Báo cáo thực tập tiếng anh PETRO VIETNAM MACHINERY – TECHNOLOGY JSC ( PV – MACHINO)

 Table 2: Importing Turnover of PV-Machino Unit: billion VND Chart 2: Importing Turnover of PV-Machino in Each Market Unit: billion VND  Table 3: Income Statement of the Company in pe

VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

***

GRADUATE INTERNSHIP REPORT

PETRO VIETNAM MACHINERY – TECHNOLOGY JSC

( PV – MACHINO)

Address: 13th Floor, CEO Building, Me Tri Ha, Pham Hung, Ha Noi

Supervisor: Mrs Do Phuong Huyen Student’s name: Dang Thu Thao

Student’s ID: 1107 1506 Major: International Business Class: IB2012B

Hanoi, 10 th March,2016

B/ Report on Operational & Business Activities of PV- Machino JSC:

I. Overview of Company’s Financial Data::

1. Revenue & Profit:

4. Sales & Marketing:

5. After Sales Service:

III. Further Research on Importing Activities of PV-Machino

1. Importing Process of PV-Machino:

2. Critical Issues and Solutions to Enhance Operational Efficiency of PV-Machino

3. Suggestions for Graduated Dissertation:

C/ Purposes, Assigned Tasks, Measurements of The Internship:

I. Internship Purposes:

II. Assigned Tasks:

III. Working methods:

D/ Achievements & Lessons after Internship:

I. Theoretical Knowledge Enhanced:

II. Practical Experiences Gained

III. Soft Skills Improved:

IV. Contributions to PV-Machino during Internship:

References:

Appendix:

12223371313131416181819212125262630333333343537373738394041

List of Tables & Charts

 Chart 1: Organizational Structure at PV-Machino

 Table 1: PV-Machino ‘s Products, Characteristics and Application

 Table 2: Importing Turnover of PV-Machino (Unit: billion VND)

 Chart 2: Importing Turnover of PV-Machino in Each Market (Unit: billion VND)

 Table 3: Income Statement of the Company in period 2012-2014

 Table 4: Owner’s Equity of PV-Machino from 2012 to 2014 ( Unit: VND )

 Table 5: Importing Turnovers of PV-Machino from 2012 – 2014

 Table 6: PV-Machino’s Structure of Imported Products

 Table 7: Planning Business Targets in 2015 of PV-Machino

 Table 8 : Process of Purchasing Materials at PV-Machino (PVM-KTDT-QT.04)

 Table 9: Executing Sales Contract of PV- Machino

 Table 10: Customer Satisfaction Evaluation Process

 Table 11: Summary of Tasks Performed During the Internship

List of Shorted Words:

6 TPP Trans-Pacific Strategic Economic Partnership Agreement

Acknowledgement

Internship is one of the most important subjects which are practical for InternationalSchool’s students In the internship period, students have opportunities to approach theworking environment in the company or government departments; also study andexperience before accession in that company

The following six-week internship at Department of Economic and Technical of PetroVietnam Machinery – Technology ( PV- Machino ) was a milestone in my study atInternational School – Vietnam National University ( IS – VNU) I would like to thank toall the supports from Mrs Do Phuong Huyen, my teachers at IS-VNU, my guidingofficers as well as other staffs in other divisions of the company I also praise all theefforts that our classmates have done in the internship period and student life We haveshared the knowledge, the ideas and the cooperation, and this was how we can finish theInternship and complete the report I hope to receive all the support for years to come.This is very important that the sharing and connecting to the practical work will behelpful for our future jobs

After the internship at PV-Machino, I have an overview of the roles, duties,operation and functional departments of the Company Thus, I can understand thestrengths and weaknesses as well as business plans to have better solutions helping thecompany achieve greater accomplishments and overcome the limitations

Last but not least, I would like to express my gratitude to my supervisor, myteachers, guiding officers and all the staffs that help me complete the internship at PetroVietnam Machinery – Technology (PV – Machino)

Finally, I would like to extend the most sincere thanks to my supervisor, Mrs DoPhuong Huyen for guiding me and my friends during the internship program

Thank you all!

