trendy jewelry brand. Improving productivity by investing in modern equipments; focusing on R & D to create more innovative and unique products; improving production processes to increase labor productivity and optimize costs. We believe that with the strategy focusing on the core production business, implementing the strategy firmly step by step; ensuring proper and adequate investment for each critical stage of the investment route; effective financial management and risk management will be a solid foundation for PNJ to achieve objectives of growth, earning market share, increasing profit; which will lead to the rising of employees income, total tax income value of the Company, shareholders dividend and Company s value. We commit to strive to successfully implement objectives set by the General Meeting of Shareholders to deserve the trust of shareholders and customers. On behalf of PNJ s Board of Directors, I would like to thank all Authorities, Value Shareholders, Partners, Value Customers and all Employees of PNJ for supporting and companying, joining hand to create success for PNJ in We hope we will still receive the support and cooperation in the near future. We wish value Shareholders, Customers and Partners a 2015 of health, wellbeing, prosperity and happiness. Chairwoman of Board of Directors Ms. CAO THI NGOC DUNG DIAMOND JEWELRY Sets made and produced by PNJ 13

8 OPERATION HISTORY

9 ANNUAL REPORT PNJ 2014 MILESTONES OF ESTABLISHMENT & DEVELOPMENT ESTABLISHMENT AND IDENTIFYING DEVELOPMENT STRATEGY QUICKLY EXPANDING THE NETWORK AND BUSINESS FIELD BOOSTING BRANDBUILDING AND IMPLEMENTING EQUITIZATION On 28/04/1988, Phu Nhuan Jewelry Sales Store was found, under the People's Committee of Phu Nhuan District when the Vietnam jewellery industry was still young, not yet developed, the market still had many limits those were challenges that 20 founders people founded the of PNJ had to pass. In 1992, PNJ was officially named Phu Nhuan Jewelry Company after two name changes from Phu Nhuan Jewelry Sales Store and Phu Nhuan Art Jewelry and Foreign Exchange Company, as well as identified the development strategies was to be a professional jewelry manufacturer and trader. At this point, PNJ also expanded its operations with the creation of the East AsiaDong A Bank with 40% contributed equity. In 1994, PNJ Hanoi branch was established, opening the expanding system strategy in the provinces and large cities nationwide later as Da Nang branch (opened in 1998), Can Tho branch (opened 1999), PNJ distribution system had been continuously expanded. This phase was also a milestone in the work of PNJ s professional branding, PNJ jewelry began to be exported. Only after several years from inception, PNJ jewelry brand had quickly dominated the market, been trusted by the consumer and proved its prestige. With honors and awards achieved: "High Quality Vietnamese Goods" Title certification, 3rd Rank Labor Medal, 2nd Rank Labor Medal PNJ was also awarded DNV s Certification of System Quality Management according to ISO standards. In 2001, PNJSilver brand name was officially launched to meet the needs of the young people who love jewelry along with continuously developing PNJ gold jewelry brand strongly with many wellknown marketing programs with the auspice of the World Gold Council. On 01/02/2004: PNJ officially implemented equalization, transformed from a public company into Phu Nhuan Jewelry Joint Stock Company. Also during this time, PNJ was awarded the Top 500 Leading Retailers in Asia Pacific title and received the 1st Rank Labor Medal

10 ANNUAL REPORT PNJ 2014 MILESTONES OF ESTABLISHMENT & DEVELOPMENT BRAND RELAUNCH AND DEVELOPING HIGH CLASS BRAND NAME LISTING STOCK, RESTRUCTURING AND STRIVING TO SUSTANABLY DEVELOP This is a stage of strong development on all aspects of PNJ, especially in the development of new brands and products, marked by the PNJSilver new image relaunch event. CAO Fine Jewellery brand name was officially born. PNJ was the crown and jewels sponsor for the Miss Universe 2008 held in Vietnam. And on 3/4/2008, PNJ officially announced the new logo change to celebrate 20 years of establishment and development with a professional, more modern image, worthy for a new way. PNJ had become one of the 200 largest enterprises in Vietnam as announced by UNDP and honored to receive the prestigious title awarded by the President: 3rd Rank Independence Medal. 3/2009, PNJ stock was officially listed on HOSE, increased its charter capital to 400 billion. 8/2009, PNJ established CAO Fashion Limited Company and added watch business with worldfamous brands in PNJ system. PNJ became the jewelry sponsor for the Miss Earth 2010 held in Vietnam. 18/10/2012, PNJ inaugurated PNJ Jewelry Factory after nearly 18 months of construction. With a total investment of 120 billion, production capacity of over 4 million products a year, this factory was rated as one of the biggest jewelry manufacturing factory in Asia. Besides, PNJ had continued to upgrade and expand the distribution system, inaugurated new branches and opened new Jewelry Centers in Kien Giang, Binh Duong, Bien Hoa, Ha Noi, and Da Nang, turned these centers into largest jewelers in the area. Especially, PNJ has officially inau gurated the largest Center of jewelry, diamonds and watches on the system at 52A 52B Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh city, which is also the headquarters of PNJ the first gold and silver store established nearly 25 years ago and considered one of the the largest diamond and jewelry center in Vietnam market marked a year of important events in PNJ brand development strategy. On 10/09/2013, PNJSilver officially repositioned brand name, launched new brand identity system, opened up a "Her world is shining" with a fashionable purple color and breakthroughs in product and brand development strategy. In parallel, PNJ gold jewelry brand announced new message "Seeing the Quality in You for the purpose of honoring the golden values, the noble qualities of women in modern day society on the platform inherits harmoniously with the traditional values of Vietnamese women. Realizing the needs of restructuring the strategy and operational mechanism to sustainably develop, since 2012, PNJ has hired foreign consultants to standardize the management system according to international standards. In 2014, PNJ has opened several jewelry center across Vietnam, raising the number of retail jewelry stores to nearly 173 stores nationwide. Superior business results of 2014 is a outcome of the successful company restructuring which aimed to sustainably develop, let PNJ become an Asian leading crafting and retailing jewelry company, dominating in all market segments that PNJ aimed in Vietnam

11 ANNUAL REPORT PNJ 2014 MERITS & AWARDS CUP QUALITY PRODUCT OF ASIAPACIFIC TOP 500 LEADING RETAILER IN ASIAPACIFIC TOP 50 VIETNAMESE BEST BUSINESS PERFORMANCE ENTERPRISE CUP BESTOWED TITLE CUP MOST EXCELLENT BUSINESS LEADERS TOP 100 VIETNAM BEST WORKPLACES BEFORE 2014 YEAR PNJ received honor for the title of Gold Quality of National Brand 2011 Bestowed Title of National Brand by the Government ( ) Awardwinner of 16 consecutive Titles of Vietnamese HighQuality Products PNJ became on of 3 Vietnamese enterprises to receive the award for Quality Product of AsiaPacific 2011 PNJ joined top 50 Vietnamese Best Business Performance Enterprise (19/06/2013) PNJ join the rank of 500 Leading Retailer in AsiaPacific and top 3 biggest retailer in Vietnam ( ) Vietnamese only enterprise that ranked in top 16 of 500 worldwide largest manufacturer and retailer published by Plimsoll (England) PNJ received certificate and trophy for Strong Brands in 2006 and 2007 PNJ received certificate and trophy for Vietnamese Golden Star Award in PNJ received certificate and trophy for Vietnam Record as the first enterprise to invest in large scale production and modern technology in jewelry processing (2007) The President of the State awarded PNJ with ThirdClass Independence Medal (June 12, 2008) The President of the State awarded PNJ with First, Second, and ThirdClass Labor Medal in 1995, 2000, and 2003, respectively PNJ became leader and receiving Government Flag of Honor (2002) PNJ was granted City Flag of Honor for 20 year development ( ) by City People s Committee PNJ was granted Flag of Honor for Building strong Local Communist Party by Vietnamese Communist Party ( ) PNJ Labor Union was awarded with ThirdClass Labor Medal PNJ was awarded Flag of Honor for Strong and excellent local Labor Union by Hochimin Labor Union (2003) PNJ has been awarded as Strong and excellent local Labor Union by Central Committee of Hochiminh Communist Party ( ) PNJ Annual report was in top 50 best AR of 2012 (07/2012) Ms. Cao Thi Ngoc Dung CEO was awarded First Class Labor Medal Ms. Cao Thi Ngoc Dung was the only female entrepreneur in top 5 entrepreneurs that awarded international Enrst and Young entrepreneur of the year Ms. Cao Thi Ngoc Dung CEO received award for 50 pioneers published by Vnexpress (16/10/2012) Cao Thi Ngoc Dung top 10 successful female entrepreneur of 2013, published by Forbes Magazine PNJ was recognized as 2014 Vietnam National Brand by Vietnam Government PNJ was awarded 2014 High Quality Vietnamese Goods Award Ms Cao Thi Ngoc Dung PNJ s General Director was voted one of 50 Most Excellent Business Leaders by Investment Bridge Magazine PNJ was recognized as one of Top 100 Vietnam Best Workplaces by Nielsen s survey 20 21

12 CORPORATE REPORTS

13 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS' REPORT 2014 OPERATION PERFORMANCE REPORT AND 2015 STRATEGIC ORIENTATION As Organizing and Operating Charter, 18th Annual General Meeting s Resolution 2014, PNJ s Board of Directors reports to the General Meeting of Shareholders the operation OPERATION PERFORMANCE OVERVIEW: Major goals of 2014 were synchronously performed and had positive result as following: I. TASK PERFORMING: 2014 is the third year in 10 year developing strategy ( ) and the end of the comprehensive restructuring s first stage. Despite receiving few support signals from the macroeconomy, but with the foundation solidly built in the first 2 years of innovation, 2014 still marked a powerful transformation of PNJ. This is also a pivotal year, reflecting the initial results of the restructuring stage before going to the accelerating stage toward longterm strategic objectives. Facing this important milestone, the Board of Directors has directed closely the implementation of shortterm and longterm plans related to production and business operation and implementing resolutions of the General Meeting of Shareholders, ensuring operating in accordance with the strategic orientation. 1.1 ENHANCING USAGE OF MANPOWER GOAL: After adding personnel for vacant positions, in 2014 PNJ has basically completed the organizational structure under the new development model. Specialized positions are especially trained to meet the evolving needs of the company. Beside enhancing the professional capability, the Board also directed to enhance internal communication so that all employees could understand the vision and strategic goals of the company, thereby earning their trust, inspiring them, making them proud to be a part of an elite community. 1.2 RAISING CUSTOMERS SATISFACTION GOAL: Not only bringing good products, PNJ also brings customers the pride of owning high class, sophisticated products and professional services from PNJ s staff. Each salesperson is intended to consult and take care of customers with passion and pride, be able to inspire customers through stories behind the jewelries. Newly launched collections in 2014 as Mystery, Friendship, Rose, Royal... are imprinted with PNJ s creation and lead the fashion trend in Vietnam. Customers therefore always trust in PNJ s brand, think of this as a way to express lifestyle and class. 1.3 STRENGTHENING CURRENT RETAIL SYSTEM AND DEVELOPING NEW SYSTEM GOAL: With current system, the Board has directed to implement the standard store model, which would begin to change the brand recognition of image, colors, light, decorations, product display and professional service manner. With the standardization of the system, customers will always receive the best quality of service at any of PNJ stores nationwide. "PNJ Standards" has been studied and developed based on modern practice of advanced countries such as UK, USA, Italy, Hongkong... to gradually make PNJ one of the Asia's leading jewelry companies, in accordance with the strategic vision. To do this, beside regular training on rules of reception and advising customers, sudden / regular checking is focused to monitor the implementation of the system. Along with the consolidation of current stores, research of expanding new system is also an important goal of the Board. In 2014, beyond the completion of planned targets, the Board also adopted a scheme to expand the network by the end of 2015, ready for the deeper and wider development of the PNJ jewelry retail chain

14 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS' REPORT 1.4 ACCOMPLISHING PLANNED TARGETS: In 2014, PNJ has successfully accomplished the plan in most of important indicators such as gross profit, financial income, earning before tax, earning after tax Unit: Milion ITEMS PLAN 2014 s performing Act/plan Total revenue + Include: Jewelry revenue Gross profit from sale and service supplying Financial income Operating net profit Earning before tax Earning after tax Consolidated Earning before tax Consolidated Earning after tax Expanding retail network Dividend 9,124,297 5,205, ,251 27, , , , , , store 20% 7,294,174 5,275, ,172 48, , , , , , store 20% 80% 101% 117% 178% 118% 119% 116% 120% 126% 150% 3. ABOUT ORGANIZING MEETINGS OF THE BOARD: In 2014, the Board has held 26 meetings; issued 28 minutes, resolutions and decisions. All meetings complied with procedures prescribed by the company Charter and the Enterprise Law to solve arising problems in time. Minutes of the meetings were made with full signatures of attending Board s members in the meeting, ensuring the correct form as prescribed by law; records, documents have been submitted to all attending Board s members in the meeting for reference as the Charter. 4. ABOUT THE SUPERVISING OF GENERAL DIRECTOR AND OTHER MAN AGERS: In 2014, the Board has well monitored the management and administration of General Director and other managers of the company. Members of the Board who also have role in the Board of Management have to participate fully regular briefings of the Board weekly, monthly, and quarterly. Therefore, the Board s members are always aware of Company s operations as well as well coordinate with the Board of Management to make right decisions, overcome difficulties and strive to achieve targets. In general, the supervision of General Manager and other managers are maintained regularly and closely, ensuring the stability and safety of company s operation, complying with the law, achieving the plan set by the Board and General Meeting s Shareholders. Realizing this is a favorable period to develop the network and to take advantage of the economy s recovery, the Board has approved the promotion of retail system development, rapidly gaining market share in the target markets. This is one of the right decisions when all the new stores opened in 2014 has quickly achieved sales expectations and attracted a large number of mid and high end customers in the area to visit and go shopping, thereby contributed to the higher profit growth rate than planned. 2. ABOUT THE 2014 ANNUAL GENERAL MEETING S RESOLUTION PERFORMING: Third term Board of Directors ( ) officially began on 14/04/2012 according to 2012 Annual General Meeting s Resolution. In 2014, the Board has convened 26 periodic meetings, issuing 28 minutes, resolutions, and decisions to perform 2014 Annual General Meeting s Resolution s tasks as following: Paying nd phase dividend in cash (10%) and provisioning funds in accordance with Article 5 of Annual General Meeting s Resolution. Advance payment of st phase dividend in cash: 12% Choosing Ernst & Young Vietnam to perform the audit for financial year 2014 Completing the shares issuance under optional program for staff and employees in 2013 Amending the Organizing and Operating Charter of PNJ to suit the Model Charter and actual situation of the company Dismissing Ms. Nguyen Thi Huong Giang as a Member of the Board and appointing Mr. Andy Ho as a new Member with the tenure of the rest of Third term ( )

15 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS' REPORT II. OPERATION, SALARY AND OPERATIONAL COST OF THE BOARD OF DIRECTORS 1. BOARD OF DIRECTORS PERSONNEL: On 14/04/2012, the th Annual General Meeting elected the Board of Directors for the Third term ( ) with seven members, including Ms. Cao Thi Ngoc Dung as Chairman of the Board and Mr. Nguyen Vu Phan as Deputy Chairman of the Board Annual General Meeting has approved the dismissal of Ms. Nguyen Thi Huong Giang from the Board due to personal resignation and appointed Mr. Andy Ho as a new member of the Board with the tenure of the rest of Third term ( ). Effective date: since BOARD OF DIRECTORS OPERATION: Members of the Board have good solidarity, responsibility and comply with jurisdiction and duties of members of the Board of Directors in accordance with the Charter. During the term, the Board has carried on resolutions of the Annual General Meeting very well, complied with jurisdiction and duties of the Board of Directors in accordance with Company s Charter and the Law. 3. BOARD OF DIRECTORS SALARY AND COST : Chairman of the Board Deputy Chairman of the Board Commissioner of the Board 26,600,000 /month 20,600,000 /month 16,600,000 /month 4. SALARY AND BONUS OF THE BOARD S MEMBER CUM COMPANY S MANAGER: Currently, PNJ has 3 member of the Board of Directors who also are Company s managers: Chairman of the Board cum Chief Executive Officer: Salary and subsidies # 130,000,000 /month Bonuses # 2.5 salary month (including 13th salary month and 1.5 ABC salary month) Deputy Chairman of the Board cum Deputy General Director for Technical: Salary and subsidies # 79,800,000 /month Bonuses # 2.5 salary month (including 13th salary month and 1.5 ABC salary month) Commissioner of the Board cum Permanent Deputy General Director: Salary and subsidies # 92,500,000 /month Bonuses # 2.5 salary month (including 13th salary month and 1.5 ABC salary month) Also, PNJ has no member of the Board who are also managers of subsidiaries. Other members of the Board are not involved in managing the Company and its subsidiaries. III. THE BOARD OF DIRECTORS STRATEGIC ORIENTATION IN 2015: Although 2014 was a relatively successful year for PNJ, the Board realized this was only a transitional stage of the restructuring; achievements in recent years need to be strengthened in order to accelerate in later years, while ensuring the sustainability of the business. In 2015, world economic is generally forecasted to have many uncertainties and recovery is only in expectation of most countries. For Vietnam's economy in particular, although its growth is rather slow but more stable than the period. In this situation, PNJ has determined only a solid engine, a proper strategy and high determination can help PNJ grow fast and steadily to overcome these difficulties. Based on the macroeconomic situation and outlook analysis of PNJ s key operations, the Board has oriented operation in 2015 as following: 1. CREATE A FOUNDATION TO ADVANCE IN MANPOWER AND ORGANIZATION: To achieve this goal, firstly arranging and operating organizing structure by function, while ensuring the strength of online structure. Building fair and attractive remuneration policies to attract and keep qualified and highly skilled employees. Continuous training and improving employees capacity. Constructing the basic standard of core competencies for providing and training qualified personnel. Keeping and promoting PNJ s unique culture while rapidly developing network and manpower. 2. STRONGLY DEVELOPING THE DISTRIBUTION NETWORK AND RAISING CUSTOMERS SATISFACTION: KEEP CONFIRMING THE LEADING POSITION IN CORE BUSINESS SEGMENT About the distribution network, the Board will keep monitoring the development of "PNJ Standards" while developing network as well as selling, continue to boost average revenue growth on each store and constantly learning, applying international management experiences. Intensively expanding the system under the sales point diagram studied and approved by the Board. Beside retail channel, wholesale channel is also built according to PNJ standards, offering more professional and quality services than competitors in the same industry. Wholesale channel does not only focus on expanding market share, but also deeply exploit the potential of each existing store to increase efficiency for the whole system. To improve customer satisfaction, the company will continue to create, innovate and improve product quality. Customer care department is assigned to manage and exploit the data to provide attractive aftersales policies, thus having more and more loyal customers

