Phuong Nam Cultural Joint Stock Corporation Prospectus Contents I

Transcription

Phuong Nam Cultural Joint Stock Corporation
Prospectus
Contents
Risk elements ................................................................................................................ 1
1. Economic risks .............................................................................................................
2. Risks of law....................................................................................................................
3. Industry risks ...............................................................................................................
4. Risks of offers.............................................................................................................. 3
5. Dilution risks .................................................................................................................
6. Other risks................................................................................................................... 4
II. Responsibible people of the prospectus ....................................................................... 4
1. Issuing company ......................................................................................................... 4
2. Consulting company ................................................................................................... 4
III. Denifitions and abbreviations . .................................................................................... 5
IV. Characteristics of issuing company ...............................................................................
1. Establishment and development................................................................................. 5
1.1 Establishment................................................................................................................
1.2 Introduction of the Company .................................................................................... 6
2. Organizational structure ..............................................................................................
3. Organization and management .................................................................................12
4. List of shareholders (name, address) who hold at least 5% of the Company’s
shareholding capital; list of founders and their shares ...................................................13
5. List of parent company and subsidiaries ..................................................................13
6. Business operation .....................................................................................................18
6.1. Quantity, product, service value in recent years..............................................18
6.2. Raw materials ...................................................................................................21
6.3. Production cost .................................................................................................23
6.4. Technological level ...........................................................................................24
6.5. Research and development for new products ..................................................25
6.6. Product and service quality control ................................................................25
6.7. Marketing..........................................................................................................26
6.8. Brands and patents ...........................................................................................27
6.9. Main contracts which are being implemented or agreed ...............................28
7. Business operation results in recent two years .........................................................28
7.1
Summary of business ratios for manufacturing and operation of the
Company in recent two years (2006-2007) and the first six months of 2008 ..............28
7.2
Factors that influence the Company’s business in the reported year .............29
8. Position of the Company in comparison to othercompetitors in the industry ........31
8.1
Position of the Company in the industry .........................................................31
8.2
The industry’s development prospects.............................................................33
8.3
Assessment of the Company development orientation’s comformity with the
industry’s orientation, government policy and international general tendency .......36
9. Employment policies ....................................................................................................
9.1. Numbers of employees .....................................................................................37
9.2
Compensation policy ........................................................................................38
9.3
Employment policy. ..........................................................................................38
9.4
Recruitment and training policy .....................................................................39
10. Dividend policy .............................................................................................................
11. Financial operations ..................................................................................................39
I.
Prospectus
11.1.
Basic accounts ..................................................................................................39
11.1.1 Fixed asset depreciation....................................................................................40
11.1.2 Average income ................................................................................................40
11.1.3 Due debt settlement...........................................................................................40
11.1.4 Accounts payable by law...................................................................................40
11.1.5 Funds establishment .........................................................................................40
11.1.6 Balance of notes payable...................................................................................41
11.1.7 Accounts receivable...........................................................................................41
11.1.8 Accounts payable ..............................................................................................42
11.1.9 Equity ................................................................................................................43
11.2.
Explanation of the discrepancy between the beginning balance of the first 9
month financial report of 2008 and the ending balance of financial report of 2007 .....43
11.2.1 Cash ...................................................................................................................43
11.2.2 Short-term accounts receivable ..........................................................................
11.2.3 Other short-term asset .......................................................................................
11.2.3 Long-term accounts receivable ........................................................................44
11.2.4 Other long-term asset ......................................................................................45
11.3 Basic financial ratios ............................................................................................45
12. Board of Directors, Board of Supervisors, Board of General Directors ....................
12.1 Members of Board of Directors............................................................................45
12.1.1 Ms. Phan Thi Le - Chairman of Board of Directors and General Director...45
12.1.2. Mr. Nguyen Huu Hoat – Vice Chairman of Board of Directors and Deputy
General Director...............................................................................................................46
12.1.3. Mr. Nguyen Quang Vinh – Member of Board of Directors ...........................47
12.1.4. Ms. Tran Thi Mai - Member of Board of Directors ........................................48
12.1.5. Mr. Nguyen Ngoc Bich - Member of Board of Directors.................................49
12.1.6. Mr. Pham Uyen Nguyen - Member of Board of Directors ..............................50
12.1.7 Mr. Vo Ngoc Thanh - Member of Board of Directors .....................................52
12.2 Members of Board of Supervisors...........................................................................
12.2.1. Mr. Vo Viet Hoa – Chief of Board of Supervisors ..........................................53
12.2.2. Mr. Cao Danh Ha - Member of Board of Supervisors. ...................................54
12.2.3. Ms. Dang Kim Lan............................................................................................55
12.3 Board of General Directors .....................................................................................
12.3.1. Ms. Phan Thi Le - General Director ................................................................56
12.3.2. Mr. Nguyen Huu Hoat – Deputy General Director ........................................56
12.4 Chief Accountant .....................................................................................................
13. Fixed asset. .................................................................................................................57
14. Projected profit and dividend....................................................................................58
14.1 Strategic plan .......................................................................................................58
14.2. Investment projects approved by the 9th shareholders’s meeting of the Company
on March 22nd, 2008 ........................................................................................................58
Investment projects in 2008 .............................................................................................58
14.3.
General comments ............................................................................................59
Prospectus
14.4.
Execution plan...................................................................................................60
PNC’s business strategy for the period of 2008 - 2010.......................................................
15. Consulting organization’s assessment of plan for profit and dividend ....................62
16. Information about the Company’s agreements which have not been implemented...
17. Information about disputes and lawsuits related to the Company may affect the
share prices..........................................................................................................................
V. Stock offer.......................................................................................................................
1. Kind of stock
Common stock ................................................................................64
2. Par value VND 10,000.00 ......................................................................................64
3. Total shares for public offer – 2,000,000 shares........................................................64
4. Offering price: equal par value (VND 10,000/share).................................................64
5. Method for distributing stock ......................................................................................
6. Time frame for distributing stock ...............................................................................
7. How to register to buy stock ......................................................................................64
8. Stock holding limit for foreign investors ......................................................................
9. Limitations regarding stock transference ...................................................................
10. Related taxes .................................................................................................................
10.1 For the Company ....................................................................................................
10.2 For investors ............................................................................................................
11. Bank account for stock selling .....................................................................................
VI. Purpose of stock offer.....................................................................................................
1. Purpose of stock offer ...................................................................................................
2. Feasible project .............................................................................................................
VII. Plan for using receivable from stock selling .................................................................
VIII. Related Partners ..........................................................................................................75
1. Offering company ......................................................................................................75
2. Auditing company.........................................................................................................
3. Consulting company .....................................................................................................
IX. Appendix......................................................................................................................75
1. Appendix 1: Copy of Business Registration Certificate...............................................
2. Appendix 2: Copy of the Company’s rules and regulations .....................................75
3. Appendix 3: Audited reports for fiscal year 2006 - 2007 and the third quarter of
2008...................................................................................................................................75
4. Appendix 4: Biographies of members of Board of Directors, Board of General
Directors, Board of Supervisors, Chief Accountant ..........................................................
5. Appendix 5: Solutions for investment projects .........................................................76
Prospectus
CONTENT
I.
Risk elements
1.
Economic risks
Economic growth and average income per capita affect the demand of consuming
cultural products such as books, films, CDs. If the economy is in the stagnant or
recessional period, the consumers’ buying behaviors will concentrate on those which
are neccessary for life such as food, clothing, shelter and will not focus on
entertainment, education, travelling, etc. Therefore, revenue and profit of those
companies in cultural field like Phuong Nam will be decrease, resulting in affecting
their share price.
Nowadays, the world’s economy is not stable and affects Vietnam economy’s
development and its businesses’ financial performance as well. The slow growth rate
of the world’s economy, the recession of the largest economy of the world – America,
and the fluctuation of crude oil and gasoline have much affected the economy of
Asian countries and Vietnam as well.
Although Vietnam economy has grown at stably high level (8.4%, 8.17% and 8.4% in
2005, 2006 and 2007, respectively) and is expected to increase from 6.5% to 7.5% in
2008-2010 period, it has signaled to grow slower than expected. High inflation, high
interest rate due to tight monetary policy, fluctuating exchange rate between Vietnam
currency and others (especially U.S. Dollar), and increasing input price of material
(especially the price of paper material and print cost are highly increasing) have
influenced companies’s business operations and people’s income. Consumer
spending for cultural products, entertainment and education is decreasing, which
affects operations of companies in the industry of cultural products such as Phuong
Nam Cultural Corporation.
2.
Risk of law
As a state-owned company transfered to a joint stock company having shares listed in
the Hochiminh Stock Exchange, Phuong Nam Culture Corporation’s operation is
influenced by legal documents of stock, stock exchange and regulations on listed
companies. Laws and under-law documents of this field are on the process of
improvement. Changes in policy are possible and at that time more or less will affect
the company’s administration and business operation. Moreover, the legal frame
adjusting the business of cultural products is still inadequate, therefore, changes in the
government policy is a possibility and then it will affect the Company’s business
operation.
Vietnam has joined WTO, Vietnam-US trade agreement, AFTA, etc. In the
international economic integrated tendency, Vietnam economy’s business activities
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Prospectus
must comply with international strict rules, especially in publishing industry.
According to the commitment road-map, the Vietnamese Government must release
the tariff barrier gradually, until 2011 for the retail industry. This will create many
difficulties for enterprises currently protected by the State. And there is no exception
to the cultural products industry. The coming time, with the progress of tariff barrier
abolishment, office supplies group of low price from neighbour countries such as
China, Thailand, etc. will landed to Vietnam and then, the competition in domestic
market will be more fierce. However, PCN is a dynamic company, not under the
State’s protectionism and has prepared for integration in advance. The company has
set up development orientation towards market-share and scope of business
expansion, competitiveness improvement, tight co-operation with foreign partners.
PNC products are genuine, high quality, trusted by consumers. Therefore, the
abolishment of tariff barriers in the coming period will not considerably affect the
company’s business activities.
3.
Industry risks
3.1
Financial risk
According to audited financial reports, up to December 31st, 2007, the balance
of payables was over VND 63 billion, making up a significant density of the
Company asset structure (29%). This is internal payables (with the Company
office and branches). If the payment of these credits is not reasonable, it will
cause shortage of business captial source of subordinate divisions which effects
business operation of the Company.
Howerver, during last years, payment of debts of partners who gave the
Company loans was performed well and investment plans were implemented
reasonably, which minimizes financial risks.
3.2
Copyright risk
At present, the prevention of stealing copyight, photocopy, reproduction, illegal
use of audio, video products and released publication cannot be performed
thoroughly. If this matter happens to products of Phuong Nam Coporation
(which has copyright of publication and release) will cause remakable
influences on business operation of the Company because market potentiality of
the Company will be exploited and used illegally. This will effect badly on
turnover and profit of the Company.
Moreover, when Vietnam has joined in international economic organizations
(AFTA, WTO....), the competion for buying copyright will be more severe
because of the participation of foreign companies in Vietnamese market. Illegal
reproduction and use of the Company’s products will significantly influence
business effect in buying copyright of domestic and foreign cultural items.
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4.
Prospectus
Risk of offers
Nowadays, many companies choose the form of issuing more shares to call for
capital. This is the form of issue in which strong points of healthy and effective
companies will be shown obviously through buying issued shares to the public.
However, stock market now has been influenced by many factors which do not
belong to the business field of the Company such as the health of economy, investor’s
psychology, buying and selling moves of foreign investors, the changes of State’s
management policy,etc. Therefore, the Company’s stock offer probably faces several
following risks:
4.1
Risk of each offer for sale:
This stock issue has risk if shares cannot not be sold out all. The number of
shares which remains after selling to employees and key investors will be
handled as follows: Board of Directors will continue to offer for sale to other
buyers at reasonable price to maintain the highest benefit to the Company, and
ask for approval of State Securities Commission of Vietnam for extending time
of issue if neccessary. With prospect and feasibility of investment projects, the
ability to attract the interest of investors to the Company’s stock is very large
which ensures the success of the stock issue.
In case shares cannot be bought all, the received amount is not enough to
finance the projects as expected, Phuong Nam Coporation will use loan capital
from the bank to supplement for the projects. Moreover, the implementation of
project consists of many stages, so the Company can find other supplementary
financial source to ensure enough capital for any business plan arisen.
4.2
Risk of projects using amount received from the stock offers:
Investment projects using capital from stock sales are highly feasible (They all
are to expand the existing bookshops, improving operation competence of the
Company). However, during the process of investing to build the projects, the
Company can face several objective difficulties such as change of economy,
increasing inflation causing high investment cost, and increasing interest rate
influencing the supplementation of investment capital and the progress of
project implementation.
5.
Dilution risks
At present, the number of outstanding shares of the Company is 6,500,000 shares, the
number of shares after this issue is 8,500,000. That means the number of additionally
issued shares is 2,000,000. Due to the increase of shares, earnings per share will be
diluted right after additional issue. The issue will be ended on March 27 th, 2009 and
the Company will receive the amount of capital from this issue and finish the
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Prospectus
additional listing of these shares. Up to this time, charter capital of the Company is
increased, therefore, earnings per share will be diluted as follows:
Items
1
2
3
6.
Descriptions
Net profit (VND)
2008 (planned)
16,624,000,000
Number of stocks at beginning of 2008, including 3,240
treasury stocks
Number of stocks issued to employees and key investors in
2008
6,496,760
2,000,000
4
Time weighted average number of shares (in 2008)
6,589,911
5
Income per share before issuing to employees and key
investors (VND/stock)(=1/2)
2,559
6
Adjusted income per share (VND/stock)(=1/4)
2,523
Other risks
Fire: Most of the Company’s products are flammable, therefore, there is always a
potential risk of fire. If the Company does not comply with stipulations of fire
fighting and prevention, it can cause serious damages to assets and business result of
the Company. However, the Company has bought insurance for its assets and
material facilities against fire in order to minimize this risk.
Other risks such as natural calamities and enemy-inflited destruction, etc. are force
majeure risks which, if being existed, will cause great damages to assets, people and
general business of the Company.
II. Responsibible people of the prospectus
1.
Issuing company
Ms. Phan Thi Le
Chairman of Board of Directors and General Director
Mr. Vo Viet Hoa
Chief of Board of Supervisors.
Mr. La Thai Hiep
Chief Accountant.
We guarantee that the information and numbers in this Prospectus are close to the real
situation of the Company, or reasonably inspected and collected.
2.
Consulting company
Bao Viet Securities Company
Mr. Nguyễn Quang Vinh
CEO
This prospectus is an integral part of public offering documents which was prepared
by Bao Viet Securities Company based on the consulting contract with Phuong Nam
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Prospectus
Joint Stock Cultural Corporation. We guarantee that the analysis, evaluation and
language use of this Prospectus were conducted reasonably and carefully based on the
information and numbers provided by Phuong Nam Cultural Joint Stock Corporation.
III. Denifitions and abbreviations
Company:
Issuing company:
Board of Directors:
Board of Directors
CEO:
Chief Executive Officer
PNC:
Abbreviated Phuong Nam Cultural Corporation
Stock:
Stock of Phuong Nam Cultural Corporation
PNF
Abbreviated Phuong Nam Film Co., Ltd
PNB
Abbreviated Phuong Nam Book Co., Ltd
PNP
Abbreviated Phuong Nam Print Co., Ltd
PNSC
Abbreviated Phuong Nam Stationary Co., Ltd
PNBC
Abbreviated Phuong Nam Brand Joint Stock Company
IV. Characteristics of issuing company
1. Establishment and development
1.1 Establishment
On February 22nd, 1982, District 11’s People’s Committee issued Decision No.
119/ QĐ-TC to establish District 11’s Cultural and General Service Company
under control of District 11’s Cultural Information Board. The Company
functioned in manufacturing and trading cultural products, opening and managing
cinemas, theatres, bookstores, photograph stores, art decor stores, etc.
On July 10th, 1989, Ho Chi Minh City’s People’s Committee issued Decision No.
403/QĐ-UB regarding transfering District 11’s Cultural and General Service
Company under control of District 11’s People’s Committee instead of District
11’s Cultural Information Board. The Company became a state company.
At the end of 1990, the Company established Phuong Nam Print Enterprise.
On February 02 nd, 1992, the Company established Phuong Nam Film Enterprise.
On April 12th, 1993, Chairman of Ho Chi Minh City’s People’s Committee issued
Decision No. 170/QĐ-UB to ebtablish District 11’s General Culture Company
under control of Ho Chi Minh City’s People’s Committee.
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Prospectus
In 1999, District 11’s General Culture Company was privatized according to
Decision No. 4430/QĐ-UB dated August 05th, 1999 by Ho Chi Minh City’s
People’s Committee to change the operation method of a state company to a
privatized company which named Phuong Nam Cultural Product Manufacturing
and Trading Joint Stock Company. The charter capital at that time was VND 15
billion in which the state owned 35%.
In March 2004, the Company issued additional stock to increase its capital by
VND 5 billion, resulting in VND 20 billion of charter capital. In the same year,
annual meeting of shareholders approved to change the name of the Company to
Phuong Nam Cultural Joint Stock Corporation (abbreviated Phuong Nam Cultural
Corporation) according to the 10th revised business registration document and the
first time re-registered business license no. 4103002356 issued by Department of
Planning and Investment of Ho Chi Minh City dated May 31 st, 2004.
The Company registered to list its name on Ho Chi Minh Securities Trading
Center (now Ho Chi Minh Stock Exchange) and the first transaction date was July
11th, 2005.
In August 2005, the Company issued additional 1,000,000 shares to call for more
capital to invest in the project to establish Megastar Media Joint Venture
Company, increasing its charter capital to VND 30 billion.
In December 2006, the Company issued addtional 1,000,000 shares, increasing its
charter capital to VND 40 billion.
In November 2007, the Company issued addtional 2,500,000 shares, increasing
its charter capital to VND 65 billion.
1.2 Introduction of the Company
Name of Company:
Abbreviation:
PNC
Logo:
Headoffice:
940 3/2 Street, Ward 15, District 11, Ho Chi Minh City
Tel:
(84-8) 8663447 - 8663448
Fax:
(84-8) 8663449
Email:
[email protected]
Website:
www.phuongnamvh.com
Charter capital:
VND 65,000,000,000 (Sixty billion Vietnam dong)
Register Document:
Decision No. 4430/QĐ-UB-KT dated 05/08/1999 of
The People Commitee of Ho Chi Minh City regarding
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Prospectus
transforming state company named General Culture
Company – District 11 to Phuong Nam Culture Joint
Stock Corporation
Business License:
No. 4103002356 issued by Department of Planning and
Investment of Ho Chi Minh City dated December 08,
2007.
Business Categories:
 Doing business relating to supermarkets, consumer goods, books, magazines,
audios and videos, photograph and print products, toys for kids;
 Manufacturing and trading cinematography’s products such as movies,
advertising movies, audio and video products; and providing services relating
to cinematography;
 Printing cultural products (e.g. books, magazines), stationary, labels,
packaging, documents used in business;
 Providing services relating to cultural information field such as photograph,
sound, music instruments, advertising design, typing and photocopying
documents;
 Importing and exporting materials, final products and machines relating to the
operation of the Company;
 Manufacturing educational products;
 Providing services relating to fixing, maintaining machines and tools that the
Company are selling, providing vehicle parking service;
 Holding fashion shows, professional music shows;
 Leasing space, office, factory;
 Manufacturing and trading audio and video products which include music,
movie, Vietnamese traditional opera, etc.;
 Providing service of writers copyright protection;
 Opening and managing food stores (not at the headoffice);
 Opening and managing cinemas;
 Providing advertising services.
2. Organizational structure
Conducting growth strategy for the period of 2008 and 2010, Phuong Nam Cultural
Corporation has improved its organizational structure more suitable and dynamic in
order to increase company’s operation effectiveness.
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Prospectus
The Company has the following structure:
-
One main office with functional departments.
-
Retail section includes one purchasing center which was established by the
merger of related units which were supplying merchandises to Phuong Nam
bookstores chain. They were General Sales Department, Book Supplies Division
which belonged to Book and Copyright Center, Disc Purchasing Division which
belonged to Phuong Nam Film and Foreign Book Division. Retail section also
includes distribution system which is the network of nationwide bookstores which
are the Company’s branches.
-
The section of the Company’s subsidiaries includes five member companies
completely owned by Phuong Nam Cultural Corporation.
The Company’s organizational structure is as follows: (next page)
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Prospectus
Company Organization
Meetings of shareholders
Board of Directors
Board of
Supervisors
General Directors
Human Resource
Administration
Purchasing
Center
Warehouse &
Transportation
PNB
HCMC Branch
Can Tho
Branch
PNP
Finance & Accounting
IT
Planning
General
Category
Hue Branch
Da Nang
Branch
PNF
Audios &
Videos
Nha Trang
Branch
Ha Noi
Branch
PNSC
National Books
PNBC
Marketing
Foreign Books
Investment
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Phuong Nam Cultural Corporation
Prospectus
 Company headoffice
The Company’s headoffice includes offices of Board of Directors and functional
departments such as Human Resource Department, Administration Department,
Finance & Accounting Department, IT Department, Planning Department, Marketing
Department and Investment Department.
Address:
Tel:
(84-8) 8663447 - 8663448.
 Purchasing Center
Purchasing Center is functioning to maintain supplies for the whole retail system of
the Company, including Warehouse & Transportation Department, General Category,
Audios & Videos, National Books and Foreign Books. The purpose of Purchasing
Center is to help supply merchandises more effective.
 Branches
Company has six branches which have independent accounting and bookkeeping. The
head of branches is Branch Directors. Branches have subordinate divisions including
bookstores, marketing divisions, human resource, administration and accounting. The
functions of branches as follows:
 Develop and manage retail stores, distributors and wholesalers in the assigned
regions.
 Sell directly to organizational customers such as libraries, schools, offices,
companies in the assigned regions.
 Supply merchandises to customers.
 Handle accounts receivable and payment collection arose at the branches.
 Implement after sale services such as taking care customers and solving
complaints from customers who are agents, wholesalers, organization customers
and retailers.
Distribution network of Company is expanding to nationwide provinces and cities.
Company has about 20 large scale bookstores and science organizations which are
located in big cities such as Ho Chi Minh City, Ha Noi, Da Nam, Hoi An, Phan Thiet,
Can Tho, etc.
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Prospectus
Bookstores of Phuong Nam Cultural Corporation (Names and addresses)
Region
Bookstore’s Name
Ha Noi
Fax
S1, S2, S3 KP Sky Garden 1, 08.3 410 2474
Ward Nguyen Van Linh, 08.3 410 2475
District 7
08.3 410 2475
Phu Tho
940 3/2 Street, Ward 15, 08.3 864 4444
District 11
08.3 866 3449
Dai The Gioi
105 Tran Hung Dao B, 08.3 857 0407
District 5
08.3 853 6090
08.3 853 6090
Nguyen Thai Son
86A Nguyen Thai Son, Ward 08.3 894 3246
3, Go Vap District
08.3 985 0287
08.3 985 0287
03 Nguyen Oanh, Ward 10,
Go Vap District
Bookstore
08.3 989 6664
Office
08.3 989 6660
Book Café
08.3 989 6659
Le Duan
2A Le Duan, Ward Ben 08.3 822 9650
Nghe, District 1
08.3 823 4542
08.3 823 4542
Ha Noi highway
191 Quang Trung, District 9 08.3 730 7558
(CoopMart)
08.3 730 9143
08.3 730 9143
Nguyen Kiem
571 Nguyen Kiem, Ward 9, 08.3 997 2476
Phu
Nhuan
District 08.3 997 1434
(CoopMart)
08.3 997 1434
Le Loi
1st Floor - Saigon Centre, 65 08.3 821 7131
Le Loi, Ward Ben Thanh, 08.3 915 1475
District 1
08.3 915 1475
Cong Hoa
15-17 Cong Hoa, Ward 4, 08.3 844 9820
District Tan Binh
08.3 811 2319
Hung Vuong
3rd Floor – Parkson Trade 08.2 222 0224
Center, 126 Hung Vuong, 08.2 222 0225
District 5
08.2 222 0225
Le Thanh Ton
Binh
Duong
Tel
Phu My Hung
Nguyen Oanh
Ho Chi
Minh
City
Address
3rd Floor – Parkson Trade
Center, 35-45 Le Thanh Ton,
Dictrict 1
Binh Duong Bookstore
1st Floor, Minh Sang Trade 0650.3 769 598
Center, BD Boulevard, Thuan
An District, Binh Duong
0650.3 769 599
Bookstore and Branch
10B Tang Bat Ho, Ward 04.3 972 4834
Pham Dinh Ho, Hai Ba Trung
District, Ha Noi
04.3 972 4867
In Ha Noi
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Region
Prospectus
Bookstore’s Name
Bookstore and Branch
Hai
Phong
In Hai Phong
Hue
Phu Xuan Bookstore –
Hue Branch
Da Nang
Hue Bookstore and
Branch
Address
Tel
Fax
3rd Floor, Thuy Duong Plaza, 031. 3722 306
Nga 5 Cat Bi Airport, Ward
Dong Khue, Ngo Quyen
District, Hai Phong
131-133 Tran Hung Dao, Hue 054.3 522 000
054.3 522 002
054.3 522 001
68 Phan Chu Trinh, Da Nang
0511.3 821 470
0511.3 817 037
0511.3 817 017
Hoi An
Hoi An Bookstore – Hoi 6 Nguyen Thi Minh Khai, TX
0510.3 916 272
An Branch
Hoi An, Quang Nam
0510.3 916 271
Binh
Thuan
Binh Thuan Bookstore
and Branch
062.3 817 701
70 Nguyen Hue, Ward Duc
Nghia, Phan Thiết
Can Tho Bookstore and
6 Hoa Binh, Tp.Can Tho
Branch
Can Tho
062.3 817 070
0710.3 813 436 071.3 813 437
Nha Trang Bookstore and 17 Thai Nguyen, Ward Phuoc 058. 3 563 415
Tan, Nha Trang City
Branch
Nha
Trang