A/ Overview of Petro Vietnam machinery – Technology JSC (PV-Machino):

1. Background Information :

PETROLVIETNAM MACHINERY – TECHNOLOGY JSC (PV-MACHINO):

• Headquarter: No 8, Trang Thi, Hang Trong, Hoan Kiem District, Ha Noi

• Representative Office: 13th Floor, CEO Building, Me Tri Ha, Pham Hung, Ha Noi

• Tel : (+84).38260344 Fax : (+84).38254050

• Website: http:// www pvmachino.vn

• Email: pvma@pvmachino.com

2. Development History:

- Petro Vietnam Machinery- Technology (PVMACHINO) with the formation and long-termdevelopment: from Import and Export Machinery Corporation which was established dated3.3.1956 and Equipment Accessary Corporation was established dated 03.03.1960 We wereincorporated into the Corporation of Machinery and Accessory under the DecisionNo.163/02-03-1992 TMDL-TCCB dated 02.03.1992 of Ministry of Trade and Tourismwhich is the Ministry of Industry and Trade The Corporation of Machinery and Accessorywas established again under the Decision No 225 TTg of the Prime Minister of the State intothe Corporation 90 under the Ministry of Industry and Trade on 17.04.1995

- In December 2002, according to the instruction of the Prime Minister on the innovation,about the reorganization enterprise of State, the Corporation of Machinery and Accessorieswas established again under the Decision No 0713/2003/QD-BTM dated 13/ 06/2003 of theMinistry of Industry and Trade on the basis of reorganizing the Office of the company andthe subsidiary units of the Corporation On 8/8/2005, Prime Minister's Decision No.197/2005 / QD-TTg allowed to operate under the organizational model of Holding company-Subsidiaries Company

- Implementing the decision receipt of Vietnam Oil and Gas Group and the Transfer Decision

of the Ministry of Industry and Trade, dated 20/12/2007, The Corporation of Machinery andAccessories was handed over intact to the Vietnam Oil and gas Group and become a memberunit of the Petrol Vietnam Power Corporation On 14/03/2008, Vietnam Oil and GasCorporation issued Decision No 517 QD-DKVN of equitizing company On 10/03/2009,Vietnam Oil and Gas Corporation issued Decision No.673 / QD-DKVN about transferringthe Corporation of Machinery and Accessary which belonged to Petrol Vietnam PowerCorporation, into the a member unit of the Vietnam Oil and gas Group and continuing tocarry out equitation

- The Company held the first General Meeting of Shareholders to establish company on09/02/2010 Department of Planning and Investment of Hanoi certificated of BusinessRegistration and Tax Registration for Petro Vietnam Machinery- Equipment JSC(PVMACHINO) and officially operated in the form of shareholder on 01/03/2010 Theauthorized capital of the company is 386.386 billion VND

- Since its establishment, PVMACHINO has deployed and constructed many projects incategories which are Power System, Technology System, and Installation of machinery andEquipment for manufacture; deploying multiple of providing supplies, equipment, machineryand vehicle packages to inside and outside projects of Petroleum Industry

- PVMACHINO constantly strives to become one of the reliable contractor that providingmachine, supplies, equipment, organization of construction, installation and implementation

of after-sales services for the project, civil works, industry, traffic, medical, exploration andexploitation of oil and gas.

3. Mission, Vision, Core Competence:

• For Customers: Provide long lasting, high-quality and stable products The needs ofcustomers are PV-MACHINO best served, non-discriminating of customers

• For shareholders and investors: PV-MACHINO always keeps the motto of enhancingtransparency and public information of the Company operation to the shareholdersand investors via many different media and also actively creating opportunities fordialogue with investors

• For business partners: Maintain, nurture and develop long-term relationships on theprinciples of respecting the interests of both parties in order to create the best qualityproducts to society

• For society: PV-MACHINO always considered sharing with the community by bothphysically and mentally contribution is the social responsibility of the enterprise

• For employees: Creating equal working environment, regardless of age, gender

4. Organizational Structure:

Under Shareholders Council & Board of Directors, the company has divided into four mainDepartments:

- Administration & Organization Department:

