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GLOBAL COUNTRY STUDY REPORT

ON

INFORMATION TECHNOLOGY INDUSTRY OF VIETNAM


w. r. t.

BUSINESS OPPORTUNITIES FOR GUJARAT/MAHARASHTRA IN IT


SECTOR AT VIETNAM

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE


AWARD OF THE DEGREE MASTER OF BUSINESS
ADMINISTRATION (MBA)
OFFERED BY
GUJARAT TECHNOLOGICAL UNIVERSITY
AHMADABAD

SUBMITTED TO
LAXMI INSTITUTE OF MANAGEMENT, SARIGAM
INSTITUTE CODE: 731

UNDER THE GUIDANCE OF: MR. PRANAV RAYTHATHA


(ASSISTANT PROFESSOR)

PREPARED BY Students:
Anandhu Raj, Priya Patel, Rupa Gupta, Purnima Pamdey, Mahesh
Valvi

MBA (4th SEMESTER) 2015-16

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Students Declaration

We, following students, hereby declare that the Global Country Study Report titled Global
Country Study Report on Information Technology Industry/Sector of Vietnam w.r.t
Business Opportunities for Gujarat/Maharashtra is a result of our own work and our
indebtedness to other work publications, references, if any, have been duly acknowledged. If
we are found guilty of copying any other report or published information and showing as our
original work, or extending plagiarism limit, we understand that we shall be liable and
punishable by GTU, which may include Fail in examination, Repeat study & re-submission
of the report or any other punishment that GTU may decide .

Enrollment no. Name Signature


147310592002 Anandhu Raj
147310592004 Gupta Rupa
147310592008 Patel Priya
147310592020 Valvi Mahesh
147310592034 Pandey Purnima

Place: .. Date: .

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Institute Certificate

This is to certify that the Global Country Study and Report on Global Country Study Report
on Information Technology Industry/Sector of Vietnam w.r.t Business Opportunities for
Gujarat/Maharashtra is the bonafied work of attached student list with enrolment
numbers, who have carried out their research under my supervision. I also certify further,
that to the best of my knowledge the work reported here in does not form part of any other
project report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate. I have also checked the plagiarism extent of
this report which is - % and the separate plagiarism report in the form of html/ pdf file is
enclosed with this.

Signature of the Faculty Guide/s


(Asst. Prof. Pranav Raythatha)

Signature of Principal/Director
(Dr. Keyur. Nayak)

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PREFACE

As the part of curriculum of Gujarat Technological university, the students of the second year
of MBA have to undergo a training program in which they have to select any organization or
company or industry or sector of foreign country and study the details of that country and
find out the existing business and future business potential of that industry/company/sector
with India.
Our group has studied Information Technology industry of India and Vietnam with an
objective to find business opportunities at Vietnam for state Gujarat and Maharashtra. Here,
we have carried out Macro analysis. The macro analysis was based on STEEPLED Analysis and
SWOT Analysis of Information Technology sector at Vietnam. Here, we compared India and
Vietnam on the basis of factors such as Social, Technological, Economic, Environment,
Political, Legal and Demographic. We come to know about strength of India in IT sector and
what are weakness and opportunity for India at Vietnam. Next, we have carried out micro
analysis which involves selection of IT Company of India and how it can be set up at
Vietnam. We studied how Indian company can grab opportunity at Vietnam. We studied
about rules and regulations at Vietnam for IT sector and also developed a business plan.
Finally, we concluded that Indian IT Company can enter at Vietnam by Joint venture,
Exporting and Outsourcing.

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ACKNOWLEDGEMENT

We would like to express our sincere gratitude and appreciation to the GTU for giving an
opportunity to undergo The Global Project which was beneficial and valuable to develop
within us the interpersonal and intrapersonal academics skills.

We would like to thanks the campus director of Laxmi Vidyapeeth, Sarigam Mr.George
Thomas and the director of Laxmi Institute of Management Dr. Keyur M. Nayak for their
constant motivation throughout the project.

We are extremely thankful and grateful to our GCSR project guide Mr. Pranav Raythatha for
giving their constant guidance, supervision, wise idea and encouragement throughout the
study and truly helped in the progression and smoothness of the project.

We also like to express our thank and gratefulness to all our colleagues for their enormous
efforts at all levels as we all have worked to completed the project successfully and on time

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EXECUTIVE SUMMARY
INTRODUCTION OF ENJAY I.T. SOLUTIONS LTD

Enjay is Technology Company helping small business grows big and big business grows
bigger. Enjay is known for their E-innovative solutions offerings for Indian SME market. Enjay
offers Smart Enterprise class Storage, Telephony, Linux on Desktop, Cloud, Desktop
Monitoring solutions. All solutions are developed in house by Enjay; hence anything and
everything can be customized according to your business requirement - in a very short time
and at a very reasonable cost.

Reduce hardware cost and software licensing costs, with help of Thin Client technology and
Operating system solutions.

Increase employee efficiency and Customer Satisfaction with the help of innovative CRM,
Telephony and employee monitoring solutions.

Enjay IT Solutions (Empowering Enterprise with Enovation), is an IT Company based in Vapi,


Gujarat - constantly endeavoring in making solutions which will benefit SME (Small and
medium enterprises) sector.

Vision and Mission

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Vision

Small and medium size enterprises in India are the growth engine of Indian economy.
Collectively they contribute $180 Billion of revenue with high growth rate and provide
employment to 75% of workforce in India through the manifestation of the relentless
entrepreneurial dreams. And, all these entrepreneurs run their business on a very tight
budget. Founders of Enjay dreamed to enable these millions of entrepreneurs with
innovative, inexpensive and useful business products. Enjay wants to Empower Enterprise
with Enovation.

Mission

Enjay started in 2007 with a vision to empower SMEs (Small and medium enterprises) in
India with innovative and inexpensive business solutions.
The Company has since launched products that have been sold in various segments of SME
industry and also education. Enjay's mission is to provide ground breaking technology
solutions which are affordable to customers and profitable to partners.

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Growth

In a very short period Enjay has achieved high growth from a small family startup to a 100+
team with revenue ranging in several crores of rupees. The success has come through the
focused leadership and exceptional contribution from each and every single Team Member.
The company is now looking beyond the geographical boundaries to foray into developed
&other developing markets where it can deliver cutting-edge Solutions leveraging the
benefit of inexpensive infra from India.Domain knowledge and the experience are the
biggest strengths of the company that help in serving thousands of businesses in India.

Team Enjay

Behind every successful company there is a hard working team of smart people. We are
people who can bring a method to the madness, and establish priorities and always remain
focused on the results. At Enjay, Enovation comes from every corner - not just technical or R
& D department.

Leadership

1) LATE Narendra Parekh President Co-founder

Mr. Narendra Parekh was a very senior veteran in Finance, administration and

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Management. He is father figure and source of inspiration. He has a great passion for
processes and teams that is effective and efficient.

2) Limesh Parekh CEO, Co-Founder

Limesh has work experience in business strategy, marketing, technology and


organizational effectiveness. He is passionate about the strategic application of technology
as a tool for total business transformation. Limesh graduated from Mumbai University with
degree in Commerce, and then from Institute of Chartered Accountancy. He received his
GNIIT from NIIT, Mumbai In 1994

3) ChaitanyaParekhVP, Co-founder

Heading the Enjay Linux Initiative, and also looking after various development
projects at Enjay. He has great passion for 100% perfection in the solutions that comes out
of Enjay. He has graduated from Mumbai in IT.

4) Siddheshwar Parekh VP, Co-founder

Head of the R&D and Engineering division of Enjay. Also looking into the operations.
He has knack of understanding the technology and implications very fast. Always gleaming
with new ideas he drives the Enovation at Enjay. He has graduated from Mumbai in IT.

COMPANY HISTORY

Enjay started its journey as Enjay Computer Consultancy - way back in 1994/95,
providing services like Assembly of Hardware, Maintenance, peripherals etc. It was
started by 3 idiots, Limesh, Chaitanya&Siddheshwar Parekh (3 brothers). Infact name
Enjay comes from first initials of Narendra&Jyotsna - Parents of these 3 idiots.

Then in 1997 / 98, it was converted to Enjay Network Solutions, and the focus shifted
from hardware to Networking, Linux etc. In 1998, Enjay launched remote booting of

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Windows 95 (running win95 without HDD, remember HDD was very costly then), which
was quite revolutionary at that time. But there was a limitation to this solution, it could
not be sold thru a reseller, it was a kind of consultancy.

In 2003 / 04, Enjay Thin Client card was released. The Model was scalable. At that time
Thin Client was very new concept, and acceptance was very low. But slowly business
grew, and Enjay became to be known as Thin Client "Card Wala". By end of 2009, Enjay
had dealers across India. The Team size grew from 4 to 13.

In 2009/10, Enjay started R & D on Telephony & CRM, which were then launched in 2011
/ 12, and by 2013 - that solution became very unique and useful. Enjay also launched
Storage Solutions & employee monitoring. These solutions positioned Enjay as a
preferred solution provider for Small Businesses. The team size grew from 14 to 70.

In all these years, two things did not change, and that was Enovation & love for Open
Source. That is the reason all the solutions by Enjay are based on Open Source only,
almost all of them are very innovative.

SWOT Analysis

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1. Enjay has been building a full set of SAP life cycle services, from
consulting to implementation, managed services, BPO and hosting,
while depending its technical and functional capability.
2. Increasing focus on domain-led solutions has led to investments in
process maps, data models and solutions for numerous industries,
including manufacturing, retail and CPG, life sciences, banking and
insurance, travel and transportation, telecom, media and entertainment,
and energy and utilities, as well as solutions in areas that are not
Strength
currently addressed by SAP, such as dealer management and legal
management solutions.
3. Clients cite enjay commitment to delivery excellence, flexibility to
changing requirements, great teamwork and technical expertise as key
strength.
4. Enjay has large client base (936 clients) and balanced geographical
revenue base with the lowest reliance on North America amongst top tier
IT companies.
5. Man power strength is less in enjay thus, it help to developed
personalized career.
1. Fuelling the rapid growth has resulted in Enjay relying more on junior,
albeit well-trained, resources, which has given rise to clients perception
of inconsistent quality of consultants, skills mismatch and resource ramp-
up delays.
2. Although making strides, Enjay still needs to improve its consulting
Weakness capabilities and process depth to be truly a business and not solely a
technology partner.
3. Clients indicate that Enjay could improve on its project management,
communication and user change management skills areas that Enjay is
actively working on to improve.

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1. Continuing investments in technology by its clientele, a growing
preference for global sourcing and the emergence of newer technologies
and business models offer many opportunities for Enjay, its integrated full
services capability global delivery footprint and scale have expanded its
addressable market, strengthened its reputation and ensured its inclusion
Opportunities in the top tier list of vendors invited for the largest and most complex

bids. These offer a sizable growth opportunity for Enjay.


2. Evolution of non-liner delivery models which could positively impact
margins, superior platform offering (diligenta, citigroup global services)
nearing maturity which could expand the scope for cross selling.
1. Industry wide supply side pressures leading to attrition, wage inflation
and eroding margins.
2. Innovation product/services of competitors.
Threats 3. New competitors entering the market.
4. Economic slowdown in the key markets and potential anti offshoring
legislation.

PORTERS FIVE FORCES MODEL FOR INDIAN IT SECTOR

a). Existing competition:

The IT Industry landscape is characterised by intense completion for conventional IT


services: Application Development & Maintenance, IT Infrastructure Management Services,
Network Management Services, and Data-center Services etc. leading therefore to
commoditization. There are several firms in the market offering similar services and it is
difficult to differentiate based on these service offerings. The existing competition comes
from both domestic players (Infosys, TCS, Wipro, HCL technologies, Tech Mahindra, Mindtree
and so forth) and international ones (IBM, Accenture, Capgemini, Cognizant and so forth).

b). Bargaining power of customers:

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For conventional IT services, bargaining power of the buyer is large and the possibility of
pressure on rates exists. The buyer, having worked with both with international IT providers
as well as Indian ones is largely the price setter and has negated (to a large extent) the
offshore advantages through mature procurement and global delivery. The international IT
firms too have negated the advantage enjoyed by Indian IT companies through captive
centres in India and globally. In this industry, in case of conventional IT services, the buyer is
king!

c). Bargaining Power of Suppliers:

The bargaining power for suppliers is very low and since high-standardization exists, there is
little scope of suppliers having any clout. The suppliers consists of IT Infrastructure providers
(Servers, computers etc.), Recruitment firms, Office Space Suppliers etc.

d). Threat of New Entrants:

In context of the highly commoditized IT services, there is little threat of new entrants. That
said, the Industry is also characterized by high people dependence and therefore can see
veterans detach from existing companies to invest in new ventures. An example of this is
Happiest Minds, which was started by a co-founder of an existing IT provider. The newer
technologies allow the possibility of new niche players that are not dependant on size or
experience constraints.

e). Availability of Substitutes:

There are no substantial substitutes to IT services apart from Internal IT departments, which
have lost clout over the years and are ever thinner in numbers and significance. One
argument for internal IT is retaining control over pertinent aspects of business but the
argument against would be since , it should outsource as much as possible and focus on
future growth in core areas. Over time there has been a steady decrease in in-house IT
development and maintenance with more and more being outsourced and the internal IT
staff has settled into a supervisory (program management) role. This has been a mixed bag
for newer services as well since internal specialization is very low, most of the work is

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outsourced. For critical areas, governance has been retained in-house and this trend seems
to have found favour with most large enterprises worldwide.

