Improve the business efficiency of Vietnam Agribank Gold Joint Stock Company Ha Dong Branch = Nâng cao hiệu quả kinh doanh của Công ty Cổ phần Vàng Agribank Việt Nam Chi nhánh Hà Đông

In recent years, the economic crisis in Vietnam has crept into every industry. Real estate bubble, bad debts, gold speculation, and unemployment are the frequently mentioned through the mass media, the scientific research or more in the daily life of every citizen of Vietnam. It no longer lies in the economic forecast, which is taking place within the economy of Vietnam. The economic crisis affected directly or indirectly to the life, work of the people, to the production and business activities of economic organizations in Vietnam. The state agency also gave a lot of new laws which have policies to stabilize the economy and put out of this crisis. However, it takes time to verify the effectiveness of the policy. Right now, the market competition is fiercer than it ever. Competition for survival and competition for development are now moving toward Vietnam. In order to do that, businesses need to have the right business strategy and strong management capability. Buying and selling good of the company will affect to the development in the current business, especially commercial enterprises. Gold is the concerned investment channel today in Vietnam and all over the world. However, like securities, gold investment sector also requires investors to equip themselves with the necessary knowledge that prevent their investment to be risky like gamble. In fact, investors are concerned about gold, but only a few people understand the profound role of world financial markets. Being considered as an asset that has a "safe haven", gold may increase in value even when the stock market declines, and when the economy is in recession. Global gold price is affected by a variety of factors, including the political environment and the economy, such as the effects of the debt crisis in Greece, the increase in gold reserves to diversify foreign exchange reserves of Central banks many countries. Especially the big emerging economies like China, Russia, India, Brazil, or the speculation of financial institutions have pushed the gold price fluctuates constantly, and have created a new record of gold price. For the last 5 years, the gold market Vietnam has made great strides and increased the volatility in step with the world market. Along with the decline of the stock market and the "freezing" on the real estate market, gold investment is one of the attractive sectors that can be considered as the potential businesses. However, we have to admit a truth that gold business is always risky channel, and it is difficult to forecast accurately. During seven weeks of internship in AJC Ha Dong branch, by my experimental working time, I have understood this branch in both organizational structure and its business activities. Simultaneously, I have a chance to look through this branch’s collected data from various sources, especially its financial statement and statement of profit or loss. Business performance of an enterprise in general and business performance of gold in particular of AJC HaDong often depends on many subjective and objective factors, such as management practices, investment strategy to develop production, product innovation, market expansion, human resource planning, the macroeconomic policies of the concerned agencies. Therefore, constantly improving production efficiency business is a leading concern of the leadership and the entire staff of AJC HaDong. That is also the overarching and expressed issue that can illustrate the quality and efficiency of economic management of the corporation. All these improvements in content innovation methods and measures applied in management only really makes sense if they increase business efficiency. Business performance is not only as a measure of quality, reflecting the level of organization, business management, but also as a matter of survival of the AJC HaDong in the current period. As Vietnam''s economy is integrating the world economy will open up many opportunities and many challenges, especially in the field of business risk potential gold and hard to predict correctly. Therefore, I choose the topic: “Improve the business efficiency of Vietnam Agribank Gold Joint Stock Company Ha Dong Branch” to be my bachelor’s thesis in finance.