- Head: Chu Van Khanh

- Deputy Head: Bui Huy Quang

- Deputy Head: Chu Thi Thanh Chung

• Finance and Accounting Department:

- Chief Accountant: Hoang Minh Duc

- Deputy Head: Ly Thi Le Ninh

- Planning and Investing Department:

- Head: Nguyen Anh Dung

- Deputy Head: Hoang Thanh Tung

- Economic and Technical Department:

- Head: Kieu Minh Son

- Deputy Head: Ta Thi Bich Quyen

- Deputy Head: Chu Hai Dang

- Deputy Head: Hoang Long

Chart 1: Organizational Structure at PV-Machino:

(Source: Organization & Administration Department)

a) Functions of Organization & Administration Department:

 The HR Organization

- Organizational structure, management mechanism and administration of the agency'sOffice Apparatus Company and its subordinate units; preparing the establishment ofcouncils, committees, delegations and working groups

- Management on personnel issues: the appointment, dismissal, transfer, rotation,evaluation, planning, rewarding and disciplining staff, management and record-keepingpersonnel; procedures for sending staff to work or study in the foreign country

 The wage & labor policy:

- To advise and assist the company leaders the implementation of guidelines and policies

of the Party and the law of the state in business, policy regimes for workers;

- Make wage policies, insurance policies, retirement for employees

 The HR training and development:

- Develop strategy, planning and development of human resources to meet thedevelopment needs of the Company

DIRECTORATE

PETRO LVIETN AM CONTR UCTIO NJ.S.C

PETROL VIETNA M MACHIN ERY- EQUIPM ENT J.S.C

MEMBERS OF COMPANY DEPARTMENTS

FINANCE AND ACCOUNTIN G DEPARTME

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FCC VIỆT NAM CO LIMI TED

VIETNA M NIPPON SEIKI LIMITE

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PROJE CT MANAG EMENT DEPAR TMENT 1-3-5-7 DINH TIEN HOANG HANOI

PVM ACHI NO SG CO.L TD

ORGANIZAT ION AND ADMINISTR ATION DEPARTME NT

PVM DAESCO DÂNG PETROL EUM MACHIN ERY TECHNO LOGY J.S.C

- Develop a plan and training policies.

 Business Administration – Administrator

- To advise and assist the Company Leader of Business Administration - Management,synthesis, receptionist, clerical - archive

- Management, equipment, purchase of assets, ensure infrastructure, facilities and workingconditions of the office of the Company; management of rental properties, facilities;security, safety and fire prevention at the agency; reception work, and welcomesdomestic and welcomes collaboration to work abroad; layout and arrangeaccommodation, accommodation, travel, work of the working groups by the companyleaders chaired

- The emulation and commendation

- The inspection, testing, receiving and resolving complaints and denunciations

b) Functions of Finance and Accounting Department:

- Develop strategies, plans and financial policies of the Company

- Develop a plan and implementing the balanced, arrange, manage and use of capital,funds, finance focus of the Company Implement the loan guarantee, performanceguarantee contracts for units in the company when the business plan viable

- System management, finance and accounting apparatus, the work of financial, accountingand tax work parent company, consolidated accounting reports throughout the Company

- Management of the Company invested externally

- Evaluating the cost estimates of the project, funding for training, scientific research,estimates of conferences, seminars, working groups the company

- Finalization of the project investment, construction, training, scientific research contractsand technology under the control of the Company

- Check the use of funds for investment projects of the Company and the investmentprojects of the subordinate units according to the assignment of the Company; self-testoperation of the Company in accordance with the Regulation on inspection andsupervision of the Company

- Analyze and evaluate the effectiveness of production and business operations andfinances of the Company annual and capital units of the Company

- To evaluate and assess the effectiveness of the business plan of the Company's office andthe business plans of the subsidiary units that use the Company's capital before theGeneral Director or an authorized person for approval

c) Functions of Planning and Investing Department

- Monthly, quarterly reports on the implementation of the plan in the company leadership

to the Company; adjust timely implementation of planned targets

- Develop and implement plans to urge coordination between production and businessunits and the Office of the Company.