058.3 819 958
Subsidiaries
Subsidiaries are established from former subordinate divisions of the Company.
Detail will be presented in section 5 below.
3. Organization and management
 General Meeting of Shareholders: General Meeting of Shareholders is the Company's
highest authoritative body and all shareholders who have voting right can participate in
the meeting. Annual General Meeting of Shareholders is hold once a year.
 Board of Directors: is the body managing the company and shall have full authority to
make decisions in the name of the company and to exercise the rights and discharge the
obligations of the company which do not fall within the authority of the General
Meeting of Shareholders. At present, Board of Directors has seven members including
one Chairman, one Vice Chairman and five Members.
 Board of Supervisors: the body directly under and elected by the General Meeting of
Shareholders. Board of Supervisors is responsible for verifying validity and legality in
managing company business operations and financial reports. Board of Supervisors is
independent from Board of Directors and General Director’s management apparatus. At
present, Board of Supervisors has three members including one Chief of Board of
Supervisors and two Members.
 Board of General Directors: led by General Director who speaks as a company legal
representative, manage daily business operations of the company and take
Page 12
Prospectus
responsibility in front of Board of Directors for executing given rights and obligations.
General Director directly conducts consultation departments in the headquarter of the
company. Deputy General Director is responsible for assisting General Director.
 Departments: The Company has seven functional departments as follows:
 Human Resource Department
 Administration Department
 Finance & Accounting Department
 IT Department
 Planning Department
 Marketing Department
 Investment Department
4. List of holders (name and address) who hold at least 5% of the Company’s
shareholding capital of the Company; list of founders and their shares

Holders who hold more than 5% shareholding capital.
(Since September 15, 2008)
Rate
No.
Holder’s Name
Address
Shares
(%)
th
01 Indochina
Capital Saigon Finance Center, 9
1,652,100 25.42%
Vietnam
Holdings
Floor, 9 Đinh Tien Hoang,
Limited
District1, Ho Chi Minh City
02 State company holders:
Liksin Corporation
701 Kinh Duong Vuong, Q6,
HCMC
1,218,000
18.74%
03 The Caravel Fund
6 Front Street, Hamilton,
Bermuda HM-11
560,000
8.62%
04 VOF Investment Ltd
1703, Sun Wah Building,
115 Nguyen Hue, District 1,
Ho Chi Minh City
517,014
7.95%
Total
3,947,114 60.72%
5. List of parent company and subsidiaries

Company holding controlling interest
Company’s Name
Indochina
Capital
Vietnam Holdings
Address
Saigon Finance Center,
9th Floor, 9 Đinh Tien
Hoang, District 1, Ho
Chi Minh City
(Since September 15th, 2008)
Shares
Amount
Rate
(1,000
(%)
VND)
1,652,100 16,521,000 25.42%
Page 13