TABLE OF CONTENTS

TABLE OF CONTENTS i

ABBREVIATION iv

LIST OF FIGURES iv

LIST OF TABLES iv

CHAPTER 1: INTRODUCTION 1

1.1 Rationale 1

1.2 Research objective 2

1.3 Scope of Research 3

1.4 Research methodology 3

1.5 The structure of the thesis 3

CHAPTER 2: GOLD TRADING BUSINESS AND THE BUSINESS EFFICIENCY 5

2.1 The role of gold in society 5

2.1.1 Feature of gold 5

2.1.2 Gold is the goods as well as one kind of currency 6

2.2 The situation of gold trading in the world and in Vietnam 8

2.2.1 The situation of gold trading in the world 8

2.2.2 The situation of gold trading in Vietnam 9

2.3 Kinds of gold investment products in Vietnam 11

2.3.1 Trading gold through account 12

2.3.2 Gold options and futures 13

2.3.3 Gold deposits 13

2.3.4 Gold backed securities 14

2.3.5 Physical gold 14

2.3.6 Trading jewelry 15

2.4 The business efficiency of gold trading business 15

2.4.1 Profitability ratios 16

2.4.2 Liquidity ratios 17

2.4.3 Activities ratio 17

CHAPTER 3: THE EFFICIENCY OF GOLD TRADING BUSINESS IN VIETNAM AGRIBANK GOLD JOINT STOCK COMPANY HA DONG

BRANCH 19

3.1 Overview of AJC Ha Dong 19

3.1.1 Vietnam Agribank Gold Joint Stock Company (AJC) 19

3.1.2 AJC Ha Dong 21

3.1.2.1 General information 21

3.1.2.2 The managerial structure 23

3.1.2.3 The accounting structure 24

3.1.2.4 Main businesses of AJC Ha Dong 25

3.1.3 SWOT analysis 26

3.1.3.1 Strengths 26

3.1.3.2 Weaknesses 27

3.1.3.3 Opportunities 27

3.1.3.4 Threats 28

3.2 Financial results 29

3.2.1 Essential analysis of financial indicators in the business statement of the AJC Ha Dong 33

3.2.2 Analyzing the situation of ensuring the working capital for business activity of AJC Ha Dong 35

CHAPTER 4: SOLUTIONS FOR IMPROVING THE BUSINESS EFFICIENCY IN AJC HA DONG 41

4.1 Development directions of AJC Ha Dong 41

4.1.1 From 2014 to 2016: Consolidation Phase 42

4.1.2 From 2017 to 2019: Growth Period 42

4.1.3 From 2020 to 2022: Expansion Period 42

4.2 Recommendations 43

4.2.1 Improve the quality of human resources 43

4.2.2 The applications of information technology in accounting 43

4.2.3 Establish the management accounting department 44

4.2.4 Innovation and development of new products in gold bullion nature

collections, souvenirs and gifts 44

4.2.5 Producing jewelry 45

4.2.6 Improving marketing activities 45

4.2.7 Putting the form of advertising, sales promotion 46

4.2.8 Solutions to improve efficiency in working capital 47

4.2.9 Research and analyze customer satisfaction 47

CONCLUSION 49

REFFERENCE 50

COMMENTS 51

Vietnam Agribank Gold Joint Stock Company Ha Dong

LIST OF FIGURES

Figure 2.1: Gold Price from 1915 to 2015 8

Figure 3.1: Organizational structure of AJC Ha Dong 23

LIST OF TABL Y Table 2.1: Some objectives achieved by AJC HaDong in 2014 compared with the plan 30

Table 2.2: Plan objectives in 2015 of AJC HaDong 32

Table 2.3: Some financial indicators of AJC HaDong in 2013 and 2014 33

Table 2.4: Statement of Financial Position of AJC Ha Dong 34

Table 2.5: Frequent working capital and capital needed 36 Table 2.6: Some indicators of business efficiency in AJC Ha Dong (2013 and 2014).37

CHAPTER 1: INTRODUCTION 1.1 Rationale

In recent years, the economic crisis in Vietnam has crept into every industry Realestate bubble, bad debts, gold speculation, and unemployment are the frequentlymentioned through the mass media, the scientific research or more in the daily life ofevery citizen of Vietnam It no longer lies in the economic forecast, which is takingplace within the economy of Vietnam The economic crisis affected directly orindirectly to the life, work of the people, to the production and business activities ofeconomic organizations in Vietnam The state agency also gave a lot of new lawswhich have policies to stabilize the economy and put out of this crisis However, ittakes time to verify the effectiveness of the policy Right now, the market competition

is fiercer than it ever Competition for survival and competition for development arenow moving toward Vietnam In order to do that, businesses need to have the rightbusiness strategy and strong management capability Buying and selling good of thecompany will affect to the development in the current business, especially commercialenterprises

Gold is the concerned investment channel today in Vietnam and all over the world.However, like securities, gold investment sector also requires investors to equipthemselves with the necessary knowledge that prevent their investment to be risky likegamble In fact, investors are concerned about gold, but only a few people understandthe profound role of world financial markets Being considered as an asset that has a

"safe haven", gold may increase in value even when the stock market declines, andwhen the economy is in recession Global gold price is affected by a variety of factors,including the political environment and the economy, such as the effects of the debtcrisis in Greece, the increase in gold reserves to diversify foreign exchange reserves ofCentral banks many countries Especially the big emerging economies like China,Russia, India, Brazil, or the speculation of financial institutions have pushed the goldprice fluctuates constantly, and have created a new record of gold price For the last 5years, the gold market Vietnam has made great strides and increased the volatility instep with the world market Along with the decline of the stock market and the

"freezing" on the real estate market, gold investment is one of the attractive sectorsthat can be considered as the potential businesses However, we have to admit a truththat gold business is always risky channel, and it is difficult to forecast accurately.During seven weeks of internship in AJC Ha Dong branch, by my experimentalworking time, I have understood this branch in both organizational structure and itsbusiness activities Simultaneously, I have a chance to look through this branch’scollected data from various sources, especially its financial statement and statement ofprofit or loss.

Business performance of an enterprise in general and business performance of gold inparticular of AJC HaDong often depends on many subjective and objective factors,such as management practices, investment strategy to develop production, productinnovation, market expansion, human resource planning, the macroeconomic policies

of the concerned agencies Therefore, constantly improving production efficiencybusiness is a leading concern of the leadership and the entire staff of AJC HaDong.That is also the overarching and expressed issue that can illustrate the quality andefficiency of economic management of the corporation All these improvements incontent innovation methods and measures applied in management only really makessense if they increase business efficiency Business performance is not only as ameasure of quality, reflecting the level of organization, business management, but also

as a matter of survival of the AJC HaDong in the current period As Vietnam'seconomy is integrating the world economy will open up many opportunities and manychallenges, especially in the field of business risk potential gold and hard to predictcorrectly Therefore, I choose the topic: “Improve the business efficiency of VietnamAgribank Gold Joint Stock Company Ha Dong Branch” to be my bachelor’s thesis infinance

1.2 Research objective

The thesis aims to analyze, synthesize, and evaluate; from that it gives some solutions

in order to improve the business efficiency of Vietnam Agribank Gold Joint StockCompany Ha Dong branch The theoretical and practical figures related to the businessefficiency at the Vietnam Agribank Gold Joint Stock Company Ha Dong branch