- Manage the use of assets of the Company and monitoring the use of assets in the unitsaffiliated companies (land, buildings, vehicles, equipment main production )

- Organize reporting investment needs of the Company, evaluation of investment projects

as assigned in the industry

- Manage the preparation of investment and investment adjustments in the course ofimplementation of the capital units of the Company

- Assess investment performance of the Company

 Business E-Commerce:

- Develop and manage electronic information of the Company, to promote the image andactivities of the Company

- Research and development of e-commerce applications

d) Functions of Economic and Technical Department:

- Advise and assist the Leadership Management Company operating business activitiesthroughout the Company

- Research and negotiate with partners to advise the company leaders choose to participate

in bidding plans and projects; Regulators assigned execution units

- Participate in building strategic, long-term business plan, medium-term and annual plans

- Actively negotiating, signing and implementing economic contracts when GeneralDirector of the Company authorized

- The return of capital, with the efficiency of each business plan; responsible for theoccurrence of the loss of capital

- To advise the Company leaders on managing economic contracts, business and othercontracts complying room registered business lines of the Company

- Directly participating in the bid, the bid dossier, open packages;

- Develop strategic goals of the Company in procurement activities; plans for a generalcontractor or subcontractor supply of machines, materials, equipment and constructionand installation of equipment for projects within and outside the Group;

- To advise institutions signed cooperation agreements with partners have sufficient legalpersonality, ability and experience.

- Subscribe to urge progress of works; participate in checking the price applied materials,equipment and workload as payment and settlement construction

5. Business Line:

PV-Machino has deployed and constructed many projects in categories which are Power System,Technology System, and Installation of machinery and Equipment for manufacture; deployingmultiple of providing supplies, equipment, machinery and vehicle packages to inside and outsideprojects of Petroleum Industry

The company constantly strives to become one of the reliable contractor that providing machine,supplies, equipment, organization of construction, installation and implementation of after-salesservices for the project, civil works, industry, traffic, medical, exploration and exploitation of oiland gas Main business line of the company includes: Commercial business and buildingindustrial equipment & in-house system for construction; manufacturing & selling / purchasingautomobile / motor‘s spare parts and other commercial services; providing commercial servicesrelating to oil machine & equipment…

a. Products :

The company has been actively restructuring import and export business in order to servedomestic demands The company is a trusted partner & wholesaler in the field of import ofmachinery, equipment and spared parts for the domestic units The major import items include:Petroleum mining machines, construction; Machine tools; Means unloaded; Experimentequipment; Billets, iron and steels; Complete equipment line; Raw materials for manufacturing;Automobile tires; Wires from; Automotive Parts; Technical equipment, construction…as follow:

Table 1: PV-Machino ‘s Products, Characteristics and Application

( Source: Economic & Technical Department)

 Here are some examples of company’s importing products:

( Source: Economic & Technical Department )

( Source: Economic & Technical Department )

( Source: Economic & Technical Department )

b. Market:

Table 2: Importing Turnover of PV-Machino (Unit: billion VND)

Turnov er

Weig

ht %

Turnov er

Weig

ht %

Turnov er

Weig

ht %

Turnov er

(Source: Economic & Technical Department)

Since establishment, the company has built strong relationships with a number of reputable

suppliers in the world The importing markets of PV- Machino include: Japan, Korea, China,

USA, Germany, England, and so on But mostly in 3 main markets: Japan, Korea, USA These

markets have different characteristics of production conditions and business practices; therefore,

the proportion of imports of the company on each market area is different On average, during

the last 3 years, the company has good relationship with many of the world market, but not

changed significantly and the proportion Key market of the company remains in Korea

(Source: Foreign Trading Report – Economic & Technical Department)

B/ Report on Operational & Business Activities of PV- Machino JSC :

I. Overview of Company’s Financial Data::

1. Revenue & Profit:

Table 3: Income Statement of the Company in period 2012-2014 (Unit: VND)

Years

Service Providing & Sales Revenue 991,724,942,718 749,634,559,056 575,475,994,158

Deductible Revenue 2,327,312,013 3,429,218,120 161,246,880Net Service Providing & Sales Revenue 989,397,630,705 746,205,340,936 575,315,747,278Cost of Goods Sold 038,605,555,018 705,781,351,584 529,179,986,552