16 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS' REPORT 3. STRENGTHENING AND ENHANCING PRODUCTION CAPACITY: Investing in modern equipments as well as enhancing employees capacity to meet modern management model of the jewelry industry. Developing R&D functions of the factory, allowing direct management department to look for new, innovative ways of processing which are more efficient or to improve the process to increase productivity. Implementing the costs and production capacity optimizing project under the direction of the Board. 4. SALES AND PROFITS GROWTH: With efforts to enhance the production business operation efficiency, the Board has set growth targets as following: Unit: Milion ITEMS 2014 s performance 2015 s plan Change (%) Total sales + Include: Jewelry sales Gross profit Financial sales Earning before tax Earning after tax Consolidated Earning before tax Consolidated Earning after tax Widening retail network Planned dividend 7,294,173 5,275, ,172 48, , , , , new stores 20% 8,227,568 6,703, ,516 12, , , , , new stores 20% 13% 27% 24% 75% 16% 17% 16% 20% 94% In 2015, PNJ will turn the foundation built in the recent years into lever to take itself to a new stage of faster development. From experiences summed up in the first phase of restructuring, the Board is confident in the successful implementation of strategic goals and bringing the highest benefit to shareholders. Above is the 2014 operation performance report and 2015 orientation of the Board of Directors, respectfully send to General Meeting of Shareholders for reviewing and comments. Regards. THE MISS OCEAN CROWN made & produced By PNJ 30 31

17 ANNUAL REPORT PNJ 2014 BOARD OF SUPERVISION'S REPORT 2014 OPERATIONAL REPORT OF SUPERVISORY COMMITTEE OF PHU NHUAN JEWELRY JOINT STOCK COMPANY I. SUPERVISORY COMMITTEE S PERFORMANCE OVERVIEW Supervisory Committee consists of 03 members; each member of the Supervisory Board continue to develop the ability to work independently as well as closely coordinatate in necessary tasks. Keeping closely in touch with PNJ s Board of Directors and Board of Management, SC has accomplished the tasks given by the shareholders. SC has targeted at important matters, focused on controlling safety and efficiency level of information and operation of PNJ, details as following: Maintaining monitoring financial status of the Company, legality of activities of Board of Directors members, Board of Management s members (BOM) and other managers. Monitoring the coordination between members in units such as Supervisory Committee, Board of Directors, Board of Management, shareholders and others as prescribed law. Monitoring the status and results of implementing the General Meeting of Shareholders resolution (GM) in this term and in 2014, other resolutions, decisions and other directives of Board of Directors (BOD). Monitoring the implementation of PNJ s regulations and other provisions. Assessing the 2014 Financial Statement of PNJ. Performing other functions and responsibilities as prescribed by laws and PNJ s Regulations. Salary and operational cost of SC in 2014: Head of SC : 11,300,000 Dong/Month Member of SC : 4,800,000 Dong/Month II. OPERATIONAL PERFORMANCE 1. SUPPERVISING BOARD OF DIRECTOR AND BOARD OF MANAGERMENT 2014 is the third year of the term, the economic situation as well as Vietnam and international market were still experiencing great difficulties with not many positive points. For PNJ, this is the third year deploying the strategic restructuring of the company. This is a very important phase, if the leadership of the Board has a slight mistake, it will lead to changing strategic objectives or prolong the restructuring process which creates huge waste. With those challenges, Board of Directors and Board of Management has: Implemented fully issues raised in the 2014 AGM s Resolution; objectives and measures outlined in the resolution of the term are reviewed, discussed and implemented uniformly in practical operation of PNJ. Each resolution of the Board of Directors has strictly comply rules, regulations and of PNJ and the laws. Evaluated correctly internal resources and potential of PNJ, scrutinized the business environment and operational environment of current and future PNJ, better positioned the vision, mission of PNJ, created breakthroughs for all strategic activities of the company. Strictly controlled other investments, efficiently divested investments when suitable. New and expanding investments focus on core jewelry producing and business operation. PNJ focused on reducing costs by greatly increasing proportion of the selfproduction to replace the import goods. Priorities are product lines with high efficiency and PNJ has production advantages. Efficiently divested the investment in SFC, brought billion dong profit to the company. Strived to develop the distribution network, opened new stores under strict process. Investing in 2014 has been kept closely to the orientation approved by the General Meeting of shareholders, all investments are forcasted to achieving growth targets as oriented in medium and longterm strategies; some investments has promoted the efficiency immediately in the investment s process and contributed to create good business results in PNJ s separated EBT rose 40.7% over 2013, exceeded16.2% of plan. EPS reached 3,396 dong strongly rose 40.7% over Conclusion: Through the monitoring, operation of the BOD, BOM and major businesses of PNJ have been fully and honestly reflected in the documents (files) of PNJ, compliance with rules, regulations of PNJ and the laws. 2. EXAMINING 2014 PROFIT DISTRIBUTION PLAN According to the proposal of 2014 profit distribution plan of the BOD sending to the General Meeting of Shareholders, Supervisory Committee claims that the 2014 profit distribution plan complies with the provisions of laws and PNJ s Charter. Dividend payout plan of 25%/par value, exceeding 5% of the 20% plan approved by 2014 AGM, including issuing stock dividend with payout ratio of 10%/par value to increase charter capital and reduce permanent loan to meet the development of distribution channels and production. Profit to distribute: 255,871,804,695 dong Includes: Divident payout: 25%/par value, equal to 188,990,819,000 dong PNJ has paid phase 1 dividend in advance with payout ratio 12%/par value by cash in PNJ has expected to pay phase 2 dividend of 2014 with payout ratio 13%/par value with 10% by shares and 3% by cash. Deduction for setting up funds: 63,587,181,000 dong, details: Unit: Milion ITEMS Financial Reserved Fund Investment Development Fund Bonus Welfare Fund Operational fund of BOD SC Operational fund of BOM Retained earning: 3,293,804,695 dong. Amount 33,000,000,000 25,587,181,000 2,000,000,000 3,000,000,000 Note (10% earning after tax) 32 33

18 ANNUAL REPORT PNJ 2014 BOARD OF SUPERVISION'S REPORT 3. FINANCIAL CONTROLLING 3.1 Figures about PNJ s equity, assets at 31/12/12014 and PNJ Group s business performance: Unit: Million dong PNJ PNJ GROUP NORMS % change % change 1. Total Assets 2,813,187 2,813, ,828,672 2,956, Includes: Cash and cash equivalents 269, , , , Shortterm receivables 76,313 76, ,325 76, Inventories 1,420,997 1,420, ,437,416 1,087, Fixed assets 452, , , , Financial investments 531, , , , Other assets 62,138 62, ,294 60, Commercial advantages 0 84, Total Equity 2,813,187 2,813, ,828,672 2,956, Includes: Shortterm debts 1,408,893 1,408, ,394,565 1,415, Longterm debts 137, , , , Authorized captital 1,266,710 1,266, ,296,523 1,318, Minor shareholders interest 87, Business performance Sales revenue 7,294,174 7,294, ,297,810 8,973, Gross sales of Business 790, , , , Financial income 48,071 48, ,739 23, Other sales income ,668 3, Operational expenses (416,883) (416,883) 128 (484,572) (375,869) 129 Financial expenses (95,054) (95,054) 153 (90,254) (84,970) 106 Other expenses (1,026) (1,026) 89 (1,586) (2,240) 71 Earning before tax 326, , , , Enterprise income tax (70,308) (70,308) 121 (79,455) (64,190) 124 Deferred enterprise income tax Earning after tax 256, , , , Evaluating the fluctuation and growth of PNJ Group Total assets: 2,828,672 million dong, declined 4% over the same period due to deinvestment from SFC. Total assets of PNJ particularly is 2,813,187 million dong, rose 10% over the same period, mainly due to increasing inventories (expanding the distribution channels and stocking products for peak occasions such as 14/2, 8/3 ) Total equity: 2,828,672 million dong, declined 4% over the same period, in which shortterm debt declined 1%, authorized equity declined 2%, shareholder interest declined 3% and longterm debt rose 2% over Total equity of PNJ particularly is 2,813,187 million dong, rose 10% mainly due to loans for business operation in the end of year. Authorized equity: Authorized equity of PNJ particularly is 1,266,710 million dong, declined 7.4 billion dong (0.6%) over 2013 and accounted for 98.3% total authorized equality of PNJ Group. PNJ s Chartered Equity is: 755,970,350,000, unchanged in Evaluating some financial indexes (until 31/12) ITEMS Return on Equity ratio (ROE) Return on Charterd Equity ratio (1) Return on Assets ratio (ROA) Net Profit Margin Gross Profit Margin (Sales and Services supplying) (2) Total Assets Turnover (3) Inventory Turnover Fixed Assets Turnover Debt to Asset Ratio Current Ratio Quick Ratio (4) PNJ GROUP Unit: Million dong "% change " % 12.82% 19.74% 6.91% 19.10% 14.32% 20.27% % 23.38% 33.85% 10.47% 35.74% 25.23% 33.96% 10% 6.15% 8.85% 2.70% 9% 7.22% 9.55% 3.79% 1.90% 2.78% 0.88% 3.45% 2.42% 3.57% 8.91% 7.51% 9.67% 2.15% 8.60% 7.95% 10.98% (0.06) (2.20) % 52.45% 54.16% 1.72% 52.65% 50.25% 54.97% (0.16) Note : (1) Charter capital, calculated on weighted average. (2) Calculated separately for Sales and service rendering operation. (3) (Operating revenues for sales and service rendering)/(total average assets). (4) Given characteristics of the inventory in the jewelry sector, quick ratio may include substantially gold (which is also inventory), so basically this ratio will be much higher. In general, basic criterias used to evaluate the operational and financial efficiency of PNJ Group and PNJ in 2014 also show stability and safety, suggesting that PNJ has a good governance system and effective operations. PNJ "% change " 5.95% 8.73% 2.33% 1.15% 3.03% %

19 ANNUAL REPORT PNJ 2014 BOARD OF SUPERVISION'S REPORT 4. EVALUATING THE COORDINATION OF SUPERVISORY WITH BOD, GENERAL DIRECTOR, OTHER MANAGERS AND SHAREHOLDERS In 2014, Supervisory Committee and Board of Directors, General Director and other managers has always closely collaborated for the benefit of the Company, shareholders and complied fully with the provisions of Internal Regulation, Company s Charter and laws. Board of Directors and General Director have always created favorable conditions for Supervisory Committee in implementing functions, duties and jurisdition. SC has not received any requests or complaints of shareholders in SC has also regularly monitored the disclosure of the Company to ensure shareholders receive information adequately, correctly and promptly. III. CONCLUSION RECOMMENDATION Strategies of this term is being executed to BOM by BOD very well. This term is very important due to the effects of the company s restructuring strategies and it will significantly affect the development of PNJ in many coming years. There are many indexes exceeding the expectation and PNJ still has to go a long way to achieve its vision and missions while the term has only 2 years left. In this situation, SC recommends BOD and BOM following things: 1. RECOMMENDATIONS FOR BOARD OF DIRECTORS BOD should consider to announce the vision achieved and relocate what exactly has to be done, from that propose the unified strategy. BOD should focus on directing to achive bigger success in building foundation and pillars to operate the company; completing the organizational and personnel structure; properly exploiting the smart IT administrating system; expanding the retail network and other sale channels; enhancing the producing and supplying capacity; controlling the finance, maintaining the cash in flow to profit; upgrading the integrated administrating system; enhancing the capacity of R&D department to develop new products and technologies. About the cultural orientation in the company: summarizing, announcing new corporate culture, PNJ is where the professionals and successfuls gather. PNJ is a creative and socially responsible company. 2. RECOMMENDATIONS FOR BOARD OF MANAGEMENT Synchronously exploiting internal investments which formed existing resources, preventing waste after investing. Improving the efficiency of supply chain management, further reducing inventory costs. Increasing the efficiency of each process of PNJ through process measuring and improving; developing IT integrated software to exploit more effectively data warehouse of company. Above is the 2014 PNJ Operational Supervising Report, Supervisory Committee respectfully sends to 2015 Annual General Meeting. Supervisory Committee would sincerely like to thank PNJ s Shareholders, Board of Directors, Board of Management, subordinate units for trusting and closely cooperating effectively. We hope to get close cooperation in the future. 36 PEARL JEWELRY Sets made and produced by PNJ

20 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT I. AN OVERVIEW OF VIETNAM ECONOMIC SITUATION AND GOLD MARKET IN 2014: 1. STABILIZING MICRO ECONOMY: Despite many challenges, 2014 still marked a stable and growing year of the microeconomy. Inflation rate has been maintained in a low level and GDP firstly exceeded target planned in 3 years, reached 5.98%. Other indexes in industry and retail also highly grew, showing a recovery of gross demand. This should be considered as an achievement of Vietnam economy rather than the result of global economic stability. On the other hand, world economy has had a tough year with the intense conflicts between Russian and the Western countries, the rising of the IS, the slow growth of China economy, Ebola outbreak these events have affected the world s growth rate severely GOLD PRICE CHART 37,400 37,100 36,800 36,500 36,200 35,900 35,600 35,270 35, VIETNAM GOLD MARKET: 2.1 Circular 22/2013/TTBKHCN dated 26/09/2013 New quality management policy protected consumer better and gave PNJ opportunity to widen market segment: Circular 22/2013/TTBKHCN dated 26/09/2013 aimed to make jewelry gold quality transparent and better protect consumer, its presence was a turning point for Vietnam jewelry gold market.after a year striving to perform Circular 22 about jewelry gold quality management of government agencies, Vietnam jewelry gold market has been expected to be more transparent, and this is an opportunity for large and wellbranded firms with a broad network and outstanding producing scale like PNJ. In other words, indirect effect of Circular 22 created a really good advantage for PNJ to quickly grow its market share, based on the prestige of reliability and sophistication of products that PNJ has constantly built for more than 20 years. 2.2 Vietnam jewelry gold market s gross demand grew in term of quantity but declined in term of value due to gold price falling: With general difficulties of the economy, it s able to understand that world jewelry gold s demand has deeply declined in almost major markets. China market s price fell 39% over the same period last year, Japan s price fell 17%, India s price fell 4% and US s price fell 1% over 19% of average rate. Vietnam was not an exception. By the end of 2014, total value of jewelry consumed in the whole market was 519 million USD, fell 8% over the same period due to gold price falling despite rising in sales by 4%. (Source:World Gold Council 2014 Report) 01/ / / / / / / / / / / / ,000 34,700 34,

21 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT 2.3 Vietnam jewelry gold market in 2014 has seen a strong growth of market share of wellbranded retailers, especially PNJ: Despite gross demand declining, 2014 has still seen the rapid growth of well known jewelry retail chain a strong proof for the trend of using jewelry brands with a large network. PNJ, a brand with 25 years of credibility advantage and a network of nearly 170 retail stores nationwide, has lead the trend and quickly expanded market share. NUMBER OF STORE RETAIL MARKET SHARE FOR PNJ JEWELRY (%) 21% % 13% 13% 12% 14% In 2014, PNJ closed some Jemma stores to build multibrand stores which sell different product lines (*) Source:World Gold Council