1.3 Scope of Research

Mainly focus on the indicators that show the business efficiency of Vietnam AgribankGold Joint Stock Company Ha Dong branch All the figures, tables and cases werecollected from the materials of 2 years 2013 and 2014

1.4 Research methodology

The thesis used many methods of analyzing, summarizing, synthesizing, andcomparing the statistics of the Vietnam Agribank Gold Joint Stock Company Ha Dongbranch through 2 years 2013 and 2014 The main source of information is secondarydata, including legal documents such as law documents; publications such as reports,magazines or other publications related to the subject

1.5 The structure of the thesis

The thesis includes three chapters as follow:

Chapter 1: Introduction gives the overall about the thesis: rationale, research purpose,object and scope of the thesis, research method, structure of the thesis

Chapter 2: Theoretical review of the gold trading business and the business efficiencyprovides the readers with theoretical background of gold trading business, gold market

in Vietnam and in the world, and the business efficiency The chapter does not onlyfeature an overview of gold and gold trading business but also clarifies concepts of theindicators that show clearly the business efficiency

Chapter 3: The efficiency of gold trading business in Vietnam Agribank Gold JointStock Company Ha Dong Branch discusses the financial results and businessefficiency of AJC Ha Dong Based on the theoretical overview above, the thesisanalyzes the financial statement and income statement that show the efficiency ofbusiness in AJC HaDong

Chapter 4: Solutions for improving the business efficiency in Vietnam Agribank GoldJoint Stock Company Ha Dong suggests some recommendations of the author toimprove the business efficiency for AJC Ha Dong

Chapter 5: Conclusion gives the summary of the thesis.

Due to limited time, knowledge and experiences, the thesis might have someshortcomings and limitations Therefore, I expect to receive comments andrecommendations from professors and readers to help me improve my thesis

I would like to express my gratitude to PhD Pham Thi Dinh, my supervisor in Falcuty

of Insurance, who gave me an orientation and a lot of useful advices to complete mythesis

I also would like to thank a lot of friendly, knowledgeable staff especially Mr NguyenThien Phuc, who directly help me a lot during the internship in AJC Ha Dong

CHAPTER 2: GOLD TRADING BUSINESS AND THE BUSINESS

EFFICIENCY.

2.1 The role of gold in society

Gold has played a special important role in major of societies since thousands yearsago Not only with a nation, a region of all known civilization considered gold as acommon trading good, but also every people around the world used gold From thetime of Egypt - Ancient Greek, medieval, early modern, and so far, gold is alwaysadored The classes, castes in any society passionately found, appropriated and storedgold Thus, gold is one of the very few values, which helped people to communicatewith the others regardless of differences in race, religion and history Currently wecan trace our use of gold back to at least 6200 years ago A variety of objects made ofgold have been found in Bulgaria from 4500-4000 BC Gold artifacts dated to 5000years ago have been found in Egyptian tombs; gold was already being beaten intosheets, foil and wire in Egypt at this time The Egyptian word for gold was ‘nub’ and

is related to Nubia, the land south of Egypt where much of Egypt’s gold was obtained.Humans have known gold and treasured it since prehistoric times Who discoveredgold? We do not know, it was discovered before there were written records Weknow there is a good chance the discovered found it in a river bed

Gold is usually associated with rocks such as quartz and pyrites As these rocksundergo weathering or erosion by water, the gold can be washed into rivers allowingpeople to find it easily

2.1.1 Feature of gold

The scientific symbol for gold is Au It is number 79 on the periodic table of elements.Gold is not magnetic, but it is an excellent conductor of electricity Its melting point is1945° F Gold is not corroded or tarnished by moisture, or oxidized (rust) by theeffects of oxygen and water, or affected by ordinary acids, as most other metals are.Deposits of gold that have lain inside a mountain or under a streambed or even on theocean’s bottom will remain there and be rather unaffected until moved by the naturalforces of the earth-or taken by man

Gold is unaffected by air, water, alkalis and all acids except aqua regia (a mixture ofhydrochloric acid and nitric acid) which can dissolve gold Gold does react withhalogens It will, for example, react very slowly with chlorine gas at room temperature

to form gold chloride, AuCl3 If gold chloride is heated gently, it will decompose torelease the pure elements again

Gold is not the most valuable metal, but it is extremely valuable and probably the mostsought after of all the valuable metals found on earth At today’s market exchangevalue, that same cubic foot of pure gold would be worth in the neighborhood of 10million dollars A cubic inch of pure gold would be worth about 7 thousand dollars Sogold is valuable, very valuable indeed; and it does not take very much of it toaccumulate a considerable amount of wealth

Because gold is dispersed widely throughout the geologic world, its discoveryoccurred to many different groups in many different locales And nearly everyone whofound it was impressed with it, and so was the developing culture in which they lived.Gold was the first metal widely known to our species When thinking about thehistorical progress of technology, we consider the development of iron and copper-working as the greatest contributions to our species' economic and cultural progress -but gold came first

Gold is the easiest of the metals to work It occurs in a virtually pure and workablestate, whereas most other metals tend to be found in ore-bodies that pose somedifficulty in smelting Gold's early uses were no doubt ornamental, and its brillianceand permanence (it neither corrodes nor tarnishes) linked it to deities and royalty inearly civilizations

