February 11, 2022

Meeting Notes

Attending
Mr. Pham The Nam
Prof. Soren Kirchner
Ms. Tang Chien
Ms. Hang (Chief Accountant)
Ms. Hang (Treasurer)
Ms. Phuong (Management Accountant)
Ms. Ngan
Mr. Duc (Interpreter)
…

Topic
The project goals set by Nam Tien’s management
●Set short-term and long-term sustainable development strategy for the corporate
●Devise methods to prevent contract breach caused by partners
●Review and remedy the current accounting systems used in Nam Tien
●Set up a detailed and standard an organizational management system
Discussion
1. Some problems Nam Tien has been facing:
a) Inappropriate accounting systems
- Poor management accounting system → Weak control of finance spent on individual business
projects
- Tax accounting system (financial statements) has to deal with fraud (a typical problem of
Vietnamese working culture)
- Tax accounting system was not properly applied in some business schemes (in Laos)
b) Business partnership
- Partners (Nam Luong) breached the contract with Nam Tien because of greed
- Vietnamese legal system deals with this issue poorly, impacting Nam Tien’s profitability
while partners can get away without dire consequences
c) Weakly developed corporate management system
- Management does not have clear KPIs for each role
- Ambiguous job responsibilities and career development path → Low morale

2. Development strategy
- According to the CEO, the following business requirements need to be met in order to
develop a sustainable business plan:
- An appropriate management system
- A standard accounting system abiding Vietnamese law and can be applied in
most business ventures
- The 2 requirements are of paramount importance for further development programs.
Therefore, getting IPO is not prioritized.
- The CEO wishes to stay and manage the company in the long run (no exit strategy from
this business).
- Prof. Kirchner needs to draw a roadmap specifying each year’s plan for the company
based on the problem it’s facing
Roundtable
1. Organizational stakeholders
Stakeholder list
2. List of companies
a) Nam Tien Ltd
● Founded in 2006
● Field:
- Mining of minerals
- Road freight
- Import & export
● Branches:

Country Branch Region Mineral

Lim village, Bac Kan City Bac Kan City (???)

Quang Son Limestone mine, Thai

Thai Nguyen City Limestone
Vietnam Nguyen

Quang Nam
Quang Nam mine (???)
Province

Bolikhamxay
Khamkeut district Gold
Province
Laos
Kaleum district Sekong Province Coal

- The operation in Laos’ branches started in 2012. In 2020, the operation stopped
due to COVID 19
● Partners:
- Nam Tien’s employees work with partners’ based on organizational hierarchy
(CEO works with CEO, managers works with managers, employees work with
employees)
Partner Ore Region

Nam Luong JSC (contract

Iron Ha Giang Province, Vietnam
breaching)

Tan Hoang Khang JSC Tin Nghe An Province, Vietnam

An Khang Iron Ha Gian Province

Phonesak Gold, Coal Laos

About Nam Luong JSC

Background Nam Luong is a mineral extraction company in Ha Giang

Has rights to exploit minerals

Own mineral processing plant (poorly built)

Connection with the hydropower plant nearby

Situation Had to look for other entities to cooperate but they lacked capability
Managed to partner with Nam Tien Co in June 2021
Nam Tien invested on improving facilities & capital and gets 65% of
processed ore. Nam Luong gets 35% of processed ore
The selling is conducted separately (each sells their own ore)

Problem Nam Luong breached the contract and wanted to sell 100% ore.
Nam Luong wished to get 65% of sold processed ore, while Nam Tien can
get 35% of sold processed ore

Reason for The money earned from selling ore eclipsed the penalty
causing Nam Luong has the advantage of owning the hydropower plant (legally
problems important to the extraction of ore) and the legal rights to mine

Plan for next Nam Tien still wishes to cooperate and invest in 2022 ($4m for underground
steps tunnels)
If things get back to normal, the mining operation could last for 18 years

b) Mining equipment
- Founded: ???
- Field: Commercial and logistics
c) Binh An
- Newly established (2022)
- Field: no particular field

3. Short-term development plan for the company

- Fix the accounting system
- There are 2 accounting systems applied by the company: tax accounting
(financial statements) and internal accounting (management accounting)
- Tax accounting is not applied thoroughly, while internal accounting is not
developed properly
- Improve the organizational management system
- The roles are not standard and suitable for such operation scope
- The responsibilities are not specific and stable, sometimes overlap with other
roles
- Come up with ways to enforce the terms in the contract to minimize contract breach and
law-breaking, creating a Win-Win situation for all parties
4. Long-term development plan for the company
- Focus on one company (possibly Binh An) where systems are standardized
- Downstream vertical (vertical integration): extract and commercialize ore

5. Outlooks of the CEO

- The Vietnamese business culture is weird, unlike developed countries such as the US. The
system is imperfect and conducive to cheating and fraud.
- The company expects Prof. Soren to analyze the situation and draw a roadmap for the
company (what they should do) each year for the next several years. Once they have a
general picture of what they should do to reach their goal, they will execute it themselves or
outsource it to other agencies.