Gross Profit from Sales & Service Provided 50,792,075,687 40,423,989,352 26,135,760,726

Revenue from Financial Activities 74,733,818,051 37,090,781,513 53,109,750,205Financial Expense 48,102,614,528 15,080,256,171 7,292,326,721Selling & Administrative Expense 24,960,001,500 20,478,543,651 15,773,393,226Business Management Expense 42,712,506,801 38,450,194,211 51,577,563,624

Other Incomes 1,801,859,571 655,844,458 2,580,122,748

Other Expenses 2,783,969,400 708,037,794 460,280,675

Income Tax Expense 672,689.862 398,860,622 405,746,991Deferred Income Tax Expense (31,058,706) - (1,307,803,186)

(Source: Audited Financial Report of PV-Machino in 2012, 2013, 2014)

- According to Audited Financial Report in 2012, 2013, 2014, business result of the Company

has significant fluctuation, indicators of revenue and profit decreased year over year, as follows:

sales revenue in 2012 reached nearly 992 billion dong; then decreased to 749 billion in 2013;

then drop rapidly to 575 billion in 2014 This shows that the business activities of the company

from 2012-2016 were not under good condition However, company’s profit still has some

positive results during this period Profit after tax in 2012 reached more than 8 billion dong; in

2013, 3 billion in 2013 (decreased 62.5% compared to 2012), and recovered to 7 billion dong in

2014 (raised 133% compared to 2013) In fact, Vietnam's economy in 2013 was very volatile, so

the company had to accept reduced profits By 2014, the overall situation of the economy has

prospered, so the after tax profits came back to higher level in 2012 and reached more than 7

billion dongs, an increase of over 133% compared to 2013 The main reason for significant

growth in 2014 is maybe from other profits from other activities, which account for more than 2

billion dongs (even when the sales revenue has prop rapidly) while it was negative in two

previous years

- In addition, significant contribution to sales revenue & profit growth is the income from joint

venture contracts, associations and financial investments, which were increased significantly and

accounted for the huge weight of market share The after tax profit of the company jumped from

2013 to 2014 is mainly due to Machino Auto Parts (MAP) Venture of auto & motorcycle parts

production

=> The data suggests that growth in revenue and profit of the company is quite positive This

means the company has potential growth, which already reflects the economic situation, capacity

and efficiency of business operations in the import and export market of machinery, equipment

and spare parts The advantageous evolution of the economy in the field of construction and real

estate, especially in 2014, has created favorable conditions for the import of equipment,

machinery and raw materials and supplies, which are key activities of the company

2. Capital Structure :

Here are some facts relating to the changes in capital structure of PV-Machino:

- With charter capital of 386 billion VND, equivalent to 38.6 million shares, 2009, PV-Machino

IPO, public offering of 5.6 million shares equivalent to 14.5% of charter capital Nearly 85% of

the remaining capital is owned by the Petro Vietnam Corporation

- Besides the IPO, the company also plans to sell shares to a strategic partner (15%), which is

expected to include Him Lam Joint Stock Company (4%) and Vietnam Joint Stock Commercial

Bank (11%) and sell to strategic investors 15%,

- However, in 2010, Petro Vietnam has transferred more than 17 million shares ( more than 44%

of charter capital) for PVI JSC (Petro Vietnam Insurance Joint Stock Company, code: PVI) for

10,509VND / shares and 13.9 million shares equivalent to 36% for PVC (Petro Vietnam

Construction Joint Stock Company, code: PVX)

- Petro Vietnam Securities Joint Stock Company (JSC) also bought 3.27 million shares and

become the major shareholder with 10.48% ownership

- On 4/2011, PV-Machino became managed units under the Petro Vietnam Technology &

Energy Company (PV- EIC) after PV-EIC owned 41.58% shares transferred from PVI, PVC

- In 2014, PV-Machino became managed unit under the Petro Vietnam Electricity Power (PV

Power) after PV-Power received transferred shares from PV EIC and PSI, and then became the

largest shareholder with ownership rate 51, 5%

Table 4: Owner’s Equity of PV-Machino from 2012 to 2014 ( Unit: VND )