It is these characteristics that gold has attracted people from the beginning not onlyalways keep colors in all conditions, but also because with a little gold, people caneasily fabricated items very beautiful makeup for life

2.2.2 Gold is the goods as well as one kind of currency

Gold has two attributes of goods, which are existing-use value and value worth

Value in use of gold: Gold is used pretty much the same everywhere Originally, due

to the brilliant colors, the easy processing and non-corrosive, gold is used for jewelry,art and supplies serving mystical religious ceremonies The applications of gold hasmade people appreciate gold, used it to adorn themselves and regarded it as a symbol

of power Since thousands of years ago, the gold objects were placed in the Pyramids

of Egypt's popular or how your donation Faraón decorated and map content in thepalace of the Emperor of China 'Son of Heaven ' This day, in addition to serving theneeds of jewelry and beauty, because of the predominant characteristics Vietnam, gold

is used in high-tech fields such as military technology, electronic technology andtravel information universe

The value worth of gold: To have gold, it is necessary in gold mining andmanufacturing Thus, the value of gold is worth of labor crystallized in it

Gold is widely used in jewelry and coinage It is also used in dental work as crowns, asgold plating for decoration and as gold thread in embroidery work The gold content inalloys is usually measured in carats (k), with pure gold defined as 24k

Gold is also one kind of currency Gold became the basis of money in many ancientcivilizations, and even today most countries maintain large reserves of gold forfinancial credibility Most modern currencies, however, are not tied to gold as theywere in the days of Gold Standard, described by economist John Maynard Keynes as

“a barbarous relic.” In addition, the undeniable value of gold is in the ritual, religious,symbol of the power of the ruling class, in admiration of the man with the jewelry, artwork associated with capital priceless art and beauty is praised by women, in otherwords, in addition to the typical value of a commodity you go through many centuries,just use as gold coins When the productive forces and the social division of labordeveloped to a certain extent, the exchange of goods thrived and people had to use thespecial commodity serves as the general price level Increasing in division of labor andproduction market is expanding across the state have more general character makesexchanges difficult, so need to use the general price level material and form unifiedcurrency rates treatment appears, at first, the money is rare things for people such asarrows, shells, fur, animal skins, and finally silver and gold

Gold is very rare, in the earth and in the universe, especially compared to carbon andthe hydrocarbon molecules that were created by natural processes on Earth.

2.3 The situation of gold trading in the world and in Vietnam.

1.1.1 The situation of gold trading in the world

Figure 2.1: Gold Price from 1915 to 2015

Source: USAGOLD.comGold as a commodity that has enduring value, play a role as an equivalent currency.This is shown clearly in the function of gold as a currency: a measure of value, means

of circulation and payment facilities, storage facilities and the world currency.Therefore, the fluctuations in the price of gold have become the first concern ofinvestors in particular and people all over the world In the history of the world goldprice point, at the time 21/1/1981 gold hit a record 875USD per troy ounce The reasonstems from the weakening US economy, rising inflation, the US bogged down in theVietnam War and to sell gold to the amount of $ 3.5 billion The move makes the goldreserves of the US dollar fell sharply and forced to float the decision dated 15/08/1971,the U.S unilaterally disable Bretton Woods agreement on day 1 and then in 18/12/1973the U.S must declare the dollar devaluation of 10% marks era rampant inflation and

the opening the stage gold prices climb on a high, from $232 in 1972 to $875 perounce.

The year of 2008 witnessed the spread of the global financial crisis, which stemmedfrom the collapse of the housing market in the US Its influence led many economies

in the world tanked, and in the context of high inflation, the investors massivelytransferred their funds into the gold market Only in quarter 1/2008, gold has increased

by 14% its value The specter of inflation growing global threat, of which the mostobvious manifestation is the price of oil continues to climb each mold, mold after mold

is higher than before and the Federal Reserve lowered interest rates to constantly fendwith the devastation of the credit crisis, while other central banks to try to keep interestrates high to curb inflation pressure as heavy dollar The "Tsunami" of the globalfinancial crisis has caused severe consequences: the loss, disruption, nationalization,bankruptcy, insolvency Governments must make plans to provide support for theeconomy but the solution is not to break the good signal for the market Moreover, thespecter of deflation fears were put era "bubble" of commodity markets went into thedeep end of which have been the most reduced crude oil at up to 70% from the peak inJuly 7 and constantly slipping so far, despite the efforts of the largest oil producingcountries such as OPEC, Russia, Saudi Arabia has slashed output The demand forgold as a safe items are not lost even the economic situation is not bright, especiallyrepercussion from the collapse of Lehman Brothers and the financial institution hastaken another giant price Gold peaked on 10/10/2008 at $950 per ounce, while thetrouble has not been thoroughly removed from the leading economy and the Feddecided to take the lowest interest rates in history, plus measures to pump hugeamounts dollars into the economy to fight the crisis is putting pressure on depreciationback to dollars

2.3.2 The situation of gold trading in Vietnam

After over two years of implementation of the new regulatory framework formanaging the gold market generally and Decree 24 particularly, the managementsolution the gold market has achieved positive results