Prospectus
Subsidiaries:
 Phuong Nam Print Co., Ltd. (PNP).
Establishment date: March 11th, 2008 (the former Phuong Nam Print Enterprise
established since 1992)
Official name:
Phuong Nam Print Co., Ltd.
Business name:
Phuong Nam Print Company (Abbreviated PNP)
Headoffice:
160/12 - 160/14 Doi Cung, Ward 9, District 11, Ho Chi Minh
City.
Logo:
Charter capital:
VND 14,000,000,000 (Fourteen billion VND)
o Printing on package (exclusive of products made of fibre, weave, sewing,
knitting in factory).
o Binding book cover and back, gold- plate, dye book cover.
o Designing templates.
o Providing commercial advertisements.
o Merchandising in printing raw materials, machinery and equipment.
o Acting as books and newspapers agency.
o Producing and merchandising in educational items.
o Besides the printing function, PNP also associates with internal and external
partners of PNC system in order to trade and develop products like calendar,
greeting card and handbook.
Major customers: General Taxation Department, Vietnam’s State Treasury,
Baoviet Holdings, Prudential Corporation, big banks and publishers.
 Phuong Nam Film One Member Limited Company (PNF)
Establishment date: May 31st, 2008 (the former Phuong Nam Film, established
since April 1992).
Official name:
Phuong Nam Film One Member Limited Company
Business name:
PHUONG NAM FILM COMPANY (Abbreviated PN Film)
Page 14
Headoffice:
Prospectus
Logo:
Charter capital:
VND 18,000,000,000 (Eighteen billion VND)
Established in April 1992, Phuong Nam Film is directly under Phuong Nam
Culture Joint-stock Corporation. After more than 15 years of successful operation,
Phuong Nam Film has built the prestige of a leading brandname company in
entertainment and commerce industry such as tape, disc, film, performance
organization and other entertainment services.
Phuong Nam Film’s production has won a great number of national and city
awards. The brand of Phuong Nam Film has become popular to numerous people
and classes inside and outside the country.
o Manufacturing, trading disc of which content is appoved to be published.
o Running cinemas.
o Holding events.
o Holding professional art performance.
o Providing service of commercial advertising.
o Trading electric, electronic products and music instruments.
o Providing training service.
o Running restaurants, average-level food stores (not at the office).
 Phuong Nam Book One Member Limited Company (PNB)
Establishment date: January 08th, 2008
Official name:
Phuong Nam Book Co., Ltd.
Business name:
Phương Nam Book (Abbreviated PNB)
Headoffice:
940 3/2 Street, Ward 15, District 11, HCMC
Logo:
Charter capital:
VND 10,000,000,000 (Ten billion VND)
o Publishing books and magazines of which content is appoved to be published.
o Designing.
Page 15
Prospectus
o Providing service of decorated art.
Operation field:
o Corporately publishing books and print products such as notebooks, audio
books and music books.
o General Publishing and Strategic Cooperation:
 Phuong Nam Book Company and Phuong Nam Culture Company have
signed the strategic cooperation contract with Tri Thuc Publisher to develop
further the segment of human knowledge book. Currently Phuong Nam
Book is the general publishing unit that issue books copyrighted to Tinh
Hoa Bookshelf, which is under Tri Thuc Publisher.
 Phuong Nam Book is simultaneously the general publishing unit for a great
number of crucial books of some big publishers like Young Publisher,
Writer Society Publisher, Literature Publisher, Women Publisher, and
Culture – Information Publisher.
 Maintain regular and close relationship with Asian Publishing Association
and organizers of big book festivals in the area, considered as the
preparation for integrating into publish community in the continent and all
over the world.
 Phuong Nam Stationery One Member Limited Company (PNSC)
Establishment date: 21/01/2008
Official name:
Phuong Nam Stationery Co., Ltd.
Business name:
Phuong Nam Stationery Company
Headoffice:
160/13 Doi Cung, Ward 9, District 11, Ho Chi Minh City
Logo:
Charter capital:
VND 16,000,000,000 (Sixteen billion VND)
Produce and merchandise paper, paper products, educational stationery, office
stationery (not produced in factory).
Business functions:
o Manufacturing and merchandising educational items, various kinds of
notebook, wax color pencils, pens, exam papers.
o Trading in foreign brand-name stationery: Office One.
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Prospectus
o Manufacturing, merchandising and processing paper products: calendar,
handbook, envelope, notepaper.
Outstanding events:
o Joined in series of trading promotion events organized by Sai Gon Tiep Thi
Magazine (in High Quality Vietnamese Goods Fair 2008, in the first year of
establishment, the company won the High Quality Vietnamese Goods Title.
o Became an official member of High Quality Vietnamese Goods Club.
 Phuong Nam Brand Joint Stock Company (PNBC)
Establishment date: Januray 04th, 2007
Official name:
Phuong Nam Brand Joint Stock Company
Business name:
Phuong Nam Brand Joint Stock Company
English name:
Phuong Nam Brand Corporation.
Headoffice:
6th Floor, My Thinh Building, 137 Le Quang Dinh, Ward 14,
Binh Thanh District, Ho Chi Minh City.
Logo
Charter capital:
VND 16,000,000,000 (Sixteen billion VND)
Approved by the General Meeting of Shareholders, PNC has formed joint venture
with East Media Holding Incorporation (EMHI) via Tinh Tuy Joint-Stock
Company (ELITE) in order to establish Phuong Nam Brand Joint Stock Company
(PNBC). PNBC operates in the form of joint-stock company according to
Commercial Register Certificate No. 4103005864 issued by Department of
Planning and Investment of Hochiminh City on 4th January 2007. The company’s
charter capital is VND 16 billion of which contributed VND 9,6 billion at 60%
and VND 6,4 billion by ELITE at 40%.
o Merchandising domestic products, personal and family utensils.
o Retailer of books, newspapers, journals, periodicals and magazines (with legal
content).
o Merchandising stationery, kid toys (except items which may cause bad effects
on personal education, children’s health or society order and safety)
o Merchandising tapes and discs with legal content (merchandising in office is
not allowed)
o Organizing professional art performances (operations in office are not
allowed).
Page 17
Prospectus
o Organizing conferences, seminars, fairs, exhibitions.
o Producing and publish films with legal content.
o Carrying out advertisements.
o Performing marketing Service.
o Doing market research.
(*)MEGASTAR Media Company
According to the Decision of General Meeting of Shareholders on January 17th,
2008, the Company conducts the negotiation on transfering 10% of PNC’s
contribution capital in Megastar Media Joint Venture Company to Envoy
Company. Therefore, the Company currently contributes 10% of total capital in
this joint venture company.
6. Business operation
6.1. Quantity, product, service value in recent years
6.1.1. Main service
a. Bookstores
Executive Unit: Nationwide branches of the Company.
Bookstore system has been expanded and modernly invested nationwide
in a unique style that meets consumers’ expectation following a new
business trend of self-chosen goods purchasing, which attracts consumer
attention. Bookstore system is the main business that brings the most
profit and revenue for the Company. Year 2007 has been so far the most
significant year in which growth rate has reached the highest level in retail
system. The 70% of the Company’s total turnover comes from retail sales,
which has increased by 19% compared to year 2006.
In order to satisfy increasing consumer needs, the Company will continue
to expand its goods distribution network by openning more bookstores in
various locations in 2008 and the next few years.
b. Cooperatively publishing and issue books
Including a wide range of books and newspapers, magazines, in which
the majority is literary books.
Executive Unit: Phuong Nam Book Company.
To take full advantage of business opportunity in book publishing
industry, especially as the copyright protection is going better every day,
the company has established Phuong Nam Book Company (former Book
Page 18
Prospectus
and Copyright Service Centre) in order to further promote copyright
purchasing. On the other hand, it cooperated with partners locally and
internationally to execute copyright services and strengthen
diversification of the Company’s kinds of cooperatively publishing
book.
The company’s partners cooperatively publishing and issue book are
publishers, authors, translators, professors, researchers, books and
newspapers export import companies, etc. Those books have been
received high appreciation from the public not only for their quality but
also for their content and form.
In late 2007 and mid-2008, a number of PNC’s book titles which are
cooperatively published and exclusively distributed have high sales
volume like “Duc Phat” (Buddha), “Nang Savitri va toi” (Savitri and I)
(by Ho Anh Thai), Kim Dung’s and Co Long’s books, “Toi muon biet”
(I’d like to know), economic books, and children books like “Con ca
may o trong nha” (Hey fish! Stay at home), psychology books like
“Vong tay yeu thuong” (Arms of Love).
c. Kinds of audio and video
Executive Unit: Phuong Nam Film Co., Ltd. (Phuong Nam Film)
Phuong Nam Film brand name has been known by numerous people,
which has been awarded ‘High Quality Vietnamese Goods” for many
successive years. Some highly consumed products issued by Phuong
Nam Film like Phuong Nam Cartoon Film, fairy tale films, music tapes
and discs. In 2007 and early months of 2008, although Phuong Nam
Film’s business operations were less eventful than what they were in the
previous years and there was a low growth in the number of publishing
tapes and discs, the company has been successful in organizing some
outstanding liveshows like “Roi le ru nguoi”, “Con duong tinh ta di” and
the introduction of Dang Thai Son Concert CD Set. Among those
events, the most prominent are the CD set of Dang Thai Son, the home
video classic films of Sony Picture, the CD set directly imported from
Singapore which has been successful in domestic market. At the end of
2007, PNF has also partnered with Galaxy to co-produce the film “Nu
hon Than Chet” (The kiss of the Death) which attracted a great number
of viewers. Revenue in 2007 reached the 16% growth compared to 2006
due to the increased income of copyright programs.
d. Producing and trading cultural products, office stationery, teaching
aids
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Prospectus
Executive Unit: Phuong Nam Stationery One Member Limited
Company (PNSC)
Products which are produced by the Company include Phuong Nam
notebook, handbook, globe, photo paper, note-paper, etc.
Although the brand PNSC notebook is new to the market, the Company
has built the network of agents throughout the provinces from Quang
Binh and below, especially the South-Western region by the Company’s
active and effective businesss policy, gradually increasing the market
share of PNSC products.
e. Print products include packaging, books, calendars, etc.
Executive Unit: Phuong Nam Print One Member Limited Company
(Print Factory)
With the average scale, the print factory performs the products for the
Company including books, newspapers, magazines, calendars, wrapping
paper, and printed paper products.
6.1.2. Table of some targets
Revenue, profit and percentage of each type of products and service of the
company over the years from 2006 to 2007 are listed in the table below.
Revenue in recent years
Unit: million VND
2006
Product and service
1 Supermarkets and bookstores
Revenue
Sep 30 th, 2008
2007
%
Revenue
133,650 75.10%
%
Revenue
%
53,329 71.43% 139,353 64.88%
2 Corporately publishing and
books, magazines publishing
10,744
6.04%
13,498
6.29%
18,975
8.83%
3 Audios and videos
15,743
8.85%
15,853
7.39%
19,482
9.07%
2,736
1.54%
8,236
3.84%
26,806 12.48%
15,096
8.48%
4 Stationery, educational tools
5 Print products (printed pages)
Total
177,969
23,742 11.06%
100% 214,657
10,163
4.73%
100% 214,778
100%
Profits in recent years
Unit: million VND
Product and service
2006
Revenue
1 Supermarkets and bookstores
Sep 30th, 2008
2007
%
9,151 61.48%
Revenue
%
16,023 79.86%
Revenue
%
13,675 72.44%
Page 20
Prospectus
Corporately publishing and
2 books, magazines publishing
1,913 12.85%
1,031
5.14%
1,395
7.39%
3 Audios and videos
1,759 11.82%
1,200
5.98%
1,551
8.22%
0.44%
0,027
0.13%
1,313
6.95%
1,996 13.41%
1,782
8.88%
0,944
5.00%
4 Stationery, educational tools
5 Print products
Total (*)
65
14,884
6 Other income (**)
100%
20,064
100% 18,879
2,573
2,511
8,519
7 Expense (***)
10,721
11,828
14,850
8 Pre-tax Income
6,736
10,747
12,548
100%
Source: PNC
(*): Profit = Gross profit – Selling expense
(**): Income = Income from financial activities + Other income
(***): Expense = Expense for financial activities + Administrative expense
6.2. Raw materials
6.2.1. Goods and materials source
Due to industry structure, the Company’s input list mainly comprises goods
which are distributed to retail network at branches all over the country, along
with a number of major raw materials allocating to subsidiaries’ production
process. Nearly all the goods and raw materials are purchased primarily from
domestic or foreign suppliers which are direct manufacturers, importers or
franchisees.
The Company set the criteria for evaluating and choosing suppliers for each
category of goods and materials to ensure the input source of materials fitting
quality, distribution and price, and also meeting the requirement of the
company’s operation. The evaluating criteria are adjusted yearly.
List of the Company’s suppliers of main materials:
No.
Supplier
01 Sai Gon Culture Company
Material to supply
Origin
Boxes for CDs, VCDs and
Vietnam
manufacturing process
02 Thanh Dat Service & Trading Co., Ltd.
Disc manufacturing process
Vietnam
03 Bach Viet Investment & Technology Disc manufacturing process
Vietnam
Joint Stock Company
04 Duc Viet Trading & Manufacturing Joint Disc manufacturing process
Vietnam
Stock Company
Page 21
No.
Supplier
Prospectus
Material to supply
Origin
05 Performing Art Derpartment
Stamp
Vietnam
06 Cinema Department
Stamp
Vietnam
07 Truong Minh Service & Trading Co., Blank CDs
Vietnam
Ltd.
08 L & C Service & Trading Co., Ltd.
Boxes for CDs, VCDs
Vietnam
09 Vu Tuyet Mai-Chien Thang Co., Ltd.
Disc covers
Vietnam
10 Ho Chi Minh City TV
Disc covers, book covers
Vietnam
11 Khai Hoan Trading Co., Ltd.
Print ink
Vietnam
12 Loi Lien Hung Service & Trading Co., Paper
Vietnam
Ltd.
13 Thinh Phat Paper Manufacturer
Paper
Vietnam
14 Bich Linh Store
Chemical
Vietnam
15 Tin Nhan Co., Ltd.
Paper
Vietnam
16 Minh Viet Long Co., Ltd.
Paper
Vietnam
17 SEIL PS Co., Ltd. - Vietnam
Chemical
Vietnam
18 Dy Khang Co., Ltd.
Print ink
Vietnam
19 Viet Mai Chemical Co., Ltd.
Print ink
Vietnam
20 Binh Tay Import Export Joint Stock Casio calculators
Vietnam
Company
21 Ha Nam Anh Trading Co., Ltd.
Souvenirs, gifts
Vietnam
22 Vinh Tien Paper Joint Stock Company
Vinh Tien notebooks
Vietnam
23 Ben Nghe Service & Trading Co. Ltd.
Ben Nghe stationery
Vietnam
24 Hanson Service & Trading Co. Ltd.
Hanson stationery
Vietnam
25 Ho Chi Minh Books and School Tools for education
Equipment Joint Stock Company
Vietnam
26 My Son Import Export & Manufacturing General products
& Trading Co., Ltd.
Vietnam
27 World of Toys Joint Stock Company
General products
Vietnam
28 Thien Long Hoan Cau Service & General products
Vietnam
Trading Co., Ltd.
29 Kien Luc Service & Trading Co., Ltd.
General products
30 Culture Development and Import Export Books
Company
Vietnam
Vietnam
Page 22
No.
Prospectus
Material to supply
Supplier
31 Hanoi Books Co., Ltd.
Origin
Books
Vietnam
32 FAHASA Ho Chi Minh City Book Books
Distribution Corporation
Vietnam
33 Ho Chi Minh Books and School Books
Equipment Joint Stock Company
Vietnam
34 Tre Publishing House Co., Ltd.
Books
Vietnam
35 Nha Nam Culture and Communication Books
Joint Stock Company – HCM Branch
Vietnam
36 McGraw-Hill Education
English books
U.S.A.
37 Random House Publishing, Inc
English books
U.K.
38 Grantham Book Services
English books
U.K.
39 Harpercollins Publishers
English books
U.K.
40 Shanghai Book & Magazine Company
Chinese books
China
Source: PNC
6.2.2. The stability of goods and materials supplying sources
The suppliers’ ability is also evaluated by the Company based on their
operation scale, financial potential, production capacity, etc. Based on
selecting the suitable supplier, the Company has signed the yearly-based
contract which leads to high stability of supply.
6.2.3. The impact of raw materials’ price on sales and profits
Raw materials are planned and signed with the suppliers annually. Thus, if
there is any suddenly increasing or decreasing change in the price of the
market’s raw materials, the Company’s sales and profits will not be
influenced much.
6.3. Production cost
The Company’s production cost standing at an average level of the industry is well
competitive with other competitors. Besides, the Company continuously implements
innovative methods in managing and using materials reasonably so as to cut the price
and promote competition of its products and service. The performance of the
company’s production cost and outputs over the years is shown in the following table.
Quantity and production cost
Unit: million VND
No.
Product and
service
2006
Quantity
Production
Cost
2007
Quantity
Production
Cost
Sep 30th, 2008
Quantity
Production
Cost
Page 23
Supermarkets and
bookstores
Corporately
publishing
and
2
books, magazines
publishing
1
3 Audios and videos
4
Stationery,
educational tools
5 Print products
Prospectus
-
-
-
-
-
-
516,306
(copies)
4,930
335,058
5,758
288,923
5,147
795,298
12,274
801,076
11,541
2,058,815
(items)
2,849
(billion
pages)
4,807 4,533,614
9,413
2,710
786,484 14,910
9,409 8.547,620 20,461
20,570
1,337
7,164
Source: PNC
6.4. Technological level
6.4.1. Computerizing managing system
Since the Company’s major operation is retail business and it has a broad
retailer network throughout the country, a variety of goods and a large
number of merchandises sold, the Company decided to use computer
software in managing the whole system at the very beginning.
The applying managing software system is the ERP system which thoroughly
manages all phases including goods purchasing, warehouse management,
financial accounting and selling. This system oversees every transactions
arising in the whole PNC system.
Systematic structure is a 3-tiers one which allows managing a large database
with efficiency, good stability and security level, together with no restriction
on deploy position under Oracle technology. The system is operated through
WAN network system directly connecting stores, branches to the central
office by using Virtual Private Network (VPN) with high security and
reasonable cost.
Thanks to the 100% computerization level by using the most recent advanced
technology, the system’s operation efficiency is increasingly upgraded, which
greatly apply to competitive situation in such digitalized era.
6.4.2 Producing audio and CD program
Technology: Basically, the Company is fairly average at producing audio and
CD program compared to other countries in the area.
The Company has equipped with a nonlinear film-making system called
MATROX which is a digital film-making technology offering tape and disc
product with high-quality sound and picture as international standard.
Page 24
Prospectus
The Company uses Digital Camcorder Camera SONY DSR-570WSL –
digital filming technology.
Domesticized level of technology: 95%( software, art-relating content).
Computerized level in managing business: 95%
Investing rate on research and development: 15% sales
Environmental safety: the production system does not cause harmful effects
on the environment.
Supporting service: the service of supporting and dealing with client’s
complaint is implemented at the Company’s nationwide bookstores,
branches, and official agencies.
6.4.3. Printing
Technology: As a whole, it is at relatively average level in comparison with
other companies in the same industry, with the ability of printing the paper
size varied from 30x40cm to 79x109cm. The Company has equipped with
eight KOMORI printers (Japanese product), in which two four-color printers
have printing speed of 10,000 pieces per hour, can yearly print more than 300
book titles and many kinds of packaging with the volume of about 3 billion
pages.
Domesticized level of technology: 50% (software, art-relating content).
Computerized level in managing business: 95%
Investing rate on research and development: 15% sales
Environmental safety: the production system has applied standards to protect
environment.
6.5. Research and development for new product
Due to the specific characteristics of the industry, PNC’s research and development
for new product is conducted at subordinate divisions and subsidiaries. Different
divisions dealing with different business will undertake the research and
development of its new product.
The research and development of new product primarily depends on market’s
demand of variety, content, quality, model, etc. Market research is conducted by
Marketing Department, Research and Development Department of the Company’s
subsidiaries or by outside consulting company. The Company’s Board of Directors
will decide to put into practice new products based on the result of market research
and feasible projects of subsidiaries. Phuong Nam Culture Corporation yearly
launches out new products such as hundreds of book titles, audio and video
products, various models of notebooks, handbooks, greeting cards, etc.
6.6. Product and service quality control
Page 25
Prospectus
6.6.1. Current quality control system
The Company’s products conform to the basic standard (company’s standard)
which is announced according to regulations set by Ho Chi Minh City
Agency of Standard for Measuring Quality.
For retail system, the Company has set quality standards for retail sales
service of Phuong Nam bookstores and applied them since midyear of 2004.
The Company is under preparation for establishing quality management
system according to ISO 9001:2000.
6.6.2. Company’s quality control division
At each of the Company’s production units, there is a quality control
division operating according to the announced standards so as to minimize
technical fault products circulating in the market.
6.7. Marketing
6.7.1. Popularizing the brand name
Realizing the importance of brand name and copyright, the Company has
established and popularized its brand name nationwide. The Company’s
operating principle is “Product and service go together with Vietnamese
cultural values”. The brand of Phuong Nam Culture Corporation – or PNC
brand - has become a prestigious brand name in Vietnamese market.
PNC brand name was honored to receive “Vietnamese Yellow Star” prize
given by Central Committee of Vietnam Young Entrepreneur Association to
record the Company’s achievement in continuously improving
competitiveness of product and brand name. In addition, Ho Chi Minh City
People’s Committee awarded traditional flag to the Company for active
contribution in building and developing the city. Moreover, the Company’s
products were voted for the title of High Quality Vietnamese Goods. PNC
brand name is on its way to affirm the position as the leading business in
cultural industry.
6.7.2. Price strategy
The Company products’ price setting is based on suitability level of
products to the demand of target customer group and price competitiveness
level in the market.
The Company carries out a nationwide united price level for retail sales of
all products including those which are not produced by the Company.
6.7.3. Marketing at bookstores
Page 26
Prospectus
The Company always concentrates on improving customer service and
frequently update customers’ responses in order to programme and
standardize the quality of products in a way that matches customers’ needs
and tastes. These efforts have been done continuously for the aim of PNC’s
service improvement and the Company’s identification features.
The Company periodicly conducts long-term and short-term promotion in a
variety of ways to attract consumers.
6.7.4. Trade promotion activities
Taking part in many exhibitions and book fairs such as the Vietnamese
High-Quality Goods Fair, Ho Chi Minh City Book Fair, industry-specialized
fair held in areas that the Company has branches and stores located.
Organizing products exhibitions, conferences and new products press
conferences.
Organizing exchanges, talk shows introducing authors and their works to
promote books.
Taking part in some charities and humanitarian activites to contribute in the
community and society.
6.8. Brands and patents
6.8.1. Logo of the Company
6.8.2. Logo of Phuong Nam Film
Disc products are using logo of Phuong Nam Film.
6.8.3. Logo of Phuong Nam Cartoon
Cartoon disc is using this logo as its brand.
6.8.4. Logo of Phuong Nam Print (*)
Page 27
Prospectus
6.8.5. Logo of Phuong Nam Book (*)
6.8.6. Logo of Phuong Nam Stationery (*)
(*): The Company is in the process of registering the above logos at
Department Intellectual Property, Ministry of Science and Industry.
6.9. Main contracts which are being implemented or agreed
Contract Name
Contract
Amount
Term
Product
Partner
Contract of notebook supply 1,347,500,000 June 2008
Notebook Daknong
(PNSC) Books
&
School
Equipment
Company
Contract of notebook supply 1,394,505,035 June 2008
Notebook COOP - Mart
(PNSC) supermarket
chain
Contract of notebook supply 4,838,645,435
Notebook Soc
Trang
(PNSC) Books
&
School
Equipment
Company
Contract of book supply
August
2008
2,082,744,874 September
2008
Book
Room to Read
Organization,
Vietnam
Source: PNC
7.
Business operation results in recent two years
7.1 Summary of business ratios for manufacturing and operation of the Company
in recent two years (2006-2007) and the first six months of 2008
Unit: VND
Page 28
No.
Ratio
Prospectus
2006
The first 9
% increase
months of 2008
2007/2006
(united)
2007
1 Total asset
163,774,958,975 218,036,898,436 421,065,108,737
33.13%
2 Net revenue
177,968,872,609 214,657,172,459 212,523,533,776
20.62%
3 Operating profit
5,636,690,696
9,626,252,816
10,908,952,577
70.78%
4 Other profit
1,099,723,591
1,120,937,052
1,638,983,452
1.93%
5 Pre-tax profit
6,736,414,287
10,747,189,868
12,547,936,029
59.54%
6 After-tax profit
5,978,333,846
9,356,752,181
9,418,186,569
56.51%
70.25%
76.42%
-
8.77%
12%
11%
-
7
Profit for paying
dividend
8 Dividend rate
Source: PNC & Audited financial reports of year 2006, 2007 and interim report of
the first 9 months of 2008
Notes:
 Income from financial activities in 2007 includes profit from Tien Phong Joint
Venture (VND 771,892,104), interest income from banks, and dividend from
Long An Books and School Equiment Joint Stock Company, etc.
 Projected income tax for 2007 was at 28% but the Company has taken
advantage of changing the listing period at Ho Chi Minh Securities Trading
Center to 2006-2007 period instead of 2005-2006 period, resulting in reducing
income tax rate for 2007 to 14%.
 Other income: from rental activities, from selling fully depreciated assets, from
holding events which have sponsors, etc.
7.2 Factors that influence the company’s business in the reported year
The Company has showed a significant growth in the year 2007 compared to 2006.
The 2007 PNC’s net revenue was VND 214.7 billion, 20.6% higher than 2006’s.
Operating profit of the year 2007 were VND 9.6 billion, increasing by 70.78% in
comparison with 2006’s. The Company achieved a pre-tax profit of VND 10.7
billion in 2007, rising 59.54% compared to 2006’s. Also, the Company attained an
amount of VND 9.3 billion after-tax profit, increasing by 56.51% against 2006’s.
That Vietnam’s economy developed well in 2007 had a good influence on the
operation of the Company. However, in the first 3 quarters of 2008, the country’s
economy suffers the world’s recession; therefore, the Company has been impacted
by the below factors.
7.2.1. Advantages
Page 29