PORTERS FIVE FORCE MODEL FOR VIETNAM IT SECTOR

a). Existing Competition:

One of the problems in the IT environment in Vietnam is the governments habit of enacting
laws over the top of existing ones. This leads to uncertainty over which rule apply, even
outright conflicts. A new unfair competition regulation issued in July illustrates this problem.
Decree 71 was issued to set out remedies for unfair competition violations. However a
2013Decree 99 already covers sanctions for IP violations including unfair competition. The
first problem is the bodies who deal with unfair competition. Decree 71 says it is the
Competition Authority at the Ministry of Trade and Industry.

b). Bargaining Power of Buyers: Porters Five Forces Analysis:

The presence of powerful buyers reduces the profit potential in an industry. Buyers increase
competition within an industry by forcing down prices, bargaining for improved quality or
more services, and playing competitors against each other. The result is diminished industry
profitability. The bargaining power of buyers comprises one of Porters five forces that
determine the intensity of in an industry. The others are barriers to entry, industry rivalry ,
the threat of substitutes and the bargaining power of suppliers .

c). Bargaining Power of Suppliers:

The second force is the bargaining power of suppliers (Porter, 1990). All companies that
manufacture goods need to obtain raw materials from external parties or suppliers. Hence, it
is imperative that companies establish good relationships with their suppliers so as to get
favorable prices and a steady supply of raw material. Yet, the supplier-manufacturer
relationship is rarely one of equals (Griffin, 2001). Normally, one party has the upper hand.
Suppliers have greater bargaining power if there are few of them so they can dictate terms
to the customers who are at their mercy (David, 2009). Bargaining Power of Suppliers
Information Technology this report serves a number of major purposes.

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d). Threat of New Entrants:

The third force is the threat of new entrant (Porter, 1990). New entrants to a market can
seriously affect the market share of existing members and this is a constant source of anxiety
for companies. In an ideal free market system, a company can enter and exit a market with
the greatest ease and that profits will be nominal. However, in the real world, there are
numerous barriers to entry, some of which are the result of economics, while others are the
outcome of government intervention (Rugman and Hodgetts, 1995).

e). Threat of Substitutes:

The fourth is the threat of substitutes, which refers to products in other industries (Porter,
1990). If the costs of the products in a particular industry are too high, customers might
switch to products in other industries. Price is not the only variable but changes in
technology have the potential to make users flock to rivals (David, 2009).

BUSINESS PLAN

Market Analysis : 4Ps

Product in the Business Plan

Enjey Solutions can offers following products and services in Vietnam

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Tiguin OS

Linux on Desktop has always been a dream, with huge FUD around it. Not any more.
With Tally, SAP, office, Email, Internet Browser and many other software on Linux.
Now Linux on Desktop is Possible.

Thin Clients

Enjay Thin Client solution, powered by Enjay Tornado OS, is right blend of hardware
and software which offers affordable yet powerful computing for SMB, Easy to
integrate with Windows or Linux Environment.

Storage Solutions

EnjayStoreVol NAS offers RAID 1,5,6,10 to protect your data and keep your business
running. With builtin Backup tool and Disaster Recovery solutions.

Enjay CRM

Hosted CRM, based on SugarCRM. Fully customised for Indian Small Businesses.
Complete Sales / Support lifecycle management. Lots of add-ons and integrations
available.

Enjay Synapse

Enjay Synapse is a solution with support for IVRS, CTI (computer telephony
integration), voice logger, call recording and detail reporting very useful for
telemarketing, telesupport and Call Center.

EnjayEnsight

Capture video and screen of your employees computers and get report of application
usage from EnjayEnsight PC Activity Monitoring software.

Place in the Business Plan

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Place refers to the distribution channel of a product. If a product is a consumer product, it
needs to be available as far and wide as possible. If the product is a business product, you
need a team who interacts with businesses and makes the product available to them. Thus
the place where the product is distributed depends on the product and pricing decisions, as
well as any STP decisions taken by a firm.

Price in the Business Plan

Pricing of a product depends on a lot of different variables and hence it is constantly


updated. Major consideration in pricing is the costing of the product, the advertising and
marketing expenses, any price fluctuations in the market, distribution costs etc.

Price Chart of Major Products and Services for Vietnam market

Product&Services Customizability Price Range


Tiguin OS Yes 20000-50000

Thin Clients Yes 100000-120000

Storage Solutions Yes 75000-100000

Enjay CRM Yes 50000-150000

Enjay Synapse Yes 10000-20000

EnjayEnsight Yes 10000-20000

Promotion in the Business Plan

Enjey Solutions is not gives prime importance to its advertisement and promotional
strategies. Company has a good image among the client and it spreads through clients to
clients.The companys favorite form of advertisement is using the online media and internet,
although the a multi-media campaign to create awareness amongst the consumers about
the various products and services it provides. In Vietnam also company can follow the same
promotional methods to attract the clients.

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The promotion budget can be 15% of sales.

Advantage of investment in Vietnam why invest?

Strategic location

The location of Vietnam provides it a lot of trade benefits. It situated in the center of
southeast Asia. One of the major components to attract foreign investors is Vietnam's is that
its ability to enter Southeast Asia's other major and developing markets.

Favorable investment climate

Since the past 3 decades, Vietnam has become as one of the most attractive places for
foreign investors. To achieve cost-effectiveness in their global supply chains investors have
been consider Vietnam as a major strategic investment location.

Increasing Exports

Because it is highlighted by its high import and export volumes Vietnam has been one of the
most open economies in international trade.

Demographic Advantage

Highly literate Young, hard-working, and easy-to-train labor force is one of the major
advantages of Vietnam as an investment destination . From the total population of Vietnam,
about 60% is below the age of 25 years. The literacy rate for the population aged 15 years
and above is approximately 94%. This is the result of the importance and priority given by
the Government of Vietnam to the development of quality training and education system in
Vietnam.

Double Tax Avoidance Agreements (DTAs)

Vietnam has already entered into DTAs with more than 50 countries at various stages of
implementation and negotiation,. The following are the countries with which Vietnam has signed
DTAs.

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Countries with which Vietnam has signed DTA agreements
Australia Hungary China Switzerland Taipei
France Poland Romani Mongolia Algeria
Thailand Netherlands Malaysia Bulgaria Myanmar
Sweden Denmark Laos Italy Finland
South Korea Norway Belgium Belarus Philippines
UK Japan Luxembourg Czech Republic Saudi Arabia
Singapore Germany Uzbekistan Canada Iceland
India Russia Ukraine Indonesia Korea Republic

Tax incentives

The generally applicable Corporate Income Tax (CIT) in Vietnam is 25%. However, core Sectors like
health, education, high-tech, infrastructure development and software and encouraged special
economic zones or areas with difficult socio-economic conditions preferential tax treatment including
tax exemption, tax reduction and preferential tax rates (10% and 20%) is available for investments.

Political stability

Vietnam's political and social stability make it one of the safest investment destinations in Southeast
Asia. Vietnam is a single-party socialist state with a high degree of ethnic, linguistic, and religious
homogeneity.

How to invest successful in Vietnam

Vietnam is a new and emerging market which is offering many opportunities to Investors.
However, being successful in doing business in Vietnam is not easy if you do not understand
market well enough.

Promote brand awareness and corporate image worldwide

Vietnamese often prefer famous brand to non-famous one. Almost successful foreign
investors in Vietnam have owned very strong brand name in other countries. Starbuck; KFC;
Canon; Samsung are the typical examples.

Understand customer needs and Respond proactively

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Vietnam is standing out to be a very large and potential market with reaching 100 million
people. However, dont ever think that is easy market.

Make a difference to your products and services

Difference makes success. If you want to compete and win others, you shall be go ahead
them with creating typical and unique products and services. That is the best way to stand
out from the competitions.

Develop and Extend network business alliance

Network is the key important in the mutual and globalized market. More networks you have,
more success you get.

REQUIRED DOCUMENTS TO SET-UP SOFTWARE COMPANY IN


VIETNAM

The establishment of a Foreign Invested Company (Hereinafter referred to as FIC) in


Vietnam requires an Investment Certificate and a Certificate of Business Registration from
the licensing authority.

Preparing the application dossier:

We shall collect necessary information and documents from you. Upon receipt of necessary
information and documents from you, we shall translate documents from English into
Vietnamese and prepare the application dossier under the standard forms.

Submission of application dossier for obtaining Investment Certificate:

Within 02working days from receipt of duly signed and sealed application dossier, we shall
submit the application dossier to the competent authority.

Submission of application dossier for obtaining Certificate of Business


Registration:

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Within 02 working days from receipt of Investment Certificate, we shall submit the
application dossier to the competent authority for obtaining Certificate of Business
Registration. It shall take about 07 working days to complete.

Post licensing:

Within 13 working days we shall complete the post licensing procedure such as publishing
the FIC in National Database of Enterprise Registration, obtaining sea land tax code
registration.

MODES OF ENTRY

To find the way of how to enter a foreign market can have a significant impact on the results.
Expansion into foreign markets can be achieved through the following four mechanisms:

a) Exporting
b) Licensing
c) Joint Venture
d) Direct Investment

a) Exporting:

Exporting commonly requires coordination among four players:

Exporter
Importer
Government
Transport provider

b) Licensing:

Licensing permits a company to enter into the target country to use the property of the
licensor. Such property usually is intangible, like trademarks, patents, and production
techniques.

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c) Joint Venture:

There are five common reasons for why company go for a joint venture: market entry,
risk/reward sharing, technology sharing and joint product development, and conforming
to government regulations.

d) Foreign Direct Investment:

Direct foreign investment had to form through the attainment of an existing entity or the
establishment of a new enterprise. However, it requires a high level of resources and a
high degree of commitment.

FORMS OF INVESTMENT IN VIETNAM

According to the Vietnam Law on Investment (2005), foreign investors can invest in
Vietnam through direct investment and indirect investment.

Direct investment Indirect investment


The direct investment is when such the Indirect investment means a form of
investor invests its invested capital and investment whereby the stockholder do
also makes an active participation in the only donate the wealth but do not
management of the investment actively participate in the management
activities, includes: of the investment activity includes:

To invest in business Through other midway financial


development. institutions.
To purchase shares or to Buying of shareholding, shares,
contribute capital in accordingly bonds and other valued papers;
to participate in management of
Through securities investment
investment activities.
reserves;
To found economic organizations
in the form of one hundred per

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cent (100%) capital of domestic
investors or one hundred per cent
(100%) capital of foreign
investors.

TYPES OF ENTERPRISE FOR FOREIGN INVESTORS TO INVEST IN


VIETNAM

a) Limited Liability Company

Here a member shall be responsible for the duties and other stuff obligations of the
enterprise within the amount of capital that had to undertake to contribute to the
enterprise. Limited liability companies are regulated by two types:

One member Limited Liability Company which has enterprise who should be owner
of one organization or individual;
In Limited Liability Company if two or more members are an enterprise must have
owned by organizations or individuals, in which the number of members shall not
less than two members and not exceed fifty.

b) Joint Stock Company:

Joint Stock Company is an enterprise which has charter capital divided into equal
portions called shares. Shareholders shall be liable for the debts and other property
obligations of the enterprise only within the amount of capital contributed to the
enterprise.

c) Partnership:

A partnership is that enterprise where compulsorily at least two members being co-
owners of the company jointly conducting business under one common name. In
addition to unlimited liability partners, there may be limited liability partners.

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d) Representative Office of foreign trader:

A foreign business entity or a foreign trader is allowed to establish Representative


Office in Vietnam. Representative office of a foreign business entity in Vietnam
(referred as Representative Office) means a subsidiary unit of the foreign business
entity, which is established in accordance with the law of Vietnam in order to survey
markets so that one can know, more about the markets and to undertake a number
of commercial enhancement activities permitted by the law of Vietnam.

e) Branch of foreign trader:

Branch means a subsidiary unit of the foreign business entity, established in


accordance with the law of Vietnam in order to enter into contracts in Vietnam and
conduct activities being the purchase and sale of goods and other commercial
activities consistent with its license for establishment in accordance with the law of
Vietnam and any international treaty to which the Socialist Republic of Vietnam is a
member.

f) The investing measures by signing Contracts:

Business co-operation contract (BCC) means the investment form signed between
investors in order to co-operate in business and also to share profits or products
without creating a legal entity.

Indias Import & export Policy: Procedures and Duties

Import Procedure:

Import trade refers to the purchase of goods from a foreign country. From country to
country the procedure for import trade differs depending upon the import policy, statutory
requirements and customs policies of different countries. In almost all countries of the world
import trade is controlled by the government.

The steps taken in import procedure are discussed as follows:

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(i) Trade Enquiry:

The first stage in an import transaction, like any other transaction of purchase and sale
relates to making trade enquiries. Agent for information regarding the price and the terms
on which the exporter will be able to supply goods.

(ii) Procurement of Import License and Quota:

The import trade in India is controlled under the Imports and Exports (Control) Act, 1947. A
person or a firm cannot import goods into India without a valid import licence. An import
licence may be either general license or specific licence.

For the purpose of issuing license, the importers are divided into three categories:

(a) Established importer,

(b) Actual users, and

(c) Registered exporters, i.e., those import under any of the export promotion schemes.

(iii) Obtaining Foreign Exchange:

Since the importer has to make payment for the imports in the currency of the exporting
country after obtaining the license, the importer has to make arrangement for obtaining
necessary foreign exchange

(iv)Placing the Indent or Order:

After the initial formalities are over and the importer has obtained the licence quota and the
necessary amount of foreign exchange, the next step in the import of goods is that of placing
the order. This order is known as Indent. An indent is an order placed by an importer with an
exporter for the supply of certain goods.