The implementation of Decree 24/2012 / ND-CP dated 03/4/2012 on the management

of gold trading activities (Decree 24), the State Bank of Vietnam (SBV) has urgentlypromulgate guidelines and give some solutions to closely manage the gold market.Now, the solution of management gold market has achieved some positive results

In late 2012, the network business of buying, selling gold bars is set up, managed withtrading venues in all 63 provinces and cities To date, the number of business locationsfor trading gold bullion has been watered down and meets the needs of people andbusinesses

In 2013, the central bank creates some biddings of supply gold bars on the market,balance the supply and demand with gold piece, and ensure the gold price remainstable SBV partly give an important contribution to maintaining a stable exchangerate, and stable foreign exchange market macroeconomic regulations Dealing with thepositive development of the gold market, from early 2014 until now, the SBV do notneed to organize tender gold bullion, contributing to limiting the use of theStabilization Fund in foreign currencies exchange rates and gold prices in order toimport gold on the international market

On the organization manage to produce gold bars, after Decree 24 was applied, also in

2012, the SBV issued Decision No 1623/Decision-SBV on the organization andmanagement of production of gold bars Accordingly, instead of having multiple brandgold bars as before, the whole market only a single brand as the central bankauthorized the Company Saigon Jewelry - SJC outsourcing The SBV decided Quotas,volume, time of production and material resources as well, on the basis of monetarypolicy and the supply and demand of gold bars on the market In order to ensure thelegitimate rights and interests of the people, the SBV continues to require the othercompanies to make the transition of other brand gold bars to SJC brand for people

In January, 5th 2015, SBV issued Decision No 2809 / Decision-SBV amending andsupplementing some articles of the charter organization and operation of the NationalMoney Printing Factory Accordingly, the National Printer is printing money, coinageand produce gold bars, gold souvenirs

The implementation of regulation for producing gold bars, importing and exportingmaterial resources and the invention of stabilize the market price have brought somepositive effects Especially, since the beginning of 2014 until now, at various times,although the world gold market has now increased, a sharp fall in domestic goldmarket remains volatile, SBV does not have to use reserves to intervene in foreignexchange markets.

Besides, the demand for gold bars in the economy has fallen sharply Gold bar demandand supply shift from shortages to balance At the time of world gold price increased

by reducing abnormal, domestic prices do not fluctuate sharply, no longer of "goldfever" caused social unrest as before

Specifically, during the year 2014, international gold markets are more complicatedwith multiple sessions with large amplitude fluctuations Highest gain is $1,380 /ounce

in the March of 2014 In the first 4 months of 2014, domestic prices are generallyvolatile and the trend of international gold prices but adjusted rate decreased less thanthe fluctuations of the international gold price During the year, the lowest price of themarket is 34.86 to 34.9 million per tael, repeated twice in the first and early inNovember By the end of month 12/2014, the domestic gold price fell from 35.13 to35.17 million / tael (buy - sell)

To conclude, in 2014, world gold price movements are relatively complex cause asignificant impact on the domestic gold price volatility, but with the policies that theSBV deployed, the gold market management has achieved positive results Stabledevelopments in the gold market have contributed to maintain the stability of theexchange rate, the foreign exchange market, increase foreign exchange reserves and astable state macroeconomics

2.4 Kinds of gold investment products in Vietnam.

Vietnam's financial market has been developing in recent years; thus, joining thederivative products as well as the investments of investors have to face with moredifficulty than in developed markets Trading in international markets not only needsthe diversity of goods (money, gold, precious metals, oil, agricultural products), butalso need to ensure that all the products for the investment requirements Additionally,

as an activity that characterized the market economy in the long time i.e supply anddemand will determine the prices of goods and clear legal framework that can helpinvestors to be peace of mind when investing In contrast, the financial market inVietnam is very new, so it may show some difficulties for the business such as: nolegal framework intended to protect investors from the risks which can be prevented,lack of derivative works, or have but the cost is too high making investment or use ofthis product can not be effective or very few, not to mention the prices of somecommodities and the exchange rate closely monitor water such as oil prices, exchangerate, makes use of derivative instruments is difficult to take effect Here are some types

of trading gold in the commercial banking Vietnam today

1.1.1 Trading gold through account

There are many banks and jewelry companies are allowed to deploy this serviceinclude: Eximbank, Sacombank, Vietnam Asia Bank, Eastern Asia and Southern;Jewelry Co., Saigon - SJC, Agribank Gold Corporation This is the bank's business andthe state Department of Foreign Exchange Management allows deployment since

2006, but this is a very promising business, banks are rushing to deploy Gold tradingaccount requires a very small margin leverage factor for trading on one large volume,while the purchase price constantly update publicly attracts a lot of investors toparticipate There are some advantages of trading gold through account

- Reduce the amount of physical gold stored in the population and the amount offoreign currency in the gold market will be limited

- Source gold deposit is improved

- Mounting prices linked to the international market, according to supply anddemand closely movement, increasingly integrated with the trading in gold andderivatives as financial markets around the world]

It can be seen that the statistical figures of gold trading business of banks in recenttimes have showed the interest from the business bank gold per year from 20 to 30billion VND, and it is clear that when the bank earn profit, there is a large segment ofinvestors damaged That means banks are not really supporting investors in the

business objectives of the bank and not to make a profit on international markets toprofit from the difference between the international price of gold and the pricedomestic gold when there are factors that impact.