Prospectus
In recent years, Vietnam has been a hot destination of foreign investors.
Vietnam has not only a well-grown economy but also a stable politics
which is an advantage of the country over others. The economic
activities of our country have a firm basis to develop and opportunities
to integrate to the world’s economy more easily. In several industries,
especially the area of publishing, printing and releasing, economy’s
health may impact the development of that field through people’s
income. Last year, Vietnam’s economy, in general, achieved an 8.5% in
growth; and Ho Chi Minh City, in particular, attained a growth of 12%.
Improved people’s income has made an increase in spending on
cultural-educational activities and buying power in cultural, educational
and entertaining publications.

The Government’s policy of socializing culture has relaxed the
economic environment. Therefore, there are more opportunities for
cooperation with private companies, and foreign investors; also,
privatizing companies dealing in culture helps reduce difficulties from
government’s controlling structure, diversify the activities in the
industry and give the company chances of acquiring modern
technology.

Phuong Nam Join Stock Corporation was listed on the Ho Chi Minh
City Securities Trading Center; for that reason, information about the
company has been well spread in the public via channels of the stock
market. Consequently, PNC has gained its prestige, achieved in
branding and became more attractive to investors than other
competitors. PNC’s audio CDs, VCDs, DVDs and books have obtained
prestige and one of the superior positions on the market. The brand
PNC now is more popular, thus the Company improves its capital
mobilization and business performances.

PNC’s management system and managing workforce’s quality have
been more and more professional and effective.

PNC has been focused on bringing new blood into the human resource
with employees who are qualified, dynamic, enthusiastic, and
determined to enhance work’s quality and effectiveness.

PNC also has been concentrated on improving bookstores’ service
quality to become the favorite place of customers.
7.2.2. Difficulties

Vietnam’s speed of economic growth in 2007 was rather high than the
others in ASEAN, however, that the national inflation rate also rose to
Page 30
Prospectus
12% affects people’s life and purchasing power. Particularly, in the first
9 months of 2008, the speed of growth showed a decrease in
comparison with that of previous years. In addition, influenced by the
world’s recession and the rise of gasoline price, the remaining high rate
of inflation has caused difficulties to people’s life.

There are more and more competitors from different economic
components in the industry including foreign companies. (pressure on
competion for human resource, business location, price, etc.)

The Goverment remains its monopoly in some areas of newspaper and
books import, cultural products, publishing, etc., thus, some PNC’s
business fields still have restrictions which hinder the company to
promote maximum ability.

Intellectual property right in music discs and tapes, newspapers and
books has not been absolutely protected by the Government. Piracy,
which is more and more sophisticated, has been impacting PNC’s
revenue, earnings and effectiveness.

With a rapid development in recent years, although the quality of staff
improved, it hasn’t been adequate for widening production and taking
oppotunities in business. In addition, PNC has some difficulties in
recruiting proficient management staff due to the harsh competition on
the labor market which also causes fluctuation in the company’s
workforce.

Price of some basic materials and fuel such as gasoline, electricity,
water, and paper changing sharply has greatly influenced on production
price and operating cost.

Under the Govermental policy of macroeconomics, bank’s loan interest
climbed and capital for new projects of PNC was not mobilized in time.
As a result, projects’ duration prolonged and effectiveness of new plans
have suffered.
8.
Position of the Company in comparison to other competitors in the industry
8.1 Position of the Company in the industry
8.1.1. Competitor
The policy of socializing cultural-educational activities of Vietnam has
brought opportunities for all economic components to deal in the business
of cultural product. This type of products is showing a continuous increase
in quantity, genres and also, the number of businesses is becoming greater.
Consequently, the competition is getting blazer, especially in retail area due
Page 31
Prospectus
to the rising appearances of new cultural products supermarkets or
bookstores. In addition, today businesses in the industry attach special
importance to branding, improving products and services as well as making
flexible business method and marketing plans. Not only intensifying
performance in big cities, competiors are actively spreading distribution
networks, and bringing goods to urban areas in remote provinces.
Bookstore section (retailing cultural products)
This market has been a hot crowded area due to the appearance of several
bookstores in recent years. In Ho Chi Minh City, there are kinds of
bookstores:

Bookstore chain of State owned companies such as Fahasa (14stores),
Vietnam Book Corporation, etc.

Bookstore chain of private companies such as Thanh Nghia Book
Private Enterprise, Phuong Nam bookstore system of Phuong Nam
Cultural Joint Stock Corporation, Van Lang Private Enterprise, Thanh
Long, Cadasa, Thoi Dai, Minh Nguyet, etc.

Futhermore, there is a range of 600 to 1000 medium and small
bookshops scattering all over the country.