(v) Dispatching a Letter of Credit:

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The exporter before shipping the goods wants to be sure about the creditworthiness of the
importer generally; foreign traders are not acquainted to each other and so. The exporter
wants to be sure that there is no risk of non-payment. Usually, for this purpose he asks the
importers to send a letter of credit to him.

(vi) Obtaining Necessary Documents:

After dispatching a letter of credit, the importer has not to do much. On receipt of the letter
of credit, the exporter arranges for the shipment of goods and sends Advice Note to the
importer immediately after the shipment of goods. An Advice Note is a document sent to a
purchaser of goods to inform him that goods have been dispatched. It may also indicate the
probable date on which the ship is expected to reach the port of destination.

There are two types of documentary bills:

(a) D/P, D.P. (or Documents against payment) bills.

(b) D/A, D.A. (or Document against acceptance) bills.

If the bill of exchange is a D/P bill, then the documents of title of goods are delivered to the
drawee (i.e., importer) only on the payment of the bill in full. D/P bill may be sight bill or
usance bill.

Usance bill is to be paid within a particular period after sight. If the bill is a D/A bill, then the
documents of title of goods are released to the drawee on his acceptance of the bill and it is
retained by the banker till the date of maturity

(vii) Customs Formalities and Clearing of Goods:

After receiving the documents of title of the goods, the importers only concern is to take
delivery of the goods, when the ship arrives at the port and to bring them to his own place
of business. The importer has to comply with many formalities for taking delivery of goods.

(a) To obtain endorsement for delivery or delivery order:

26
When the ship carrying the goods arrives at the port, the importer, first of all, has to obtain
the endorsement on the back of the bill of lading by the shipping company.

(b) To pay Dock dues and obtain Port Trust Dues Receipts:

The importer has to submit two copies of a form known as Application to import duly filled
in to the Lading and Shipping Dues Office. This office levies a charge on all imported goods
for services rendered by the dock authorities in connection with lading of goods.

(c) Bill of Entry:

The importer will then fill in form called Bill of Entry. This is a form supplied by the custom
office and is to be filled in triplicate.

(d) Bill of Sight:

If the importer is not is a position to supply the detailed particulars of goods because of
insufficiency of information supplied to him by the exporter, he has to prepare a statement
called a bill of sight.

(e) To pay Customs or Import Duty:

There are three types of imported goods:

(i) Non dutiable or free goods,

(ii) Goods which are to be sold within the country or which are for home consumption, and

(iii) Re-exportable goods i.e. goods meant for re-export. If the goods are duty free, no import
duty is to be paid at the custom office.

(f) Bonded and Duty paid Warehouses:

The port trust and custom authorities maintain two types of warehouses-Bonded and Duty
paid.

The bonded warehouses are used by the importer when:

27
(i) He has no go down of his own.

(ii) He cannot pay the duty immediately.

(iii) He wants to re-export the goods and thereby does not want to pay the duty.

(iv) He wants to pay the duty in installments.

(g) Appointment of clearing Agents:

The importer may take the delivery of the goods himself at the port. But it involves much of
time, expenses and difficulty.

(h) Making the Payment:

The mode and time of making payment is determined according to the terms and conditions
as agreed to earlier between the importer and the exporter. In case of a D/P bill the
documents of title are released to the importer only on the payment of the bill in full.

(i) Closing the Transactions:

The last step in the import trade procedure is closing the transaction. If the goods are to the
satisfaction of the importer, the transaction is closed. But if he is not satisfied with the
quality of goods or if there is any shortage, he will write to the exporter and settle the
matter.

Export Procedure

Export procedure describes the documents required for exporting from India. Special
documents may be required depending on the type of product or destination. Certain export
products may require a quality control inspection certificate from the Export Inspection
Agency. Some food and pharmaceutical product may require a health or sanitary certificate
for export.

The following are the export documents required for the processing of the Shipping Bill:
GR forms (in duplicate) for shipment to all the countries.

28
4 copies of the packing list mentioning the contents, quantity, gross and net weight
of each package.

4 copies of invoices which contains all relevant particulars like number of packages,
quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc.

Contract, L/ C, Purchase Order of the overseas buyer.

AR4 (both original and duplicate) and invoice.

Inspection/ Examination Certificate.

REGULATIONS OF VIETNAMS IMPORT& EXPORT

Within Vietnam Some time ago an sponsor has set up their trading company, it is
very necessary to know that the countrys import and export regulations and actions
of their workers gain a strong understanding of following companies must be aware
of before starting their trading functions in Vietnam. That lay out the key takeaways.

Procedures of Import and Export Licensing:

In order to set up a trading company Vietnam does not require a company to have an
import/export license. In import/export activities must follow the procedures for
adjusting their Investment Certificates companies that wish to expand their current
business operations in order to engage however, additionally foreign investors who
wish to engage in import/export activities in Vietnam are required to obtain an
Investment Certificate. In order to be able to conduct import/export business, a
foreign investor must register with the Department of Planning and Investment (DPI).

Duties for Import/Export:

Between the domestic market and a non-tariff zone, are subject to import/export
duties. Most goods imported/exported across the borders of Vietnam, or which pass

29
exceptions to this include goods. From a non-tariff zone, and goods passing from one
non-tariff zone to another in transit, goods exported abroad.

Imports of Vietnam:

Country Vietnam imposes a tax on almost every type of product that is imported. For
example, consumer products and luxury goods are extremely taxed while tools,
equipment, and raw materials, tend to take delivery of lower taxes and even tax
exemptions., Imports are subject to import tax, Value-added tax (VAT) and, for certain
goods, Special Consumption Tax (SCT) .The import tax rates range depending on the type
of product.

Goods include preferential tax rates, special preferential tax rates, and ordinary tax
rates .Tax rates applicable to imported:

Preferential tax rates apply to goods originating from countries, which apply the most
favored nation treatment groups of countries, or territories.
Special preferential tax rates apply to goods originating from countries, which apply
special preferences on import tax to Vietnam groups of countries, or territories.

Ordinary tax rates will be no more than 70 percent higher than the preferential tax
rates specified by the government.

Ordinary tax rates apply to goods originating from countries, which do not apply the
most favored nation treatment of special preferences on import tax to Vietnam
groups of countries, or territories.

VAT rates range from zero to ten percent, with ten percent being the most common rate.
Detailed information can be found in Decree No. 83/2014/TT-BTC.

Exports of Vietnam:

For export tax only certain commodities are liable. From zero to 45 percent export taxes
range. Subject to Value-added Tax Many goods are also. Goods for export, but instead sell

30
the products domestically, are liable for SCT In addition, the Law on Special Consumption Tax
(SCT) stipulates that exporters who purchase SCT tax-liable. For the year 2014, the tax tariff
can be found in Circular 164/2013/TTBTC; Circular 17/2014/TT-BTC and Circular
30/2014/TT-BTC. Goods are specified for each item in the Export Tariff. VAT on exported
goods is zero percent.

New Circulars which will either replace or supplement the previous ones. The export tax
rates applicable to exported whenever there is an update in the tax tariff, the Ministry of
Finance will issue it.

Tax exempt goods of Vietnam:

Imported and exported goods are exempt from tax; these include the following in certain
situations:

Goods imported for processing for foreign partners then exported or goods exported
to foreign countries for processing for Vietnam then re-imported under processing
contracts goods temporarily imported for re-export or temporarily exported for re-
import.
Goods imported in service of petroleum activities goods imported to create fixed
assets for projects entitled to investment incentives or investment projects funded
with official development assistance (ODA) capital sources.
Activities of scientific research and technological development goods imported for
direct use.

Tax Calculation of Vietnam:

These are adorned in the customs declaration and are multiply by the tax calculation cost
and the tax rate of each item, which is affirmed in the tariff at the time of tax calculation.
The billed import/export tax amount is equal to the unit volume of each actually
imported/exported goods item. The tax calculation methods are specified below:

Payable Tax = unit volume of each actually imported/exported goods item x the tax
calculation price x the tax rate of each item at time of calculation

31
For goods items subject to absolute tax: Payable tax = unit volume of each actually
imported/exported goods item x the absolute tax rate provided for a goods unit at
time of tax calculation

INDEX

SR.NO PARTICULAR Page No.


1 Business Plan- INTRODUCTION TO ENJAY PVT LTD 1
2 SWOT ANALYSIS OF ENJAY PVT LTD 11
3 POTERS FIVE FORCE MODEL:
-INDIAN IT FIVE FORCE MODEL 13

32
-VIETNAM IT FIVE FORCE MODEL 17
4 BUSINESS PLAN 21
5 MARKET ANALYSIS 22
6 REQUIRED DOCUMENT TO SET UP SOFTWARE 33
COMPANY IN VIETNAM
7 MODES OF ENTRY 35
8 INDIAN EXPORT IMPORT POLICY 43
9 VIETNAM EXPORT -IMPORTVPOLICY 47
10 SUPOORTING INSTITUTE TO FACILITATE IMPORT- 50
EXPORT
11 FINANCIAL DADA 51
-PROJECTED BALANCE SHEET 52
- PROJECTED P&L ACCOUNT 55
-PROJECTED CASH FLOW 57
-RATIO 58
-BREAK EVEN ANALYSIS 62

12 FINDING 64
13 SUGGESTIONS 65
14 CONCLUSION 66
15 BIBLOGRAPHY 67

1. Business Plan- INTRODUCTION OF ENJAY I.T. SOLUTIONS LTD

33
Enjay is Technology Company helping small business grows big and big business grows
bigger. Enjay is known for their E-innovative solutions offerings for Indian SME market. Enjay
offers Smart Enterprise class Storage, Telephony, Linux on Desktop, Cloud, Desktop
Monitoring solutions. All solutions are developed in house by Enjay; hence anything and
everything can be customized according to your business requirement - in a very short time
and at a very reasonable cost.

Reduce hardware cost and software licensing costs, with help of Thin Client technology and
Operating system solutions.

Increase employee efficiency and Customer Satisfaction with the help of innovative CRM,
Telephony and employee monitoring solutions.

34
Company Profile

Enjay IT Solutions LTD.

4th Floor, Asopalav Building, Bhilad - 396105.PH. No: 0260-


6612900-02 (100 lines)

Enjay IT Solutions (Empowering Enterprise with Enovation), is an IT Company based in Vapi,


Gujarat - constantly endeavoring in making solutions which will benefit SME (Small and
medium enterprises) sector.

Vision and Mission

Vision

Small and medium size enterprises in India are the growth engine of Indian economy.
Collectively they contribute $180 Billion of revenue with high growth rate and provide
employment to 75% of workforce in India through the manifestation of the relentless
entrepreneurial dreams. And, all these entrepreneurs run their business on a very tight
budget. Founders of Enjay dreamed to enable these millions of entrepreneurs with
innovative, inexpensive and useful business products. Enjay wants to Empower Enterprise
with Enovation.

Mission

35
Enjay started in 2007 with a vision to empower SMEs (Small and medium enterprises) in
India with innovative and inexpensive business solutions.

The Company has since launched products that have been sold in various segments of SME
industry and also education. Enjay's mission is to provide ground breaking technology
solutions which are affordable to customers and profitable to partners.

Growth

In a very short period Enjay has achieved high growth from a small family startup to a 100+
team with revenue ranging in several crores of rupees. The success has come through the
focused leadership and exceptional contribution from each and every single Team Member.
The company is now looking beyond the geographical boundaries to foray into developed
&other developing markets where it can deliver cutting-edge Solutions leveraging the
benefit of inexpensive infra from India.Domain knowledge and the experience are the
biggest strengths of the company that help in serving thousands of businesses in India.

Team Enjay

36
Behind every successful company there is a hard working team of smart people. We are
people who can bring a method to the madness, and establish priorities and always remain
focused on the results. At Enjay, Enovation comes from every corner - not just technical or R
& D department.

Leadership

1) LATE Narendra Parekh President Co-founder

37
Mr. Narendra Parekh was a very senior veteran in Finance, administration and
Management. He is father figure and source of inspiration. He has a great passion for
processes and teams that is effective and efficient.

2) Limesh Parekh CEO, Co-Founder

Limesh has work experience in business strategy, marketing, technology and


organizational effectiveness. He is passionate about the strategic application of technology
as a tool for total business transformation. Limesh graduated from Mumbai University with
degree in Commerce, and then from Institute of Chartered Accountancy. He received his
GNIIT from NIIT, Mumbai In 1994

3) ChaitanyaParekhVP, Co-founder

Heading the Enjay Linux Initiative, and also looking after various development
projects at Enjay. He has great passion for 100% perfection in the solutions that comes out
of Enjay. He has graduated from Mumbai in IT.

4) Siddheshwar Parekh VP, Co-founder

Head of the R&D and Engineering division of Enjay.Also looking into the operations.
He has knack of understanding the technology and implications very fast. Always gleaming
with new ideas he drives the Enovation at Enjay. He has graduated from Mumbai in IT.