1.1.2 Gold options and futures

Gold options and futures are the gold speculation subsidiaries which are transienthypothesis on the future gold costs The businesses are more intricate and exchanginghypothesis however not in physical gold Consequently, those methods for venturesare suitable for more experienced and advanced speculators To purchase alternatives

is unsafe, a larger number of financial specialists lose than win The unmistakableplaying point is that the financial specialist can control a huge speculation with a little,and be restricted, measure of cash The detriment is that alternatives terminate inside asettled time of time Gold choices and prospects may bring an extensive fortune; itadditionally may be lost all in a moment

1.1.3 Gold deposits

To ensure payment requirements, credit gold is used to ensure the value of money Forexample, in the real estate transaction, the buyer before payment or not buy a house,the bank bought gold held in custody to prevent the price of gold up Conversely, if theseller has not received money gold afraid of declining in gold price, they can borrow abank loans for sold out When received by the buyer they will pay the money back tothe bank Suppose an investor predicted gold prices rise, banks will borrow money tobuy gold deposits The amount of the mortgage loan is due bought some gold to thebank, and the bank loan will be paid to the shop to sell gold brought gold Conversely,

if investors predict gold prices fell, they would go to the bank gold loans sold to stores.Stores bring gold to buy the amount of money is put into the bank prior to thecollateral for the loan of gold Thus, investors only spend a small amount of 1/10 orless as specified percentage of banks that can perform this operation Banks only dotheir job performance, but the customers do their investment This service may occurrisks for both sides, if the wrong direction, the investor may suffer property loss verymuch, because they use their capital as financial leverage Because of gaining bigprofits when investment, this service attracts many investors

1.1.4 Gold backed securities.

Gold backed securities are one of gold investment ways which indirectly invest gold Itcombines the benefits of physical gold bullion with the liquidity of the traditionalsecurities market Usually, the gold of securities can be redeemed, but the redemptionfee is relatively high to prevent gold trading frequency Gold exchange-traded funds(ETFs) are an investment fund traded on stock exchanges, much like stocks Differentfrom the stock ETF, gold ETF is a financial derivative product tracking the spot goldprice

Advantage of gold backed securities is: first, the dealing spreads are comparativelylower than physical gold (such as gold jewelry, coins and small bars), commonly theyare 0.5%; second, removed from the gold custodial fees, storage fees and insurancecosts, only need pay a management fee of about 0.4%; at last, with high liquidity, it isconvenient to trade Disadvantages of gold backed securities: investor does not havegold ownership; some stock exchanges impose extra charges on each trading

1.1.5 Physical gold

Generally, physical gold is a piece of the vast majority's venture portfolio Physicalgold could be put resources into the type of gold adornments, gold coins or goldbullion The benefit of physical gold: financial specialist has the direct proprietorship,and keeps esteem The impediment is: secretly put away gold is with low liquidity, theexpenses are high which including conveyance and handling charges In respect togold coins and gold gems, gold bullion is more desirable over contribute, due to itslower expenses and high liquidity

Vaulted gold speaks to gold bullion It is put away in expert bank vaults The financialspecialist likewise obtains the vaulted gold possession, however doesn't hold the gold

in his own particular hands Generally, the vaulted gold pays lower expenses and gives

a high liquidity

1.1.6 Trading jewelry

Business model of trading jewelry is the business that the products are gold jewelry,handicrafts such as ring, chain, ring, earrings, pins, and other subjects Gold jewelrymarket is constantly developing and expanding Not to mention the biggest markets ofthe industrialized countries, it is the French market, the US, Italy, Japan, Hong Kong,India Currently the gold market tends to thrive in Asia where the economy is growing

at a relatively fast pace, gold jewelry market development and sales with many diverseforms as exhibited sold in the commercial center, on the internet, shop page health,especially international fairs are held regularly around the world has boosted the sale

of jewelry Consumers today tend to want to quickly change the design and style withthe more unique designs They are not only interested in the quality of raw materials asbefore Therefore requires line, production technology in the field of jewelrymanufacturing increasingly improved to keep up with market demands

1.2 The business efficiency of gold trading business.

We can base on some different ways when considering the term ‘efficiency’ However,generally, business efficiency is critical to the accomplishment of any undertaking.Business productivity is a wide term that makes a great deal of progress Each part ofyour business, from money to human resources, from generation to conveyance, can

be filled with inefficiencies that drive expenses up At the point when surveyingexpenses, it is critical to recollect that there's more than cash in question: expense istime, quality, and great will Being productive business means making choices thatbring the advantages to one sector of a business without unexpectedly taking fromanother Knowing the ventures to take and the apparatuses to use to make yourbusiness more productive will help you get the best results in any event conceivableexpense Quantitatively speaking, the economic efficiency of the production-tradingreflected the relationship between results and costs money Qualitatively speaking, itreflects the influence of manufacturing activities - trading for solving theserequirements and economic objectives, requirements and political objectives - society.Gold business includes of trading gold, ensuring the balance of gold trading accounts,and earning profits through exchange rate and interest rate of different currency andgold We can define the business efficiency of gold trading into some indicators asfollow:

To analyze a business efficiency of a corporation, we need to base on financial ratios.Because of the limit in the study, I will focus on some main financial ratios that reflectclearly the business performance of AJC Ha Dong