22 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT II BUSINESS PERFORMANCE: BUSINESS OPERATING RESULT MOST OF MAIN INDEXES REACHED OR EXCEEDED THE PLANNED TARGET After many years pursuing highend jewelry line with an absolute trust on the growing potential of Vietnam market, 2014 marked this shift clearly. Consumers looking for jewelry gold products now care about the need of selfactualization and one s own lifestyle rather than speculating as before. This was covered in PNJ s strategic orientation, so that PNJ could quickly seize the opportunity and turn it into impressive figures. After a slow growing period due to focusing on reconstruction, 2014 saw a strong acceleration of PNJ. By the end of 2014, PNJ s gross profit was 790 billion, rose 32% over the same period, exceeded target 17%. EBT reached 326 billion, rose 36%, exceeded target 18%. EAT rose 41%, exceeded target 16%. This is a great encouragement for what PNJ has determined to perform for the last 2 years. An appropriate development strategy and a spirit of daring to change, daring to challenge to achieve the goals are the contributors for PNJ s success in recent years SALES JEWELRY SALES GREW OUTSTANDINGLY, IN LINE WITH CORE BUSINESS SEGMENT DEVELOPMENT STRATEGY: Sales structure changed significantly compared to the same period, particularly bullion gold sales occupied only 28% total sales instead of 43% as in 2013, jewelry gold revenue rose from 54% in 2013 to 70% in These figures represented for PNJ s determination in developing the core business segment, focusing on improving its gross profit rate. Two major factors affected this change are the Board s longterm strategy and the market s consumption trend. About the strategy, bullion gold would still be traditional business segment; jewelry gold would be intensively invested to grow rapidly and sustainably in coming years. About the market in 2014, gold price changed insignificantly, customers therefore were not interested in gold bullion, in longterm, this is the Government s goal to convert the accumulated gold into cash in circulation. 0.20% 0.12% 2014 SALES STRUCTURE 2.09% 2014 BUSINESS OPERATING RESULT PERFORMANCE VS PLAN ITEMS PLAN Unit: Million +/ (%) Perf/Plan Accumlated Accumlated 27.68% GOLD BAR PNJ GOLD Total revenue + Include: Sale from jewelry Gross profit from sale and service supplying 9,124,297 5,205, ,251 7,294,174 5,275, ,172 7,603,581 4,296, ,778 4% 23% 32% 80% 101% 117% 69.91% SERVICES WATCH Financial income Financial expenses 27,000 85,000 48,071 95,054 26,361 62,134 82% 53% 178% 112% PNJ SILVER Selling expenses 253, , ,532 34% 123% G & A expenses 90, ,944 91,804 15% 117% Unit: Million Operating net profit Earning before tax (EBT) 275, , , , , ,111 36% 36% 118% 119% CHANGE +/ (%) Earning after tax (EAT) 220, , ,394 41% 116% Bullion gold 2,018,825 3,268,239 38% Consolidated EBT 279, , ,007 44% 120% Jewelry gold 5,099,662 4,184,756 22% Consolidated EAT 202, , ,037 51% 126% Jewelry silver 152, ,427 16% Widening retail network 12 cửa hàng 18 cửa hàng 150% Watches 14,726 10,422 41% Dividend 20% 45% Services 8,680 8,737 1% (*) 2014 dividend will be paid 15% by cash and 30% by shares. Total revenue 7,294,174 7,603,581 4% 42 43

23 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT 2.1 Strong growth in core business segment, wholesale and retail jewelry gold business: In 2014, jewelry gold sales accounted for 70% total sales and 85% gross profit, affirmed itself a core business operation of PNJ. And in this year, jewelry gold sales rose 22%, highest rate in 3 consecutive years. This growth rate is the outcome of a strong investment on technology, training, reorganizing sale staff and retail operation and ERP support in managerment. This business segment will still be invested concentratedly and hopefully keep growing strongly in coming years PNJ Gold Retail Business: Retail business plays a major role in sales and gross profit growth rate of PNJ, and this business segment has been concretely invested for recent years, especially in strategy period. 70% Total Revenue TOTAL REVENUE AND JEWELRY GOLD REVENUE IN Unit: Million GOLD JEWELRY's REVENUE AND GOLD RETAIL SALES Unit: Million 37% % % % % Total revenue Jewelry Gold revenue Jewelry Gold Sales Growth Rate % % Gold Jewelry Revenue Gold Retail Sale Growth Rate Of Gold Retail % 4% %

24 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT 2.1 Strong growth in core business segment, wholesale and retail jewelry gold business: PNJ Gold Reatail Business In 2014, retail jewelry gold sales reached 2,280 billion, rose 42%;gross profit rose 36% over the same period, contributed 31% to gross sales and 74% gross profit. Comparing to 4% growth rate of 2013, these figures represented for an outstanding result and an initial success of the comprehensive reformation in retail operation, especially when Vietnam s total jewelry demand in 2014 declined 8% over the same period. (World Gold Council 2014 Report) Same store sales grew 25% in 2014 and 18 newly opened stores has contributed 10% on additional retail sales. To achieve these impressive results in 2014, PNJ has applied breakthrough improvements in managing and administrating retail operation at following key factors: Human Resources (People); Products and Customer Service (Product); Brand Recognition and Marketing (Promotion) and Network Developing (Place). Human Resources (People):: 2014 has marked significant change in coaching and training PNJ jewelry consulting staff to enhance sale skills and serving manner at stores. It can say that investing on this staff is one of top priorities of PNJ in Examining and assessing programs are regularly performed to quickly detect weak points in the system as well as potentially capable candidates to promote. Consumers therefore always feel satisfied about the service when they come to PNJ. Beside, excellent remuneration policy, appropriate acknowledgement for achievements also contribute significantly to exhort this staff s spirit is also the year when the retail network finished converting to managing under well practicing standards structure of world leading jewelry retailers on the world, separating function and responsibility of some units, therefore enhancing the coordinating and managing effects. In addition, added senior manager staff to enhance retail managing capability of the entire system. In spite of quickly increasing in store number nationwide in 2014 and the increasing of staff at local stores, PNJ was still outsanding in training coaching and cultural integrating, ensuring the homogenous service quality throughout the expanding process. Products and Customer Service (Product): Keep promoting the reliability and sophistication of products, PNJ s longterm strategy is creating the difference about product s quality a key element to position a brand class and earn customers trust. To do this, PNJ has constantly invested onlatest technologies and manufacturing methods in the world. Because of right investment decisions, PNJ has successfully manufactured jewelry by Italian technology, diamond jewelry These products were loved by customers due to equivalent quality with imported but lower price. The goal in the next 2 years is completely replacing imported products with selfmanufactured products. Investing on technology as well as manpower for designing staff to bring unique designs that lead the fashion trend and make a symbol for PNJ. In 2014, PNJ has launched various notable collections with hundreds of jewelry designs. This means the tireless creativity of designing staff has brought more choices to the customers as well as to be the trend creator in Vietnam jewelry market. Besides subjective changes, it must mention the impact of objective factors such as macroeconomic situation, consumer trends... these factors are the causes to help boost sales. Customers increasingly prefer high quality jewelry products such as diamonds, colored gemstones, highly sophisticated jewelry... which are the advantage of PNJ. These movementsare the beginning of an inevitable trend as the market grows and customers demand is increasingly higher. And with it legacy, PNJ has a solid foundation to be ready for a breakout stage of development in all aspects, exactly the goal set: "Vietnam leading jewelry company in middle and highend segment." PNJ has taken advantage of the database on advanced ERP platform to coordinate products and optimize product categories in stores, increase the supply of products properly and in line with tastes of customers. Orientatingthe consulting staff at the store to focus on consulting best suited solutions to the needs of customers has contributed significantly to the satisfaction of the customers. According to the market research department s latest study, improving the quality of service itself has increased the level of customer satisfaction and frequency of successful transactions significantly over the same period. Marketing (Promotion): Advocating standardizing recognizedimage at the stores after completing the standard store model has created synchronization and positive in the whole system. Promotional activities aiming to increase the visitors to the stores had initial success and will continue to develop in the future. Promotional activities for important events includingwedding Season, March 8 Day (International Women Day), October 20 Day, Valentine Day... are planned and implemented correctly. This has contributed to boost sales and generate buzzes for PNJ on the market. Network Expanding (Place): In 2014, PNJ exceeded the network expanding plan, adding 18 stores nationwide, focusing at level 1 and level 2 cities. Most of the new stores are large scale stores,located in prime locations and quickly generate buzz, help PNJ dominate the market. Newly opened stores have quickly achieved expected revenue and profit, contributing 10% of extra total retail sales in By the end of 2014, PNJ had 173 stores including 80 gold jewelry stores (independent gold jewelry stores and general stores), 85 silver jewelry stores and 8 Cao Fine Jewellery independent stores. With experienced foundation and standardized network expansion process, this activity is expected to be accelerated in the coming years to strengthen the leading and dominant positionof PNJ in Vietnam jewelry industry

25 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT 2.1 Strong growth in core business segment, wholesale and retail jewelry gold business: Wholesales: Targeted to nationwide enterprises, in 2014 PNJ opened Buon Ma Thuot branch to promote business in the Central Tay Nguyen region. With the opening of this branch, PNJ has currently had five wholesale centers in the Northern region, Central Tay Nguyen region, HCMC and Mekong Delta region, rapidly expanded market share in most important areas across the country. In 2014, total sale quantity rose 17%, sales rose 36% over the same period. PNJ has not only producedcommon jewelry products but also targetedspecific gifts ordered by companies with high demands on crafted level, unique designs. PNJ is currently considered the leading reliable address for large companieswhich are inneed of high quality jewelry gifts, medals, logos Exporting: PNJ is proud to be able to meet strict standards of foreign partners, thus become the only Vietnam firm to export jewelry. Through exporting, PNJ does not only introduce "made in Vietnam" jewelry brand to the world but also build longlasting relationships with partners in the industry and other industries, which help PNJ easily accessible with new production technology, current fashion trends, advanced management methods, all of which enhancepnjbusiness performance. 2014, gold exporting sales was 76 billion, fall 12% over the same period mainly due to declining gold price, however public salesrose 20% over the same period. Silver exporting sales rose 5% over the same period. Although the increasing is not outstanding, in the situation of unstable economy of the world, especially the US market the main exporting market of PNJ showed no signs of growth in demand, this is an encouraging result for PNJ sales team

26 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT 2.3 PNJSILVER: 2.4 Gold bar: PNJSILVER SALES IN Unit: Million As highlighted in official reports as well as messages to investors in recent years, bullion gold is not the main business of PNJ, it is just a traditional business with a brand strategy. PNJ is one of few companies licensed to tradebullion gold in Vietnam, this earns customers trust and is the first choice when talk to gold products. Thus, despite the marginal profit only 0.5%1% and contributing only 2% of gross profit, this will still be one of PNJ s business activities. However, fluctuations in this business do not significantly affect the overall result of the company % 37% % 2.5 Others (watches, services): Reached 23.3 billion in sales, accounted for 0.3% total sales. In this segment, watch salesrose 41%. Despite not contributing significantly to gross sales, this is still a potential business segment due to available retail outlets and watch sales has grown steadily over 40% a year. Grown 41% Year on year 6% 16% After relaunching PNJSilver with a more luxurious image and many marketing strategies aimed to over 20yearold customer, PNJ silver sales has achieved the growth rate of 15%, an impressive figure after 2 years of negative growth. In 2014,PNJ has not openedany silveronly jewelry stores, butcombined selling with gold jewelry in large gold jewelry stores. This combination helped PNJSilver expose more to high income customers, and PNJ stores will be known as onestop jewelry shopping place

27 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT III. KEY MISSIONS PERFORMANCE: 1. ENHANCING HUMAN RESOURCES EFFICIENCY: In 2014,PNJ has completed the organizational structure under the new model, filling up key positions and consolidating KPI system to individual level. Applying competitive remuneration policies, focusing on the production and sales department. Investing in training is regularly carried out to improve manpower s quality to meet company s operating and developing needs via internal training programs and training with international experts. 2. STRENGTHENING AND DEVELOPING THE SYSTEM: In 2014, PNJ has invested in reconstructing thesystem s infrastructure and the standardized recognized image for stores, brought a new face to the whole system. Completing product distribution process to optimize capital, optimize supply chain and products portfolio in stores. Planning on opening new stores and new sales channels in accordance with market demand. Improving the standard storemodel to increase operational efficiency. Opening the Tay Nguyen Wholesale Center, increased total wholesale centers to 5nationwide, enable market developing to almost all provinces across the country. Besides expanding the market, PNJ also focuses on developing the wholesale channel in depth to fully exploit existing markets and customers. 3. RAISING CUSTOMER SATISFACTION: In 2014, PNJ has built a standard store model, unified from recognized image to serving manner and quality of service provided to customers. Raising customer satisfaction through training skills and serving manner of staff toward customers (internal and external). Raising customer satisfaction through products and services. Developingparticular technical service center (warranty, manufacturing according to specific requirements...). Developing business policy, customer policy to bring customers more benefits, which increases customers loyalty to the brand. 4. GROWING SALES AND PROFIT: To optimize sales per store and per customer, in 2014PNJ has simultaneously implemented projects aimed to enhance the service s quality, ensure the products quality and quantity, showcaseproducts properly, combine with marketing to increase number of visitors to the store, and build timely and worthy reward policy for consulting staff at the stores. Thanks to the research and thoroughly preparation before implementingnetwork expanding project, PNJ s plansucceeded beyond expectation and all the new stores has quickly reached the expected revenue, increased 10% of retail sales over the same period. Increasing industrial stages in production, contributing to reduce wastage and improve labor productivity. Current loss ratio of PNJ is <1%, well below comparing to the average level of jewelry manufacturing industry in the world, contributing to increased the marginal profit of PNJ 52 DIAMOND JEWELRY Sets made and produced by PNJ

28 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT IV. RISK MANAGEMENT: In an unstable business environmentlike Vietnam, effective risk management is a big challenge for every company.knowing how to seize the opportunity will elevate one company to big success, but only companies withaneffective risk management systemcan turn this opportunity into sustainable development, and this is the aim of PNJ. 1. RISK MANAGEMENT IN BUSINESS STRATEGY: After years of building and developing, PNJ is proud to be the leading jewelry company in Vietnam. Its products do not only bring pride to the customers but also become a Vietnam s outstanding representative in world arena. What made the difference between PNJ and other jewelry companies? Those areright development strategy, appropriate to each developing stage of the market, and these are the decisive factor, bringing PNJ stepbystep solidly and deeply marked in consumers hearts. Development strategy is built on the basis of comprehensive studies on macroeconomic situation, PNJ s competitive advantage over competitors in the industry; thereby PNJ can determine the longterm vision and goals for each stage of development. Toachieve those goals, the Board has actively promoted internal communication, help all employees understand and comply with the strategic orientation, together lead PNJ to the target. 2. RISK MANAGEMENT IN OPERATIONAL ENVIRONMENT: Policy risk: Although Vietnam is determined a very potential market for jewelry industry, but just like other emerging markets, the economy always has potential uncertainties and risks. Especially for a sensitive market like gold market, the policy changing is inevitable before it canbe completed. Therefore, to reduce risks, PNJ has always focused on observing policies and major orientations of the Government, from that made appropriate changes in the strategies. At the same time, PNJ actively researched and proposed on building and developing solutions for Vietnam jewelry industry to Government agencies and gradually marked its name on the map of countries with large scale jewelry producing and exporting in the world. Risk of purchasing power decreasing due to economic cycle: This is a general risk that any companycan experience, but with a branding strategy aimed at multiple customer segments andvarious product lines, PNJ has partially limited this risk. Risk of unstable input price:this risk is relatively well controlled through analyzing, forecasting and managing the company's price. With the support of ERP software, cost and inventory controlling become easier and more efficient. Not only applyingadministrating methods, product s strategic orientation is one of the fundamental elements to reduce price risk. In the future when the brand is the main factor of cost,this risk will be reduced much more. 3. RISK MANAGEMENT IN HUMAN RESOURCES: In 2014, PNJ has reviewed and rebuilt the remuneration policy to guarantee income and benefits so it can be more comprehensively competitive than average level of the labor market. Beside attracting the talented, PNJ has also focused on training to improve, enhance the professional capabilities and provide a clear promotion roadmap to each employee to ensure the longterm commitment. Also, it must not exclude the bond between PNJ employees formed by PNJ culture, where people attach to each other and dedicateto the benefit of the company as a whole family. In 2014, PNJ was one of 100 Best Workplaces in Vietnam as Nielsen s survey, and ranked 2nd in Best Vietnam Retail Companies. 4. FINANCIAL RISK MANAGEMENT: Risk of inventory: Inventory management is a very important factor to each retail company includep NJ, contributing to the performance of the company. Understanding this matter, inventory management has beencarried out carefullyfrom the storage, based on assessments of market demand to distribution and regularly monitoring to take timely measures to boost sales with slowmoving goods. In 2014, inventory turnover of most product groups rose, increased operational efficiency and savedfund for the company. Risk of capital: The finance department is responsible for building longterm financial plan, budgeting and controlling activities under budget, so the company can take the initiative in allocating resources rationally, improving the efficiency of capital