Enjay Client List who are using Enjay CRM / Synapse ( Telephony Solutions ):

1. Mahaonline
2. MP Online

38
3. Bank Of Baroda
4. Insight Business Machines Pvt Ltd
5. Rutu Marketing
6. Jai Research Foundations
7. Acma Computers Pvt Ltd
8. Jhariwala Lab
9. Chowgule Industries Ltd - Pune
10. Phoenix Medicals Pvt Ltd

Client list for Enjay CRM &Enjay Synapse

Hem Infotech (Ahmedabad


Adarsh Credit Co-Operative society Ltd
Punjab Group of Colleges Ambala Education
Protech Microsystems India Pvt ltd
System Solution Baroda
Security Weaver LLC
Chawla Publications (p) Ltd.
Omnex India Pvt Ltd.
Navaida solutions LLC Dubai
Soluesem CRM brazil
Spooky Zebra - London

COMPANY HISTORY

Enjay started its journey as Enjay Computer Consultancy - way back in 1994/95,
providing services like Assembly of Hardware, Maintenance, peripherals etc. It was

39
started by 3 idiots, Limesh, Chaitanya&Siddheshwar Parekh (3 brothers). Infact name
Enjay comes from first initials of Narendra&Jyotsna - Parents of these 3 idiots.

Then in 1997 / 98, it was converted to Enjay Network Solutions, and the focus shifted
from hardware to Networking, Linux etc. In 1998, Enjay launched remote booting of
Windows 95 (running win95 without HDD, remember HDD was very costly then), which
was quite revolutionary at that time. But there was a limitation to this solution, it could
not be sold thru a reseller, it was a kind of consultancy.

In 2003 / 04, Enjay Thin Client card was released. The Model was scalable. At that time
Thin Client was very new concept, and acceptance was very low. But slowly business
grew, and Enjay became to be known as Thin Client "Card Wala". By end of 2009, Enjay
had dealers across India. The Team size grew from 4 to 13.

In 2009/10, Enjay started R & D on Telephony & CRM, which were then launched in 2011
/ 12, and by 2013 - that solution became very unique and useful. Enjay also launched
Storage Solutions & employee monitoring. These solutions positioned Enjay as a
preferred solution provider for Small Businesses. The team size grew from 14 to 70.

In all these years, two things did not change, and that was Enovation & love for Open
Source. That is the reason all the solutions by Enjay are based on Open Source only,
almost all of them are very innovative.

ENJAY JOBS

40
Innovate

Bring out the genius in you, amaze yourself, surprise the world. At Enjay, ennovation comes
from every team, every department, every individual.

Delight

Enovation comes @ Enjay from each and every corner. We believe in creating user
experience which will delight our users.

Grow

Working in a startup has its own advantages - you get unimaginable opportunity to grow to
unimaginable levels in unimaginable time - just no limits.

41
Software and hardware engineering

If your passion is software programming or Hardware engineering - then this is right place.
@ Enjay we work on many cutting edge technologies.

Technical Support

Support is lifeline of Enjay, if solving problems with innovation excites you. If you are happy
to help and that well deserve thank you - then you fit in here.

Marketing and Pre-Sales experts

42
Need to visualize the solutions out of sheer technology, and how technology can be used to
make this world a better place. Apply technology to business problems

Administration and Finance

Enjay has almost paperless environment - We use ERP, CRM & Google Apps to manage Enjay.
Management is an ART and technology is Science. We need people who can combine these
both very well.

Graduate Interns

What better way to kick starts your career with the innovative environment that Enjay
Offers? We also offer projects and industrial internship for MCA, B.tech, M.tech, BE & ME
students.

SWOT Analysis

43
1. Enjay has been building a full set of SAP life cycle services, from
consulting to implementation, managed services, BPO and hosting,
while depending its technical and functional capability.
2. Increasing focus on domain-led solutions has led to investments in
process maps, data models and solutions for numerous industries,
including manufacturing, retail and CPG, life sciences, banking and
insurance, travel and transportation, telecom, media and entertainment,
and energy and utilities, as well as solutions in areas that are not
Strength
currently addressed by SAP, such as dealer management and legal
management solutions.
3. Clients cite enjay commitment to delivery excellence, flexibility to
changing requirements, great teamwork and technical expertise as key
strength.
4. Enjay has large client base (936 clients) and balanced geographical
revenue base with the lowest reliance on North America amongst top tier
IT companies.
5. Man power strength is less in enjay thus, it help to developed
personalized career.
1. Fuelling the rapid growth has resulted in Enjay relying more on junior,
albeit well-trained, resources, which has given rise to clients perception
of inconsistent quality of consultants, skills mismatch and resource ramp-
up delays.
2. Although making strides, Enjay still needs to improve its consulting
Weakness capabilities and process depth to be truly a business and not solely a
technology partner.
3. Clients indicate that Enjay could improve on its project management,
communication and user change management skills areas that Enjay is
actively working on to improve.

44
1. Continuing investments in technology by its clientele, a growing
preference for global sourcing and the emergence of newer technologies
and business models offer many opportunities for Enjay, its integrated full
services capability global delivery footprint and scale have expanded its
addressable market, strengthened its reputation and ensured its inclusion
Opportunities in the top tier list of vendors invited for the largest and most complex

bids. These offer a sizable growth opportunity for Enjay.


2. Evolution of non-liner delivery models which could positively impact
margins, superior platform offering (diligenta, citigroup global services)
nearing maturity which could expand the scope for cross selling.
1. Industry wide supply side pressures leading to attrition, wage inflation
and eroding margins.
2. Innovation product/services of competitors.
Threats 3. New competitors entering the market.
4. Economic slowdown in the key markets and potential anti offshoring
legislation.

45
PORTERS FIVE FORCES MODEL FOR INDIAN IT SECTOR

a). Existing competition:

The IT Industry landscape is characterised by intense completion for conventional IT


services: Application Development & Maintenance, IT Infrastructure Management Services,
Network Management Services, and Data-center Services etc. leading therefore to
commoditization. There are several firms in the market offering similar services and it is
difficult to differentiate based on these service offerings. The existing competition comes
from both domestic players (Infosys, TCS, Wipro, HCL technologies, Tech Mahindra, Mindtree
and so forth) and international ones (IBM, Accenture, Capgemini, Cognizant and so forth).

46
It is in the context of non-conventional services, i.e. the ones focussed (Digitization et al) on
emerging technologies and trends such as Analytics, Cloud computing, Social Media,
Enterprise Mobility, Internet of Things etc. where the opportunity for differentiation through
niche-specialization occurs. Another argument might be for industry-vertical specialization
but the major buyers (in terms of Industries) for instance Banking & Financial Services (BFSI),
Manufacturing, Energy & Utilities etc. are well catered to and it would be easier to think of
IT companies as portfolios of verticals (across clients) especially when considering growth
potential (with the growth in an industry benefiting the IT service provider that draws most
revenues from the industry in question). Vertical specialization therefore will only be
beneficial for industries going through rapid change (Telecom for instance) or through rapid
growth caused by external factors like government regulation. The healthcare industry is a
major example and thing bode well for it both in developing markets (due to non-linear
permeation to affect broader access) as well as developed ones (based on the ageing
demographics).

b). Bargaining power of customers:

For conventional IT services, bargaining power of the buyer is large and the possibility of
pressure on rates exists. The buyer, having worked with both with international IT providers
as well as Indian ones is largely the price setter and has negated (to a large extent) the
offshore advantages through mature procurement and global delivery. The international IT
firms too have negated the advantage enjoyed by Indian IT companies through captive
centres in India and globally. In this industry, in case of conventional IT services, the buyer is
king!

In case of non-conventional services, i.e. those that cater to emergent technologies and
technology trends (in Data Analytics or Enterprise Mobility for instance) there is potential for
differentiation and higher margins. Also this is the case for non-conventional, partnership-
style engagements where both risk and rewards are higher.

47
c). Bargaining Power of Suppliers:

The bargaining power for suppliers is very low and since high-standardization exists, there is
little scope of suppliers having any clout. The suppliers consists of IT Infrastructure providers
(Servers, computers etc.), Recruitment firms, Office Space Suppliers etc.

d). Threat of New Entrants:

In context of the highly commoditized IT services, there is little threat of new entrants. That
said, the Industry is also characterised by high people dependence and therefore can see
veterans detach from existing companies to invest in new ventures. An example of this is
Happiest Minds, which was started by a co-founder of an existing IT provider. The newer
technologies allow the possibility of new niche players that are not dependant on size or
experience constraints.

e). Availability of Substitutes:

There are no substantial substitutes to IT services apart from Internal IT departments, which
have lost clout over the years and are ever thinner in numbers and significance. One
argument for internal IT is retaining control over pertinent aspects of business but the
argument against would be since , it should outsource as much as possible and focus on
future growth in core areas. Over time there has been a steady decrease in in-house IT
development and maintenance with more and more being outsourced and the internal IT
staff has settled into a supervisory (program management) role. This has been a mixed bag
for newer services as well since internal specialization is very low, most of the work is
outsourced. For critical areas, governance has been retained in-house and this trend seems
to have found favour with most large enterprises worldwide.

Broadly speaking the market for conventional services is highly commoditised with potential
for differentiation concentrated around niche expertise in new technologies and trends
(SMAC + Internet of Things) and around non-conventional engagements (revenue/profit

48
share, risk-reward models). It is unlikely that the market for conventional services will vanish
overnight but the future promises to hold a highly modified view.

49
PORTERS FIVE FORCE MODEL FOR VIETNAM IT SECTOR

a). Existing Competition:

One of the problems in the IT environment in Vietnam is the governments habit of enacting
laws over the top of existing ones. This leads to uncertainty over which rule apply, even
outright conflicts. A new unfair competition regulation issued in July illustrates this problem.
Decree 71 was issued to set out remedies for unfair competition violations. However a
2013Decree 99 already covers sanctions for IP violations including unfair competition. The
first problem is the bodies who deal with unfair competition. Decree 71 says it is the
Competition Authority at the Ministry of Trade and Industry. Whereas Decree 99 permits a
variety of bodies, who normally handle IP cases. Secondly the procedures specified differ,
with Decree 71 laying down specific new procedures, while Decree 99 adopts pre-existing
ones. A third point is different levels of fines are imposed. For example one offence of
passing off has a fine of 200 mn VND in Decree 71 and 500 mn VND in Decree 99. There are
increased fines for cyber squatting, trade secret theft and so on, which is good news, but
only if you use the new Decree! The general rule is that the later decree should apply, if it is
unclear which should be used. This potentially takes a wide range of IP related unfair
competition violations out of the hands of existing IP authorities and off to a new
department. It is not at all certain that this was intended; authorities are often protective
and try to retain jurisdiction so we fully expect the existing authorities to continue to hear
cases. We will only know how this will pan out once the decrees start to conflict and
decisions get made. It is quite common for parallel jurisdictions to run for years.

b). Bargaining Power of Buyers: Porters Five Forces Analysis:

The presence of powerful buyers reduces the profit potential in an industry. Buyers increase
competition within an industry by forcing down prices, bargaining for improved quality or
more services, and playing competitors against each other. The result is diminished industry
profitability. The bargaining power of buyers comprises one of Porters five forces that

50
determine the intensity of in an industry. The others are barriers to entry, industry rivalry ,
the threat of substitutes and the bargaining power of suppliers .

The power of an industrys important buyer groups depends upon:

Characteristics related to its market situation the relative importance of its purchases from
the industry as compared with its overall business. How to assess the power of a buyer
group .The following conditions indicate that a buyer

Group is powerful:

The buyer group is concentrated, or purchases large volumes relative to the sellers sales
Products purchased from the industry represent a significant percentage of the buyers costs
or purchases Products purchased from the industry are standard or undifferentiated
alternative suppliers are easy to find and competitors are played against each other Few
switching costs exist (little penalty for moving to another supplier) Profits earned are low
(greater incentive to reduce purchasing costs)

Buyers pose a significant threat of backward integrationbuyers demand concessions, and


may engage in tapered integration (producing some components in-house and purchasing
the rest from outside suppliers) The industrys product is not important to the quality of the
buyers products or Services The buyer has full information (their knowledge of demand,
market prices and supplier costs provides them with leverage.

c). Bargaining Power of Suppliers:

The second force is the bargaining power of suppliers (Porter, 1990). All companies that
manufacture goods need to obtain raw materials from external parties or suppliers. Hence, it
is imperative that companies establish good relationships with their suppliers so as to get
favorable prices and a steady supply of raw material. Yet, the supplier-manufacturer
relationship is rarely one of equals (Griffin, 2001). Normally, one party has the upper hand.
Suppliers have greater bargaining power if there are few of them so they can dictate terms
to the customers who are at their mercy (David, 2009). Bargaining Power of Suppliers
Information Technology this report serves a number of major purposes. First of all, it seeks

51
to understand the development of Information Systems IS/ Information Technology IT
theory. Secondly, it narrows the scope to enterprise value chain to evaluate the current
practice in this area. Finally, it seeks to evaluate and analyze the future of the companies
studied in relation to IS/ IT.

d). Threat of New Entrants:

The third force is the threat of new entrant (Porter, 1990). New entrants to a market can
seriously affect the market share of existing members and this is a constant source of anxiety
for companies. In an ideal free market system, a company can enter and exit a market with
the greatest ease and that profits will be nominal. However, in the real world, there are
numerous barriers to entry, some of which are the result of economics, while others are the
outcome of government intervention (Rugman and Hodgetts, 1995).

Strong brand names are important (Technology Industry)


Advanced technologies are required (Technology Industry)
Patents limit new competition (Technology Industry)
Customers are loyal to existing brands (Technology Industry)
High switching costs for customers (Technology Industry)
Entry barriers are high (Technology Industry)

e). Threat of Substitutes:

The fourth is the threat of substitutes, which refers to products in other industries (Porter,
1990). If the costs of the products in a particular industry are too high, customers might
switch to products in other industries. Price is not the only variable but changes in
technology have the potential to make users flock to rivals (David, 2009).