Thanks to the development of the Internet, bookstores has now been
online, such as www.vinabook.com, www.nhasachkienthuc.com,
www.saharavn.com, etc.
The biggest competitors of PNC are Ho Chi Minh City Book Distribution
Corporation (Fahasa Corp), Thanh Nghia Book Private Enterprise (Nguyen
Van Cu Bookstore Chain). Other small competitors are Minh Thanh
Company, Nhan Van Cultural Services Corp, etc.
Cooperatively publishing and issue book
Main competitors are Ho Chi Minh City Book Distribution Corporation
(Fahasa Corp), Tre Publishing
Communication Corp, etc.
House,
Nha
Nam
Culture
and
Producing and trading stationery
Today, there are many big stationery manufacturers such as Vinh Tien Joint
Stock Company, Thien Long Group Corporation, Tien Phat, Hoa Binh, Tan
Thuan Tien, etc. Main products of these businesses are notebooks and
stationery for students
Music production and release (Discs and Tapes), Shows and art
exhibitions organizing
Page 32
Prospectus
Competitors are well-positioned businesses such as Tre Production, Kim Loi
Studio, Rang Dong Entertainment Inc., Viet Tan Studio.
Printing
Direct competitors are businesses having large scale production and
operating for years such as Tran Phu, Liksin, Finance Printing, ITAXA, etc.
Furthermore, some printing houses and small private printing enterprises are
also competing with PNC.
8.1.2. The position of PNC in the industry
In the field of music production, PNC’s brand and products has dominated
considerable position. Music discs and tapes of PNC are very well-known in
the country and overseas for high quality.
In the field of publishing and releasing, PNC’s book brand has showed an
image of high prestige, and high quality products. The Company has an
equivalent operating scale to a medium publishing house in Vietnam, and a
high competitiveness on the market.
In the field of printing, PNC’s brand and products has showed the same
position as it has in publishing and releasing.
In book and stationery retail, PNC’s bookstore and branch system has a
nationwide operating scale with nearly 20 stores and supermarkets having
high quality and customer service.
All in all, with a diversified ability in business and a nationwide distribution
network, Phuong Nam Cultural Corporation is one of the leaders in
manufacturing and trading cultural products. Considerable competitors
having wide range of operating and business are Fahasa, Thanh Nghia Book
Private Enterprise, etc.
In addition, PNC has gained its reputation by cooperating with foreign
publishers in publishing in releasing and distributing book. In 2007, the
company has been awarded with the title “Recognition of Asian’s most
creative book seller” by MacMilan Publishing Corp.
8.2 The industry’s development prospect
The Government’s policy of sociolizing cultural and educational activities has
encouraged many enterprises, organizations and individuals to join in cutural
business, generating an eventful, diversified and consumer-stimulated market.
The increasing numbers of tourists and oversea Vietnameses coming to Vietnam
also contribute to the increase of demand for cultural products, especially books,
journals and souvenirs.
Page 33
Prospectus
Our economic growth rate is currently high and stable, leading to the improved
income of all walks of life, making people more and more interested in spiritual
needs, especially the need for education, knowledge enrichment, entertainment, etc.
so the market demand for cutural products is higher and higher. Therefore, more
and more domestic and imported products are brought out for consumption,
especially in urban ereas.
The increasing numbers of students followed by the increasing spiritual need,
together with the youth’s trend of seeking for unheard-of things also make the
market of cultural products more ebullient. Enterprises have been trying their best
in order to meet the youth’s need.
The market growth can be imagined by the following table :
No.
Criteria
Unit
2004 2005
2006 -2007
Increase
Rate (%)
1
Population
Person 82,032,300 85,195,000
3.86%
2
Number of secondary schools
School
26,817
27,593
2.89%
3
Number of
teachers
secondary school’s
Person
771,000
789,600
2.41%
4
Number of
students
secondary school’s
Person 17,122,600 16,256,600
-0.05%
5
Number of college and university
teachers
Person
47,613
53,364
13.15%
6
Number of college and university
students
Person
1,319,754
1,666,239
26.25%
7
Number of foreign tourists
Person
2,905,900
4,230,000
45.57%
8
Average income per capita
USD
553
722
30.56%
Source: Statistics Department
Besides the above factors, the Government also has some specified targets and
development orientations for the industry of cultural products. The development
planning target of the Publishing, Printing and Book Publishing industry of
Vietnam until 2010:
 The Publishing, Printing and Book publishing industry of Vietnam will delevop
in the direction of being independent, self-controlled, advanced and nationally
characterized. Publications will be diversified in genres and contents, in line
with the country’s industrialization and modernization, satisfying people’s
increasing demand for publications. Disseminating Vietnam’s typical products
to the world as well as acquiring mankind cutural quintessence to introduce to
the home country.
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Prospectus
 Maintaining the annual average growth rate of book titles at 15-20%, printed
pages at 10-15%. Until 2005 the numbers of books per capita will be four
copies per year, 485 billion standard printed pages, publication export turnover
is targeted to increase one and a half time compared to the year of 2000. Until
2010 the numbers of books per capita will be six copies per year, 785 billion
standard printed pages, publication export turnover is targeted to increase twice
compared to the year 2005.
 The Publishing, Printing and Book Publishing industry of Vietnam strive to
reach the average-good ranking in Asia.
The Government management task in publishing is also reformed in accordance
with the industry’s development level, illustrated by promulgating the Publishing
Law.
With the industry and Government’s targets and development orientations, the
general condition of the business our company participated in has changed
positively in recent years.
8.2.1. The Publishing, Printing and Book Publishing industry
The publishing industry’s growth rate is rather high. The are now 54
publishing houses nationwide, 1,200 printing premises, 129 book-issuing
companies and over 10,000 book stores. The numbers of published book
titles and book copies are increasing. Many valuable book collections,
research work of politics, culture and arts, science and technology,
economic management, etc. have been published and introduced.
Operation of publishing section:
Year
Number of book titles
Number of book copies
(million copies)
2003
2004
2005
2006
2007
16,110
19,695
20,191
24,000
25,609
223,400 242,700 249,200 230,000 276,477
Source: The Publishing and Annual Statistic Department
The average productivity growth rate of Printing industry is over 10% per
year. The Printing industry has met all the printing demand of the society,
including high-grade publications, ranking advanced in the area and
reaching international quality standards.
The Book Publishing network has delevoped quickly and extensively. Many
bookstores and book-supermarkets have been built in big cities. The average
growth rate of Book Publishing industry is 15% per year; the publication
market is rather diversified; the export-import of books and journals has also
increased dramatically.
Page 35
Prospectus
Considerably contributing to the development of the Printing, Publishing
and Book Publishing industry is the association between publishing houses
and priviate printing premises. With high professionalism, they have
provided the market with so many book titles, which are diversifed in
contents and subjects, helping publishing houses overcome difficulty in
capital and markets, creating an expansive, flexible and dynamic issuing
network. The year 2004 marked a milestone for the publishing industry with
the event that the publishing law was passed at the 6 th session, the eleventh
National Assembly, with more transparent terms. There are some changes in
nature such as individuals can take part in all three stages of the publishing
process: making drafts, printing and issuing (instead of two stages stipulated
in the Law on Publishing, 1993), replacing the acceptance of each book title
with registering publishing plans.
8.2.2. The area of audio-visual products and cultural products
The video disc and record market is rather eventful now with the
participation of many State-owned and private companies, satisfying the
consumers’preferences and tastes. However, the increasingly serious
condition of copyright violations and piracy has considerably affected the
studios. The market of manufacturing and trading cultural products has also
made great advance in accordance with the increasing consumption demand
of the society, especially the students and intelligentsia.
Vietnam is preparing for joining in important economic institutions, signing
many agreements with international governments and organizations. This
generates a big opportunity for enterprises in the industry to expand their
export and import of cultural products.
8.3 Assessment of the company development orientation’s conformity with the
industry’s orientation, Government policy and international general tendency
With the trend of international economic and cultural integration, the industry of
manufacturing and trading cultural products has many opportunities to expand
markets and diversify products but also have many difficulties coping with
competition. Moreover, the industry of manufacturing and trading cultural products
is one of the industries significantly affected by the condition of economic
development. Vietnam’s success in foreign affairs and a stable political
environment compared to other countries in the area (Thailand, China, Taiwan, etc.)
have become an advantage attracting foreign investment capital, positively
supporting the economic growth. In the other hand, Vietnam is also affected by the
world economic condition. This has remarkable effect on people’s lives and the
consumption of cultural products.
Page 36
Prospectus
In the industry’s development trend, the company’s operation orientations as
follows:
 Link the business to establishing and delevoping the culture of Vietnam and
acquiring the international cutural quintessence.
 Look for and exploit domestic and alien copyrights, co-operate in issuing
valuable cultural publications.
 Build a strong trade-mark and try to get customers’reliance in PNC product
quality.
 Keep on expanding distribution network nationwide to meet the consumers’
need in line with the modern trend. Establish Phuong Nam selling style towards
maximizing clients’ need satisfaction, focus on developing and raising trademark value through investing, advertising and improving service quality.
Expand direct distrubuting channels to enterprises, organizations and schools.
 Enhance direct exploiting products from Vietnamese producers and imports
from regional countries, in direction to exclusive distributing prestigious
manufacturers’ products.
 Invest in modern machinery and equipments to improve productivity, quality
and reduce the product price.
In addition, the Company must solve some problems to keep and upgrade its
position in the market, ensure its growth rate and enhance the operation efficiency:
 Improve staffs’ management skills to keep pace with the company’s gowth and
market’s requirements.
 Continue to improve the professionalism in advertising and marketing activities
in order to take full advantage of opportunities from the market.
 Complete quality standard system in Phuong Nam bookstore’s production and
services, further upgrade standards equal to regional and international standards.
 Attach importance to expanding export of cultural products to the world.
 Complete the human resource development policy.
After more than 20 years doing business, through particular activities, Phuong Nam
Culture Corporation has made good impressions on consumers’ hearts and cultural
management agencies, all levels of local goverments, news agencies, contributing
to the embellishment, reservation of cultural values and dissemination of scientific
knowledge.
9.
Employment policies
9.1. Numbers of employees
Page 37
Prospectus
Total number of employees in the Company until December 31 st, 2007 was 854
people, including 104 managing staffs.
Labor force structuring by education level as following :
Education Level
Master’s Degree
Bachelor’s Degree
College
Vocational
High School
Under High School
Total
2006
3
%
0.37%
144
34
67
424
139
811
2007
3
%
0.35%
17.76%
4.19%
8.26%
52.28%
17.14%
162
41
81
496
71
18.97%
4.80%
9.48%
58.08%
8.31%
100%
854
100%
Source: PNC
9.2 Compensation policy
Average per capita income of labourers in 2006 was VND2,060,000 per month, and
VND2,187,000 per month in 2007. Staffs in the Company have the benefits such as
Social insurance, Medical insurance, allowance for lunch, working overtime, petrol,
depreciation, etc.
The Company has preferential policy for excellent staffs, pecifically, in the staff
salary ranges, besides the coefficient of base pay under the government regulation,
there are also salary ranges for job description; compensation accounts for a
generous portion in the total staffs’ salary. For the whole system of bookstores and
subsidiaries, staffs will be paid based on revenues, work assigned, reponsibilities
and the importance of the work in the producing and trading process.
Besides the benefits stipulated in the Labour Law, Phuong Nam Culture
Corporation’s staffs also have benefits under many other forms such as periodic
health-check, vacation, travelling, etc.
The Company establishes reserve for staff reward and welfare, and reserve for
unemployment allowance anually to use for rewarding and social welfare
expenditure such as maternity allowance, allowance for disadvantaged staffs, etc.
The Company has worthy reward policy for individuals who have merits to the
Company, and also has punishment and serious disciplinary measures to individuals
who make bad effects on the Company.
9.3 Employment policy
Working hours: 7.5 hours per day, 1.5 days off per week. The working hours are
tightly supervised by managers of each department and the Adminstration
Department.
Page 38
Prospectus
Working condition : office is spacious with air-conditioners and fully equipped with
office supplies. For direct workforce, the Company provides all equipments for
safety and sanitation. Safety is put on top of priority, regulations on technical safety
are strictly followed. The Administration Department monitors the maintenance
schedules of the technical department to ensure no accident happens. The Company
also covers accident insurance for employees.
Union activities such as Party cell, the Union, Communist Youth Union have
maintained regularly
9.4 Recruitment and Training policy
For administrators and professional staffs: administrators and professional staffs
must be University graduates. The Company has focused on training activities,
especially training on management skills, on the other hand, improved professional
skills for staffs at each unit.
For unskilled and occasional workers: the recruitment will be announced on the
mass media. After recruited, these staffs will be trained in communication skills,
customer service skills and instructed to deal with particular circumstances.
The Company has a complete plan from the beginning of the year on arranging or
sending staffs to short training courses organized by professional schools in HCMC.
These courses are aimed to improve employees’ professionalism and supplement to
the key positions in the Company.
10. Dividend policy
The Company will pay dividends to shareholders in case of making profit and after
finishing its tax payment reponsibility and other financial reponsibilities legally. Right
after paying all fixed dividends, the Company can also be capable for paying all liabilities
and other maturity asset liabilities.
The Annual General Meeting of Shareholders will determine the dividend ratio payable
to shareholders based on the Board of Director’s suggestion, the current year’s business
performance and the next year’s business plan.
According to the annual six-month finacial balancesheet, the Board of Director can
advance dividends to shareholders. In 2005, the income after tax reached VND4.261
billion; dividend rate per par value was 12% and ratio of dividend per income was
70.17%. In 2006, income after tax reached VND5.978 billion, dividend rate per par value
was 12% and ratio of dividend per income was 70.25%. The income after tax in 2007
was VND9.356 billion, dividend rate per par value was 11% and ratio of dividend per
income was 76.42%.
11. Financial operations
11.1. Basic accounts
Page 39
Prospectus
11.1.1 Fixed asset depreciation
Fixed assets are depreciated on the straight-line method to amortize the cost
of fixed assets with the estimated usage period, in confirmation with the
Decision no. 206/2003/QĐ/BTC dated 12/12/2003 issued by the Minister of
Finance regarding the management, usage and fixed asset depreciation
mechanism.
Depreciation schedule applied in the Company:
Factory, building:
06 -25 years
Machiery, equipment:
03-07 years
Vehicle:
07 years
11.1.2 Average income
Staffs’ per capita average income in 2006 was VND2,060,000 per month,
and VND2,187,000 per month in 2007
11.1.3 Due debt settlement
The company settled maturity liabilities in good manner. According to the
audited financial report in 2006-2007, the Company effected payment for all
liabilities on due date.
11.1.4 Accounts payable by law
The Company was serious in paying value added tax, corporate tax, etc.
legally.
11.1.5 Reserve establishment
The Company established reserve under the Company’s rules and applicable
law, including:

Deduct 5% to the reserve of financial allowance until the balance of the
fund comes up to 10% of the charter capital

Establish the reserve of unemployment allowance until the balance of
the reserve equivalent to the Company’s actual compensations for 6
months

Establish the reserve of reward and benefits as stipulated,
The real ratio of deducting to the funds will be submitted by the Board of
Director to the Annual General Meeting of Shareholders.
Balance of reserve for 2006 and 2007
Unit: VND
Reserve
2006
2007
The first 9
months of
Page 40
Prospectus
2008
Reserve
allowance
of
financial
908,929,328 1,359,420,039 1,681,252,574
Reserve of investment &
3,144,727,481 3,144,727,481 3,144,727,481
development (*)
Reserve
benefits
of
reward
and
(215,849,052)
255,409,300 (397,853,138)
3,837,807,757 4,759,556,820 4,428,126,917
Total
Source: Audited financial reports for 2006 – 2007and
interim report for the first 9 months of 2008
(*): The Company has not created funds for investment and development
since 2006 according to Decision of the seventh General meeting of
shareholders on March 18th, 2008.
11.1.6 Balance of notes payable:
As of December 31 st, 2007, balance of notes payable are as follows:

Short-term loan: VND 8,521,800,000

Long-term loan: Non
The Company did not have over due debt.
As of September 30th, 2008, balance of notes payable are as follows:

Short-term loan: VND 42,810,734,037

Long-term loan: VND 7,150,559,400
The Company did not have over due debt.
11.1.7 Accounts receivable
Unit: VND
2006
Accounts payable
Advance to suppliers
Intercompany
2007
The first 9 months of
2008
Total
over
due
debt
Total
over
due
debt
over
due
debt
29,471,161,496
-
33,076,510,139
-
77,329,221,231
-
2,158,127,757
-
7,722,734,470
-
8,640,606,157
-
-
-
-
-
-
-
4,580,196,206
-
4,106,431,602
-
32,482,131,907
-
Total
receivable
Other receivable
Page 41
Prospectus
2006
2007
over
due
debt
Total
Provision for doubtful
2008
over
due
debt
Total
over
due
debt
Total
-
-
-
-
-
-
-
-
-
-
-
-
36,209,485,459
-
44,905,676,211
-
118,451,959,295
-
debt
Other long-term
receivable
Grand total
11.1.8 Accounts payable
Unit: VND
2006
2007
Total
over
due
debt
Total
over
due
debt
-
89,252,186,437
-
201,692,988,047
-
20,331,204,000
-
8,521,800,000
-
42,810,734,037
-
59,632,285,820
-
63,223,967,807
-
123,352,582,655
-
371,050,531
-
525,762,468
-
2,368,787,913
-
6,336,145,241
-
3,846,493,446
-
6,476,249,054
-
2,626,335,921
-
3,293,968,299
-
3,305,877,144
-
3,402,289,137
-
2,254,203,745
-
5,636,125,250
-
6,615,929,539
-
7,585,990,672
-
682,292,500
-
2,634,861,697
-
89,340,869,663
-
-
-
-
78,840,620,788
over
due
debt
99,315,240,189
Total
Short-term debt
Loan & Short-term
debt
Accounts payable
Advance from
customers
Accounts payable to
state budget
Accounts payable to
employees
Accrued expense
Other accounts
payable
Long-term debt
Intercompany long-
2008
-
Page 42
Prospectus
term payable
Other long-term
payable
Loan & long-term
debt
Grand total
390,492,500
-
2,634,861,697
-
3,349,689,475
-
291,800,000
-
-
-
7,150,559,400
-
101,546,928,471
-
91,887,048,134
-
291,033,857,710
-
11.1.9 Equity
Đơn vị tính: đồng Việt nam
2006
Equity
2007
The first 9 months
of 2008
62,443,879,556 125,894,441,002 124,476,763,939
Source: Audited financial report for 2006 – 2007and
11.2. Explanation of the discrepancy between the beginning balance of the first 9
month financial report of 2008 and the ending balance of financial report of
2007
The financial statement of 2007 was ununited. Although PNC’s subsidiaries were in
operation from the end of the year 2007, but as the time of operation was in
11/2007, revenues and expenses haven’t arised and did not unify to the auditing
statement of 2007. The figures of the first 9 month financial statement of 2008 were
united, so there are some adjustments as follows:
11.2.1 Cash:
In the auditing statement of 2007, the balance of
“Cash and cash
equivalents” included only one item “Cash”. In the balancesheet for 9
months of 2008, this figure was seperated to two items, which were “Cash”
with balance of VND5,192,760,453 and “Cash equivalents” with balance of
VND1,688,296,859.
11.2.2 Short-term accounts receivable
“Short-term accounts receivable” increased by VND8,261,896,031 (the
balance of the auditing statement at the ending of the year 2007 was
VND44,905,676,211, the balance of the balancesheet for 9 months at the
beginning of the year 2008 was VND53,167,572,242) as the “Other
accounts receivable” increased by VND8,261,896,031 (the balance of the
auditing statement at the ending of the year 2007 was VND4,106,431,602,
Page 43
Prospectus
the balance of the balancesheet for 9 months at the beginning of the year
2008 was VND12,368,27,633) due to some following reasons:

Closed the “Advance” with the balance of VND2,920,896,031 in the
item “Other short-term assets” to the item “Other accounts receivable”
in the item “Short-term accounts receivable”

Closed the “Short-term mortgages, securities and deposits” with the
balance of VND5,341,000,000 in the item “Other short-term assets” to
the item “Other accounts receivale” in the item “Short-term accounts
receivable”
11.2.3 Other short-term assets
“Other short-term assets” reduced by VND8,261,896,031 (the balance of the
auditing statement at the ending of 2007 was VND12,758,960,173, the
balance of the balancesheet for 9 months at the beginning of 2008 was
VND4,497,064,142) as the “Other short-term assets” reduced by
VND8,261,896,031 (the balance of the auditing statement at the ending of
2007 was VND8,980,658,993, the balance of the balancesheet for 9 months
at the beginning of 2008 was VND718,762,962) due to some following
reasons:

Closed the “Advance” with the balance of VND2,920,896,031 in the
item “Other short-term assets” to the item “Other accounts receivable”
in the item “Short-term accounts receivable”