29 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT V. FINANCIAL RATIOS VI. SUBSIDIARIES PERFORMANCES: Liquidity s indexes o Current ratio o Inventory turnover o Inventory day Performance s indexes o Gross Profit Margin (GPM) o Return on Sales (ROS) o Return on Assets (ROA) o Return on Equity (ROE) Unit Times Turn Days % % % % x % 4% 9% 20% 1.21x % 2% 7% 14% Indicators of solvency do not change significantly over the same period, because working capital is mainly from loans. Unlike other companies, PNJ's inventory is gold and precious stones which have high liquidity, thus significantly reducing the risk of liquidity risk. Inventory day increased over the same period clearly reflected the business situation in 2014 when jewelry segment gradually accounted for higher proportionthan bullion gold segment. Despite low inventory days, bullion gold does not contribute significantly to gross profit. Therefore, the increasing of inventory daysmay press the equity situation but generally is a positive trend due to much higher marginal profit. Regarding each product group, inventory day of both gold and silver jewelry are reduced by 4% and 12% over the same period. All profit indicators were higher than the same period, reflecting an efficient year of the entire company. After divesting from the SFC, PNJ had only two subsidiaries:cao Fashion Limited Company (CAO Fine Jewellery) and PNJL Assessment Limited Company. 1. CAO Fine Jewellery With 10 billion authorized capital, CAO s sales reached 40.8 billion, fall 5.3% over the same period; net profit reached 1.2 billion. As known, despite positive signs from the economy, this is still not the time consumers willing to pay for luxurious products, so 2014 was still a tough year for CAO. However, the Board has determined CAO is a brand strategy and the investment needs long time to catch the trend and certainly it willbring impression when the time comes. In the present, CAO has already been rated as a highend jewelry brand by customers, comparable to international brands, and this is the most important success of CAO. 2. PNJL: Major in providing gem and diamond testing services. Gross sales in 2014 reached 11.8 billion, rose 13% over the same period. Gross profit reached 8.4 billion, rose 17% over the same period. Earning before tax reached 6.1 billion, rose 21%. Along with gemstone purchasing trend, PNJL s sales have constantly increased. PNJL brand has been rated as the most creditworthy brand in the field of diamond and stone quality control

30 ANNUAL REPORT PNJ 2014 BOARD OF MANAGERMENT'S REPORT VII. CONCLUSION: Ending 2014 with impressive figures, the entire staff of PNJ believed in the strategy proposed.investors could also see the effectiveness in the management of the Board. This is aninitial success as the foundation of the manpower, the system and new strategy has gradually formed a complete and smooth mechanism. From what has been achieved, the Board believes that 2015 and subsequent years will be a period of stronger growth, letting PNJ quickly achieve the goal: Become the leading jewelry manipulating and retailer in Asia, Holding top rank in mid and highend segments in Vietnam 58 RUBY JEWELRY Sets made and produced by PNJ

31 STRUCTURE OF PERSONNEL ORGANIZATION & ENTERPRISE ADMINISTRATION

32 ANNUAL REPORT PNJ 2014 PNJ' ORGANIZATION CHART GENERAL SHAREHOLDER COUNCIL BOARD OF SUPERVISION BOARD OF DIRECTORS BOARD OF DIRECTORS OFFICE CHIEF EXECUTIVE OFFICER (CEO) REPRESENTATIVE MANAGERS (ISO) DEPUTY DIRECTOR DEPUTY DIRECTOR DEPUTY DIRECTOR (PERMANENT) DEPUTY DIRECTOR NORTHERN BRANCH MARKETING DEPARTMENT FINANCE AND ACCOUNTING DEPARTMENT PNJ JEWELRY FACTORY HUMAN RESOURCE DEPARTMENT CENTRAL BRANCH ECOMMERCE DEPARTMENT ADMINISTRATIVE DEPART MENT EFFICIENCY MANAGEMENT DEPARTMENT DESIGN DEPARTMENT WESTERN BRANCH WHOLESALE DEPARTMENT IT DEPARTMENT RETAIL SALE DEPARTMENT EXPORT DEPARTMENT SUPPLY DEPARTMENT SERVICE CENTER 62 63

33 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS 1 Mrs. CAO THI NGOC DUNG CHAIRWOMAN 2 Mrs. NGUYEN THI CUC MEMBER OF BOD 3 Mr. NGUYEN VU PHAN VICE CHAIRMAN Year of birth: 1957 Nationality: Vietnam Professional skills: Bachelor of Industrial Commercial Economics ( University of Economics Hochiminh city) Year of birth: 1960 Nationality: Vietnam Professional skills: MBA, University of Economics Hochiminh City Year of birth: 1956 Nationality: Vietnam Professional skills: o MBA of University of Technology Hochiminh City o Forging and Mechanical Engineer, University of Technology Ha Noi EMPLOYMENT HISTORY : Deputy Manager of Planning department, Phu Nhuan Synthesis Company : Planning Manager of Phu Nhuan Agricultural Foods Company : General Manager of Phu Nhuan Jewelry Company 1990: General Manager of Phu Gia Credit Center : General Manager of Phu Nhuan Trading Company : Chairwoman of Dong A bank 2003present: Chairwoman of Dong A Land : Chairwoman of Dai Viet Energy JSC 2004present: ChairwomanCEO of Phu Nhuan Jewelry JSC EMPLOYMENT HISTORY : Officer of Statistic and Planning Department, Phu Nhuan District : Chief Accountant of Phu Nhuan Jewelry Company : Deputy Manager of Phu Nhuan Jewelry Company 2004 present: BOD member and Deputy Director of Phu Nhuan Jewelry JSC 2007 present: Head of Dong A Bank s Board of supervision EMPLOYMENT HISTORY : Head of Technical Department, Caric Factory : Technical Officer of Synthetic Equipment Company ( Hochiminh Industrial Department) : Technical Officer of New Technology Company (COTEC), Vietnam Scientific Institution, Hochiminh Branch : Deputy Manager of Garment factory, Binh Duong Manufacturing and ImportExport Company : Deputy Manager of Phu Nhuan Jewelry Company 2004present: Vice Chairman and Deputy Director of Phu Nhuan Jewelry JSC DIAMOND JEWELRY Sets made and produced by PNJ 64 65

34 ANNUAL REPORT PNJ 2014 BOARD OF DIRECTORS 4 Mr. NGUYEN TUAN QUYNH MEMBER OF BOD Year of birth: 1972 Year of birth: 1972 Nationality: Vietnam Professional skills: o PHD Degree in Business Administration, Paramount University o MBA of Hochiminh City Open University. o Bachelor of Business Administration, University of Economics Hochiminh City EMPLOYMENT HISTORY : o Assistant CEO, Deputy sale manager of Gas Saigon Petro o BOD Member of Sai Gon Phu Yen oil and gas JSC o BOD Member of Sai Gon Nghe An oil and gas JSC : Deputy Director of Saigon Gas : Deputy Director of Phu Nhuan Jewelry JSC : Vice Chairman of Dai Viet Energy JSC : Chairman of Hong Vina Gas Company 2007 Present: Chairman of Doanh Chu Investment and Training JSC 2008 Present: Chairman of Saigon Fuel JSC 5 Mr. ANDY HO MEMBER OF BOD Year of birth: 1983 Nationality: America Professional skills: o MBA of Massachusetts Institute of Technology o Bachelor of Accounting, Colorado University EMPLOYMENT HISTORY : Investment Manager at Dell Computer Corp (America) : Investment Manager at Prudential Fund Management 2007 Present: CIO of Vina Capital representative office MRS. PHAM VU THANH GIANG MEMBER OF BOD 6 7 Nationality: Vietnam Professional skills: o Master of banking and finance, University of Applied Sciences, Northwestern Switzerland. o Bachelor of Banking and Finance, Banking University, Ho ChiMinh City EMPLOYMENT HISTORY : AON Vietnam Staff 2007present: Investment Manager, Mekong Capital MRS. NGUYEN THI BICH HA MEMBER OF BOD Year of birth: 1969 Nationality: Vietnam Professional skills: o MBA, Vanderbilt University, USA o Applied economics in policy analysis Certificate, Fulbright Program, Vietnam o Bachelor of Foreign Trade, University of Economics Hochiminh City EMPLOYMENT HISTORY : Staff, Sales Department of Phu Yen Import Export company, Hochiminh Branch : Sale manager of Phu Yen Import Export company, Hochiminh Branch : Deputy Director of Saigon 1 Joint Stock Company : Deputy Manager of Dong A Bank : Deputy General Director of Dong A Bank : Consultant, BOD member of Binh Minh Community Development : Senior Consultant of College of Business Administration and Management (CBAM) 2013 present: Deputy Director of Life s Value Research and Consultant Center 66 67

35 ANNUAL REPORT PNJ 2014 BOARD OF MANAGEMENT 1 Mrs. CAO THI NGOC DUNG CHAIRWOMAN Year of birth: 1957 Nationality: Vietnam Professional skills: Bachelor of Industrial Commercial Economics ( University of Economics Hochiminh city) 1 3 EMPLOYMENT HISTORY : Deputy Manager of Planning department, Phu Nhuan Synthesis Company : Planning Manager of Phu Nhuan Agricultural Foods Company : General Manager of Phu Nhuan Jewelry Company 1990: General Manager of Phu Gia Credit Center : General Manager of Phu Nhuan Trading Company : Chairwoman of Dong A bank 2003present: Chairwoman of Dong A Land : Chairwoman of Dai Viet Energy JSC 2004present: ChairwomanCEO of Phu Nhuan Jewelry JSC 2 Mrs. NGUYEN THI CUC MEMBER OF BOD Year of birth: 1960 Nationality: Vietnam Professional skills: MBA, University of Economics Hochiminh City 4 Mr. LE HUU HANH DEPUTY DIRECTOR Year of birth: 1963 Nationality: Vietnam Professional skills: o Bachelor of Chemistry, University of Technology Hochiminh City o Gemstone and Diamond Testing Expert EMPLOYMENT HISTORY : Technical Staff of No.4 Printing company : Sale staff of General Services Company, Go Vap District : Sale staff, Manager of Hanoi Branch, Sale Deputy Manager, Sale manager of Phu Nhuan Jewelry Company 2004present: Deputy director of Phu Nhuan Jewelry JSC 2 EMPLOYMENT HISTORY : Officer of Statistic and Planning Department, Phu Nhuan District : Chief Accountant of Phu Nhuan Jewelry Company : Deputy Manager of Phu Nhuan Jewelry Company 2004 present: BOD member and Deputy Director of Phu Nhuan Jewelry JSC 2007 present: Head of Dong A Bank s Board of supervision 5 Mrs. PHAM THI MY HANH DEPUTY DIRECTOR Year of birth: 1970 Nationality: Vietnam Professional skills: o MBA, National Economics University Washington University o Bachelor of Foreign Language, University of Social Sciences and Humananities Hochiminh City o Bachelor of Bussiness Administration, University of Economics Hochiminh City Mr. NGUYEN VU PHAN VICE CHAIRMAN Year of birth: 1956 Nationality: Vietnam Professional skills: o MBA of University of Technology Hochiminh City o Forging and Mechanical Engineer, University of Technology Ha Noi EMPLOYMENT HISTORY : Head of Technical Department, Caric Factory : Technical Officer of Synthetic Equipment Company ( Hochiminh Industrial Department) : Technical Officer of New Technology Company (COTEC), Vietnam Scientific Institution, Hochiminh Branch : Deputy Manager of Garment factory, Binh Duong Manufacturing and ImportExport Company : Deputy Manager of Phu Nhuan Jewelry Company 2004present: Vice Chairman and Deputy Director of Phu Nhuan Jewelry JSC EMPLOYMENT HISTORY : Staff of Sales Department, Phu Nhuan Jewelry Company : Secretory Toba Investment : Sale Satf, CEO assistant, Deputy Manager then Manager of Research and Marketing Department, Phu Nhuan Jewelry Company : Manager of Research andmarketing Department, Manager of CAO brand : Manager of CAO Limited company 2012 present : Deputy Director of Phu Nhuan Jewelry JSC 68 69

36 ANNUAL REPORT PNJ 2014 BOARD OF SUPERVISION 1 Mr. PHAM VAN TAN HEAD OF BOARD OF SUPERVISION Year of birth: 1960 Nationality: Vietnam Professional skills: o Bachelor of Industrial Commercial Economics ( University of Economics Hochiminh city) o Bachelor of Political Economy, National political institution Journalism and Communication Department 1 2 EMPLOYMENT HISTORY : Assistant in Teaching and administration department, University of Economics Hochiminh city : In charge of Sale and Administration, SJC Jewelry Factory : Manager, Branch manager, Deputy Director of Dong A Bank : BOD consultant of International Cominucation Net (INCOMNET) 3 Mrs. NGUYEN NGOC HUE MEMBER OF BOARD OF SUPERVISION Year of birth: 1965 Nationality: Vietnam Professional skills: o Bachelor of Commercial Finance, Finance and Accouting University, Hochiminh City o Certificate of Accounting & Finance of Import Export activities, Foreign Trade College o Certificate of Chief accountant training course, Ministry of finance. 3 2 Mr. TRAN VAN DAN MEMBER OF BOARD OF SUPERVISION Year of birth: 1974 Nationality: Vietnam Professional skills: o Bachelor of Accounting, Commercial University o Bachelor of Business Administration, Hochiminh University of Technology (HUTECH) o Chief accountant certificate, Hochiminh National University EMPLOYMENT HISTORY 1997 present: Đã trải qua các chức danh sau tại Công ty Vàng Bạc Đá Quý Phú Nhuận PNJ: From 14/08/2012: Head of Executive Board, Production Subsystem, ERPXman Project From 03/06/2013: Head of Strategy Unit Strategy Administrating Department (In charge of Producing and Office Units) From 01/11/2013: Head of Administrative Unit Strategy Administrating Department (In charge of Producing and Office Units) From 10/10/2014: Deputy Director Efficiency Administrating Department From 15/01/2015: Head Department Jewelry Workshops Quality Administrating Department EMPLOYMENT HISTORY : General accountant, Codimex Company Vung Tau : Chief accountant, Canadian Hotel, Vung Tau : Chief Accountant, Giao Chau Company, Vung Tau : General Accountant, Duhacom, HCM City : Chief Accountant of Compunet Company, HCMC : Head of Payment Division of PNJ 2011present: Chief accountant of PNJ Laboratory Limited Company