-Owner’s Capital

-Owner’s Invested Capital

-Owner’s Other Capital

-Investment & Development Fund

-Financial Reserve Fund

-Non-Distributed After Tax Profit

442,264,385,747 386,386,000,000 112,877,308 7,535,244,593 6,791,126,041 41,439,137,805

399,458,368,718 386,386,000,000 112,877,308 8,342,659,312 7,598,540,760 (2,981,708,662)

405,946,315,956 386,386,000,000 112,877,308 8,342,659,312 7,598,540,760 3,506,238,576

(Source: Balance Sheet – Financial Report in 2012, 2013, 2014)

As we can see from the table, PV- Machino has been financed mostly by its owner’s capital,

which is account for more than 442 billion dongs of owner’s capital and more than 386 billion

dongs owner’s invested capital The other two sources of capital come from State governmentfunds such as investment & development fund and financial reserve fund; these sources only take

a small amount in total owner’s equity and not fluctuated too much during this period However,the remained source of capital from non-distributed after tax profit has changed incredibly from

2012 to 2014 More specifically, the non-distributed after tax profit was very high with morethan 41 billion dongs in 2012, then rapidly drop to negative 2 billion dongs in 2013, and thenincreased to more than 3 billion dongs in 2014 This shows that the revenues from operation orother activities of the company in 2012 was much higher than the last two years, and implies anegative sight to the company’s revenue in the next 5 years

3. Importing Turnovers:

- From 2012 to 2014, importing turnover has decreased over the period In particularly, theweight of importing turnover has gone down from 1.86% in 2012 to 1.19% in 2014 This showsthat the company has been facing troubles in importing goods

Table 5: Importting Turnovers of PV-Machino from 2012 – 2014

(Unit: Billion VND)

3 Weights in Total Revenue (%) 1,86% 1,45% 1,19%

(Source: PV-Machino’s official website)

- Besides, with the aim of diversifying the range of imported commodities and ensure sources,over last 3 years, the company has been actively researching the sources of supply as well asmarket in order to serve importing activities

- Commodities for mining, construction; unloading facilities; experimental equipment; complete equipment line; raw materials for production… are on the way of dropping

from 2012 to 2014 Except some items such as machine tools, car tires and auto parts… tend to increase Machine tool has very fast growth with the growth rate increases from 2.77% to 23.59% as the following table:

Table 6: PV-Machino’s Structure of Imported Products

Commodity

Turnover (Trillion VND)

Turnover (Trillion VND)

Turnover (Trillion VND)

Growth Rate (%)

Growth Rate (%)

Mining & Construction

Electronic Equipment

Automobile Spare Parts

1,109 997 1,068 -10,1% 7,12%

(Source: Financial & Accounting Department of PV-Machino)

II. Operational Activities in Company’s Value Chain:

1. Business Plan :

Each year, every unit has to build a business plan and submit to the Company in the form of PVC/ S-BM.01 After receiving the company targets, within 10 days, each unit has to build a financialplan for the next year so that Company can actively raise capital for production and businessactivities

Besides pursuing company’s mission and statement, PV-Machino supposes some significantstrategic plans, which is demonstrated through “Business Plan Draft in 2015” announced inGeneral Meeting 2014 as follows:

The Board of Directors agreed to advocate early implementation of PV-Machino shareslisted on the Stock Exchange market

Look for demand trend and find new customers in mountainous region of Vietnam such

as Lam Dong, Gia Lai, Cao Bang, Ha Giang

Develop business structure, therefore, is the necessary condition which needs to becompleted in advance PV-Machino have been analyzing and developing importingdepartment into both in-and-out customs way for half of year since early 2015

The Company will carry out restructuring and there will no longer subsidiaries andfocusing on core business areas PV-Machino are focused approach projects, powergeneration plant of General Electric Company Vietnam Accordingly, PV Machino willparticipate in the supply chain of materials, equipment and spare parts in the GeneralElectric Company in Vietnam, gradually raise the proportion of revenue from the field ofproviding supplies and equipment from 30% to 50%

Table 7: Planning Business Targets in 2015 of PV-MachinoNo

.