Closed the “Short-term mortgages, securities and deposits” with the
balance of VND5,341,000,000 in the item “Other short-term assets” to
the item “Other accounts receivale” in the item “Short-term accounts
receivable”
11.2.3 Long-term accounts receivable
“Long-term accounts receivable” increased by VND1,172,606,166 (the
balance of the auditing statement at the ending of 2007 was
VND247,200,000, the balance of the balancesheet for 9 months at the
beginning of 2008 was VND1,419,806,166) due to the “Other long-term
accounts receivable” increased by VND1,172,606,166 (the balance of the
auditing statement at the ending of 2007 was VND247,200,000, the balance
of the balancesheet for 9 months at the beginning of 2008 was
VND1,419,806,166) as closed the “Other long-term assets” with the balance
of VND1,172,606,166 in the item of “Other long-term assets” to the item
“Other long-term accounts receivable” in the item “Long-term accounts
receivable”.
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Prospectus
11.2.4 Other long-term asset
“Other long-term assets” reduced by VND1,172,606,166 (the balance of the
auditing statement at the ending of 2007 was VND7,064,855,221, the
balance of the balancesheet for 9 months at the beginning of 2008 was
VND5,892,249,055) due to the “Other long-term assets” reduced by
VND1,172,606,166 as closed the “Other long-term assets” with the balance
of VND1,172,606,166 in the item of “Other long-term assets” to the “Other
long-term accounts receivable” in the item “Long-term accounts
receivable”.
11,3 Basic financial ratios
The first 9
Ratio
2006
2007
months of
2008
1, Liquidity Ratio (time)
 Current ratio
1.14
1.71
1.29
 Quick ratio
0.50
0.72
0.69
 Debt over total asset
0.62
0.42
0.69
 Debt over equity
1.63
0.73
2.23
 Inventory turnover
2.12
2.04
1.46
 Net revenue over asset
1.09
0.99
0.51
 After-tax profit over net revenue
3.36%
4.36%
4.43%
 After-tax profit over equity
9.61%
7.42%
7.22%
 After-tax profit over asset
3.65%
4.29%
2.24%
 Operating income over net revenue
3.17%
4.48%
5.13%
1,877
2,063
2,077
2, Debt Equity Ratio (time)
3, Operating Ratio (time)
4, Profitability Ratio (%)
5, Shareholders’ Equity Ratio
(Par value: 10,000 VND/share)
Earnings per share (VND/share)
12. Board of Directors, Board of Supervisors and Board of General Directors,
12.1 Members of Board of Directors
12,1,1 Ms. Phan Thi Le - Chairman of Board of Directors and General
Director
Gender:
Female
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Prospectus
Date of birth:
February 02nd, 1959
Place of birth:
Khanh Hoa Province, Vietnam
ID No.:
020588347 issued by Ho Chi Minh City Police
Department dated August 15th, 2002
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Khanh Hoa Province, Vietnam
Current home address: E25-K300 Cong Hoa, Ward 12, Tan Binh District, Ho
Chi Minh City
Work phone:
(84-8) 3866 3447/3866 3448
Education level:
Master’s Degree
Professional skill level: Statistics – Accounting, Master of Economics
Occupation/Professional background:
 1978 - 1982:
Student of Ho Chi Minh City University of Economics
 1983 - 1989:
Chief Accountant of General Culture Company – District
11
 1989 - 1999:
Director of General Culture Company – District 11
 1999 – present:
Chairman of Board of Directors and General Director of
Phuong Nam Culture Corporation.
Current position:
Chairman of Board of Directors and General Director of
Phuong Nam Culture Corporation
Number of shares holding: 537,072 shares accounted for 8.623% charter capital
Including:
+ Personal holding: 131,072 shares
+ Representative holding: 406,000 shares (state-owned
shares)
Relative people who hold shares: Non
Law violation act: Non
Conflict of interest: Non
12.1.2. Mr. Nguyen Huu Hoat – Vice Chairman of Board of Directors and
Deputy General Director
Gender:
Male
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Prospectus
Date of birth:
April 12th, 1961
Place of birth:
Quang Nam Province, Vietnam
ID No.:
Department dated February 09th, 2004
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Quang Nam Province, Vietnam
Current home address: 1H, 6th Street, Binh Thoi Building, District 11, Ho Chi
Minh City
Work phone:
(84-8) 3866 3447/3866 3448
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Industrial Economics - Administration
 1978 - 1982:
Military Obligation
 1982 - 2004:
Worked at General Culture Company – District 11 with
the following positions: Chief of Executive Board of
Dam Sen Cultural Park; Manager of Stores Chain of
screen printing; Director of Print Factory; Vice Chairman
of Board of Directors and Deputy General Director of
Phuong Nam Culture Corporation
Current position:
Vice Chairman of Board of Directors and Deputy General
Director of Phuong Nam Culture Corporation
Including:
shares)
12.1.3. Mr. Nguyen Quang Vinh – Member of Board of Directors
Gender:
Male
Date of birth:
February 03rd, 1962
Place of birth:
Dong Da, Hanoi
Page 47
Prospectus
ID No.:
Department dated August 11th, 1999
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Son Ninh, Huong Son, Ha Tinh
Current home address: P305, 11B Ton Dan, Hoan Kiem, Hanoi
Work phone:
(84-4) 3943 3435/ 3943 3016
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Finance and Accounting
 1983:
Worked at Ministry of Finance (Specialist of Department
of Foreign Affairs)
 1983 - 1987:
Work at Ministry of Defense (Assistant of Bureau of
Bureau of Finance-Military Affairs and later moved to
General Bureau of Economics)
 1988 - 1992:
Worked at Ministry of Finance (Specialist of Department
of Foreign Affairs and later moved to Specialist of
Department of Finance-Trade Affairs)
 1992 - 2000:
PETEC Trading and Investment Corporation
 2000 - present:
Member of Board of Directors and CEO of Bao Viet
Securities Company
Current position:
Member of Board of Directors and CEO of Bao Viet
Securities Company
Including:
+ Representative holding: 116,001 shares
12.1.4. Ms. Tran Thi Mai - Member of Board of Directors
Gender:
Female
Date of birth:
December 23 rd, 1951
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Prospectus
Place of birth:
Tien Giang
ID No.:
Department dated July 23 rd, 1987
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Tien Giang
Current home address: 3/9 Yen The, Ward 2, Tan Binh District, Ho Chi Minh
City
Work phone:
(84-8) 3930 3623/ 3930 4601/ 3930 4600
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Science in Education-Major in Chemistry
 1974 - 1980:
Teacher of Vung Tau High School
 1980 - 1984:
Teacher of Ly Tu Trong High School, Ho Chi Minh City
 1985 - 1989:
Vice Manager of Department of Fair and Exhibition – Ho
Chi Minh City Fair and Exhibition Company
 1990 - 1992:
Assistant to Director of Young Mike LTD - Taiwan
 1992 - present:
Director of representative office of HUALON CORP
(Malaysia) in Vietnam
Current position:
Member of Board of Directors, Director of representative
office of HUALON CORP (Malaysia) in Vietnam
Including:
+ Representative holding: Non
12.1.5. Mr. Nguyen Ngoc Bich - Member of Board of Directors
Gender:
Male
Date of birth:
1945
Place of birth:
Hà Tây,
Page 49
Prospectus
ID No.:
Department dated September 20th, 2004
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Do Dong Ward, Thanh Oai District, Ha Tay Province
Current home address: 14P Nguyen Thi Tan, Ward 2, District 8, Ho Chi Minh
City
Work phone:
(848) 3829 5619
Education level:
Master’s Degree
Professional skill level: Master of Law
 1973 - 1975:
Lawyer of Saigon Bar Association
 1989 -1992:
Legal advisor at Overseas Finance
Corporation in Ho Chi Minh City
 1993 - 1994:
Legal advisor at INVESTIP Company
 1994 - 1996:
Representative for Law firm Paul, Weiss, Rifkind,
&
Trading
Wharton & Garrison, New York City in Vietnam
 1994 - 2003:
Professor of University Ho Chi Minh City, Ho Chi Minh
City Open University, Ho Chi Minh City Law University,
Legal Professional Training School, Lawyer at Phuong
Thuan & Bich Law Office. He has joined HCMC Bar
Association, specializing in company law, financial law
and trade law.
Current position:
Member of Board of Directors, Lawyer
Including:
12.1.6. Mr. Pham Uyen Nguyen - Member of Board of Directors
Gender:
Male
Date of birth:
June 08th, 1968
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Prospectus
Place of birth:
Saigon
ID No.:
Department dated November 25th, 2003
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Quang Nam
Current home address: 19 D, Thach Thi Thanh, District 1, Ho Chi Minh City
Work address:
P 1730, 155 Nguyen Hue, District 1, Ho Chi Minh City
Work phone:
(84-8) 3821 9930
Education level:
Master’s Degree
Professional skill level: MBA( Major in Finance and Banking)
 07/1990 - 07/1991:
Intern reporter – Tuoi Tre Newspaper
 07/1991 - 07/1994:
Science Researcher – Ho Chi Minh City Institute of
Economics
 07/1994 - 07/1997:
Full scholarship international student at Nanyang
Technological
University,
Singapore
and
Pennsylvania State University, the U.S., MBA Major
in Finance and Banking; Investment Advisor of GSIC
- Government of Singapore Investment Corporation
 07/1997 - 02/2000:
Vice chief of Evaluation Board - Ho Chi Minh City
Investment Fund for Urban (HIFU)
 01/2000 - 09/2003:
Director of Ho Chi Minh City Branch – Bao Viet
Securities Company (BVSC)
 09/2003 - 03/2007:
Executive Director and Chief of Representative
Office of VinaCapital Investment Managent Ltd
which is a managing organization of VietNam
Opportunity Fund (VOF); Director of member
companies of VOF such as VOF Investment Ltd, Asia
Value Investment Ltd, Vietnam Venture Ltd, Vietnam
Investment Ltd and Vietnam Enterprise Ltd; General
Director of Phong Phu Investment Company.
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Prospectus
 03/2007 – 09/2007:
High-level advisor of VinaCapital Group Investment
Management Ltd
 09/2007 - present:
Founder, Vice Chairman of Board of Directors and
CEO of Vietnam Synergy Fund
Current position:
Member of Board of Directors
Including:
Relative people who hold shares:
 Mother: Ms. Dang Thi Vui holds 3,940 shares
 Father: Mr. Pham Huyen holds 359 shares
12.1.7 Mr. Vo Ngoc Thanh - Member of Board of Directors
Gender:
Male
Date of birth:
November 02rd, 1961
Place of birth:
Dong Xuan, Phu Yen
ID No.:
Department dated April 09th, 2004
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Phu Yen
Current home address: 201/100 Hoang Viet, Ward 4, Tan Binh District, Ho Chi
Minh City
Work address:
Work phone:
(84-8) 3834 2002 - 3835 6617
Education level:
Bachelor’s Degree
Professional skill level: Mechanical Engineer, Bachelor of Asian Studies and
Marketing Management of Adamson University, Manila,
the Philippines
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Prospectus
 1983 - 1988:
Vice Manager of Planning Department of Material &
Equipment Supply Enterprise – Central Cotton
Company
 1989 - 1994:
Chief of representative office of Imexpan Pacific
Company (the Philippines) in Vietnam
 1995 - present:
Chairman of Board Members and General Director of
An Phong Service and Trading Co., Ltd. which is the
owner of Maximark supermarket chain
Current position:
Member of Board of Directors
Including:
12.2 Members of Board of Supervisors
12.2.1. Mr. Vo Viet Hoa – Chief of Board of Supervisors
Gender:
Male
Date of birth:
April 08th, 1953
Place of birth:
Phu Yen
ID No.:
Department dated July 27th, 2000
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Phu Yen
Current home address: 229/5A Nguyen Lam, Ward 7, Phu Nhuan District, Ho
Chi Minh City
Work phone:
(848) - 8663447/8663448
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Science in Education, Major in Language
Studies
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Prospectus
 1977 - 1986:
Staff of Ho Chi Minh City University of Education,
Manager of Finance Department of Ho Chi Minh City
University of Education
 1988 - 1993:
Director of Dam Sen Cultural Park – Ho Chi Minh
City Tourism Company
 1994 - 2004:
Worked at Phuong Nam Cultural Corporation with
the following positions: Vice Director of Print
Enterprise, Chairman of Company Union and Chief
of Board of Supervisors
Current position:
Chief of Board of Supervisors, Chairman of Company
Union of Phuong Nam Cultural Corporation
Number of shares holding: 580 shares accounted for 0.009% charter capital
Including:
+ Personal holding: 580 shares
12.2.2. Mr. Cao Danh Ha - Member of Board of Supervisors
Gender:
Male
Date of birth:
1958
Place of birth:
Daklak
ID No.:
Department dated October 21st, 1995
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Daklak
Current home address: 6/10G 3 rd Street, Lu Gia Condominium, Ward 15, District
11, Ho Chi Minh City
Work phone:
848 - 8654140 /0913,902170
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Economics, Major in Foreign Trade
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Prospectus
Hung Vuong Construction Investment Joint Stock
Company, Ho Chi Minh City
Current position:
Member of Board of Supervisors
Including:
12.2.3. Ms. Dang Kim Lan
Gender:
Female
Date of birth:
June 12th, 1955
Place of birth:
Sai Ung
ID No.:
Department dated September 12th, 1994
Nationality:
Vietnam
Ethnic:
Kinh
Fatherland:
Dong Thap
Current home address: 637 Truong Chinh, Ward Tay Thanh, Tan Phu District,
Ho Chi Minh City
Work phone:
(08) 7512562
Education level:
Bachelor’s Degree
Professional skill level: Bachelor of Finance - Accounting
 01/1977 - 06/1986:
Chief Accountant of Giai Phong Rubber State
Enterprise
 07/1986 - 12/1989:
Acting Chief Accountant of Machanical Electric
Enterprise which belonged to Liksin Corporation
 01/1990 - 04/1993:
Vice Manager of Finance & Accounting Department Liksin Corporation
 05/1993 - 02/1995:
Acting Chief Accountant of Liksin Industry - Printing
- Packaging Corporation
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Prospectus
 03/1995 - 11/1995:
Acting Chief Accountant of Liksin Paper, Printing &
Packaging Production
 12/1995 - 06/2002:
Director
of
Finance-Accounting
and
Chief
Accountant of Liksin Corporation
 07/2002 - present:
Member of Board of Directors and Chief of Board of
Supervisors of Liksin Corporation, Chief of Board of
Supervisors of Sagomic Joint Stock Corporation, Phat
Tai Co., Ltd., Liksin General Print Joint Stock
Corporation, supervior of Dong A Commercial Joint
Stock Bank, My Nghe Export Joint Stock
Corporation, Mai Lan Joint Stock Corporation, Orient
Plastic Corporation, and An Lac Label Printing Joint
Stock Corporation.
Current position:
Member of Board of Supervisors
Including:
+ Personal holding: Non
shares)
12.3 Board of General Directors
12.3.1. Ms. Phan Thi Le - General Director
Biography is showed as above.
12.3.2. Mr. Nguyen Huu Hoat –Deputy General Director
Biography is showed as above.
12.4 Chief Accountant
Mr. La Thai Hiep – Chief Accountant
Gender:
Male
Date of birth:
December 28th, 1977
Place of birth:
TP, HCM
ID No.:
Department dated February 14th, 2008
Nationality:
Vietnam
Page 56
Ethnic:
Prospectus
Kinh
Fatherland:
Current home address: 10/25 379 Street, Ward Tang Nhon Phu A, District 9,
HCM City
Work phone:
(84-8) 3866 3447
Education level:
Bachelor’s Degree
Professional skill level: Finance - Accounting
 2000 - 2005:
Chief Accountant of SELCO Co., Ltd. - Vietnam
 2005 - 2006:
Financial Accountant of NESTLE Co., Ltd. - Vietnam
 2006 - 2007:
Chief Accountant of SCANMACH Joint Venture
Company - Vietnam
 2007 – 10/2008:
Financial Analysis Specialist of
Services Center
 10/2008 - present:
Chief Accountant of Phuong Nam Cultural Joint
BASF Business
Stock Corporation
 10/2008 – present:
Current position:
Director of Finance of Phuong Nam Cultural Joint
Stock Corporation
Director of Finance of Phuong Nam Cultural Joint Stock
Corporation
Number of shares holding: zero shares
13. Fixed asset
Fixed asset book value according to audited financial report as of December 31st, 2007 as
follows:
Unit:VND
Salvage
No.
Item
Original Cost
Salvage value
value /
Original
Cost (%)
A
Tangible Fixed Asset
60,200,717,740
31,911,631,649
53.01%
1
Dwellings, buildings and
27,065,985,511
18,295,230,072
67.59%
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Prospectus
structures
2
Machinery and equipment
18,333,048,416
5,280,558,221
28.80%
3
Vehicle
1,812,127,934
490,509,144
27.07%
4
Management tools
12,989,555,879
7,845,334,212
60.40%
B
Intangible Fixed Asset
1,950,589,068
62,151,306,800
1,606,992,930
33,518,624,579
6.26%
53.93%
Tổng cộng
Source: Audited financial report of 2007
14. Projected profit and dividend,
14.1 Strategic plan
Unit: million VND
2007
2008
2009
% +/% +/% +/Amount compared Amount compared Amount compared
to 2006
Equity (charter capital)
Net revenue
65,000 62.50%
17.65%
214,657 20.62% 325,118 51.46% 478,000
47.02%
After-tax profit/revenue
(%)
(%)
to 2008
85,000 30.77% 100,000
After-tax profit
After-tax profit /Equity
to 2007
9,356 56.51%
16,624 77.66%
22,268
33.96%
4,36% 29.76%
5,11% 17.30%
4,66%
-8.89%
-3.69% 19,56% 35.86% 22,27%
13.86%
-8.33%
-6.67%
14,40%
Dividend (%)
11%
15% 36.36%
14%
14.2. Investment projects approved by the 9 th shareholders’s meeting of the
Company on March 22 nd, 2008
Investment projects in 2008
Unit: VND
Investment Value
(as of December
31 st, 2007)
No.
Investment projects
I
Projects approved in 2007 and to be executed in
2008
1
Nha Trang 1 Bookstore
7,800,000,000
2
Nguyen Oanh Bookstore
5,000,000,000
3
Can Tho 1 Bookstore (Book cafe)