37 ANNUAL REPORT PNJ 2014 SITUATION CORPORATE GOVERNANCE II. BOARD OF DIRECTORS RESOLUTIONS COMPANY INFORMATION No. Resolution s number Dated Content Name of company : PHU NHUAN JEWELRY JOINT STOCK COMPANY Abbreviation : PNJ Address : 170E Phan Dang Luu Street, Ward 3, Phu Nhuan District, HCMC Telephone : Fax: Charter capital : 755,970,355,000 Security code : PNJ 1 79/2014/NQHĐQTCTY 2 215/2014/BBHĐQTCTY 3 219/2014/NQHĐQTCTY 4 227/2014/NQHĐQTCTY 17/01// /03/ /03/ /03/2014 Ratifying time, venue and contents of some documents of 2014 Annual General Meeting; Signing trade agreements with relevant persons. Supplementing working capital Changing members of Board of Director (Nguyen Thi Huong Giang, Andy Ho) Agreeing on contents of 2014 Annual General Meeting s documents I.. BOARD OF DIRECTORS OPERATION /2014/BBHĐQTCTY 229/2014/BBHĐQTCTY 12/03/ /03/2014 Supplementing working capital of jewelry business Agreeing on loan plan 1. BOARD OF DIRECTORS MEETINGS 7 268/2014/NQHĐQTCTY 24/03/2014 Approving on loan plan No Board of Directors Members Cao Thi Ngoc Dung Nguyen Vu Phan Nguyen Thi Cuc Nguyen Thi Bich Ha Nguyen Tuan Quynh Nguyen Thi Huong Giang Andy Ho (Ho An T) Pham Vu Thanh Giang Title Chairwoman Deputy Chairman Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Number of participating meetings Ratio 100% 100% 100% 92% 100% 100% 100% Absence s reason Resigned from BOD as a Commissioner from 03/03/2014 Elected to BOD as a Commissioner from 03/03/ /2014/BBHĐQTCTY 287/2014/NQĐHĐCDCTY 288/2014/QĐĐHĐCDCTY 291/2014/NQHĐQTCTY 294/2014/NQHĐQTCTY 431/2014/NQHĐQTCTY 31/03/ /03/ /03/ /03/ /03/ /05/2014 Agreeing on limit for bank loans 2014 Annual General Meeting Resolution on Amending, Suppelmenting of Phu Nhuan Jewelry JSC s Charter Agreeing on the last registering date for paying 2nd phase of 2013 dividend in cash Establishing PNJ Quang Ninh Branch (a subordinate unit) Producing Business Operational Performance Report of First 4 months of 2014 and Action program /2014/BBHĐQTCTY 14/05/2014 Agreeing on limit for bank loans 2.. SUPERVISION OF BOARD OF DIRECTORS TO GENERAL DIRECTOR Some of Board of Directors members attended the briefings of Board of Directors every week, month, quarter. The supervision of Board of Directors to Board of Management is done through monthly activity reports /2014/BBHĐQTCTY 619/2014/NQHĐQTCTY 646/2014/BBHĐQTCTY 11/06/ /07/ /07/2014 Agreeing on loan plan for supplementing working capital of jewelry business, operating expenses Selecting auditing agent for fiscal year 2014 Renewing withdrawal time of Contract number dated at Branch of Shinhan Vietnam Limited Bank Operation Department 3. OPERATION OF COMMITTEES UNDER BOARD OF DIRECTORS Board of Directors has not established any committees /2014/NQHĐQTCTY 688/2014/NQHĐQTCTY 28/07/ /07/2014 Establishing affiliate of Phu Nhuan Jewelry JSC PNJ Quang Nam Branch Ratifying Producing Business Operational Performance Report of First Half of 2014, Operational Orientation /2014/NQHĐQTCTY 15/08/2014 Establishing affiliate of Phu Nhuan Jewelry JSC PNJ Dong Thap Branch /2014/NQHĐQTCTY 26/08/2014 Approving to transfer a part of Saigon Fuel Corporation s shares owning by Phu Nhuan Jewelry JSC PNJ /2014/BBHĐQTCTY 08/09/2014 Supplementing working capital at South East Asia Commercial Bank Cong Hoa Branch 72 73

38 ANNUAL REPORT PNJ 2014 SITUATION CORPORATE GOVERNANCE 2. SHARES TRANSACTIONS : No. Resolution s number Dated Content Approving to transfer all of Saigon Fuel Corporation s /2014/NQHĐQTCTY 22/09/2014 shares owning by Phu Nhuan Jewelry JSC PNJ /2014/NQHĐQTCTY 971/2014/NQHĐQTCTY 03/10/ /10/2014 Ratifying Producing Business Operational Performance Report of First 9 Months of 2014, Objectives of Fisrt 9 Months of 2014, Major goals of 2015 Agreeing on expected registration date to make the final payment of 1st phase of 2014 s dividend in cash; Changing and appointing President of CAO Fashion Company, Ltd; Changing legal representative of CAO Fashion Company, Ltd; Amending Article 6 of Organizing and Operating Charter of CAO Fashion Company, Ltd No Trader Dragon Capital Investment Fund To Thi Thao Pham Thi My Hanh Relation with internal share holder/ major shareholder Major Shareholders Relating person Deputy General Director Number of shares owning at the beginning Quantity Ratio 9,05% 0,12% 0,43% Number of shares owning at the end Quantity Ratio 9,84% 0,55% Reason of change (purchase, sell, convert, reward) Purchase Sell Purchase /2014/QĐHĐQTCTY 03/10/2014 Deciding on changing legal representative and amending Organizing and Operating Charter of CAO Fashion Company, Ltd. 4 Cao Ngoc Vu Relating person ,06% 0 Sell /2014/BBHĐQTCTY 1114/2014/NQHĐQTCTY 15/10/ /11/2014 Supplementing working capital at PG Bank Saigon Branch Transfering all of Que Huong Liberty JSC s shares owning by PNJ 3. OTHER TRANSACTION: (transactions of internal shareholders/ major shareholders and persons relating to the Company). No. Trader Relation with the Company Content of transaction III. CHANGING THE LIST OF PERSONS RELATING TO PUBLIC COMPANY ACCORDING TO THE PROVISIONS OF PARAGRAPH 34, ARTICLE 6 OF SECURITY LAW On 03/03/2014, Ms. Nguyen Thi Huong Giang sent request for resigning as a member of Board of Directors with personal aspirations and approved by the 2014 Annual General Meeting of Shareholders. On 29/3/2014, the 2013 Annual General Meeting of Shareholders approved the electing of Mr. Andy Ho as a member of Board of Directors in the 3rd term ( ) and approved the valid time is the date of the Board of Directors appointed 03/03/2014. See files attached Dong A Real Estate JSC Golden Mark CPM JSC Golden Space Corp Relating to Board of Directors member Relating to Board of Directors member Relating to Board of Directors member Contract of constructing, renovating, repairing, interior decorating offices, workshops, warehouses, business commercial systems Contract of project consulting and supervising Contract of interior decorating wooden furniture (counters and cabinets providing, installing, warranty, repairing) for offices, production business systems IV. TRANSACTIONS OF INTERNAL SHAREHOLDERS AND RELATING PERSONS 1. LIST OF INTERNAL SHAREHOLDERS AND RELATING PERSONS See files attached. V. OTHER NOTES On 29/03/2014, performed amending and supplementing the Organizing and Operating Charter of Phu Nhuan Jewelry JSC under 2014 Annual General Meeting s Resolition ON BEHALF OF BOARD OF DIRECTORS CHAIRMAN MS MS. CAO THI NGOC DUNG 74 75

39 PRODUCTS & SERVICES

40 BRAND PNJ GOLD JEWELRY Officially announced in Vietnam since 1989, PNJ gold jewelry brand has confirmed its leading position when pioneered a fashion revolution in Vietnam jewelry market by exquisite jewelry with various designs and superior quality. More than 26 years of development, PNJ gold jewelry brand has constantly innovated to bring hundreds of collection diverse in gold material, abundant in kind of gemstone with extraordinary design, contributing to honor the beauty, elegance and class of Vietnamese consumers. Especially, with the message "Honoring the true value", PNJ has elevated the value of each jewelry product, to not only adorn the beauty but also honor the soul, the virtue of the women. Besides, collections such as Golden Happiness Wedding Jewelry, ECZ Jewelry, Diamond Jewelry... are the proofs for skilled processing level, bringing the pride for customers and confirming the mission of PNJ gold jewelry brand: "Bringing the pride to customers by exquisite jewelry products with outstanding quality Brand PNJSILVER JEWELRY AND FASHION ACCESSORIES Announced on Vietnam jewelry market in 2001, after 15 years of innovation and development, PNJSilver has affirmed its leading position in silver jewelry and fashion accessories field. Aiming at young customers, PNJSilver with fashionable and dynamic purple pink color has easily identified by customers in many shopping centers throughout Vietnam. Leading silver jewelry and accessories fashion trends, each year PNJSilver has released many new collections, suiting the modern lifestyle with the interesting and colorful media story "Her Shinny World". With main product lines such as Charming, Elegant, Stylish and Baby which are distributed at 100 retail stores across the country, PNJSilver has kept striving, creating constantly to become a leading silver jewelry and accessories brand for young girls.

41 BRAND CAO FINE JEWELLERY Announced in 2005, CAO Fine Jewelry is a highclass jewelry brand in both domestic and international market. It is favored by fashion connoisseurs due to the combination of Western sophistication and traditional Oriental beauty. The uniqueness of the product is created by skillful hands of experienced designers and skilled jewelry craftsmen who are always ready to turn ideas into real masterpieces, satisfying the needs and preferences of each consumer. Products of CAO Fine Jewelry is crafted from 18k gold and white diamonds, colored diamonds, natural gemstones, semiprecious stones with vibrant colors all are guaranteed with the excellent sparkle and fine cutting edges from top names in the field of gem cutting or jewelry assessment in the world... BRAND JEMMA JEWELRY Announced in late 2009, with the development orientation to become a luxury and modern jewelry and fashion accessories brand, Jemma is a new option which brings the elegance and nobility to ladies. All Jemma products are designed in a modern style based on the latest fashion trends in the world with various and unique materials, to not only create fashion and trendy products, but also to show character and style of the owners. With the launching of Thu Khoa Huan boutique in 2013, CAO Fine Jewellery once again showed a steady direction to conquer fastidious customers as well as directly compete with other international jewelry brands in Vietnam.

42 ENTERPRISE CULTURE

43 ANNUAL REPORT PNJ 2014 COMMON HOME PNJ CULTURAL IDENTITY What is PNJ s biggest asset? It s not money. It is the corporate culture and human. Ms. Cao Thi Ngoc Dung PNJ General Director If we regard PNJ as a house, then the people and community are the foundation of that house. For 27 years of development, PNJ has built a strong and steady foundation so the PNJ house can stand firmly, beautifully and sustainably develop through many years. And also on that foundation, PNJ Common Home culture was born. At which, each member of PNJ family has lived with discipline, responsibility, professional manner but full of love, solidarity and ready to help each other in work and life, exchange information as well as encouraged to raise the cultural level and professional level. The efforts of each member are worthily rewarded, encouraged or appointed to an appropriate position, and above all, they are good example for the community and next generations to follow. To create the "PNJ Common House" culture, specific characters and important major factors are core values, which are forged by PNJ in the journey of 27 years: Responsibility, Honesty, Quality, Innovation and Creativity. These 5 values are the foundation that makes PNJ people, PNJ strength, PNJ spirit, the oriental compass in every action program, every decision for the development of the PNJ, and help each individual and team to behave uniformly, mannerly in work and life. PNJ culture and core values are instilled in the business culture with customers, investors, partners, social community and most clearly in the internal operations for its employees. Through organizations and communities, many activities for the employees are held regularly and frequently, to meet the needs of health care, improving life standards, as well as building pride and bonds among members: team building seminars, thematic workshops, forums of youth, entertainment festivals, sports competitions, PNJ family day, a Healthcare Club... PNJ Culture teachs each member of PNJ staff to live responsibly for themselves, society and community, to be a citizen who respect the law, the values of Humanity Politeness Gratitude Wisdom Credit must always be promoted. PNJ is also regarded as a school where people are not treated by materials, or immediate interests, but with respect and love. It is the "PNJ Common House" culture that has created a regulated, professional, disciplined and mannerly community, which is always ready to sacrifice and dedicate for the company. PNJ Culture has significantly contribute to create the position of PNJ, make competitiveness, help develop a stronger team and attract the talented, connect employees, be a foundation and confidence for the sustainable development of PNJ

44 ANNUAL REPORT PNJ th Anniversary of PNJ Charity Fund A journey of love Established in 2005, after 10 years of operation, PNJ Charity Fund has contributed to the society more than 25 billion dong to work together to improve the lives of poor people, poor patients and facilitate the development of hidden talents. Several billion dong sharing with the community each year may be not too much but it has demonstrated the enduring commitment of the leaders and PNJ charity fund for charity. USING THE MONEY AT THE RIGHT PLACES TO HELP AS MUCH AS POSSIBLE: With the fund raising from the donation of staff and employees, welfare fund and donations from partners... PNJ Charity Fund has been able to pursue many volunteer and charity programs to help communities in this 10 year journey. Regularly every year, PNJ donates several hundred million dong for the Sponsoring Association for Poor Patients; several hundred million dong for scholarships for poor students... but the biggest contribution is for the poor living in remote areas. Most of the volunteer and charity programs are to visit poor people in remote villages in the Central, Tay Nguyen or Mekong Delta area. In each trip, PNJ has always prepared each single gift to suit the life of people there and handed them, no matter how rough the road is. Only in 2014, total budget for charitable activities of PNJ was 4.5 billion dong, 2015 Tet holiday gifts program particularly occupied 2.5 billion dong, including more than 3,000 gifts for poor people in Phu Nhuan District ang poor remote areas in Dak Lak, Gia Lai, Da Nang, Quang Nam, Quang Ngai, An Giang and Kien Giang... Besides, PNJ Charity Fund is also willing to join hands with the press agencies, unions, associations and local authorities... to sponsor gifts and money in emergencies such as hurricanes, floods, natural disasters, building rural roads, building shelters for the poor, supporting fishermen of Truong Sa Hoang Sa to keep working at sea, funding poor people to start their own business... After each trip, any participating members fret with things not yet done, and always have new ideas for PNJ Charity Fund to keep helping the community. Since late 2014, besides annual programs, PNJ Charity Fund has launched new project named PNJ Shelters a plan to provide housing for the lonely poor with difficult circumstances nationwide... It is expected that PNJ will build 50 shelters, worth 40 million dong each in the first phase of the project. Ms. Dang Thi Lai, PNJ s Chief Accountant cum Vice President of PNJ Charity Fund, said: "There are three highlights in the operation of PNJ Charity Fund: The first is the heart from the Board of Management to each employees, all are genuinely eager to share with difficult people; The second is money; The third is the consensus of the company when conducting each charity program". JOURNEYS OF LOVE WITH THE APPEARANCE OF THE LEADERS: In "journeys of love" to bring gifts to remote areas annual Tet holidays, there are always members of the Board of Directors, especially Ms. Cao Thi Ngoc Dung General Director. With a casual style and intimacy in the "PNJ uniform", Ms. Dung does not hesitate to do anything together with everyone to help give gifts to country people as quickly as possible. In occasions like this, she usually skip the "opening statement" for not has anyone waited long, but she always sees the needs of people and defects of the organizing... to do better next time. The warm heart of Ms. Dung is a shinny example for all employees and staff who participated in company s charity trips and it has positively affected many partners of the company as well as the business community, attracting them to join hands with PNJ to share with the society. Attending in the charity trip of HCMC University of Medicine and Pharmacy Hospital collaborating with the PNJ Charity Fund to perform free medial examination and dispense free medication for 500 poor people of Thanh Hoa commune, Thuan Chau district, Soc Trang province on 17/8/2014, Ph.D Dr. Vu Thanh Tri Head of Technical Department of University of Medicine and Pharmacy Hospital, said: "This is the first time University of Medicine and Pharmacy Hospital has combined the medical charity with PNJ s charity trip. Our 10 doctors delegation, including 04 Ph.D, 02 professors, 03 pharmacists... often organize medical charity trips several times a year, but this time I have to say I am very glad to see the good results in many respects. Poor people there did not only receive necessary gifts, but also had free medical examination and medication, a new bridge and a family also received a new house. The trip is also an opportunity to connect doctor and pharmacist with PNJ s youngsters. I must say that you (PNJ) have created a good impression on us about the professionalism as well as your kinded hearts for poor people here. ". Those good impressions can not be gained without the consensus of PNJ members about the concept Giving is receiving the happiness and peace for the soul from the leader of the company 86 87

45 ANNUAL REPORT PNJ PNJ WITH COMMUNITY TYPICAL ACTIVITIES Awarding Vu A Dinh scholarships, PNJ scholarships, Saigon Economic Times Donating to build shelters for the poor and those who contributed to the country Accompanying with the Loving Fishnets for Hoang Sa, Truong Sa s fisherment program Donating for the Fund for the Poor of HCMC Vietnamese Fatherland Front Committee Accompanying with the funding for handicraft villages project Donating for programs which care for victims of Agent Orange Donating for Spring on Border and Islands programs Visiting and giving Tet holiday gift annually for the poor in the Central, Tay Nguyen and Mekong Delta area Building bridges for the poor in Ben Tre and Tra Vinh Donating for programs which support the fishermen Supporting for PNJ s disadvantaged employees Caring for the blind in Phu Nhuan district, disabled children at Phu Nhuan Niem tin School Donating for people at disaster areas Capital supporting for coastal area people. Organizing Blood Donating annually, collaborating with hospitals to give free medical examination for the poor in remote area Performing the project PNJ Shelters to build houses for the poor 88 89

46 THE COMPANY Phu NhuanJewelry Joint Stock Company ( the Company ) is a shareholding company incorporatedunder the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No issued by the Department of Planning and Investment of Ho Chi Minh City on 2 January 2004, as amended. The Company was listed on the Ho Chi Minh City Stock Exchange ( HOSE ) from 23 March 2009 pursuant to the Decision No. 129/DKNY issued by the General Director of HOSE on 26 December FINANCIAL STATEMENTS 2014 The current principal activities of the Company are to trade gold, silver, jewelry and gemstones, and to import and export jewelry in gold, silver and gemstones. The Company s head office is located at 170E Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. In addition, the Company also has one hundred and seventy four (174) retail shops located at various provinces in Vietnam. BOARD OF DIRECTORS Members of the Board of Directors during the year and at the date of this report are: Ms Cao Thi Ngoc Dung Chairwoman MrNguyen 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 Member Mr Andy Ho Member appointed 3 March 2014 Ms Nguyen Thi Huong Giang Member resigned 3 March 2014 BOARD OF SUPERVISION Members of the Board of Supervision during the year and at the date of this report are: Mr Pham Van Tan Ms Nguyen Ngoc Hue Mr Tran Van Dan Head of the Board of Supervision Member Member 91