Substitute has lower performance (Technology Industry)


Substitute is lower quality (Technology Industry)

52
Substitute product is inferior (Technology Industry)
High cost of switching to substitutes (Technology Industry)
Bargaining Power of Customers
Product is important to customer (Technology Industry)
Large number of customers (Technology Industry)
Limited buyer choice (Technology Industry)

53
BUSINESS PLAN

54
BUSINESS PLAN

Market Analysis : 4Ps

This business plan for Enjay I.T Solution is exclusive in its succinct display of major guidelines
to success. Combining the business plan with specialized and appropriate focal points with
uniformly significant aims provides a precise display of the firm's objectives and a powerful
concept on the course of business. The plan also helps in triggering the sales of its product
by distinguishing it from the opposition. By expanding their business to Vietnam they can
achieve the following goals

Business plan for Enjay I.T Solution - Objectives

To propose and expand company's software commodity in an expeditious manner.


To promote the company's software to skilled investors in the demographic area and
then internationally.

55
To trigger the sales of the company from an amount to the desired amount in an
estimated period.

Product in the Business Plan

The first thing a company need, if a company want to start a business, is a product.
Therefore Product is also the first variable in the marketing mix. Product decisions are the
first decisions you need to take before making any marketing plan. A product can be divided
into three parts. The core product, the augmented product and the tertiary product. Before
deciding on the product component there are some questions which need to ask yourself.

What product are you selling?

What would be the quality of your product?

Which features are different from the market?

What is the USP of the product?

Whether the product will be branded as sub brand or completely new?

What are the secondary products which can be sold along with primary (Warranty,
services)

Based on these questions, several product decisions have to be made. These product
decisions will in turn affect the other variables of the marketing mix

Enjay I.T Solution Limited is an IT services, business solutions and outsourcing organization
that delivers real results to global businesses, ensuring a level of certainty no other firm can
match.

Enjey Solutions can offers following products and services in Vietnam

Tiguin OS

Linux on Desktop has always been a dream, with huge FUD around it. Not any more.
With Tally, SAP, office, Email, Internet Browser and many other software on Linux.
Now Linux on Desktop is Possible.

56
Thin Clients

Enjay Thin Client solution, powered by Enjay Tornado OS, is right blend of hardware
and software which offers affordable yet powerful computing for SMB, Easy to
integrate with Windows or Linux Environment.

Storage Solutions

EnjayStoreVol NAS offers RAID 1,5,6,10 to protect your data and keep your business
running. With builtin Backup tool and Disaster Recovery solutions.

Enjay CRM

Hosted CRM, based on SugarCRM. Fully customised for Indian Small Businesses.
Complete Sales / Support lifecycle management. Lots of add-ons and integrations
available.

Enjay Synapse

Enjay Synapse is a solution with support for IVRS, CTI (computer telephony
integration), voice logger, call recording and detail reporting very useful for
telemarketing, telesupport and Call Center.

EnjayEnsight

Capture video and screen of your employees computers and get report of application
usage from EnjayEnsight PC Activity Monitoring software.

Place in the Business Plan

Place refers to the distribution channel of a product. If a product is a consumer product, it


needs to be available as far and wide as possible. If the product is a business product, you

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need a team who interacts with businesses and makes the product available to them. Thus
the place where the product is distributed depends on the product and pricing decisions, as
well as any STP decisions taken by a firm.

Company Locations and Facilities

The Company has to initialyestablish a dedicated office room in Hanoi in Vietnam Country. In
Hanoi, there is a relatively short history of incubators already including especially Vat Gias
incubation space. But coming soon there will be many more including the Silicon Valley
project. Hanoi has long been the power center, where the government rules. Its also a
significant startup scene in its own right. Thats why we prefer Hanoi to start business

Enjey Solutions in presentGeographically located in Bhilad, Gujarat.thecompany has clients


from different states of India as well as other foreign countries.North America and Europe
constituting the largest markets for services. Through improvements in logistics and
infrastructure, Enjey Solutions has been making great inroads in its manufacturing and
distribution policies. In India, the company has made investments in the SSO (Support
Service Organization), PSO (Professional Services Organization).with the help of both SSO
and PSO has been able to provide complete solutions. This has strengthened the companys
capabilities in backing the installation types that ranges from large to single orders for multi-
locations.

Enjay Solutions expands its operations in Mumbai. Starting Mumbai branch as a strategic
move to expand into Western region and as a first step to expand to entire India.

EnjaySolutions , the developers of various innovative Business solutions like Enjay CRM,
Telephony, Tiguin Linux OS, employee monitoring software, Thin Clients, & storage. Enjay has
been into this field for last 17 years, with very well matured solutions and experienced team
behind it.

Company already have been working very closely with many partners in Mumbai. Company
also have more than 700 of customers using our solutions only in Mumbai. Having a local
presence in city like Mumbai will help us provide better service and explore new business
opportunities for them and their partners.

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Price in the Business Plan

Pricing of a product depends on a lot of different variables and hence it is constantly


updated. Major consideration in pricing is the costing of the product, the advertising and
marketing expenses, any price fluctuations in the market, distribution costs etc. Many of
these factors can change separately. Thus the pricing has to be such that it can bear the
brunt of changes for a certain period of time. However, if all these variables change, then the
pricing of a product has to be increased and decreased accordingly.

Enjey Solutions has a management information structure in place that gathers the product
prices of its competitors and then after careful analyzing makes its own pricing policies that
are somewhat parallel to the competitors prices. The main objective of EnjeySolutionsis to
provide services rather than running after the revenues hence, the company has kept a
reasonable pricing policy for most of its products and services.

It is happy to gain minimum profit margins in order to get a competitive advantage over its
adversaries. EnjeySolutionsis a firm believer in spreading its network in every nook and
corner and generating more volumes. The company realizes more the volume revenues will
come automatically, therefore it has kept pricing policies consumer friendly to garner wealth
maximization instead of profit maximization.

Price Chart of Major Products and Services for Vietnam market

Product&Services Customizability Price Range


Tiguin OS Yes 20000-50000

Thin Clients Yes 100000-120000

Storage Solutions Yes 75000-100000

Enjay CRM Yes 50000-150000

Enjay Synapse Yes 10000-20000

EnjayEnsight Yes 10000-20000

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Promotion in the Business Plan

Enjey Solutions is not gives prime importance to its advertisement and promotional
strategies. Company has a good image among the client and it spreads through clients to
clients.The companys favorite form of advertisement is using the online media and internet,
although the a multi-media campaign to create awareness amongst the consumers about
the various products and services it provides. In Vietnam also company can follow the same
promotional methods to attract the clients.

The promotion budget can be 15% of sales.

Promotions in the marketing mix includes the complete integrated marketing


communications which in turn includes ATL and BTL advertising as well as sales promotions.
Promotions are dependent a lot on the product and pricing decision. What is the budget for
marketing and advertising? What stage is the product in? If the product is completely new in
the market, it needs brand / product awareness promotions, whereas if the product is
already existing then it will need brand recall promotions.

Under the companys sales promotion policies, Enjey Solutions provides special offers to
corporate houses, institutions and end-users. It has also started various policies under which
some of the Enjey Solutions product could be purchased through EMI. It has joined the Go
Green movement. Under this TCS has developed a GreenEdge framework that will cater to
the needs and wants of manufacturing industry.

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Advantage of investment in Vietnam why invest?

Strategic location

The location of Vietnam provides it a lot of trade benefits. It situated in the center of
southeast Asia. One of the major components to attract foreign investors is Vietnam's is that
its ability to enter Southeast Asia's other major and developing markets. It is proved that it is
a potentially a good trading partner for this countries because of its close proximity to China
and most other Association of South East Asian Nations (ASEAN) countries.

Favorable investment climate

Since the past 3 decades, Vietnam has become as one of the most attractive places for
foreign investors. To achieve cost-effectiveness in their global supply chains investors have
been consider Vietnam as a major strategic investment location. Tax benefits for investments
in Preferential Investment Sectors, transparent investment environment, liberalized
economic structure, investor friendly legal and regulatory environment with well-established
legal and regulatory frameworks including the Labor Code, Land Law, Law on Competition,
Civil Code, Law on Securities, Enterprise Law and Investment Law, low cost labor, favorable
Foreign Direct Investment policy, clearly defined these are the some of the investment
sectors for Vietnam and user friendly Banking and Foreign Exchange Norms and clearly
defined Licensing process for foreign investors investing in Vietnam for the first time.

To increase the investments in Vietnam the inclusion of Vietnam as a member of the World
Trade Organization (WTO) shall also act as a catalyst to bring about opportunities for the
economic development of Vietnam.

Increasing Exports

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Because it is highlighted by its high import and export volumes Vietnam has been one of the
most open economies in international trade. It has applied trade in very orderly manner as
liberalisation, some sectors of the economy to international markets a two-track approach
has opening while protecting others.

Major export from Vietnam is crude oil. It is a major exporter of agricultural commodities
such as rice, coffee, tea and rubber and also a export of services such in tourism, mining and
high-technology sectors has been growing at a reasonable pace.

Vietnam is now also considered as a major source of the world's manufactured goods,
especially garments, textiles and footwear. Favorable import duty regime for import of
certain goods under certain categories. It has been adopted a favorable import duty regime
with import duty exemptions available. They are three categories such as

Ordinary
Preferential and

Extra-preferential

Import duty at rates goods entering Vietnam Based on the trading relationship between
Vietnam and the exporting country. Components and materials imported for manufacturing
goods for export are exempted from import duty provided and these goods are exported
within 275 days. Other than this investments in encouraged investment projects, like
infrastructure development projects are eligible to import duty exemptions for a time of 5
years from the date of start of operation for importing raw materials, supplies and
accessories which cannot yet be domestically produced.

Demographic Advantage

Highly literate Young, hard-working, and easy-to-train labor force is one of the major
advantages of Vietnam as an investment destination . From the total population of Vietnam,
about 60% is below the age of 25 years. The literacy rate for the population aged 15 years
and above is approximately 94%. This is the result of the importance and priority given by
the Government of Vietnam to the development of quality training and education system in

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Vietnam. In every year in Vietnam on an average About 1.5 million people have been added
to the labor force, over the past decade. Professionals making a part of the labor force
speak, read and write English as well as other relevant foreign languages at workplaces. The
biggest advantage to appropriate training conducted by professional experts for employees
is the low-cost labor force.

Double Tax Avoidance Agreements (DTAs)

Vietnam has already entered into DTAs with more than 50 countries at various stages of
implementation and negotiation,. The following are the countries with which Vietnam has signed
DTAs.

Countries with which Vietnam has signed DTA agreements


Australia Hungary China Switzerland Taipei
France Poland Romani Mongolia Algeria
Thailand Netherlands Malaysia Bulgaria Myanmar
Sweden Denmark Laos Italy Finland
South Korea Norway Belgium Belarus Philippines
UK Japan Luxembourg Czech Republic Saudi Arabia
Singapore Germany Uzbekistan Canada Iceland
India Russia Ukraine Indonesia Korea Republic

A foreign tax credit is available to resident tax payers in respect of foreign taxes paid for
those country that has a DTA with Vietnam, Vietnamese Corporate Income Tax attributable
to foreign income or the amount of credit given is the lower of the tax suffered in the foreign
country.

Tax incentives

The generally applicable Corporate Income Tax (CIT) in Vietnam is 25%. However, core
Sectors like health, education, high-tech, infrastructure development and software and
encouraged special economic zones or areas with difficult socio-economic conditions
preferential tax treatment including tax exemption, tax reduction and preferential tax rates
(10% and 20%) is available for investments. As a part of the preferential tax treatment,
investments in encouraged sectors projects attract a corporate income tax exemption for
first four years of operations, income tax at 50% of the preferential rate of income tax rate

63
for the nine subsequent years, income tax at preferential tax rate for the subsequent two
years and the corporate income tax at the usual rate of 25% thereafter. Also, as a part of the
preferential corporate income tax regime, losses are allowed to be carried forward for a
period of 5 years.

Political stability

Vietnam's political and social stability make it one of the safest investment destinations in
Southeast Asia. Vietnam is a single-party socialist state with a high degree of ethnic,
linguistic, and religious homogeneity. Only political organizations affiliated with the
Communist Party are permitted to contest elections in Vietnam, this aids the government to
maintain political stability, promoting Vietnam as an investment avenue and ensuring
economic development.

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How to invest successful in Vietnam

Vietnam is a new and emerging market which is offering many opportunities to Investors.
However, being successful in doing business in Vietnam is not easy if you do not understand
market well enough.

Promote brand awareness and corporate image worldwide

Vietnamese often prefer famous brand to non-famous one. Almost successful foreign
investors in Vietnam have owned very strong brand name in other countries. Starbuck; KFC;
Canon; Samsung are the typical examples.

Understand customer needs and Respond proactively

Vietnam is standing out to be a very large and potential market with reaching 100 million
people. However, dont ever think that is easy market. Vietnamese customers are different
from other market. They have different interest, shopping habit or even different payment
method. So, to persuade customer, you have to respond proactively to adapt with local
customer and market.

Make a difference to your products and services

Difference makes success. If you want to compete and win others, you shall be go ahead
them with creating typical and unique products and services. That is the best way to stand
out from the competitions.

Develop and Extend network business alliance

Network is the key important in the mutual and globalized market. More networks you have,
more success you get. In addition, there are some others key advices which you need to
consider before decide to concentrate into Vietnamese market such as:management with in-
depth information; overview of the main goals; and social responsibility and protection
environment.