3,000,000,000
4
Office One Project
2,000,000,000
II
New projects in 2007
1
Improvement of Phuong Nam image
17,800,000,000
45,700,000,000
5,000,000,000
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No.
Prospectus
Investment projects
Investment Value
(as of December
31 st, 2007)
Network development
40,700,0000,000
2
Binh Duong Bookstore
1,200,000,000
3
Parkson Bookstore - Le Thanh Ton
1,500,000,000
4
Parkson Bookstore - Tan Son Nhat
1,500,000,000
5
Lotte Bookstore – District 7
3,000,000,000
6
Bookstore at 01 Nguyen Hue, Hue City
7
Phan Thiet Bookstore
5,000,000,000
8
Parkson Bookstore - Hai Phong
1,500,000,000
9
Ha Noi 1 Bookstore
6,000,000,000
Investment into subsidiaries and joint ventures
21,000,000,000
18,400,000,000
1
Phuong Nam Stationery Company
6,800,000,000
2
Phuong Nam Print Company
1,850,000,000
3
Phuong Nam Film Company
750,000,000
4
Phuong Nam Brand Company
1,000,000,000
5
Phuong Nam Media Company (PNM)
4,000,000,000
6
Establishment of Mega - Phuong Nam Company
4,000,000,000
Total of investment
81,900,000,000
14.3. General comments
The cultural and educational socialization policy is increasingly encouraged by the
Government, so there are more and more individuals and enterprises participating in
printing, publishing, books and films issuing activities, therefore products in the
market are also more and more diversified.
From 26/10/2004, Vietnam became official member of Berne Convention (the
Convention protecting the literary and artistic work was signed at Berne,
Switzerland in 1886), according to this convention, publishing houses who want to
print out translated books must have the copyright.
The effect of actions agaisnt copyright violations and piaracy hasn’t been
satisfactory, causing many difficulties for enterprises who operate in legitimate
manner.
People’s income and living standard are increasing day by day, so the need for
reading is also increasing respectively. As a result of that, more books (including
domestic and imported ones) have been introduced to the market, the quality and
content have been further emphasized. Many bookstores have been opened. The
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Prospectus
publishing industry will have fierce competition and will become more
professional, too. The competition in retail, wholesale, printing, producing and
trading audio-visual and other cultural products has become more and more severe.
Enterprises in this industry have focused on investing in trade-marks, the business
and marketing styles have been more and more flexible, the quality of products and
services have been continuously improved while prices are likely to be lowered.
With the objective to expand the market share and set up an extensive network,
enterprises in cultural products industry have the trend to offer high commission
rate in order to attract the wholesalers and retailers. On the other hand, to preserve
their profits, they try to raise the retail price offered to consumers. This situation
may make bad effects on the market and reduce purchasing power.
Some categories of souvenir and toy group originated from ASEAN countries when
imported to Vietnam are good in quality and competitive in prices due to low
import tax.
The printing industry is in severe competition as the numbers of enterprises
participating in this field are increasing, the CMT price is reducing, leading to
reducing profits.
14.4. Execution plan
PNC’s business strategy for the period of 2008 - 2010
 Competitive position: PNC tries to become the leading company in producing
and trading of cultural products in Vietnam.
 Distribution: the current bookstore chain will be increased to 40 bookstores in
15-20 provinces/cities nationwide.
 Management: effective and efficient management by professional and skilled
ones.
 Revenue of 2010: VND 600 billion
 Margin: 7%
 Market cap: VND 500 billion
Operating plan will be deployed at every subsidiary of PNC:
 Phuong Nam Print One Member Limited Company (PNP)
Operating orientation: identifying PNP is a company specialized in general
printing (including all kinds of publications, books, magazines, packing,
calendars, advertising publications, etc.)
Operating plan:
-
Restrucure the organization under PNC’s subsidiary model
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Prospectus
-
Establish and complete the quality management system according to ISO
9000:2000
-
Research and develop factories producing end-products to factories
specialized in processing services after printing (binding, end-products
processing, etc.)
-
Liquidate used printers, invest in new ones, improve service quality.
-
Set up a marketing department directly reported to the company’s Sales
Department
-
Build and strengthen the operation of the end-products’ quality checking
department (KCS)
-
Extend the scope of clients via PNC’s co-operation and investment in
companies of same industry.
 Phuong Nam Film One Member Limited Company (PNF)
-
Organize personnel in accordance with the company’s strategy until 2010
-
Upgrade the production procedure to improve product quality
-
Try to seek for partners sponsored for scheduled liveshow projects
-
Accelerate the progress of copyright acquirement of alien cultural products,
directed towards market of cartoon for children
-
Import and distribute complete audio-visual products from Asian countries
for trial purposes.
-
Set up the series of high quality CD shops, independent to the bookstore
system’s activities.
-
Speed up investing in making celluloid films under co-operation forms,
based on the system of Megastar cinema boxes, a joint venture with PNC.
 Phuong Nam Book One Member Limited Company (PNB)
-
Publish interesting collections of books and introduce new kinds of books
(to teenagers).
-
Issue audio books for trial purposes
-
Accelerate the progress of copyright acquirement, seek for new sources,
expand network of collaborators, transaction places and accept competition
in prices to realize the targets.
-
Enhance sales-support activities in the system under the instruction and
training of book sellers, organize PNC corners at bookstores out of the
system to increase the purchasing power.
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Prospectus
-
Adjust the price system appropriately.
-
Improve the efficiency of marketing activities, re-organize bookcafe’s
activities in PNC bookstore system
-
Upgrade production procedure towards professionalism
 Phuong Nam Stationery One Member Limited Company (PNSC)
-
Priority is given to stablizing the company’s operating premises and key
personnel
-
Foster production of prestigious products such as notebooks, books, earth
models, etc. and exploit other products such as stickers, envelopes, etc.
-
Objective markets are HCMC, southern provinces and central provinces
from Quang Binh
-
Complete distributing channels and regional selling policies
-
Ensure the supply of 23% of the total sales to PNC retail system
 Phuong Nam Brand One Member Limited Company (PNBC)
-
Increase sales of current bookstores, focus on bookstores at HCMC, Hanoi
and other cities with high purchasing power
-
Develop bookstore network
-
Strengthen and improve the quality of purchasing, diversify the sources and
categories, improve imports’ quality and produce under domestic licence
-
Reduce cost, increase profits
-
Strengthen human resources in conformity with business orientations and
targets
-
Carry out Office 1 project on wholesale distributing office supplies
 Retail system (bookstore system)
-
Extend and improve quality of retail system (expand bookstore system,
change the identification series of the whole bookstore system, standardize
Phuong Nam bookstores and book cafe)
-
Strengthen purchasing activity, standardize the procedure of purchasing and
supplying products to outlets and customer service agents
-
Develop selling activities via offering plans to organizations, standardize the
display in bookstor
15. Consulting organization’s assessment of plan for profit and dividend
Page 62
Prospectus
Our economy is now open to the world, strongly integrated into the regional and
international economy. Our Government has increasingly widened economic – cultural
relations, signed many conventions with other countries and international organizations,
therefore increasing the opportunities to expand markets for enterprises.
Preferential investment policies and the State’s step-by-step completion of legal system
have increased the investment activities in the home country and abroad.
In the past few years, the growth rate of the Publishing, Printing and Book Publishing
industry was high and rather stable, averaged at 15-20% of book tiltes, 10-15% of printed
pages. The Dicision no. 40/2002/QĐ-BVHTT dated 31/12/2002 issued by the Ministry of
Culture and Information concerning the approval to the development plan of the
Publishing, Printing and Book Publishing industry until 2010 specifies targets and
development orientations. This is an advantage for enterprises trading in cultural product
industry such as PNC.
Phuong Nam Culture Company has developed in line with the Government policy and
the market’s development tendency, illustrated by investing in distribution and
establishment network of bookstores in big cities across the country, focusing on human
resource admidnistration, enhancing the broadcasting activities, publishing association,
computerizing management, investing in new machinery and equipments for the sake of
higher efficiency, reducing prices, improving competitiveness, co-operating to establish
cineflex at big cities, organizing bookshelves in supermarket system, etc.
Plans of revenues, profits, dividends made by Phuong Nam Culture Company was based
on the development prospect of the industry, market demand and the company’s
competitiveness. If unusual events affecting enterprises’ business operation hadn’t
happenned, the company’s plan for three year 2006-2008 would have been highly
feasible, ensuring the annual ratios of dividend.
Please note that the above mentioned comments were under the assessment of a
consulting organization, based on the information selectively collected and the theory of
stock and finance, but not implicated for ensuring the stock value as well as the reliability
of forecasted figures. This remark is just for the investors’ reference when making
decision themselves.
16. Information about the Company’s agreements which have not been implemented
Non
17. Information about disputes and lawsuits related to the Company may affect the
share prices
The Company does not have any dispute or lawsuit.
V. Stock offer
Page 63
Prospectus
1.
Kind of stock
Common stock
2.
Par value
VND 10,000
3.
Total shares for public offer
2,000,000 shares
 Phát hành cho CBCNV Công ty: 300,000 cổ phiếu
 Phát hành cho các nhà đầu tư lớn: 1,700,000 cổ phiếu
(According to the Resolution of Phuong Nam Culture Corporation’s Annual General
Meeting of Shareholders 2008 passed on 22/03/2008)
4.
Offering price: equal par value (VND 10,000/share)
5.
Method for distributing stock
Shares offered to the company’s staffs and important investors will be distributed by
Phuong Nam Culture Corporation to individuals and institutions after receiving the
Public Offering License from the State Securities Commission of Vietnam (SSC).
6.
Time frame for distributing stock
The expected distribution period: within 90 days from the date SSC grants the Public
Offering License.
7.
How to register to buy stock
 Offering to the company’s staffs:
Institutions and individuals subject to issuance: Phuong Nam Culture Corporation’s
employees who have positively contributed to the company’s development and success.
The list of these staffs and the number of shares distributed to each of them will be
determined by the Board of Director.
After receiving the Public Offering License from the SSC, the Board of Director will
choose the appropriate time to inform the staffs about the share issuance according to the
approved list. The period of registration and payment will be 2 weeks from the date of
notification.
 Offering to important investors
Institutions and individuals subject to issuance: Investors who are individuals,
organizations in Vietnam or in foreign countries, have a sound financial position and can
contribute to the Phuong Nam Culture Corporation’s business operation
number of stocks distributed to each of them will be determined by the Board of Director.
After receiving the Public Offering License from the SSC, the Board of Director will
choose the appropriate time to inform the investors about the share issuance according to
the selected list. The period of registration and deposit will be 2 weeks from the date of
notification. Within 2 working day after the registering expiration, the Board of Director
will determine the exact shares sold to each investor. The investors will have 5 working
days to pay for the shares.
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Prospectus
The period of issuance share certificates: it is expected that within 10 working days after
the payment expiration, the company will issue new share certificates to investors who
haven’t registered and deposited.
Solution to seperate shares: the shares left over from distributing to important investors
and staffs will be offered by the Board of Directors with reasonable prices in order to
bring highest benefits for the company and shareholders
8.
Stock holding limit for foreign investors
As per the Decision no. 238/2005/QĐ-TTg dated 29/09/2005 of the Prime Minster
concerning the ratio of the foreign party’s participation in the stock market of Vietnam,
the percentage of foreign investors’ shareholding is limited to the maximum of 49% of all
the outstanding shares in the company.
The ratio of PNC shareholding of the company’s current foreign shareholders is 46.43%
on 02/08/2008.
9.
Limitations regarding stock transference
Shares issued to important investors and the company staffs are transferable.
10. Related taxes
10.1 For the Company
The company pays for corporate tax with the tax rate of 28% of taxable income in
the year 2008 and 25% from 2009.
The company pays for value added tax under the tax deduction method with the
applied value added tax rate of 5% and 10%.
10.2 For investors
The Circular no. 100/2004/TT-BTC dated 20/10/2004 of the Ministry of Finance
detailing the value added tax and income tax from stock business in territory of
Vietnam, stipulated as follows:
 Individuals and organizations when investing do not have to pay individual
income tax and corporate tax for the dividend income received.
 Individuals when investing do not have to pay individual income tax for
earnings from investing in stocks of listed companies.
 Domestic and foreign investment organizations with business registration
certificate in Vietnam must pay for corporate tax from selling and buying stocks
of listed companies.
 Foreign organizations with no business registration certificate in Vietnam must
be levied a fixed amount when selling the stocks
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Prospectus
According to Individual income tax Law no. 04/2007/QH12 dated 21/11/2007 and the
Decree no. 100/2008/NĐ-CP dated 08/09/2008 detailing some regulations on the
Government’s individual income tax Law, individual investors must pay individual
income tax for earnings from stock investment as follows:
 Earnings from capital investment: dividend and capital investment income
under other forms, exlusive investing in the Government bond.
 Earnings from equity transference: income from transfering the equity in
economic organizations, income from transfering stocks, income from
transfering the equity under other forms.
 Earnings from inheritance of stocks, equity, etc.
 Earnings from gifts of stocks, equity
The above regulations are effective from 01/01/2009.
11. Bank account for stock selling
Account name: Phuong Nam Cultural Joint Stock Corporation
Account number : 311 10 00 00 41023
Bank: Bank for Investment and Development of Vietnam, Tay Saigon Branch, Ho Chi
Minh City
Address:
98-100 Ta Uyen Street, Ward 4, District 11, Ho Chi Minh City
VI. Purpose of stock offer
1.
Purpose of stock offer
This issuance of additional shares to the public to raise more capital of PNC is aimed to
sponsor some company’s projects under the Resolution of the Board of Directors on
02/12/2008 included in the plan for 2008 passed by the General Meeting of Shareholders
as follows:
Nha Trang Bookstore: VND 12.6 billion (The project value is VND 15.6 billion,
which has been used VND 3 billion in 2007)
Nguyen Oanh Bookstore: VND 8 billion
Parkson Bookstore - Hai Phong: VND 0.9 billion
Contributing capital to establish Mega Phuong Nam Company (conducting movie’s
subtitle): VND 5.4 billion
2.
Feasible project
Due to the urgent need for project investment serving for the bookstore’s business
operation expansion intime and the condition of varying stock market, the capital
mobilization through issuing more shares has coped with so many difficulties, so the
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Prospectus
company has planned to lend from the bank in order to carry out the following
bookstore’s projects first:
Nha Trang Bookstore - Opened on May 24 th, 2008