1.2.1 Profitability ratios

Gross margin = Total revenue Gross profit

A company's total sales revenue minus its cost of goods sold, divided by the total salesrevenue, expressed as a percentage The gross margin represents the percent of totalsales revenue that the company retains after incurring the direct costs associated withproducing the goods and services sold by a company The higher the percentage, themore the company retains on each dollar of sales to service its other costs andobligations

Profit margin = Total revenue Net income

A ratio of profitability calculated as net income divided by revenues, or net profitsdivided by sales It measures how much out of every dollar of sales a companyactually keeps in earnings

Profit margin is very useful when comparing companies in similar industries A higherprofit margin indicates a more profitable company that has better control over its costscompared to its competitors Profit margin is displayed as a percentage; a 20\% profitmargin, for example, means the company has a net income of $0.20 for each dollar ofsales

Return on Asset (ROA) = Total assets Net income

An indicator of how profitable a company is relative to its total assets ROA gives anidea as to how efficient management is at using its assets to generate earnings.Calculated by dividing a company's annual earnings by its total assets, ROA isdisplayed as percentage Sometimes this is referred to as "return on investment"

Return on Equity (ROE) = Total equity Net income

The amount of net income returned as a percentage of shareholders equity Return onequity measures a corporation's profitability by revealing how much profit a companygenerates with the money shareholders have invested

1.2.2 Liquidity ratios

Current ratio = Current liabilities Current assets

A liquidity ratio that measures a company's ability to pay short-term obligations

The current ratio can give a sense of the efficiency of a company's operating cycle orits ability to turn its product into cash Companies that have trouble getting paid ontheir receivables or have long inventory turnover can run into liquidity problemsbecause they are unable to alleviate their obligations

Cash ratio = Cash∧marketable securities Current liabilities

The ratio of a company's total cash and cash equivalents to its current liabilities Thecash ratio is most commonly used as a measure of company liquidity It can thereforedetermine if, and how quickly, the company can repay its short-term debt A strongcash ratio is useful to creditors when deciding how much debt, if any, they would bewilling to extend to the asking party

1.2.3 Activities ratio

Cost of goods sold to sale ratio = Cost of goods sold Total revenue

The cost of goods sold (COGS) to sales ratio shows the percentage of sales revenueused to pay for expenses which vary directly with sales

Administration ratio =Administration e xpenses Total revenue

The sales to administrative expense ratio is an asset utilization measure that allowsanalysts to understand the level of overhead costs required to support a given level ofrevenues Investor-analysts oftentimes track this ratio over time, since the ratio shoulddecrease as a company achieves economies of scale.

Assets turnover = Total assets Sale

The amount of sales or revenues generated per dollar of assets The Asset Turnoverratio is an indicator of the efficiency with which a company is deploying its assets.Inventory turnover = Cost of goods sold Average inventory

A ratio showing how many times a company's inventory is sold and replaced over aperiod The days in the period can then be divided by the inventory turnover formula

to calculate the days it takes to sell the inventory on hand or "inventory turnoverdays.”

Receivables turnover ratio = Average net receiv ables Net credit sales

An accounting measure used to quantify a firm's effectiveness in extending credit aswell as collecting debts The receivables turnover ratio is an activity ratio, measuringhow efficiently a firm uses its assets

CHAPTER 3: THE EFFICIENCY OF GOLD TRADING BUSINESS IN VIETNAM AGRIBANK GOLD JOINT STOCK COMPANY HA DONG

BRANCH 3.1 Overview of AJC Ha Dong.

3.1.1 Vietnam Agribank Gold Joint Stock Company (AJC)

English name: Vietnam Agribank Gold Joint Stock Company Corporation.

AJC, established under Decision No 131/Decision-Agribank in September 28th, 1994

of Agricultural Chief Executive Officer, is dependent accounting units of AgriculturalBank of Vietnam

On March 24th, 2003, AJC was agreed by Prime Minister ofthe Socialist Republic of Viet Nam and authorized by Governor of the State Bank

of Viet Nam Chairman of the Board of Directors of Agribank Vietnam has signed thedecision No.44/Decision-BOD for establishing the Jewelry Fine Art AgricultureDevelopment Bank Corporation, which is an independent accounting unit under theVietnam Bank for Agriculture Development Bank, and is ranked as class I

On June 25th, 2003, Governor State Bank of Vietnam signed Decision No 655/2003 /Decision-SBV for merging Jewelry Fine Art Vietnam on Agriculture andDevelopment Bank of Vietnam Jewelry Fine Art Company received the JewelryCompanies in Hanoi, Jewelry Companies in Ha Tay, Jewelry Crafted Companies

On June 29th, 2007, Chairman of the Board of of Agribank Vietnam has signedDecision No 654/Decision-BOD for approving to change the Jewelry Fine Art

Agriculture Development Bank Corporation with 100% state capital into joint-stockcompanies.