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REQUIRED DOCUMENTS TO SET-UP SOFTWARE COMPANY IN
VIETNAM

The establishment of a Foreign Invested Company (Hereinafter referred to as FIC) in


Vietnam requires an Investment Certificate and a Certificate of Business Registration from
the licensing authority. Depending upon the location of the company, the licensing authority
may be the Provincial Peoples Committee (for companies located outside industrial or
export processing zones) or the provincial Industrial and Export Processing Zones
Management Authority (for companies located in industrial or export processing zones).

The roadmap for the incorporation of the FIC for producing software can be described in
following steps as follows:

Preparing the application dossier:

We shall collect necessary information and documents from you. Upon receipt of necessary
information and documents from you, we shall translate documents from English into
Vietnamese and prepare the application dossier under the standard forms. The initial
drafted application dossier shall be sent to you for your comments. Then, after updating the
application dossier based on your comments, we shall obtain the preliminary comments
from the competent authority and send the finalized application dossiers for you to sign and
seal. We anticipate that this phase shall be completed within 05-07 working days. The
prepared documents shall then be sent to you for review, signing and seal.

Submission of application dossier for obtaining Investment Certificate:

Within 02working days from receipt of duly signed and sealed application dossier, we shall
submit the application dossier to the competent authority. It shall take about 20 working
days from submission of application dossier to the competent authority for the provincial
licensing authority to grant the Investment Certificate.

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Submission of application dossier for obtaining Certificate of Business
Registration:

Within 02 working days from receipt of Investment Certificate, we shall submit the
application dossier to the competent authority for obtaining Certificate of Business
Registration. It shall take about 07 working days to complete.

Post licensing:

Within 13 working days we shall complete the post licensing procedure such as publishing
the FIC in National Database of Enterprise Registration, obtaining sea land tax code
registration.

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MODES OF ENTRY

To find the way of how to enter a foreign market can have a significant impact on the results.
Expansion into foreign markets can be achieved through the following four mechanisms:

e) Exporting
f) Licensing
g) Joint Venture
h) Direct Investment

e) Exporting:

Exporting is a traditional and well-established method of reaching foreign markets. Exporting


is the marketing and direct sale of domestically-produced goods in another country. Under
this it is not compulsory that the goods be produced in the target country, no investment in
foreign production facilities is required. Most of the costs associated with exporting are
considered as a marketing expenses.

Exporting commonly requires coordination among four players:

Exporter
Importer
Government
Transport provider

f) Licensing:

Licensing permits a company to enter into the target country to use the property of the
licensor. Such property usually is intangible, like trademarks, patents, and production
techniques. For the exchange for the rights to use the intangible property and possibly for
technical assistance, licensee pays a fee for the same.

Licensing has the potential to provide a very large ROI because little investment on the part
of the licensor is required, However, because the licensee produces and markets the
product, potential returns from manufacturing and marketing activities may be lost.

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g) Joint Venture:

There are five common reasons for why company go for a joint venture: market entry,
risk/reward sharing, technology sharing and joint product development, and conforming to
government regulations. Other benefits include political connections and distribution
channel access that may depend on relationships.

Such alliances often are favorable when:

The partners' strategic goals converge while their competitive goals


diverge;
The partners' size, market power, and resources are small compared to
the industry leaders.

Partners are able to learn from one another while limiting access to their
own proprietary skills.

In a joint venture ownership, control, length of agreement, pricing, technology transfer,


local firm capabilities , resources, and government intentions are considered as key issues.

h) Foreign Direct Investment:

Direct foreign investment had to form through the attainment of an existing entity or the
establishment of a new enterprise. However, it requires a high level of resources and a high
degree of commitment. Foreign direct investment (FDI) has the direct ownership of facilities
in the target country. Direct ownership provides to high degree of control to the operations
and the ability for the better knows the consumers and competitive environment. They
involves the source of transfer to the resources including capital, technology, and personnel.

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FORMS OF INVESTMENT IN VIETNAM

According to the Vietnam Law on Investment (2005), foreign investors can invest in
Vietnam through direct investment and indirect investment.When foreign investors

require to set up their business in Vietnam need to be advised by a law firm

in Vietnam on forms of investment

Direct investment Indirect investment


The direct investment is when such the Indirect investment means a form of
investor invests its invested capital and investment whereby the stockholder do
also makes an active participation in the only donate the wealth but do not
management of the investment actively participate in the management
activities, includes: of the investment activity includes:

To invest in business Through other midway financial


development. institutions.
To purchase shares or to Buying of shareholding, shares,
contribute capital in accordingly bonds and other valued papers;
to participate in management of
Through securities investment
investment activities.
reserves;
To found economic organizations
in the form of one hundred per
cent (100%) capital of domestic
investors or one hundred per cent
(100%) capital of foreign
investors.

To start other forms of direct


investment.

To establish joint venture

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economic organizations between
domestic and foreign investors.

To invest in the contractual forms


of: BCC, BO, BTO, and BT.

To invest for carrying out of a


merger and acquisition of an
enterprise.

The direct investment is when such the investor invests its invested capital and also
makes an active participation in the management of the investment activities, includes:

To invest in business development.


To purchase shares or to contribute capital in accordingly to participate in
management of investment activities.

To found economic organizations in the form of one hundred per cent (100%)
capital of domestic investors or one hundred per cent (100%) capital of foreign
investors.

To start other forms of direct investment.

To establish joint venture economic organizations between domestic and foreign


investors.

To invest in the contractual forms of: BCC, BO, BTO, and BT.

To invest for carrying out of a merger and acquisition of an enterprise.

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TYPES OF ENTERPRISE FOR FOREIGN INVESTORS TO INVEST IN
VIETNAM

a) Limited Liability Company In Vietnam following category of company


exist under the LOE:

Limited liability company with one member (one-member LLC)

Limited liability company with more than one members (LLC)

An LLC is a legal company organized by its members by way of capital shared to the LLC. The
capital contribution is treated as equally for each members. The members of an LLC are
legally responsible for the debts of the LLC to the improvement of their capital shared - or
undertaken to be shared - to the LLC. An LLC initiated by one or more foreign investors may
take the form of either a 100% Foreign Owned Enterprise (FOE) where all members are
foreign investors or of a foreign-invested joint-venture company between one or more
foreign investors and one or more domestic investors.

b) Joint Stock Company:

Under the Enterprise Law, a JSC is a company whose officially written capital is divided into
shares held by three or more organizations or persons. A JSC is a recognized legal company
under Vietnamese law and partners are liable for the financial obligations and
responsibilities of the company to the improvement of the amount of their shared capital. A
JSC has the right to provide securities to increase capital and it may noted on the Securities
Exchange. The establishing partners of a JSC must pay at least 20% of the total number of
common shares that the JSC is permitted to offer for sale. The JSC must have common
shares and may have preferred shares and/or issue bonds. Partners in JSCs may be
Vietnamese or foreign. A common partner has the right, among other things:

To attend the General partners Meeting;

72
To vote in a number that correlate to his/her/its amount of shares;

To get dividends, to transfer his/her/its shares as specified under the Enterprise Law;
and

To give priority in buying new shares offered for sale.

c) Partnership:

Partnership is that two or more people being co-owners of the company and jointly doing
business under a common name.

A Partnership Company is a form of business established by at least two general partners


and may also have limited partners. General partners are legally responsible for all duties of
the Partnership Company with their own possession, while limited partners are only
responsible for the improvement of their capital contribution. Nowadays in Vietnam the
Partnership Companies have not been a common vehicle for foreign investment.

d) Private enterprise

A private enterprise is belonged to one person who is legally responsible to paying the cost
for all activities of the company to the improvement of his/her profit. An individual only
setup one private company. So that it may not have any type of security.

e) Joint venture

Basically, the foreign investor and its Vietnamese partner combinely apply to setup a
company. The investor has two ways to make a joint venture: (i) create a new initiative or
(ii) participate in an existing initiative through the buying of the companys shares. A joint
venture setup as a limited legal responsible company with more than one member, as a joint
stock company or as a partnership on the basis of a joint venture contract.

f) Representative Office of foreign trader:

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As an alternative to settingup or investing in a Vietnamese initiative, certain foreign
companies may set up a branch or a representative office in Vietnam,in which both cases
there should be license by the relevant authorities.

A representative office setup by any foreign business company to look for and to develop
business opportunities for the foreign parent. Many foreign investors are ready to setup
their representative offices in Vietnam before deciding to invest, in order to examine the
local market. As the name suggests, a representative office is a dependent unit of the foreign
company, not an independent unit.

A representative office is only allowed to engage in business development and related


activities and cannot manage profit producing activities. (i.e: the direct payment or receipt
of funds, sale or purchase of goods, or provision of services), but the representative Office is
permitted to

To work in a particular way with the purposes, scope and duration which are stated
in the license;
To purchase the equipment and facilities for the working of the Representative
Office;
To recruit Vietnamese and foreign workers by their law of Vietnam in order to work
for the Representative Office;
To open accounts in foreign money and to use such accounts only for the working of
the Representative Office.

g) Branch of foreign trader:

A branch office can be a subunit of a foreign company and may undertake commercial activities for
direct business purposes in connection with international parties to which Vietnam is a trading
partner. In Vietnam banks, tobacco companies, airlines, law firms, and foreign companies producing
an effect in the fields of culture, education and tourism are permitted to setup branches. Foreign
companies may also setup branches in Vietnam to manage business activities and activities directly
related to business of goods.

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75
Indias Import & Export Policy: Procedures and Duties

Import Procedure:

Goods bought from foreign countries are referred as Import trading. The trading methods
adopted by each country differs in various aspects including their policy, legal requirements
and custom policies. The government of the country is responsible for controlling the import
trade. The basis of the government controls is to keep an eye on legal use of foreign
exchange restrictions, safety of native industries, etc. The import trading procedure have to
take into account all the steps given by the government. Below are the various steps
involved in import procedure:

a. Trade Analysis: The first step involved in import trading is investigation in regards to
price and terms on which the exporter will be supplying merchandise. The details
such as merchandise requirements, description, size, weight, quantity, and item
number/grade should be mentioned in the analysis report. In addition, the method
and time of delivery, packing terms and conditions in regards to remittance should
also be mentioned. This inquiry is a first formal request sent by the purchaser. In
return, the purchaser receives the quote from the seller and the quotation includes
the requested information by the purchaser.
b. Acquisition of Import License and Quota: The import trade of India in controlled
under the Imports and Exports Act since 1947. An individual or a business cannot
import merchandise without a valid import license, no matter what the category of
the license is.
The general license allows to import merchandise from any country while other type
of specific/individual license only allows to import from specific countries. The
government of India maintains its import policy under Import Trade Control Policy
Book also knows as Red Book. Imported must go through the Red Book to check out
the limitations/class of merchandise that can be imported in a given period of time.
The importers are categorized in terms of license issuance: Established importer,
actual user, and registered exporter.

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c. Obtaining Foreign Exchange: The importer has to work with foreign exchange since
the payment to be made to the exporter is supposed to be in exporters local
currency. The Exchange Control Department of the Reserve Bank of India is the
preferred method for foreign exchange. The government of each country controls the
foreign exchange reserves and are released through its central bank. For this the
buyer needs to submit an application along with the obtained import license to the
back participating in foreign exchange as per the directions mentioned in the
Exchange Control Act. The exchange back supports and forwards the application to
the Exchange Control Department of the Reserve Bank of India. Based on the
exchange policy, the Reserve Bank of India sanctions the release of foreign exchange
after processing the application. Moving forward, the buyer gets the requested
foreign exchange from the exchange bank but has limitations of specific period/time
and number of transactions supported during that time.
d. Order Placement: Following the initial procedure of obtaining license, working with
exchange bank, and receiving the quote; the next step is of placing the order also
known as indent. An indent means order paced by a buyer to the seller for the supply
of certain merchandise. The order placement contains the description of the
expected quality, quantity, packaging, price negotiation, and route of delivery. There
are several types of indent such as open indent, closed indent, and confirmatory
indent. The open indent does not include information such as price, the seller is
responsible to complete it. Whereas for the closed indent, all the information
including price, packaging, shipping, brank, insurance, etc. are completed by the
buyer beforehand. In confirmatory indent, the agent of the buyer is
responsible/confirms the order placed.
e. Dispatching a Letter of Credit: The buyer is requested to send a letter of credit to the
seller in regards to no risk of non-payment and credit dependability of the buyer. The
letter of credit is also known as L.C and is issued by the buyers exchange bank which
ensures the payment of received by the foreign dealer, on the buyer will be accepted
on presentation up to a specified amount.
f. Obtaining necessary documents: Following the issuance of a letter of credit, the
buyer does not have to take any further steps. Once the seller receives the letter of
credit, the seller makes arrangements for the shipment of merchandise and updates
the buyer with the Advice Note. An Advice Note is basically a document sent to the

77
buyer to update them that the merchandise has been dispatched. It also includes the
expected date of delivery. The seller withdraws the bill of exchange which also
includes the value of merchandise, insurance policy, consumer invoice, etc. This
detailed bill is called as Documentary bill; it is then sent to the buyer through their
exchange bank location based in buyers country of location to collect the payment.
Types of Documentary bills: D.P (Documents against payment) bills, and D.A
(Document against acceptance) bills.
If it is a D.P bill, then the documents of title of merchandise are handed to the buyer
only if the payment of the bill is made in full. D.P bill may also be in the form of sight
bill or usance bill. For sight bill, the payment should be received immediately, but
usually allows 24 hours time frame. Whereas usance bill allows specific time slot to
make the payment. If it is a D.A bill, then the document of the title of merchandise
are handed to the buyer once bill is obtained by the exchange bank; it usually takes
30 to 90 days to clear the payment.