3 Before – Tax Profit Billion Dongs 15.00

(Source: Planning & Investing Department – PV Machino)

According to the business plan produced in 2015, PV-Machino expects to gain revenue of

600 billion dong, pre-tax profit of 15 billion, after tax profit of 13.24 billion

In addition, PV Machino also makes long-term plans for the next 5 years, from now to

2020 In particularly, the company expected revenue of 700 billion in 2016; 850 billion in

2017, 1,000 billion in 2018, 2019 and 2020 was 1,200 billion to 1,500 billion

Similarly, profit before tax from 2016 to 2020 is respectively 24.98 billion, 28.19 billion,32.76 billion, 37.32 billion, and 50.36 billion With after-tax profit targets, the period of

2016 to 2020 is laid out plans respectively 21.98 billion, 24.55 billion, 28.21 billion,

31.86 billion and 42.29 billion.:

2. Supply & Logistics:

PV Machino looks for the partners oversea with the most economical prices and expenses,corresponds with suppliers by mails or direct phone calls to ask for prices, volume and sign thecontracts The importing markets of PV- Machino include: Japan, Korea, China, USA, Germany,England, and so on But mostly in 3 main markets: Japan, Korea, USA

Table 8 : Process of Purchasing Materials at PV-Machino (PVM-KTDT-QT.04)

BM.01/PVM-KTĐT-QT.04

2

Material PurchasingEmployees

Price Notice ofSuppliers

3 Logistic employee submit

purchasing report &

business plan

KTĐT-QT.04

BM.02/PVM-Purchasing Demand

Collect Price Notice

Submit Purchasing Report & Business Plan

Select Supplier & Business plan

Purchasing Order & Contract

Conducting Contractđơn hàng

Nhập kho

4 Authorized personsGeneral Director /

5 Staff makes orders &

negotiate contract

6 Officers Follow ContractConducting Process Delivery Notice& Contract

7 Logistic Staff store good /Materials Manage Files

(Source: Economic & Technical Department – PV Machino)

• Step1 - Demand for purchase: Officer in charge of setting number of purchased goods

required to make a purchase in accordance with the requirements of the proposal

• Step2 - Collect quotes: Officer in charge of a purchase notice to the suppliers of goods

and providers of goods requests a quote Each purchasing officer takes at least the 03quote vendors

• Step3 - Making a purchase report: the Purchase report shall make according to form

BM.02 / PVM-KTDT-QT.04 to the general director of the company, or the personauthorized to approve The proposed report must note down selected provider & statingreasons for the selection

• Step 4 - To approve the selection of suppliers: General Director is directly endorsing the

purchase of goods, in other cases, the approval of the person authorized by the DirectorGeneral

Put in Warehouse

• Step 5 - Consider signing contracts/orders: After the report is approved, purchasing

officers negotiate contracts or orders to the Director General or the person authorized tosign

- For local suppliers, a contract must be signed and stamped in red

- For foreign suppliers, contract via fax are acceptable

• Step 6 - Implementation of the contract: Contract signed is transferred to Accounting

Department to carry out the payment according to the payment terms of the contract.Officer is in charge of purchasing procedures with supplier’s consignee as well asmonitoring the implementation process of the contract

• Step 7 - Test and warehousing:

Officer hand-overs purchasing vouchers for Accounting department and records Based on thecharacteristics of the goods and services purchased, the selection & assessment criteria tosuppliers will be different In that case, the General Director will assess and reevaluate suppliersbased on the following criteria:

 The quality of goods and services

 The number of goods and services

 The delivery time of goods and services

Logistic staff verifies quality and technical paper, C/O; Customs clearance and exchange towarehouse Depend on each type of products and material, company manages them into suitableshape of inventory (cube or liquid); follow each condition to decide to store goods at PVMachino’ s warehouse or bonded warehouse

• Once a week, agencies & other distribution channels have to prepare quick report via theCompany's website on the progress of implementation of the contract for the company’sleaders to approve plans

• After making plans, wholesalers or agency has to report on the effectiveness of the planfor the approval of company’s leaders (The Economic & Technical Division coordinatewith Financial & Accounting Division)