Products and forms of trading:

Products:
-
Books and magazines: national language and foreign language
-
Stationery, cultural products and souvenirs, toys for children
-
CD and records of all kinds
-
Book café

Business forms:
-
Retail some kinds of books, cultural products, souvenirs... to local people and
tourists under self-selected form.
-
Retail cultural products to customers as organizations, enterprises, schools,
hospitals...
-
Sell beverage to readers and tourists who can read books free of charge on the
premises
-
Wholesale some kinds of books, stationery to organizations, distributors/agents

Scale and space distribution for business in the bookstore:
Ground floor: 700 m2

-
Self-selected selling of books and magazines in national language and foreign
language
-
Self-selected selling of disc

First floor: 582 m2
-
Self-selected selling for stationery, calendars, greeting cards
-
Self-selected selling for souvenir, decorating products, toys for children
-
Self-selected selling for electronic products

-
Second floor (terrace): 720m2
For book café business (out door and air conditioning)

In door café with air conditioner (506m2)

Out door café (130m2)
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Prospectus
 Investment detail in fixed asset:
Unit: thousand VND
No.
Items
Capital need
Note
1
Newly build entire building and
provision
9,555,000
Design, newly build the building,
set up air system, yard, plants,
parking lot, voltage station, fire
prevention, uninstall construction
structure,etc.
2
Shelves and equipment for bookstore
and office
4,400,000
Include security camera system,
electric automatic gate
3
Furniture, equipment for book café
1,525,000
4
Machinery and equipment
120,000
Total
5
Computers, office machines, etc.
15,600,000
Projects which were implemented in 2007 costed VND 3 billion,
the remainder in 2008 was VND 12.6 billion.
 Business rerults of projects:
No.
1
2
3
4
5
6
9
10
11
Items
Sales revenue
Deductible
Value Added Tax
Total Net Revenue
Cost of Good Sold
Gross profit
Total expense
Total pre-tax profit
Income tax
Net profit
Year 01
Year 02
Year 03
Year 04
Year 05
Year 06
Year 07
Year 08
Year 09
Year 10
25,200,000
1,461,600
1,461,600
23,738,400
16,158,084
7,580,316
4,988,594
2,591,722
725,682
1,866,040
27,720,000
1,607,760
1,607,760
26,112,240
17,773,893
8,338,347
5,104,095
3,234,253
808,563
2,425,690
30,492,000
1,768,536
1,768,536
28,723,464
19,551,282
9,172,182
5,161,973
4,010,209
1,002,552
3,007,657
33,541,200
1,945,390
1,945,390
31,595,810
21,506,410
10,089,400
5,298,908
4,790,492
1,197,623
3,592,869
36,895,320
2,139,929
2,139,929
34,755,391
23,657,051
11,098,340
5,442,949
5,655,391
1,413,848
4,241,543
38,740,086
2,246,925
2,246,925
36,493,161
24,839,904
11,653,257
5,622,150
6,031,107
1,507,777
4,523,330
40,677,090
2,359,271
2,359,271
38,317,819
26,081,899
12,235,920
5,740,003
6,495,917
1,623,979
4,871,938
42,710,945
2,477,235
2,477,235
40,233,710
27,385,994
12,847,716
5,862,187
6,985,529
1,746,382
5,239,147
44,846,492
2,601,097
2,601,097
42,245,396
28,755,293
13,490,102
5,988,869
7,501,233
1,875,308
5,625,925
47,088,817
2,731,151
2,731,151
44,357,665
30,193,058
14,164,607
6,120,220
8,044,388
2,011,097
6,033,291
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Prospectus
 Investment effect from projects:
No.
Items
1
2
3
4
5
6
Initial investment capital
Revenue
Total expense
Pre-tax profit
Income tax
After-tax profit
ROI (Return of
Investment)
NPV (Net present
value)
IRR (Internal rate of
return)
Discount rate
11
12
13
14
Year
0
(15,600,000)
Year
1
(1,550,000)
23,738,400
21,146,678
2,591,722
725,682
1,866,040
Year
2
Year
3
Year
4
Year
5
26,112,240
22,877,987
3,234,253
808,563
2,425,690
28,723,464
24,713,255
4,010,209
1,002,552
3,007,657
31,595,810
26,805,318
4,790,492
1,197,623
3,592,869
34,755,391
29,100,000
5,655,391
1,413,848
4,241,543
Year
6
(1,650,000)
36,493,161
30,462,054
6,031,107
1,507,777
4,523,330
Year
7
(4,000,000)
38,317,819
31,821,902
6,495,917
1,623,979
4,871,938
Year
8
Year
9
Year
10
40,233,710
33,248,181
6,985,529
1,746,382
5,239,147
42,245,396
34,744,162
7,501,233
1,875,308
5,625,925
44,357,665
36,313,278
8,044,388
2,011,097
6,033,291
5 year 3
months
15,177,644
27,4%
13,0%
Nha Trang Bookstore project has been implemented since 2007 and continue to be implemented in 2008.
Nguyen Oanh Bookstore - Opened on October 17 th, 2008

Area improved and expanded:
Total area: 2,880m2 including 3 floors (720 m2/floor) in which:

-
Basement: Office, parking lot, electrical generator, warehouse, technical section
-
Ground floor: for selling national language and foreign language books
-
First floor: for selling general products, Disney products, disc
-
Second floor: for bookcafé
Investment in fixed asset
Unit: thousand VND
No.
Items
Capital need
Note
Page 69
Prospectus
No.
Items
Capital need
1
Bookstore
4,980,000
2
Book café
2,864,000
3
Provision
156,000
Total

No
1
2
3
4
5
6
7
9
11
12
No
1
2
3
4
5
6
11
2% of total investment
8,000,000
Business results of bookstores:
Items
Sales revenue
Deductible
Value Added Tax
Total Net Revenue
Cost of Good Sold
Gross profit
Total expense
Operating profit
Pre-tax profit
Income tax
After-tax profit

Note
Expense for design and area reclamation and clearance,
design and internal decoration, expense for shelves.
Area reclamation and clearance, internal design,
furniture, tools and equipment for making drinks, tools
for serving drinks.
Year 01
32,400,000
1,620,000
1,620,000
30,780,000
20,857,236
9,922,764
9,254,716
668,048
668,048
167,012
501,036
Year 02
38,880,000
1,944,000
1,944,000
36,936,000
25,028,683
11,907,317
9,700,387
2,206,929
2,206,929
551,732
1,655,197
Year 03
46,656,000
2,332,800
2,332,800
44,323,200
30,034,420
14,288,780
10,210,162
4,078,619
4,078,619
1,019,655
3,058,964
Year 04
55,054,080
2,752,704
2,752,704
52,301,376
35,320,560
16,980,816
10,760,612
6,220,204
6,220,204
1,555,051
4,665,153
Year 05
64,963,814
3,248,191
3,248,191
61,715,624
41,678,260
20,037,363
11,385,824
8,651,539
8,651,539
2,162,885
6,488,654
Year 06
74,708,387
3,735,419
3,735,419
70,972,967
47,929,999
23,042,968
12,865,767
10,177,201
10,177,201
2,544,300
7,632,900
Year 07
85,914,645
4,295,732
4,295,732
81,618,912
54,932,147
26,686,766
13,581,834
13,104,932
13,104,932
3,276,233
9,828,699
Year 08
94,506,109
4,725,305
4,725,305
89,780,804
59,725,316
30,055,488
14,226,140
15,829,348
15,829,348
3,957,337
11,872,011
Year 09
103,956,720
5,197,836
5,197,836
98,758,884
65,697,848
33,061,036
14,928,173
18,132,863
18,132,863
4,533,216
13,599,647
Year 10
114,352,392
5,717,620
5,717,620
108,634,772
72,267,632
36,367,140
15,693,181
20,673,959
20,673,959
5,168,490
15,505,470
Investment effect of bookstores when they are operating:
Items
Initial investment
capital
Revenue
Total expense
Pre-tax profit
Income tax
After-tax profit
ROI (Return of
investment)
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
0
1
2
3
4
5
6
7
8
9
10
(8,000,000)
(1,940,000)
30,780,000
30,111,952
668,048
167,012
501,036
36,936,000
34,729,071
2,206,929
551,732
1,655,197
44,323,200
40,244,581
4,078,619
1,019,655
3,058,964
52,301,376
46,081,172
6,220,204
1,555,051
4,665,153
61,715,624
53,064,085
8,651,539
2,162,885
6,488,654
(5,410,000)
70,972,967 81,618,912
60,795,767 68,513,981
10,177,201 13,104,932
2,544,300 3,276,233
7,632,900 9,828,699
89,780,804
73,951,456
15,829,348
3,957,337
11,872,011
98,758,884 108,634,772
80,626,021 87,960,813
18,132,863 20,673,959
4,533,216
5,168,490
13,599,647 15,505,470
4 years
Page 70
No
12
13
14
Items
NPV (Net present
value)
IRR ( Internal rate
of return)
Discount rate
Prospectus
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
0
1
2
3
4
5
6
7
8
9
10
36,309,571
44,7%
13,0%
Parkson Bookstore - Hai Phong – Opened on October 10th, 2008

Products and business forms:
 Products:
- Books and magazines: national language and foreign language
- Stationery, cultural products and souvenirs, high-grade toys for children
- CD and records of all kinds
 Business forms:
- Retail some kinds of books, cultural products, souvenirs, etc. under self-selected form

Scale and space distribution for business in the bookstore:
The bookstore’s area is 375 m2 which is distributed for business as follows:
-

280 m2: display and book selling (including 100 m2 for foreign language books)
80 m2: display and general selling
15 m2: display and disc selling
Investment in fixed asset:
Unit: thousand VND
No.
Items
1
area reclamation and clearance
2
Shelves
3
Machinery, equipment, tools
Capital need
70,000
740,000
Total
90,000
900,000
Page 71
Prospectus
Business results of projects:
No
1
2
3
4
5
6
7
9
10
11
Items
Sales revenue
Deduction
Value Added Tax
Total Net Revenue
Production cost
Gross profit
Total expense
Operating profit
Total pre-tax profit
Income tax
After-tax profit

No
1
2
3
4
5
6
11
12
13
14
Year 01
6,480,000
375,840
375,840
6,104,160
4,370,512
1,733,648
1,602,961
130,687
130,687
32,672
98,015
Year 02
7,452,000
432,216
432,216
7,019,784
5,026,089
1,993,695
1,840,790
152,905
152,905
38,226
114,679
Year 03
8,569,800
497,048
497,048
8,072,752
5,780,002
2,292,749
2,058,610
234,140
234,140
58,535
175,605
Year 04
9,855,270
571,606
571,606
9,283,664
6,647,003
2,636,662
2,216,857
419,805
419,805
104,951
314,854
Year 05
11,333,561
657,347
657,347
10,676,214
7,644,053
3,032,161
2,492,996
539,165
539,165
134,791
404,374
Year 06
13,033,595
755,948
755,948
12,277,646
8,790,661
3,486,985
2,808,530
678,455
678,455
169,614
508,841
Year 07
14,336,954
831,543
831,543
13,505,411
9,669,727
3,835,684
3,060,962
774,722
774,722
193,680
581,041
Year 08
15,770,649
914,698
914,698
14,855,952
10,636,700
4,219,252
3,338,114
881,138
881,138
220,285
660,854
Year 9
17,347,714
1,006,167
1,006,167
16,341,547
11,700,370
4,641,177
3,642,452
998,725
998,725
249,681
749,044
Year 10
19,082,486
1,106,784
1,106,784
17,975,702
12,870,407
5,105,295
3,976,695
1,128,600
1,128,600
282,150
846,450
Investment effect from projects:
Items
Initial investment
capital
Revenue
Total expense
Pre-tax profit
Income tax
After-tax profit
ROI (Return of
investment)
NPV (Net present
value)
return)
Discount rate
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
0
1
2
3
4
5
6
7
8
9
10
(900,000)
(420,000)
6,104,160
5,973,473
130,687
32,672
98,015
7,019,784
6,866,879
152,905
38,226
114,679
8,072,752
7,838,612
234,140
58,535
175,605
9,283,664
8,863,860
419,805
104,951
314,854
10,676,214
10,137,049
539,165
134,791
404,374
(270,000)
12,277,646
11,599,191
678,455
169,614
508,841
13,505,411
12,730,689
774,722
193,680
581,041
14,855,952
13,974,814
881,138
220,285
660,854
16,341,547
15,342,822
998,725
249,681
749,044
17,975,702
16,847,102
1,128,600
282,150
846,450
5 years
5,97
1,916,423
32,7%
13,0%
Page 72
Prospectus
Establishment of Mega Phuong Nam Company to add movie subtitle
Total projected investment capital
USD 800,000
VND 13,600,000,000

Product of the project: provide service of adding Vietnamese subtitle to imported movies

Investors: Phuong Nam Cultural Corporation (40%), Mega Film Co. (Singapore) (50%), VIETINVEST Corp, (Dai Viet Investment &
Trading Joint Stock Company) ( 10%),

Manufacturing location: 160/7 Doi Cung Street, District 11, Ho Chi Minh City

Business results of projects:
No.
Year
Items
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
1
Revenue
2
Value added tax
3
Net revenue (1-2)
2,475,200 2,858,856 3,313,674 3,847,760 4,426,971 5,737,064 6,610,317 7,612,526 9,795,530 11,313,837
Production expense
1,497,564 1,574,626 1,663,166 1,764,445 1,874,900 2,073,790 2,227,267 2,400,879 2,716,118 2,961,337
4
2,722,720 3,144,742 3,645,041 4,232,536 4,869,668 6,310,771 7,271,348 8,373,778 10,775,083 12,445,220
247,520
285,886
883,500
331,367
883,500
384,776
977,636 1,284,230 1,650,508 2,083,315 2,552,071 3,663,274 4,383,050 5,211,647 7,079,411 8,352,500
6
Overhead
291,532
324,769
7
Earnings Before Interest &
Tax ( (EBIT)
686,104
959,461 1,288,194 1,678,688 2,101,148 3,141,237 3,799,822 4,559,862 6,319,795 7,500,759
9
Earnings Before Tax
686,104
959,461 1,288,194 1,678,688 2,101,148 3,141,237 3,799,822 4,559,862 6,319,795 7,500,759
10
Income tax (25%)
171,526
239,865
322,048
11
Earnings After Tax
514,578
719,596
966,145 1,259,016 1,575,861 2,355,928 2,849,867 3,419,896 4,739,846 5,625,569
419,672
525,287
785,309
583,227
883,500
979,553 1,131,384
Gross profit
522,037
883,500
761,253
5
450,923
883,500
661,032
883,500
404,627
883,500
573,706
Including: depreciation
362,314
883,500
442,697
651,785
883,500
759,616
883,500
851,741
949,956 1,139,965 1,579,949 1,875,190
Note: Each movie is made one original and 5 copies

Financial effect from projects:
Page 73
Prospectus
Unit: thousand VND
No.
Items
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
0
1
2
3
4
5
6
7
8
9
10
(8,700,000)
(4,900,000)
2,475,200
2,858,856
3,313,674
3,847,760
4,426,971
5,737,064
6,610,317
7,612,526
9,795,530
11,313,837
1
Initial investmnet capital
2
Revenue
3
Total expense
1,789,096
1,899,395
2,025,480
2,169,072
2,325,823
2,595,827
2,810,494
3,052,664
3,475,735
3,813,077
4
Pre-tax profit
686,104
959,461
1,288,194
1,678,688
2,101,148
3,141,237
3,799,822
4,559,862
6,319,795
7,500,759
5
Imcome tax
171,526
239,865
322,048
419,672
525,287
785,309
949,956
1,139,965
1,579,949
1,875,190
6
After-tax profit
ROI (Return of
Investment)
NPV (Net present value)
return)
Discount rate
514,578
719,596
966,145
1,259,016
1,575,861
2,355,928
2,849,867
3,419,896
4,739,846
5,625,569
11
12
13
14
7 years 10 months
5,331,732
19,9%
13,0%
Notes: the capital invested in Mega Phuong Nam exceeds the estimated expense submitted to the Annual General Metting of Shareholders 2008
due to the changes in the ratios of equity among parties in the joint venture, of which, PNC’s contributed rate increased from 32% to 40% and the
variation of exchange rate at the time of contributing.
The projects already completed with the capital lent from the bank have covered higher investment expenditure than the estimated expenditure
submitted to the Annual General Metting of Shareholders 2008 because of the discrepancy between the expenditure submitted to the shareholders
at the end of 2007 and the actual expenditure affected by inflation in 2008.
Page 74
Prospectus
VII. Plan for using receivable from stock selling
The Phuong Nam Culture Company will use all the expected returns from the shares issuing
of around VND20 billion to re-invest and restructure the investment capital for projects listed
in the Resolution of the General Metting of Shareholders on 02/12/2008 out of other projects
of 2008 passed on the Resolution of the General Metting of Shareholders on 22/03/2008 under
the following priorities:
1. Nha Trang Bookstore
2. Nguyen Oanh Bookstore
3. Parkson Bookstore - Hai Phong
4. Contributing capital to establish Mega Phuong Nam Company
The deficiency will be financed by short-term loans to supplement to investment and the
revenues from projects in operation will contribute to the company’s capital payable to the
loans.
VIII. Related partners:
1.
Offering company:
Address: 940 3/2 Street, Ward 15, District 11, HCMC
Phone: (84-8) 3866 5163
2.
Fax:
(84-8) 3930 4281
Auditing company:
Auditing and Accounting Financial Consulting Company (AFC)
Address: 2 rd Floor, Indochina Park Tower Building, 4 Nguyen Dinh Chieu, District 1, Ho
Chi Minh City
Phone: (84-8) 2220 0237
3.
Fax:
(84-8) 2220 0265
Consulting company:
Address: 8 Le Thai To, Hoan Kiem District, Hanoi
Phone: (84-04) 3928 8888
Fax:
(84-04) 3928 9888
HCMC Branch: 11 Nguyen Cong Tru, District 1, Ho Chi Minh City
Phone: (84-8) 3821 8564- 3914 1995
Fax:
(84-8) 3821 8566
IX. Appendix
1.
Appendix 1: Copy of Business Registration Certificate
2.
Appendix 2: Copy of the Company’s rules and regulations
3.
Appendix 3: Audited reports for fiscal year 2006 - 2007 and the third quarter of
2008
Page 75
Prospectus
4.
Appendix 4: Biographies of members of Board of Directors, Board of General
Directors, Board of Supervisors, Chief Accountant
5.
Appendix 5: Solutions for investment projects
Ho Chi Minh City, on the ………….day of …………, 2008
Signatures of Chairman of Board of Directors & General Director, Chief of Board of Supervisors
and Chief Accountant
Chairman & General Director
Chief of Board of Supervisors
Chief Accountant
Vo Viet Hoa
La Thai Hiep
Phan Thi Le
Consulting Company
Nguyen Quang Vinh
Page 76

Phuong Nam Cultural Joint Stock Corporation Prospectus Contents I

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