Export Procedure

Export procedure describes the documents required for exporting from India. Special
documents may be required depending on the type of product or destination. Certain export
products may require a quality control inspection certificate from the Export Inspection
Agency. Some food and pharmaceutical product may require a health or sanitary certificate
for export.

Shipping Bill/ Bill of Export is the main document required by the Customs Authority for
allowing shipment. Usually the Shipping Bill is of four types and the major distinction lies
with regard to the goods being subject to certain conditions which are mentioned below:

Export duty/ cess


Free of duty/ cess

Entitlement of duty drawback

Entitlement of credit of duty under DEPB Scheme

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Re-export of imported goods

The following are the export documents required for the processing of the Shipping Bill:
GR forms (in duplicate) for shipment to all the countries.
4 copies of the packing list mentioning the contents, quantity, gross and net weight
of each package.

4 copies of invoices which contains all relevant particulars like number of packages,
quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc.

Contract, L/ C, Purchase Order of the overseas buyer.

AR4 (both original and duplicate) and invoice.

Inspection/ Examination Certificate.

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VIETNAMS IMPORT& EXPORT REGULATIONS

Following are laid out the key takeaways that companies must be aware of before starting
their trading functions in Vietnam. Vietnam, it is very necessary to know that their workers
gain a strong sympathetic of the countrys import and export regulations and events. Once
an investor has set up their trading company within.

Import and Export Licensing Procedures:

Companies that wish to expand their current business operations in order to engage in
import/export activities must follow the procedures for adjusting their Investment
Certificates. Additionally, foreign investors who wish to engage in import/export activities in
Vietnam are required to obtain an Investment Certificate.

Vietnam does not require a company to have an import/export license in order to set up a
trading company. However, in order to be able to conduct import/export business, a foreign
investor must register with the Department of Planning and Investment (DPI).

Goods banned from import into the country include cigars, tobacco, petroleum oils,
newspapers and journals, and aircraft. Goods banned for export include petroleum oil.
According to Circular 34/2013/TT-BCT, there are certain goods that foreign invested
enterprises may not export from, or import into, Vietnam.

Certain goods require the trading company to obtain import and export permits from the
government, these include:

Explosive pre-substances and industrial explosives.

Goods subject to import control in accordance with international treaties to which


Vietnam is a contracting party.
Goods subject to export control in accordance with international treaties to which
Vietnam is a contracting party.
Goods exported within quotas set by foreign countries.

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All imports and exports must comply with the relevant government regulations on
quarantine, food safety, and quality standards, and must be inspected by the relevant
government agencies before clearing customs.

Import/Export Duties:

Most goods imported/exported across the borders of Vietnam, or which pass


between the domestic market and a non-tariff zone, are subject to import/export
duties.

Exceptions to this include goods in transit, goods exported abroad from a non-tariff
zone, and goods passing from one non-tariff zone to another.

Most goods and services being exported are exempt from tax.

Export duties (ranging from zero percent to 45 percent and computed on free-on-
board (FOB) price) are only charged on a few items, mainly natural resources such as
minerals, forest products, and scrap metal.

Consumer goods, especially luxury goods, are subject to high import duties, while
machinery, equipment, materials and supplies needed for production, especially
those items which are not produced domestically, enjoy lower rates of import duties,
or even a zero percent tax rate.

Duty rates for imported goods include preferential rates, special preferential rates,
and standard rates depending on the origin of the goods.Import/export duties
declaration are required upon registration of customs declarations with the customs
offices.

Export duties must be paid within 30 days of registration of customs declarations. For
imported goods, import duties must be paid before receipt of consumer goods.

Depending on the trade conditions, Vietnam imposes a number of different types of


duties on the import and export of goods.

Companies wishing to find in-depth information on a range of goods would be well


advised to visit the website of Vietnam Customs.

81
Imports:

Imports are subject to import tax, Value-added tax (VAT) and, for certain goods,
Special Consumption Tax (SCT).

Vietnam imposes a tax on almost every type of product that is imported into the
country.

The import tax rates range depending on the type of product, for example,
consumer products and luxury goods are highly taxed while machinery,
equipment, and raw materials, tend to receive lower taxes and even tax
exemptions.

Tax rates applicable to imported goods include preferential tax rates, special
preferential tax rates, and ordinary tax rates:

VAT rates range from zero to ten percent, with ten percent being the most common rate.
Detailed information can be found in Decree No. 83/2014/TT-BTC.

Exports:

Only certain commodities are liable for export tax. Export taxes range from zero to 45
percent.

Many goods are also subject to Value-added Tax. In addition, the Law on Special
Consumption Tax (SCT) stipulates that exporters who purchase SCT tax-liable goods for
export, but instead sell the products domestically, are liable for SCT.

The export tax rates applicable to exported goods are specified for each item in the Export
Tariff. For the year 2014, the tax tariff can be found in Circular 164/2013/TTBTC; Circular
17/2014/TT-BTC and Circular 30/2014/TT-BTC.

82
Whenever there is an update in the tax tariff, the Ministry of Finance will issue new Circulars
which will either replace or supplement the previous ones. VAT on exported goods is zero
percent.

Supporting institute to facilitate import/export

ECGC Schemes
Export-Import Bank of India (EXIM Bank)

ECGC Schemes

In order to provide export credit insurance support to Indian exporters, the Government of
India set up the Export Credit Guarantee Corporation of India Limited (ECGC).

Functions of ECGC

provides a range of credit risk insurance covers to exporters against loss in export of
goods and services,
offers guarantees to banks and financial institutions to enable exporters obtain better
facilities from them,

Provides Overseas Investment Insurance to Indian companies investing in joint


ventures abroad in the form of equity or loan.

ECGC Provides

offers insurance protection to exporters against payment risks


provides guidance in export-related activities

makes available information on different countries with its own credit ratings

makes it easy to obtain export finance from banks/financial institutions

assists exporters in recovering bad debts

83
Financial Data
Projected Financial Statementsfor next 5 years
I. Income Statement
II. Balance Sheet
III. Cash flow
IV. Ratio
V. Break even analysis

Blanacesheet of Enjay Ltd


84
------------------- in Rs. Cr. -------------------

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

EQUITIES AND LIABILITIES


SHAREHOLDER'S FUNDS
Equity Share Capital 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51
Total Share Capital 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51 12.51
Reserves and Surplus 51.99 67.65 69.76 70.61 58.71 68.664 70.3 71.944 73.584 75.224
Total Reserves and Surplus 51.99 67.65 69.76 70.61 58.71 68.664 70.3 71.944 73.584 75.224
Total Shareholders Funds 64.51 80.16 82.27 83.12 71.22 81.17 82.81 84.446 86.084 87.722
NON-CURRENT LIABILITIES
Long Term Borrowings 2.59 22.07 8.67 2.27 0.21 -0.206 - -5.118 -7.574 -10.03
2.662
Deferred Tax Liabilities [Net] 0.3 4.89 5.35 3.9 0 2.411 2.252 2.093 1.934 1.775
Other Long Term Liabilities 5.04 12.02 10.12 10.91 7.53 10.285 10.67 11.059 11.446 11.833
Long Term Provisions 0.36 0.23 0.32 0.11 0.1 0.032 - -0.096 -0.16 -0.224
0.032
Total Non-Current Liabilities 8.3 39.22 24.46 17.18 7.84 12.512 10.22 7.92 5.624 3.328
CURRENT LIABILITIES
Short Term Borrowings 15.08 42.88 44.01 35.84 40.82 49.058 53.5 57.946 62.39 66.834
Trade Payables 42.85 42.34 54.78 27.11 29.45 26.697 22.49 18.291 14.088 9.885
Other Current Liabilities 10.5 30.23 21.98 16.34 9.81 13.191 11.66 10.137 8.61 7.083
Short Term Provisions 8.46 6.61 5.22 5.56 2.89 2.091 0.872 -0.347 -1.566 -2.785
Total Current Liabilities 76.9 122.06 126 84.85 82.97 91.031 88.52 86.017 83.51 81.003
Total Capital And Liabilities 149.7 241.44 232.7 185.2 162 184.72 181.6 178.4 175.24 172.07
ASSETS
NON-CURRENT ASSETS
Tangible Assets 22.43 55.44 47.23 35.36 13.83 23.674 19.95 16.218 12.49 8.762
Capital Work-In-Progress 10.88 8.83 6.99 7.5 2.12 1.609 - -2.161 -4.046 -5.931
0.276
Fixed Assets 33.31 64.27 54.23 42.86 15.95 25.285 19.67 14.059 8.446 2.833
Deferred Tax Assets [Net] 0 0 0 0 2.44 1.952 2.44 2.928 3.416 3.904
Long Term Loans And 5.19 6.62 6.3 5.47 6.18 6.201 6.284 6.367 6.45 6.533
Advances
Other Non-Current Assets 3.57 0.22 0.17 0.84 1.36 0.092 - -0.668 -1.048 -1.428
0.288
Total Non-Current Assets 42.07 71.11 60.7 49.18 25.94 33.543 28.12 22.705 17.286 11.867
CURRENT ASSETS
Inventories 4.51 1.53 1.7 6.05 0.75 2.008 1.708 1.408 1.108 0.808

85
Trade Receivables 89.81 137.91 152.2 115.2 122.5 136.35 140.6 144.9 149.17 153.45
Cash And Cash Equivalents 5.94 16.15 11.91 7.41 5.81 6.744 5.844 4.944 4.044 3.144
Short Term Loans And 1.81 11.31 4.97 6.68 6.18 7.423 7.834 8.245 8.656 9.067
Advances
OtherCurrentAssets 5.56 3.43 1.23 0.66 0.82 -1.335 -2.56 -3.785 -5.01 -6.235
Total Current Assets 107.63 170.33 172 136 136.1 151.18 153.4 155.69 157.95 160.21
Total Assets 149.7 241.44 232.7 185.2 162 184.72 181.6 178.4 175.24 172.07
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 43.4 71.87 33.25 34.76 25.37 19.779 12.46 5.145 -2.172 -9.489
CIF VALUE OF IMPORTS
Trade/Other Goods 11.5 0.22 0 0 0 -4.622 - -9.266 -11.59 -13.91
6.944
Capital Goods 3.99 3.44 0 0 0 -1.94 - -4.224 -5.366 -6.508
3.082
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign 2.35 3.67 0.01 0 0 -1.305 - -2.979 -3.816 -4.653
Currency 2.142
REMITTANCES IN FOREIGN CURRENCIES FOR
DIVIDENDS
Dividend Remittance In - - - - -
Foreign Currency
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods - - - - -
Other Earnings - - - - -
BONUS DETAILS
Bonus Equity Share Capital 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
NON-CURRENT
INVESTMENTS
Non-Current Investments - - - - -
Quoted Market Value
Non-Current Investments - - - - -
Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted - - - - -
Market Value
Current Investments - - - - -
Unquoted Book Value

86
Income Statement of Enjay Ltd

------------------- in Rs. Cr. -------------------

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

INCOME
Revenue From Operations 124.36 196.17 137.75 98.36 87.99 77.761 60.706 43.651 26.596 9.541
[Gross]
Revenue From Operations 124.36 196.17 137.75 98.36 87.99 77.761 60.706 43.651 26.596 9.541
[Net]
Other Operating Revenues 0.89 4.21 5.67 3.2 3.28 4.581 4.958 5.335 5.712 6.089
Total Operating Revenues 125.25 200.38 143.42 101.56 91.27 82.342 65.664 48.986 32.308 15.63
Other Income 1.12 1.25 2.02 1.23 1.99 2.038 2.21 2.382 2.554 2.726
Total Revenue 126.38 201.63 145.44 102.79 93.26 84.376 67.868 51.36 34.852 18.344
EXPENSES
Purchase Of Stock-In Trade 71.76 32.35 40.24 21.5 28.51 9.667 -0.068 -9.803 - -
19.538 29.273
Changes In Inventories Of -4.39 2.98 -0.17 -4.98 5.3 3.174 4.316 5.458 6.6 7.742
FG,WIP And Stock-In Trade
Employee Benefit Expenses 8.27 9.95 15.9 18.75 15.17 20.388 22.648 24.908 27.168 29.428
Finance Costs 2.42 9.38 11.84 9.58 7.2 11.012 11.988 12.964 13.94 14.916
Depreciation And 2.75 8.34 10.99 10.02 6.31 10.322 11.202 12.082 12.962 13.842
Amortisation Expenses
Other Expenses 30.87 111.19 60.26 43.64 25.37 30.701 22.846 14.991 7.136 -0.719
Total Expenses 111.68 174.19 139.07 98.52 87.85 85.263 72.93 60.597 48.264 35.931

Profit/Loss Before 14.7 27.44 6.37 4.26 5.41 -0.892 -5.068 -9.244 -13.42 -
Exceptional, ExtraOrdinary 17.596
Items And Tax
Profit/Loss Before Tax 14.7 27.44 6.37 4.26 5.41 -0.892 -5.068 -9.244 -13.42 -
17.596
Tax Expenses-Continued
Operations
Current Tax 5.3 4.36 1.23 3.69 1.28 0.559 -0.312 -1.183 -2.054 -2.925
Less: MAT Credit 0 0 0.78 0 0 0.156 0.156 0.156 0.156 0.156