47 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 MANAGEMENT Members of the Management during the year and at the date of this report are: Ms Cao Thi Ngoc Dung General Director Mr Le HuuHanh 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 STATEMENT BY MANAGEMENT Management does hereby state that, in its opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2014and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of consolidated financial statements. For and on behalf of management: LEGAL REPRESENTATIVE The legal representative of the Company during the year and at the date of this report is Ms Cao Thi Ngoc Dung. AUDITORS The auditor of the Company is Ernst & Young Vietnam Limited. Management of Phu NhuanJewelry Joint Stock Company ( the Company ) is pleased to present its report and the consolidated financial statements of the Company and its subsidiaries ( the Group ) for the year ended31 December MANAGEMENT S RESPONSIBILITY IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS Management is responsible for the consolidated financial statements of each financial year which give a true and fair view of the consolidatedfinancial position of the Group and of the consolidated results of its operationsand its consolidated cash flows for the year. In preparing those consolidated financial statements, management is required to: Select suitable accounting policies and then apply them consistently; Make judgements and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; and prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue its business. Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the consolidated financial position of the Group and to ensure that the accounting records comply with the applied accounting system. It is also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Management confirmed that it has complied with the above requirements in preparing the accompanying consolidated financial statements

48 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 CONSOLIDATED BALANCE SHEET as at 31 December 2014 Code ASSETS Notes Ending balance Beginning balance INDEPENDENT AUDITORS REPORT 100 A. CURRENT ASSETS To: The Shareholdersof Phu NhuanJewelry Joint Stock Company I. Cash and cash equivalents 1. Cash 2. Cash equivalents We have audited the accompanying consolidated financial statements of Phu NhuanJewelry Joint Stock Company and its subsidiaries ( the Group ) as prepared on March 2015 and set out on pages 5 to 39which comprise the consolidated balance sheet as at 31 December 2014, and the consolidated income statement and consolidated cash flow statement for the year then ended, and the notes thereto. Management s Rresponsibility Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of consolidated financial statements, and for such internal control as management determines is necessary to enable the preparation and presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Rresponsibility Our responsibility is to express an opinion on these consolidated 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 II. Current accounts receivable 1. Trade receivables 2. Advances to suppliers 3. Other receivables 4. Provision for doubtful debts III. Inventories 1. Inventories IV. Other current assets 1. Shortterm prepaid expenses 2. Valueadded tax deductible 3. Tax and other receivables from the State 4. Other current assets B. NONCURRENT ASSETS ( ) ( ) ,239,106,817,480 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 entity'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 entity'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 I. Fixed assets 1. Tangible fixed assets Cost Accumulated depreciation 2. Intangible fixed assets Cost Accumulated amortization 3. Construction in progress ( ) ( ) ( ) ( ) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view, in all material respects, of the consolidated financial position of the Group as at 31 December 2014, and of the consolidated results of its operations and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Enterprise Accounting System and the statutory requirements relevant to preparation and presentation of consolidated financial statements II. Investment properties 1. Cost 2. Accumulated depreciation III. Longterm investments 1. Investments in associates 2. Other longterm investments 3. Provision for longterm investments ( ) ( ) ( ) IV. Other longterm assets 1. Longterm prepaid expenses 2. Deferred tax assets V. Goodwill TOTAL ASSETS Ho Chi Minh City, Vietnam 30 March

49 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2014 CONSOLIDATED BALANCE SHEET (continued) as at 31 December 2014 Code RESOURCES Notes Ending balance Beginning balance Code ITEMS Notes Current year Previous year A. LIABILITIES I. Current liabilities 1. Shortterm loans 2. Trade payables 3. Advances from customers 4. Statutory obligations 5. Payables to employees 6. Accrued expenses 7. Other payables 8. Bonus and welfare fund II. Noncurrent liabilities 1. Other longterm liability 2. Longterm loans B. OWNERS EQUITY I. Capital 1. Share capital 2. Share premium 3. Treasury shares 4. Investment and development fund 5. Financial reserve fund 6. Undistributed earnings C. MINORITY INTERESTS TOTAL LIABILITIES AND OWNERS EQUITY OFF BALANCE SHEET ITEM ( ) ( ) Revenue from sale of goods and rendering of services 2. Deduction 3. Net revenue from sale of goods and rendering of services 4. Costs of goods sold and services rendered 5. Gross profit from sale of goods and rendering of services 6. Finance income 7. Finance expenses In which:interest expense 8. Selling expenses 9. General and administrative expenses 10. Operating profit 11. Other income 12. Other expenses 13. Other profit 14. Share of profit (loss)of associates 15. Profit before tax 16. Current corporate income tax expense 17. Deferred income tax benefit 18. Net profit after tax Attributable to: Minority interests Equity holders of the Company 19. Basic and diluted earnings per share (/share) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ITEM Ending balance Beginning balance Foreign currencies: United States dollar ( USD ) Gold taels Australian Dollar ( AUD ) Duong Quang Hai Dang Thi Lai Cao Thi Ngoc Dung Preparer Chief Accountant General Director 30 March 2015 Duong Quang Hai Dang Thi Lai Cao Thi Ngoc Dung Preparer Chief Accountant General Director 30 March

50 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 CONSOLIDATEDINCOME STATEMENT for the year ended 31 December 2014 CONSOLIDATED CASH FLOW STATEMENT (continued) for the year ended 31 December 2014 Code ITEMS Notes Current year Previous year Code ITEMS Notes Current year Previous year I. CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Depreciation and amortization Provisions Profits from investing activities Interest expense ( ) ( ) Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year ( ) Operating profit before changes in working capital (Increase) decrease in receivables Increase in inventories Increase in payables Increase in prepaid expenses Interest paid Corporate income tax paid Other cash inflows from operating activities Other cash outflows from operating activities Net cash flows used in operating activities ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Duong Quang Hai Dang Thi Lai Cao Thi Ngoc Dung Preparer Chief Accountant General Director 30 March II. CASH FLOWS FROM INVESTING ACTIVITIES Purchase and construction of fixed assets Proceeds from disposals of fixed assets Payments for investments in other entities Proceeds from sale of investments in other entities Interest and dividends received ( ) ( ) Net cash flows (used in) from investing activities (3,020,764,200) III. CASH FLOWS FROM FINANC ING ACTIVITIES Issuance of shares Drawdown of borrowings Repayment of borrowings Dividends paid ( ) ( ) ( ) ( ) 40 Net cash flows used in financing activities ( ) ( ) 98 99

51 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December CORPORATE INFORMATION Phu NhuanJewelry Joint Stock Company ( the Company ) is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No issued by the Department of Planning and Investment of Ho Chi Minh City on 2 January 2004, as amended. The Company was listed on the Ho Chi Minh City Stock Exchange ( HOSE ) from 23 March 2009 pursuant to the Decision No. 129/DKNY issued by the General Director of HOSE on 26 December The current principal activities of the Company are to trade gold, silver, jewelry and gemstones, and to import and export jewelry in gold, silver and gemstones. The Company s head office is located at 170E Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. In addition, the Company also has one hundred and seventy four(174) retail shops located in various provinces in Vietnam. The number of the Group s employees as at 31 December 2014was 2,494 (31 December 2013: 2,653). CORPORATE STRUCTURE The Company s corporate structure includes two subsidiaries, as follows: CAO Fashion Company Limited ( CFC ), a onemember limited liability company, was established under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No issued by the Department of Planning and Investment of Ho Chi Minh City on 14 August CFC s registered head office is located at 170E Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. CFC s principal activities are to produce and trade fashion products, silver and gold jewelery, and art and craft products, and to import and export art and craft products. PNJ Laboratory Company Limited ( PLC ), a onemember limited liability company, was established under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No issued by the Department of Planning and Investment of Ho Chi Minh City on 16 December PLC s registered head office is located at 205 Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City, Vietnam. PLC s principal activities are to provide jewelery inspection and consultancy services. 2. BASIS OF PREPARATION 2.1 ACCOUNTING STANDARDS AND SYSTEM The consolidated financial statements of the Company and its subsidiaries ( the Group ), expressed in Vietnam dong ( ), are prepared in accordance with Vietnamese Enterprise Accounting System and Vietnamese Accounting Standardsissued by the Ministry of Finance as per: Decision No. 149/2001/QDBTC dated 31 December 2001 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 1); Decision No. 165/2002/QDBTC dated 31 December 2002 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 2); Decision No. 234/2003/QDBTC dated 30 December 2003 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 3); Decision No. 12/2005/QDBTC dated 15 February 2005 on the Issuance and Promulgation of Six Vietnamese Accounting Standards (Series 4); and Decision No. 100/2005/QDBTC dated 28 December 2005 on the Issuance and Promulgation of Four Vietnamese Accounting Standards (Series 5). Accordingly, the accompanying consolidated balance sheet, consolidated income statement, consolidated cash flow statement and related notes, including their utilisation are not designed for those who are not informed about Vietnam s accounting principles, procedures and practices and furthermore are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries other than Vietnam. 2.2 APPLIED ACCOUNTING DOCUMENTATION SYSTEM The Group s applied accounting documentation system is the General Journal system. 2.3 FISCAL YEAR The Group s fiscal year applicable for the preparation of its consolidated financial statements starts on 1 January and ends on 31 December. 2.4 ACCOUNTING CURRENCY The consolidated financial statements are prepared in which is also the Group s accounting currency. 2.5 BASIS OF CONSOLIDATION The consolidated financial statements comprise the financial statements of the Company and its subsidiariesfor the year ended31 December Subsidiariesare fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continued to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intracompany balances, income and expenses and unrealised gains or losses resulting from intracompany transactions are eliminated in full. Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the consolidated income statement and within equity in the consolidated balance sheet, separately from parent shareholders equity. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1 CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash on hand, cash at banks, gold, and shortterm, highly liquid investments with an original maturity of less than three months that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value. 3.2 RECEIVABLES Receivables are presented in the consolidated financial statements at the carrying amounts due from customers and other debtors, after provision for doubtful debts. The provision for doubtful debts represents amounts of outstanding receivables at the balance sheet date which are doubtful of being recovered. Increases and decreases to the provision balance are recorded as general and administrative expense in the consolidated income statement. 3.3 INVENTORIES Inventories are stated at the lower of cost incurred in bringing each product to its present location and condition, and net realisable value. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs to complete and the estimated costs necessary to make the sale. The perpetual method is used to record inventories, which are valued as follows: Merchandises, consumables, and raw materials cost of purchase on a weighted average basis. Finished goods and workin process cost of direct materials and labour plus attributable manufacturing overheads based on the normal operating capacity on a weighted average basis

52 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 Provision for obsolete inventories An inventory provision is created for the estimated loss arising due to the impairment of value (through diminution, damage, obsolescence, etc.) of merchandise goods, raw materials, finished goods, and other inventories owned by the Group, based on appropriate evidence of impairment available at the balance sheet date. Increases and decreases to the provision balance are recorded into the cost of goods sold account in the consolidated income statement. 3.4 FIXED ASSETS Tangible and intangible fixed assets are stated at cost less accumulated depreciation or amortization. The cost of a fixed asset comprises its purchase price and any directly attributable costs of bringing the fixed asset to working condition for its intended use. Expenditures for additions, improvements and renewals are added to the carrying amount of the assets and expenditures for maintenance and repairs are charged to the consolidated income statement as incurred. When fixed assets are sold or retired, their cost and accumulated depreciation or amortization are removed from the consolidated balance sheet and any gain or loss resulting from their disposal is included in the consolidated income statement. Land use rights Land use right is recorded as an intangible fixed asset on the consolidated balance sheet when the Group obtained the land use right certificates. The costs of land use right comprise all directly attributable costs of bringing the land lot to the condition available for intended use. 3.5 DEPRECIATION AND AMORTIZATION Depreciation of tangible fixed assets and amortization of intangible fixed assets are calculated on a straightline basis over the estimated useful life of each asset as follows: Buildings and structures 5 25 years Machinery and equipment 3 15 years Motor vehicles 4 10 years Office equipment 3 8 years Computer software 3 years The useful life of the fixed assets and depreciation and amortization rates are reviewed periodically to ensure that the method and the period of the depreciation and amortisation are consistent with the expected pattern of economic benefits that will be derived from the use of fixed assets. 3.6 INVESTMENT PROPERTIES Investment properties are stated at cost including transaction costs less accumulated depreciation. Subsequent expenditure relating to an investment property that has already been recognized is added to the net book value of the investment property when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing investment property, will flow to the Group. Depreciation of investment properties are calculated on a straightline basis over the estimated useful life of each asset as follows: Land use rights 10 years Buildings 10 years Investment properties are derecognised when either they have been disposed of or when the investment properties are permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the assets is recognised in the consolidated income statement in the year of retirement or disposal. Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owneroccupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment properties when, and only when, there is change in use, evidenced by commencement of owneroccupation or commencement of development with a view to sale. The transfer from investment property to owneroccupied property or inventories does not change the cost or the carrying value of the property for subsequent accounting at the date of change in use. 3.7 BORROWING COSTS Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds and are recorded as expense during the year in which they are incurred. 3.8 PREPAID EXPENSES Prepaid expenses are reported as shortterm or longterm prepaid expenses on the consolidated balance sheet and are amortized over the year for which the amounts are paid or the year in which economic benefits are generated in relation to these expenses. The following types of expenses are recorded as longterm prepaid expenses and are amortised to the consolidated income statement. Prepaid rental includes land and shop rental prepaid for many years under operating lease contracts and are amortized over the lease term; Tools and consumables with large value issued in use and can be used for more than one year; and Others are amortized to the consolidated income statement over 2 to 3 years. 3.9 INVESTMENTS IN ASSOCIATES The Group s investment in its associates is accounted for using the equity method of accounting. An associate is an entity in which the Group has significant influence that is neither subsidiaries nor joint ventures. The Group generally deems they have significant influence if they have over 20% of the voting rights. Under the equity method, the investment is carried in the consolidated balance sheet at cost plus post acquisition changes in the Group s share of net assets of the associates. Goodwill arising on acquisition of the associate is included in the carrying amount of the investment and is amortized over a 10year year. The consolidated income statement reflects the share of the postacquisition results of operation of the associate. The share of postacquisition profit (loss) of the associates is presented on face of the consolidated income statement and its share of postacquisition movements in reserves is recognized in reserves. The cumulative postacquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment. The financial statements of the associates are prepared for the same reporting year and use the same accounting policies as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group BUSINESS COMBINATIONS AND GOODWILL Business combinations are accounted for using the purchase method. The cost of a business combination is measured as the fair value of assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange plus any costs directly attributable to the business combination. Identifiable assets and liabilities and contingent liabilities assumed in a business combination are measured initially at fair values at the date of business combination

53 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 After initial recognition, goodwill is measured at cost less accumulated amortisation. Amortisation of goodwill is calculated on a straightline basis over 10 years during which the source embodying economic benefits are covered by the Group INVESTMENTS IN SECURITIES AND OTHER INVESTMENTS Investments in securities and other investments are stated at their acquisition costs PROVISION FOR INVESTMENTS Provision is made for any diminution in value of the investments at the balance sheet date in accordance with the guidance under the Circular No. 228/2009/TTBTC issued by the Ministry of Finance on 7 December 2009 and the Circular No. 89/2013/TTBTC issued by the Ministry of Finance on 28 June Increases and decreases to the provision balance are recorded as finance expenses in the consolidated income statement PAYABLES AND ACCRUALS Payables and accruals are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group FOREIGN CURRENCY TRANSACTIONS Transactions in currencies other than the Group s reporting currency of are recorded at the exchange rates ruling at the date of the transaction. At the end of the year, monetary assets and liabilities denominated in foreign currencies are translated at buying exchange rate announced by the commercial bank where the Group maintains bank accounts ruling at the balance sheet date. All realised and unrealised foreign exchange differences are taken to the consolidated income statement EARNINGS PER SHARE Basic earnings per share amounts are calculated by dividing net profit after tax for the year attributable to ordinary shareholders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profit after tax attributable to ordinary equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, excluding trade discount, rebate and sales return. The following specific recognition criteria must also be met before revenue is recognised: Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually upon the delivery of the goods. Rendering of services Revenue is recognised when the service has been rendered. Interest Revenue is recognised as the interest accrues unless collectability is in doubt REVENUE RECOGNITION(continued) Dividends Income is recognised when the Group s entitlement as an investor to receive the dividend is established TREASURY SHARES Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss upon purchase, sale, issue or cancellation of the Group s own equity instruments APPROPRIATION OF NET PROFITS Net profit after tax is available for appropriation to shareholders after approval in the shareholders meeting, and after making appropriation to reserve funds in accordance with the Group s Charter and Vietnam s regulatory requirements. The Group maintains the following reserve funds which are appropriated from the Group s net profit as proposed by the Board of Directors and subject to approval by shareholders at the annual general meeting. Financial reserve fund This fund is set aside to protect the Group s normal operations from business risks or losses, or to prepare for unforeseen losses or damages for objective reasons and force majeure, such as fire, economic and financial turmoil of the country or elsewhere. Investment and development fund This fund is set aside for use in the Group s expansion of its operation or indepth investments. Bonus and welfare fund This fund is set aside for the purpose of pecuniary rewarding and encouraging, common benefits and improvement of the employees benefits and,and presented as a liability on the consolidated balance sheet