On June 24th, 2008, the Chairman of the Board of Directors of Agribank Vietnam hassigned Decision No 732/Decision-BOD for approving share schemes, and changingthe Jewelry Fine Art Agriculture Development Bank Corporation to the GeneralCorporation with a capital of VND 206 billion

On May 9th, 2008, AJC conducted an auction to sell shares for the first time (IPO)successfully AJC has had 02 strategic shareholders which are South East Asia Bank(SeABank) and Nam Cuong Group and many other common shareholders

On November 14th, 2008, AJC conducted a meeting of Shareholders adopted thecharter, plans for production and business activities; AJC also elected the Board ofDirectors, the Supervisory Board of the Corporation

On December 29th, 2008, Chairman of the Board of Directors of AgriBank of Vietnamsigned Decision No 1737/Decision-BOD to change the name of the corporation fromJewelry Fine Art Agriculture Development Bank Corporation to Vietnam AgribankGold Corporation Joint Stock Company (abbreviated as AJC)

Agribank Gold Corporation Joint Stock Company (AJC) is one of the largestenterprises of gold industry in Vietnam Switching to joint stock company model, AJCunleash resources, potentially availability, as well as the advantage of the newpotential resources The trend of globalization poses great challenges to the AJC aswell as creates new opportunities to develop strong AJC AJC tend to apply theprinciple of building and operating the system is standardized, modernized to ensureall activities synchronized by AJC are rational, optimal, and always tightlycontrollable, safe AJC set the aim of the year of 2025, they will be the leading brand

in Vietnam, known in Southeast Asia, and become popular all over the World ofproducing gold bullion, gold jewelry, silver, real estate investment business, and areputation for financial services, banks in the region AJC network is available in mostprovinces and cities in Vietnam AJC particularly emphasizes on recruitment, trainingstaff in order to meet the full requirements of expanding and developing the company

It is expected that by 2025 the number of staff working for AJC will reach about

9,000 The total assets of the system increased 25 times today The average income percapita income increased 5 times now Dividends paid to investors often greater thanthe interest rate plus inflation AJC's shares on the stock market reach a high price, andhave increased liquidity AJC is environmentally friendly, reliable members, partners,investors and customers AJC constantly improve product quality, service AJC ofteninterested in improving the material life and spirit of the staff, members of the AJC,ensure the dedication, entitlements, rights are honored equally among all members.The greatest happiness of every member of AJC is devoted their abilities

3.1.2 AJC Ha Dong

3.1.2.1 General information.

Agribank Gold Corporation Vietnam Joint Stock Company - Ha Dong branch wasestablished in 1981

Abbreviation: AJC Ha Dong

Head office: 537 Quang Trung Street, Phu La Ward, Ha Dong District, Hanoi,Vietnam

Tax code: 0100695362 to 003

Phone: 04 33824352

On May 30th, 1981, the State Bank of Vietnam decided to establish a Gold and JewelryCenter of Ha Son Binh Province, the predecessor of AJC Ha Dong branch At thattime, the organizational form was “Sufficient revenue cover Expense”

On March 12th, 1988, the company was renamed Ha Tay Jewelry Company depended

on the State Bank of provinces At that time, all business activities were directly underthe control of the Director of State Bank of Ha Tay province

On June 2nd, 1989, State Bank gave the decision No 71-NH/HT to allow Ha TayJewelry Company to be accounted independently and autonomy in production andbusiness activities

October 2, 1991, with the appearance of the Jewelry Fine Art AgricultureDevelopment Bank Corporation, Ha Tay Jewelry Company was separated from theState Bank to return to Jewelry Corporation Business activities were under the statuteand the charter of the Vietnam Jewelry Corporation, and also under the control of theGeneral Director.

On July 1st, 2003, The Jewelry Corporation of Vietnam was merged into the Agribank

of Vietnam Ha Tay Jewelry Company was merged into Jewelry Fine Art AgricultureDevelopment Bank Corporation under the Decision No 655/2003 /Decision – SBV onJune 25th, 2005 of the Governor of the State Bank of Vietnam and become Ha Dongbranch and operates under the statutes of the Agribank of Vietnam

On December 29th, 2008, Chairman of the Board of Directors of AgriBank of Vietnamsigned Decision No 1737/Decision-BOD to change the name of the corporation fromJewelry Fine Art Agriculture Development Bank Corporation to Vietnam AgribankGold Corporation Joint Stock Company (abbreviated as AJC) Ha Dong-branchbecame an operating unit under the Headquarters

From that time to now, Ha Dong Branch has been a potential unit, and leading ineffective business operation It is the result of the tireless striving of various staff andemployees in the branch, especially the wise direction, and the high responsibilities ofthe Ha Dong Branch’s managers Ha Dong Branch has obtained some greatachievements

3.1.2.2 The managerial structure.

Figure 3.1: Organizational structure of AJC Ha Dong

(Source: Synthesis Report of AJC Ha Dong - 2013)Managerial apparatus of Ha Dong branch is organized compactly, with highly efficientoperations, and provides timely and complete all information managementrequirements

- Board of Directors: Management operations in quantity and quality of goodsand services to ensure timely planned operation, and simultaneously manage allthe other activities of the company, as inspecting and supervising theconsumption of goods and services

- Administrative Department: drafting the regulations implementing work, thecharter company's operations, manage the human resources for the company,and securing the document and data

- Accounting Department: organizing closely accounting, checking the assets andfunds, determining and distribution the result, monitoring and supervising theentire operations of the company, draft the financial accounting report,

Vice Director 2

Trading Center No 1Trading Center No 2

Ha Dong Jewelry Center

Chief Accountant

Chief Accountant AccountantA Department