87
Entitlement
Deferred Tax -0.68 4.59 0.46 -1.45 0.5 -0.42 -0.788 -1.156 -1.524 -1.892
Tax For Earlier Years 0.25 -0.07 1.69 0 0.01 0.253 0.212 0.171 0.13 0.089
Total Tax Expenses 4.86 8.88 2.6 2.24 1.78 0.232 -1.048 -2.328 -3.608 -4.888
Profit/Loss After Tax And 9.84 18.56 3.76 2.02 3.62 -1.134 -4.032 -6.93 -9.828 -
Before ExtraOrdinary Items 12.726
Extraordinary Items 0 0 -0.2 0 0 -0.04 -0.04 -0.04 -0.04 -0.04
Profit/Loss From 9.84 18.56 3.56 2.02 3.62 -1.174 -4.072 -6.97 -9.868 -
Continuing Operations 12.766
Profit/Loss For The Period 9.84 18.56 3.56 2.02 3.62 -1.174 -4.072 -6.97 -9.868 -
12.766

OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 8 15 3 2 3 -0.7 -3 -5.3 -7.6 -9.9
Diluted EPS (Rs.) 8 15 3 2 3 -0.7 -3 -5.3 -7.6 -9.9
VALUE OF IMPORTED AND
INDIGENIOUS RAW MATERIALS
STORES, SPARES AND
LOOSE TOOLS
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 2.5 2.5 1.25 1 1 0.3 -0.15 -0.6 -1.05 -1.5
Tax On Dividend 0.41 0.41 0.2 0.17 0.2 0.08 0.014 -0.052 -0.118 -0.184
Equity Dividend Rate (%) 20 20 10 8 8 2.4 -1.2 -4.8 -8.4 -12

88
Cash flow of Enjay Ltd

------------------- in Rs. Cr. -------------------

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Profit/Loss Before 14.7 27.44 6.17 4.26 5.41 -0.932 -5.108 -9.284 -13.46 -
Extraordinary Items And 17.636
Tax
Net CashFlow From 0.97 -4.81 26.02 30.82 5.92 25.443 29.996 34.549 39.102 43.655
Operating Activities
Net Cash Used In -10.38 -40.9 -0.18 2.19 0.73 9.885 16.416 22.947 29.478 36.009
Investing Activities
Net Cash Used From -1.18 52.28 - - -9.67 - - - - -
Financing Activities 31.32 33.81 35.661 45.968 56.275 66.582 76.889
Net Inc/Dec In Cash And -10.58 6.57 -5.49 -0.8 -3.02 -0.339 0.436 1.211 1.986 2.761
Cash Equivalents
Cash And Cash 14.55 3.96 10.53 5.04 4.46 1.978 0.068 -1.842 -3.752 -5.662
Equivalents Begin of Year
Cash And Cash 3.96 10.53 5.04 4.23 1.44 1.638 0.504 -0.63 -1.764 -2.898
Equivalents End Of Year

89
Ratio of Enjay Ltd

------------------- in Rs. Cr.


-------------------

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Investment
Valuation Ratios
Face Value 10 10 10 10 10 10 10 10 10 10
Dividend Per Share 2 2 1 0.8 0.8 0.24 -0.12 -0.48 -0.84 -1.2
Operating Profit Per 14.99 35.1 21.73 18.1 13.53 14.714 12.722 10.73 8.738 6.746
Share (Rs)
Net Operating Profit 100.11 160.15 114.63 81.17 72.95 65.812 52.482 39.152 25.822 12.492
Per Share (Rs)
Free Reserves Per -- -- -- -- --
Share (Rs)
Bonus in Equity 20 20 20 20 20 20 20 20 20 20
Capital
Profitability Ratios
Operating Profit 14.97 21.91 18.95 22.29 18.54 21.588 22.34 23.092 23.844 24.596
Margin(%)
Profit Before 12.65 17.64 11.13 12.27 11.38 10.641 9.85 9.059 8.268 7.477
Interest And Tax
Margin(%)
Gross Profit 12.77 17.75 11.29 12.42 11.63 10.889 10.128 9.367 8.606 7.845
Margin(%)
Cash Profit 9.96 13.34 10.14 11.72 10.64 11.082 11.056 11.03 11.004 10.978
Margin(%)
Adjusted Cash 9.96 13.34 10.14 11.72 10.64 11.082 11.056 11.03 11.004 10.978

90
Margin(%)
Net Profit Margin(%) 7.85 9.26 2.48 1.99 3.97 0.601 -0.902 -2.405 -3.908 -5.411
Adjusted Net Profit 7.78 9.2 2.45 1.96 3.88 0.542 -0.962 -2.466 -3.97 -5.474
Margin(%)
Return On Capital 20.83 25.37 13.49 11.41 11.23 6.518 3.202 -0.114 -3.43 -6.746
Employed(%)
Return On Net 15.25 23.15 4.33 2.43 5.08 -2.27 -6.376 -10.482 -14.588 -18.694
Worth(%)
Adjusted Return on 15.25 23.15 4.57 2.43 5.08 -2.222 -6.328 -10.434 -14.54 -18.646
Net Worth(%)
Return on Assets 51.56 64.07 65.75 66.44 56.92 64.875 66.184 67.493 68.802 70.111
Excluding
Revaluations
Return on Assets 51.56 64.07 65.75 66.44 56.92 64.875 66.184 67.493 68.802 70.111
Including
Revaluations
Return on Long 25.51 36.02 20.02 16.21 17.64 12.415 8.86 5.305 1.75 -1.805
Term Funds(%)
Liquidity And
Solvency Ratios
Current Ratio 1.2 0.97 0.96 1.05 1.11 1.028 1.018 1.008 0.998 0.988
Quick Ratio 1.66 1.82 1.81 2.13 2.87 2.877 3.15 3.423 3.696 3.969
Debt Equity Ratio 0.27 0.81 0.64 0.46 0.58 0.633 0.66 0.687 0.714 0.741
Long Term Debt 0.04 0.28 0.11 0.03 -- 0.045 0.025 0.005 -0.015 -0.035
Equity Ratio
Debt Coverage
Ratios
Interest Cover 7.08 3.92 1.54 1.45 1.75 -0.791 -2.104 -3.417 -4.73 -6.043
Total Debt to 0.27 0.81 0.64 0.46 0.58 0.633 0.66 0.687 0.714 0.741
Owners Fund
Financial Charges 8.21 4.81 2.47 2.49 2.63 0.078 -1.27 -2.618 -3.966 -5.314
Coverage Ratio
Financial Charges 6.21 3.87 2.23 2.26 2.38 0.609 -0.318 -1.245 -2.172 -3.099
Coverage Ratio Post
Tax
Management #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Efficiency Ratios
Inventory Turnover 27.8 131.1 84.35 16.8 122.1 98.72 106.15 113.58 121.01 128.44
Ratio
Debtors Turnover 1.52 1.73 0.99 0.76 0.77 0.413 0.166 -0.081 -0.328 -0.575

91
Ratio
Investments 27.8 131.1 84.35 16.8 122.1 98.72 106.15 113.58 121.01 128.44
Turnover Ratio
Fixed Assets 3.63 2.65 1.86 1.49 1.4 0.52 -0.042 -0.604 -1.166 -1.728
Turnover Ratio
Total Assets 1.52 1.38 1.06 0.84 0.81 0.534 0.338 0.142 -0.054 -0.25
Turnover Ratio
Asset Turnover Ratio 1.59 1.75 1.02 0.79 0.78 0.412 0.154 -0.104 -0.362 -0.62

Average Raw -- -- -- -- --
Material Holding
Average Finished -- -- -- -- --
Goods Held
Number of Days In 116.65 149.5 215.46 290.28 366.61 419.91 483.98 548.05 612.12 676.19
Working Capital
Profit & Loss
Account Ratios
Material Cost 57.28 16.14 28.05 21.17 31.23 16.653 11.946 7.239 2.532 -2.175
Composition
Imported -- -- -- -- --
Composition of Raw
Materials Consumed
Selling Distribution -- -- -- -- --
Cost Composition
Expenses as -- -- -- -- --
Composition of Total
Sales
Cash Flow Indicator
Ratios
Dividend Payout 25.43 13.47 35.1 49.47 27.61 42.324 46.36 50.396 54.432 58.468
Ratio Net Profit
Dividend Payout 19.86 9.29 8.59 8.3 10.07 5.051 2.994 0.937 -1.12 -3.177
Ratio Cash Profit
Earning Retention 74.57 86.53 66.77 50.53 72.39 58.05 54.014 49.978 45.942 41.906
Ratio
Cash Earning 80.14 90.71 91.53 91.7 89.93 94.973 97.03 99.087 101.144 103.201
Retention Ratio
AdjustedCash Flow 1.4 2.41 3.57 3.16 4.13 4.797 5.418 6.039 6.66 7.281
Times

92
Breakeven of Enjay Ltd

Estimated Break Even Analysis

2016 2017 2018 2019 2020

BEP=FIXED INVESTMENT=INTEREST/SALES
-VARIABLE COST
PARTICULAR

FIXED INVESTMENT 25.285 19.672 14.059 8.446 2.833

INTEREST 5.156 4.18 3.204 2.228 1.252

dep 5.042 4.162 3.282 2.402 1.522

93
SALES 77.761 60.706 43.651 26.596 9.541

VARIABLE COST 85.263 72.93 60.597 48.264 35.931

FIXED INVESTMENT + INTEREST + DEPRECIATION 35.483 28.014 20.545 13.076 5.607

SALES - VARIABLE COST -7.502 -12.224 -16.946 -21.668 -26.39

BEP(UNITS IN Cr.) - - - - -
4.72981 2.29172 1.21238 0.60347 0.21247

94
FINDINGS

From the analysis it is found that there are more opportunity for Indians IT
companies to do the business in the country like Vietnam.
As there are 60%(approx.) of young workmen literate so that it would be beneficial
for the Indian companies to hire employee staff easily with low labour cost.
Vietnam country offer trade agreement with foreign countries for doing business
with Vietnam.
There are many Indian IT companies existing in Vietnam offer different IT products to
the local communities.
In 2014, two-way trade between Vietnam and India topped US$5.4 billion, while
export from Vietnam to India were worth more than $2.4 billion and imports from
the country reached more than $3 billion..
Vietnamese governments plan to improve its information technology system which
is an opportunity for India to collaborate with Vietnam and update their information
technology system.
As India is a global powerhouse in information technology, it will be great if
Vietnamese and Indian businesses can work together to bring their software and
hardware together in future electronics products.
As a result, it is necessary to increase cooperation and trade between the two
countries so that INDIA CAN BECOME a major supplier of software and hardware
industry of Vietnam

95
SUGGESTION

From the above study it has been suggested that:


IT companies should come up with new innovated and upgrade IT software and
hardware to increase they market in foreign IT companies.
Enjay starting business in Vietnam should try to match with the exiting competition
with Indian as well as Vietnam IT companies by providing upgrade software for
banks, business etc.
Government of Vietnam should provide less percentage of tax rate for doing business
in Vietnam.
Vietnams bank suffer from low public confidence, regulatory and managerial
weakness, high levels of non-performing loans (NPL), non-compliance with the Basel
capital standards, and the absence of international auditing. So that enjay company
should provide software to the banks that can cover up the lacking point in Vietnam.
The IT sector of India needs to discard its old model of service providing and
operations. The old model popularly known as the ADM(Application, Development
and Maintenance)is obsolete. It is imperative that the IT sector resorts the new
model of outcome based billing and fixed contract based services.
Vietnam Human resource development should be established to help IT workers
master new technology and conduct research and development activities.
Vietnam outsource most of the software from foreign countries like US and China so
Vietnam should trade more with Indian companies software from India to Vietnam.
That would established good relation between both the countries.

CONCLUSION

The project find out the swot, portes five force model and also conclude business
plan for Enjay ltd in Vietnam its vast products (core banking services)

96
Enjay has high opportunity to expand their business in Vietnam with low labor cost
and high qualified employee.
Good business relationship can be conducted between Vietnam and India.
A memorandum of understanding for a sister city relationship between Ho Chi Minh
City and Mumbai are being discussed, and all concerned parties are working on
opening the first office of an Indian bank in Ho Chi Minh City.
Vietnam needs other institutions to support the market, including insurance,
security, co-author and technology consultancy firms.
Vietnam although it does not get the publicity , but India and China remains a highly
attractive location for software development and for many IT and IT equipment
companies because of the fast pace of growth in the market.

BIBLIOGRAPHY

WEBSITE:

http://www.scribd.com
http://en.wikipedia.org/wiki/marketing_stratagies_for_products_software

97
http://www.articealley.com/article_1264372_3.html
http://www.docstoc.com/docs/16064158/INFORMATION-TECHNOLOGY-
%E2%80%93-SECTOR-ANALYSIS-_2_
core banking solutions for small banks - a global perspective
Reserve bank of san Francisco. Asia Focus: Banking Reform in Vietnam, june 2014.
http://www.frbsf.org/publications/banking/asiafocus/2014/june-banking-reform-in-
vietnam.pdf.
Fitch ratings.2015 outlook:asia-pacific banks. January 3,1 2015.
http://www.asianbondsonline.adb.org/publication/external2015/outlook asia pacific
banks2.
Business advantangeVietnam.reforms open up banking sector, 2015
http://businessadvantagevietnam.files.wordpress.com/2015/02/businessadvantagevi
etnam2015_p14_15.pdf.

REFERENCE JOURNALS:

1. A. Thilagaraj.s.nattar,IT Industry performance and future,market survey, December


2015
2. Nirvikarsingh, information technology and indias Economic development , April 2002
3. Sanjay kumar pal, 21 century information technology revoluation ubiquity volume
9, issue24(june 17-23-2008)
4. Yojana,Electronics& information Technology, september2012
5. NirvikarSingh ,Indias Information technology sector: what contribution to Broader
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technologies and domestic entrepreneurship in developing countries March 2003.

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