54 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December TAXATION Current income tax Current income tax assets and liabilities for the current and prior yearsare measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted as at the balance sheet date. Current income tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the current income tax is also dealt with in equity. Current income tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current income tax assets against current income tax liabilities and when the Group intends to settle its current income tax assets and liabilities on a net basis. Deferred income tax Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences, except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the related transaction affects neither the accounting profit nor taxable profit or loss. Deferred income tax assets are recognised for all deductible temporary differences, carried forward unused tax credit and unused tax losses, to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried forward unused tax credit and unused tax losses can be utilised, except where the deferred income tax asset in respect of deductible temporary difference which arises from the initial recognition of an asset or liability which at the time of the related transaction, affects neither the accounting profit nor taxable profit or loss.the carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Previously unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred income tax assets to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled based on tax rates and tax laws that have been enacted at the balance sheet date. Deferred income tax is charged or credited to the consolidated income statement, except when it relates to items recognised directly to equity, in which case the deferred income tax is also dealt with in the equity account. Deferred income tax assets and liabilities are offset when there is a legally enforceable right for the Group to offset current income tax assets against current income tax liabilities and when they relate to income taxes levied by the same taxation authority on either the same taxable entity or when the Group intends either settle current income tax liabilities and assets on a net basis or to realise the assets and settle the liabilities simultaneously, in each future year in which significant amounts of deferred income tax liabilities or assets are expected to be settled or recovered FINANCIAL INSTRUMENTS Financial instruments initial recognition and presentation Financial assets Financial assets within the scope of the Circular No. 210 /2009/TTBTC dated 6 November 2009 issued by the Ministry of Finance providing guidance for the adoption in Vietnam of the International Financial Reporting Standards on presentation and disclosures of financial instruments ( Circular 210 ) are classified, for disclosures in the notes to the consolidated financial statements, as financial assets at fair value through profit or loss, heldtomaturity investments, loans and receivables or availableforsale financial assets as appropriate. The Group determines the classification of its financial assets at initial recognition. All financial assets are recognised initially at cost plus directly attributable transaction costs. The Group s financial assets include cash, cash equivalents,trade and other receivables. Financial liabilities Financial liabilities within the scope of Circular 210 are classified, for disclosures in the notes to the consolidated financial statements, as financial liabilities at fair value through profit or loss or financial liabilities measured at amortised cost as appropriate. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at net of directly attributable transaction costs. The Group s financial liabilities include trade and other payables, and loans. Financial instruments subsequent remeasurement There is currently no guidance in Circular 210 in relation to subsequent remeasurement of financial instruments. Accordingly, the financial instruments are subsequently remeasured at cost. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated balance sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously SEGMENT INFORMATION A segment is a component determined separately by the Group which is engaged in providing products or related services (business segment), or providing products or services in a particular economic environment (geographical segment), that is subject to risks and returns that are different from those of other segments

55 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December DISPOSAL OF EQUITY INTEREST On 23 September 2014, the Company disposed allshares in Sai Gon Fuel Joint Stock Company to Ms Tran Thi Thu Phuong and Sai Gon Transport Agency Joint Stock Company in accordance with the Share Transfer Agreements dated 23 September 2014 at the selling price of 174,453,518,000. Accordingly, the Group incurred a loss of 1,667,321,778 from this transaction,and was recognised in the consolidated income statement (Note 23). 5. CASH AND CASH EQUIVALENTS Details of movements of provision for doubtful debts At beginning of year Add: Provision during the year Less: Disposal of a subsidiary At end of year Current year ( ) Previous year ( ) Ending balance Beginning balance Cash on hand Cash at banks Cash in transit Cash equivalents INVENTORIES Ending balance Beginning balance TOTAL CURRENT ACCOUNTS RECEIVABLE Ending balance Beginning balance Merchandise goods Finished goods Work in process Tools and supplies Raw materials Goods in transit TOTAL Trade receivables In which: Due from third parties Inventories of 570,000,000,000 were pledged as collateral for shortterm loans obtained from commercial banks (Note 15). Advances to suppliers In which: Due from third parties Other receivables In which: Due from third parties OTHER CURRENT ASSETS Ending balance Beginning balance Provision for doubtful debts ( ) ( ) Shortterm rental deposits Advances to employees NET TOTAL

56 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December TANGIBLE FIXED ASSETS 10. INTANGIBLE FIXED ASSETS Buildings and structures Machinery and equipment Motor vehicles Office equipment Total Land use rights Computer software Total Cost: Beginning balance Additions Decrease due to disposal of a subsidiary Disposals Ending balance In which: Fully depreciated Accumulated depreciation: Beginning balance Depreciation for the year Decrease due to disposal of a subsidiary Disposals Ending balance Net carrying amount: Beginning balance Ending balance ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Cost: Beginning balance Additions Decrease due to disposal of a subsidiary Ending balance Accumulated amortization: Beginning balance Amortization for the year Decrease due to disposal of a subsidiary Ending balance Net carrying amount: Beginning balance Ending balance ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Land use rights with the carrying amount of 69,152,139,738 were pledged to obtain loans from commercial banks (Note 19). Buildings and machineries with the carrying amount of 15,234,478,078 were pledged to obtain loans from commercial banks (Note 19). 11. INVESTEMENT PROPERTIES Land use right Building Total Cost: Beginning balance Decrease from disposal of a subsidiary Reclassified Ending balance ( ) ( ) ( ) Accumulated amortization: Beginning balance Depreciation for the year Decrease from disposal of a subsidiary Reclassified Ending balance ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Net carrying amount: Beginning balance Ending balance

57 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December LONGTERM INVESTMENTS 12.1 INVESTMENT IN ASSOCIATE Name 12.2 OTHER LONGTERM INVESTMENTS Ending balance Beginning balance Name Ending balance Beginning balance Number of shares Cost of investment Number of shares Cost of investment Dong A Land Joint Stock Company Cost of investment in associates Accumulated lossof the associate Dividends received Cost of investment % of interest Cost of investment % of interest , ,62 Ending balance ( ) ( ) Beginning balance ( ) ( ) Dong A Joint Stock Commercial Bank (DAB) (i) Saigon M&C Real Estate Joint Stock Company Quehuong Liberty Joint Stock Company Hoang Minh Giam project Gia Dinh Development Investment Corporation Petec Coffee Joint stock Company Others TOTAL TOTAL Provision for longterm investments ( ) ( ) Dong A Land Joint Stock Company ( DAL ) is a shareholding company incorporatedunder the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate No issued by the Department of Planning and Investment of Ho Chi Minh City on 24 July DAL s registered head office is located at 43R/12, Ho Van Hue Street, Ward 9, Phu Nhuan District, Ho Chi Minh City, Vietnam. DAL s principal activities are to provide design services, project management, construction services, to provide real estate consulting services and real estate agency, and to trade houses and interior products. NET (i) DAB s shares were pledged to obtain loans from commercial banks (Note 15) PROVISION FOR LONGTERM INVESTMENTS Current year Previous year At beginning of year Add: Provision created during the year Less: Decrease due to disposal of a subsidiary At end of year ( )

58 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December GOODWILL Movements in goodwill during the year are as follows: 15. SHORTTERM LOANS Ending balance Beginning balance Cost: Beginning balance Shortterm loans from banks (i) Decrease from disposal of a subsidiary ( ) Shortterm loans from individuals (ii) Current portion of longterm loans (Note 19) Ending balance TOTAL Accumulated amortisation: Beginning balance Amortisation for the year Decrease from disposal of a subsidiary ( ) ( ) ( ) HOW TO MAKE PURE GOLD 24K Ending balance Net carrying amount: Beginning balance Ending balance 14. LONGTERM PREPAID EXPENSES Ending balance Beginning balance Office and retail shop renovation costs Retail shop rentals Tool and supplies TOTAL

59 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 (i) Details of shortterm loans with floating rate from commercial banks to finance the Group s working capital requirements are as follows (ii) Details of individual loans with floating rate to finance the Group s working capital requirements are as follows: Banks Ending balance Maturity date Interest % p.a. Collateral Lender Ending balance Maturity date Interest % p.a. Collateral Asia Commercial Joint Stock Bank Main Transaction Office From 9 January 2015 to 26 March 2015 From 6 to 6.5 The Group's DAB shares Individuals July 2015 From 1 to 5 Unsecured Vietnam Joint Stock Commercial Bank for Industry and Trade Ho Chi Minh Branch From 6 January 2015 to 30 March 2015 From 2.8 to 5.9 Inventories Joint Stock Company Bank for Foreign Trade of Vietnam Ho Chi Minh Branch From 3 January 2015 to 23 March 2015 From 2.8 to 5.9 Unsecured 16. TRADE PAYABLES Ending balance Beginning balance Southeast Asia Commercial Joint Stock Bank From 11 March 2015 to 29 March ,5 Unsecured Due to third parties Due to a related party Petrolimex Group Commercial Joint Stock Bank Ho Chi Minh Branch 70,000,000,000 From 27 February 2015 to 9 March Inventories TOTAL CTBC Bank Company Limtied Ho Chi Minh Branch 63,000,000,000 From 10 January 2015 to 30 January 2015 From 5.2 to 5.5 Unsecured 17. STATUTORY OBLIGATIONS Shinhan Bank Vietnam Limited Ho Chi Minh Branch Military Commercial Joint Stock Bank Ho Chi Minh Branch 60,000,000,000 20,393,013,713 From 10 January 2015 to 30 From 25 January 2015 to 28 February 2015 From 5 to Unsecured Inventories Corporate income tax (Note 25.2) Valueadded tax Others Ending balance Beginning balance Ho Chi Minh City Housing Development Commercial Joint Stock Bank Ho Chi Minh Branch 15,900,000, January Inventories TOTAL Vietnam Prosperity Joint Stock Commercial Bank Ho Chi Minh Brach 15,385,000, February Inventories TOTAL

60 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December OTHER PAYABLES Details of the longterm loans with floating rate from the commercial banks to finance the Group s working capital requirements are as follows: Trade union fees Social and health insurance Others TOTAL 19. LONGTERM LOANS Loans from banks Ending balance Ending balance Beginning balance Beginning balance Banks Dong A Commercial Joint Stock Bank Head Office Ending balance Maturity date 29 April 2016 Interest % p.a. 6 Collateral Land use right of land lot located at 577 Nguyen Kiem, Ward 9, Phu Nhuan District, Ho Chi Minh City; house located at 52A 52B Nguyen Van TroiStreet, Ward 15, Phu Nhuan District, Ho Chi Minh City and building and structures located at Le Thanh Ton Street, Ben Thanh Ward, District 1, Ho Chi Minh City In which: Current portion (Note 15) Noncurrent portion Asia Commercial Joint Stock Bank Main Transaction Office April December ,5 Land use right of land lot located at 1618 Thu Khoa Huan street, District 1, Ho Chi Minh CityLand use right of land lot located at 2 Duong Quang Ham street, Binh Thanh District, Ho Chi Minh City TOTAL

61 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December OWNERS EQUITY 20.1 MOVEMENTS IN OWNERS EQUITY 20.2 CAPITAL TRANSACTIONS WITH OWNERS AND DISTRIBUTION OF DIVIDENDS Current year Previous year Undistributed earnings Total ( ) 20.3 SHARES ORDINARY SHARES Investment and development fund Financial reserve fund Share capital Share premium Treasury shares ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) Contributed share capital Beginning balance Increasein year Ending balance Dividends paid Dividends declared ( ) ( ) ( ) ( ) Shares authorised to be issued Shares issued and fully paid Ordinary shares Treasury shares Ordinary shares Shares in circulation Ordinary shares Ending balance Number of shares (709) Beginning balance Number of shares EARNINGS PER SHARE The following table shows the income and share data used in the basic and diluted earnings per share calculations: Net profit attributable to ordinary equity holders of the Company Weighted average number of ordinary shares during the year for basic earnings per share Current year (709) Previous year Previous year Beginning balance Capital increase Net profit for the year Dividends paid Profit appropriation Transfer to bonus and welfare fund Ending balance Current year Beginning balance Net profit for the year Dividendspaid Profit appropriation Transfer to bonus and welfare fund Ending balance Basic and diluted earnings per share There have been no dilutive potential ordinary shares during the year and up to the date of these consolidated financial statements

62 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December REVENUE 21.1 REVENUE FROM SALE OF GOODS AND RENDERING OF SERVICES Gross revenue Of which: Sale of gold, silver and jewelry Sale of oil, gasoline Rendering of services Sale of accessories Sale of investment properties Less: Sales return Valueadded tax applying direct method Of which: Sale of gold, silver and jewelry Sale of oil, gasoline Rendering of services Sale of accessories Sale of investment properties Current year ( ) ( ) ( ) ( ) ( ) ( ) Net revenue Previous year COSTS OF GOODS SOLD AND SERVICES RENDERED Cost of gold, silver and gemstone Cost of oil, gasoline Cost of accessories Cost of rendering of services Cost of investment properties TOTAL FINANCE EXPENSES Interest expense Loss from disposal of its investment Loss from disposal a subsidiary Realised foreign exchange losses (Reversal provision) provision for investments Others Current year Current year 79,682,197,799 6,772,956,000 1,667,321, ,406,647 (490,724,600) 1,658,496,601 Previous year Previous year 83,525,727, ,688, ,265,314 TOTAL FINANCE INCOME Current year Previous year 24. PRODUCTION AND OPERATING COSTS Current year Previous year Interest income Dividends earned Foreign exchange gains Others Raw materials Labour costs Depreciation and amortization Expenses for external services Others TOTAL TOTAL

63 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December CORPORATE INCOME TAX The Group has the obligation to pay corporate income tax ("CIT") at the rate of 22% of taxable profits. A reconciliation between the profit before tax and taxable profit is presented below: The tax returns filed by the Group are subject to examination by the tax authorities. As the application of tax laws and regulations is susceptible to varying interpretations, the amounts reported in the consolidated financial statements could change at a later date upon final determination by the tax authorities CIT EXPENSE Current CIT expense Adjustment for under accrual of tax from prior years Current year TOTAL Previous year Profit before tax Adjustments: Disposal of a subsidiary Amortised goodwill Nondeductible expenses Change in accrued expenses (Reversal of provision)provision for investments Unrealised foreign exchange losses Dividends earned Share of losses (profits) of associates Current year ( ) ( ) ( ) Previous year ( ) Estimated current taxable profit CURRENT CIT The current tax payable is based on taxable profit for the current year. The taxable profit of the Group for the year differs from the profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted at balance sheet date. Estimated current CIT Increase from acquisition of a subsidiary Decrease due to disposal of a subsidiary Adjustment for under accrual of CIT from prior years CIT payable at beginning of year CIT paid during the year ( ) ( ) ( ) CIT payable at end of year DEFERRED CIT The following are the deferred tax assets and liabilities recognized by the Group, and the movements thereon, during the current and prior reporting year Consolidated balance sheet Consolidated income statement Ending balance Beginning balance Current year Previous year Accrued expenses

64 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December TRANSACTIONS WITH RELATED PARTIES Significant transactions with related parties during the year were as follows: Related parties Dong A Joint Stock Commercial Bank Dong A Land Joint Stock Company Remuneration to members of the Board of Directors, the Board of Supervision and Management: 27. OPERATING LEASE COMMITMENTS The Group leases shopsand outlets under operating lease arrangements.the minimum lease commitment as at 31 December 2014 under the operating lease agreement is as follows: Within 1 year From 1 to 5 years Over 5 years TOTAL 28. SEGMENT INFORMATION Relationship Related party Associate Current year Ending balance Nature of transaction Dividends received Services rendered Previous year Salaries and bonus Amount 7,699,250,000 5,313,662,665 Beginning balance The primary segment reporting format is determined to be business segments as the Group s risks and rates of return are affected predominantly by differences in the products and services produced. The operating businesses are organized and managed consolidated according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The Group is principally engaged in trading gold, silver, jewelry, accessories and gemstone; provision of jewelry inspection service, investment property, oil, and gasoline. Transfer prices between business segments are set on an arm s length basis in a manner similar to transactions with third parties. Segment revenue, segment expense and segment results include transfers between business segments. Those transfers are eliminated in preparation of consolidated financial statements. The Group operates in one geographical segment which is Vietnam. The following tables present revenue and profit and certain assets and liabilities information regarding the Group s business segment. Jewellery inspectionservices Others Elimination Total Gold, silver and gemstone Accessories Oil, gasoline For the year ended 31 December 2014: Revenue Sale to external customers Sale deduction ( ) Total revenue Results ( ( ) ( ) ( ) Segment gross profit Unallocated expenses Finance income Finance expenses Other profit Net profit before CIT CIT expense ( ) ( ) ( ) ( ) Net profit for the year ( ) Assets and liabilities Segment assets Unallocated assets Total assets ( ) Segment liabilities Unallocated liabilities Total liabilities

65 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 Investment property Elimination Total Jewellery inspection services Gold, silver and gemstone Accessories Gasoline For the year ended 31 December 2013: ( ) ( ) ( ) Revenue Sale to external customers Sale deduction Total revenue ( ) Total revenue Results ( ) ( ) ( ) ( ) Segment gross profit Unallocated expenses Finance income Finance expenses Other profit Net profit before CIT CIT expense Net profit for the year ( ) Assets and liabilities Segment assets Unallocated assets Total assets ( ) Total assets Segment liabilities Unallocated liabilities Total liabilities 29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Group s principal financial liabilities comprise loans, trade and other payables. The main purpose of these financial liabilities is to finance the Group s operations. The Group has trade and other receivables, cash, cash equivalents and shortterm deposits that arise directly from its operations. The Group does not hold or issue any derivative financial instruments. The Group is exposed to market risk, credit risk and liquidity risk. Management reviews and agrees policies for managing each of these risks which are summarized below. MARKET RISK Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans, depositsand availableforsale investments. The sensitivity analyses in the following sections relate to the position as at 31 December 2014and 31December2013. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group s exposure to market risk for changes in interest rate relates primarily to the Group s loans, deposits with floating interest rates. The Group manages its interest rate risk by keeping close watch on relevant market situation, in order to contemplate and adapt its leverage level as well as financing strategies to the prevailing situation. Interest rate sensitivity The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans. With all other variables held constant, the Company s profit before tax is affected through the impact on floating rate borrowings as follows: Current year Previous year Increase/decrease in basis points Effect on profit before tax ( ) ( )

66 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 MARKET RISK Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group s exposure to the risk of changes in foreign exchange rates relates primarily to the Group s operating activities. The Group does not employ any derivative financial instruments to hedge its foreign currency exposure. No analysis on foreign currency sensitivity was performed for the year ended 31 December 2014 since the Group s exposure to foreign currency changes for all other currencies is not material. Equity price risk The Group s listed and unlisted equity securities are susceptible to market price risk arising from uncertainty about future values of the investment securities. The Group manages equity price risk by placing a limit on equity investments. The Board of Directors reviews and approves all equity investment decisions. As at 31 December 2014, the exposure to listed and unlisted equity securities at fair value was 450,342,875, ,651,988,400 (31 December 2013: 503,151,908,400513,447,908,400). A decrease of 10% in the value of the listed and unlisted securities could have an impact of approximately 45,034,287,50046,065,198,840(31 December 2013: 50,315,190,84051,344,790,840) on the Group s profit before tax, depending on whether or not the decline is significant or prolonged. An increase of 10% in the value of the listed and unlisted securities would increase Group s profit before tax by 45,034,287,500 46,065,198,840(31 December 2013: 50,315,190,84051,344,790,840). Commodity price risk The Group exposes to commodity price risk in relation to purchase of certain commodities. The Group manages its commodity prices risk by keeping close watch on relevant information and situation of commodity market in order to properly manage timing of purchases, production plans and inventories level. The Group does not employ any derivative financial instruments to hedge its commodity price risk. Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its financing activities, including deposits with banks. Trade receivables Customer credit risk is managed by the Group based on its established policy, procedures and control. The Group s exposure to credit risk in relation with receivables is mainly influenced by the individual characteristics of each customer. The Group mostly has cash sale which are not exposured to the credit risk. Bank deposits The Group's bank balances are mainly maintained with wellknown banks in Vietnam. Credit risk from balances with banks is managed in accordance with the Group s policy. The Group s maximum exposure to credit risk for the components of the consolidated balance sheet at each reporting dates are the carrying amounts as illustrated in Note 4. The Group evaluates the concentration of credit risk in respect to bank deposit as low. Liquidity risk The liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligation due to shortage of funds. The Group s exposure to liquidity risk arises primarily from mismatches of maturities of financial assets and liabilities. The Group monitors its liquidity risk by maintaining a level of cash, cash equivalents and bank loans deemed adequate by management to finance the Group s operations and to mitigate the effects of fluctuations in cash flows. The table below summarizes the maturity profile of the Group s financial liabilities based on contractual undiscounted payments: Ending balance Loans Trade payables Other payables, and accrued expenses TOTAL Beginning balance Loans Trade payables Other payables, and accrued expenses TOTAL Less than 1 year From 2 to 5 years Total COLLATERAL The Group has pledged its inventories, fixed assets and DAB s shares in order to fulfil the collateral requirements for loans obtained from commercial banks (Notes 15 and 19). The Group did not hold any collateral at 31 December 2014and 31 December

67 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December FINANCIAL ASSETS AND FINANCIAL LIABILITIES Set out below is a comparison by class of the carrying amounts and fair value of the Group s financial instruments that are carried in the consolidated financial statements. Fair value Carrying amount Ending balance Beginning balance Ending balance Beginning balance Cost Provision Cost Provision ( ) ( ) ( ) ( ) Financial assets Other longterm investments Trade receivables Other receivables Cash and cash equivalents ( ) ( ) TOTAL Carrying amount Financial liabilities Loans Trade payables Payables to related parties Other payables, and accrued expense Ending balance Beginning balance Ending balance Beginning balance TOTAL

68 ANNUAL REPORT PNJ 2014 FINANCIAL STATEMENTS 2014 PNJ DISTRIBUTION NETWORK NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2014 The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The fair values of the financial assets and liabilities had not yet been formally assessed and determined as at 31 December 2014 and 31 December However, management assessed that the fair values of these financial assets and liabilities were not materially different from their carrying value as at balance sheet date. 31. EVENTS AFTER THE BALANCE SHEET DATE There have been no significant events occurring after the balance sheet date which would require adjustments or disclosures to be made in the consolidated financial statements. Duong Quang Hai Dang Thi Lai Cao Thi Ngoc Dung Preparer Chief Accountant General Director 30 March 2015 HO CHI MINH CITY DISTRICT 1: PNJ JEWELRY CENTER, 174 Le Thanh Ton Vincom Dong Khoi (Level 1) Parkson Saigon Tourist, 35Bis 45 Le Thanh Ton PNJ JEWELRY CENTER, 292 Hai Ba Trung PNJSilver Store, 21 Tran Quang Khai Nowzone, Ground Floor, 235 Nguyen Van Cu Co.opmart Cong Quynh, 189C Cong Quynh PHU NHUAN DISTRICT: PNJ JEWELRY CENTER, 52A 52B Nguyen Van Troi PNJ JEWELRY CENTER, 159 Phan Dang Luu PNJSilver Store, 338 Phan Dinh Phung Co.opmart Nguyen Kiem, 571 Nguyen Kiem Big C Hoang Van Thu, 202B Hoang Van Thu Co.opmart Rach Mieu DISTRICT 2: Parkson Cantavil, Hanoi Highway, An Phu Ward DISTRICT 3: PNJ JEWELRY CENTER, 666 Nguyen Dinh Chieu PNJSilver Store, 305 Nguyen Dinh Chieu PNJ JEWELRY CENTER, 132 Cach Mang Thang Tam Co.opmart Nguyen Dinh Chieu, 168 Nguyen Dinh Chieu DISTRICT 5: PNJ JEWELRY CENTER, 7 An Duong Vuong Parkson Hung Vuong, 126 Hung Vuong DISTRICT 6: PNJ JEWELRY CENTER, 255A 255B Hau Giang DISTRICT 7: Lotte Mart, 469 Nguyen Huu Tho DISTRICT 8: Coopmart Tuy Ly Vuong, 4054, Tuy Ly Vuong DISTRICT 9: Coopmart Hanoi Highway, 191 Quang Trung DISTRICT 10: Maximark 3/2, 33C, 3rd of February street Coopmart Ly Thuong Kiet, 497 Hoa Hao PNJSilver Store, 127 3rd of February street PNJSilver Store, 477 Nguyen Tri Phuong Big C Mien Dong, 268 To Hien Thanh DISTRICT 11: PNJ JEWELRY CENTER, 71 Ong Ich Khiem PNJSilver Store, 140 Ong Ich Khiem Parkson Flemington, 184 Le Dai Hanh Co.opmart Phu Tho, Phu Tho Lu Gia Apartments DISTRICT 12: Coopmart Nguyen Anh Thu, 167/2, Nguyen Anh Thu TAN BINH DISTRICT: PNJ JEWELRY CENTER, 300 Hoang Van Thu PNJ JEWELRY CENTER, 510 Ly Thuong Kiet PNJ JEWELRY CENTER, 230B Le Van Sy PNJSilver Store, 139 Cach Mang Thang Tam PNJSilver Store, 459 Truong Chinh Parkson C & T Tan Son Nhat, 60A Truong Son Maximark Cong Hoa, 1517 Cong Hoa Tan Son Nhat International Airport, International Terminal TAN PHU DISTRICT: PNJ JEWELRY CENTER, 237 Nguyen Son BigC Phu Thanh, 53 Nguyen Son BigC Pandora, 1/1 Truong Chinh AEON shopping center, 30 Bo Bao Tan Thang GO VAP DISTRICT: PNJ JEWELRY CENTER, 362A Nguyen Van Nghi PNJ JEWELRY CENTER, 21/3 Quang Trung PNJ JEWELRY CENTER, 403 Thong Nhat Big C Go Vap, Co.opmart Phan Van Tri, 543/1 Phan Van Tri Co.opmart Quang Trung, 304 Quang Trung BINH THANH DISTRICT: PNJ JEWELRY CENTER, 127A Dinh Tien Hoang PNJ JEWELRY CENTER, 60 Xo Viet Nghe Tinh PNJSilver Store, 76 No Trang Long PNJSilver Store, 131 Hoang Hoa Tham PNJSilver Store, 201 Xo Viet Nghe Tinh PNJSilver Store, 732 Xo Viet Nghe Tinh BINH TAN DISTRICT: Big C An Lac, 1231 National Highway 1A Coopmart Binh Tan, 158 No.19 Street, Binh Tri Dong B THU DUC DISTRICT: PNJ JEWELRY CENTER, 141 Vo Van Ngan CoopXtra, National Highway 1A, Linh Trung Ward Vincom Thu Duc, 216 Vo Van Ngan HOC MON DISTRICT: PNJ JEWELRY CENTER, 143/6 Nguyen Anh Thu CU CHI DISTRICT: Coopmart Cu Chi, 357 Highway

69 ANNUAL REPORT PNJ 2014 PNJ DISTRIBUTION NETWORK DISTRIBUTION SYSTEM MAP OF PNJ HA NOI AND NORTHERN REGION HAI BA TRUNG DISTRICT: PNJ JEWELRY CENTER, 6A Tran Nhan Tong; Vincom, 191 Ba Trieu PNJSilver Store, 548 Bach Mai PNJSilver Store, 26 Tran Dai Nghia CAU GIAY DISTRICT: PNJ JEWELRY CENTER, 334 Cau Giay PNJSilver Store, 256 Cau Giay Big C in Hanoi, 222 Tran Duy Hung DONG DA DISTRICT: PNJ JEWELRY CENTER, 129 Chua Boc PNJSilver Store, 136 Ton Duc Thang PNJSilver Store, 5B10 Pham Ngoc Thach BA DINH DISTRICT: PNJSilver Store, 30 Doi Can PNJSilver Store, 263 Kim Ma HA DONG DISTRICT: Coopmart Ha Dong PNJSilver Store, 87A Quang Trung DISTRICT LONG BIEN : PNJSilver Store, 345 Ngoc Lam Big C Savico, 79 Nguyen Van Linh PNJSilver Store, 383 Ngo Gia Tu THANH XUAN DISTRICT: Vincom Royal, 172 Nguyen Trai HAI PHONG: 18A Lach Tray, Hai Phong Parkson Thuy Duong Plaza BigC Hai Phong, Floor 1, Le Hong Phong VINH CITY: BigC Vinh, 2 Quang Trung VINH PHUC: PNJSilver Store, 80A Le Xoay NAM DINH: BigC Nam Dinh THANH HOA: BigC Thanh Hoa QUANG NINH: Vincom Ha Long HAI DUONG: Big C shopping center HA TINH: Co.op Mart Ha Tinh CENTRAL REGION HUE: PNJ JEWELRY CENTER, 10 Hung Vuong Co.opmart Hue, 06 Tran Hung Dao, Phu Hoa Ward Big C Hue, 181 Ba Trieu PNJSilver Store, 10 Hung Vuong DANANG: PNJ JEWELRY CENTER, 7072 Tran Phu PNJ JEWELRY CENTER, 123 Hung Vuong PNJ JEWELRY CENTER, 359 Phan Chu Trinh PNJSilver Store, 77 Phan Chu Trinh Big C Danang, 225 Hung Vuong HOI AN: PNJ JEWELRY CENTER, 633 Hai Ba Trung QUANG NGAI: PNJ JEWELRY CENTER, 36 Hung Vuong Co.opmart Quang Ngai QUY NHON: Tran Hung Dao Big C Quy Nhon, Co.opmart Quy Nhon NHA TRANG: PNJ JEWELRY CENTER, 19A Quang Trung Co.opmart Nha Trang, Maximark Nha Trang SOUTH EASTERN REGION PHAN THIET: Coopmart Phan Thiet, 01 Nguyen Tat Thanh BINH PHUOC: Coopmart Binh Phuoc BIEN HOA: PNJ JEWELRY CENTER, 97 30th of April Street PNJ JEWELRY CENTER, 482 Pham Van Thuan PNJSilver Store, 105 National Highway 1A BigC Bien Hoa, Long Binh Tan Ward BINH DUONG: PNJ JEWELRY CENTER, 3A Hung Vuong AEON Binh Duong, Coopmart Binh Duong, BigC Di An BA RIA: Co.opmart Ba Ria, Nguyen Huu Tho VUNG TAU: PNJ JEWELRY CENTER, 380 Le Hong Phong Coopmart Vung Tau, 36 Nguyen Thai Hoc TAY NINH: Coopmart Tay Ninh Coopmart Trang Bang PNJ JEWELRY CENTER, 877 Cach Mang Thang Tam LONG AN: Coopmart Long An, An TP.Tan PNJ JEWELRY CENTER, 51 Truong Dinh, Tan An City SOUTH WESTERN REGION TIEN GIANG: Coopmart My Tho PNJ JEWELRY CENTER, 188 Ap Bac My Tho BEN TRE: Co.opmart Ben Tre CAN THO CITY: PNJ JEWELRY CENTER, 46 Ngo Quyen Sense Can Tho City, 01 Hoa Binh Highway PNJSilver Store, 114 Hai Ba Trung PNJSilver Store, 88A Mau Than TRA VINH: Co.opmart Tra Vinh DONG THAP: Co.opmart Cao Lanh PNJ JEWELRY CENTER, 86 Nguyen Hue, Cao Lanh City AN GIANG: PNJ JEWELRY CENTER, 63 Hai Ba Trung Coopmart Long Xuyen, 12 Nguyen Hue SOC TRANG: Coopmart Soc Trang BAC LIEU: Co.opmart Bac Lieu KIEN GIANG: Co.opmart Kien Giang PNJ JEWELRY CENTER, 38 Hoang Hoa Tham VINH LONG: PNJ JEWELRY CENTER, 1F Hoang Thai Hieu Coopmart Vinh Long LONG XUYEN: Co.opmart Long Xuyen CA MAU: Coopmart Ca Mau PNJ JEWELRY CENTER, 4A Hung Vuong TAY NGUYEN REGION GIA LAI: PNJ JEWELRY CENTER, 14 Hoang Van Thu, Pleiku city Coopmart Pleiku BUON MA THUOT: PNJ JEWELRY CENTER, C1C2 Dien Bien Phu Coopmart Buon Ma Thuoc LAM DONG: PNJ JEWELRY CENTER, 08 Hoa Binh area, Da Lat Coopmart Bao Loc, Water Tower, Tran Phu street, Bao Loc BigC Da Lat, Ho Tung Mau By the end of 2014, the retail system has had 169 stores, including 78 gold jewelry stores (gold only jewelry stores and mixed stores), 83 silver jewelry stores and 8 Cao Fine Jewellery stores. Besides, PNJ also has nearly 3,000 wholesale customers nationwide, PNJ jewelry has been exported to the US, Canada, Denmark, Germany, Australia, Japan