PETROVIETNAM TECHNICAL SERVICES CORPORATION TABLE OF CONTENTS
GENERAL OVERVIEW 08 History of Establishment & Development 10 Partners, Clients 14 Organizational Structure, Management System 16 Business Field Organization 24 Resources 30 Development Strategies 41
SUSTAINABLE DEVELOPMENT REPORT 42
BUSINESS ACTIVITIES IN 2016 54 Business Performance Result in 2016 56 Report From The Board of Management 60 Assessment From The Board of Directors 77
CORPORATE GOVERNANCE 80 Activities in 2016 and the plan of the board of Directors in 2017 82 Supervisory Board’s Activities in 2016 and Action plan in 2017 88 Remuneration and other benefits of The Board of Directors, 92 The Supervisory Board, and The Board of Management in 2016
Domestic trading name: Tổng công ty Cổ phần Dịch vụ Kỹ thuật Dầu khí Việt Nam Ricks management 94 Foreign trading name: Petrovietnam Technical Services Corporation Trading name abbreviation: PTSC PVS SECURITIES 98 Tax code: 0100150577 Shareholder 100 Address: 5th Floor, PetroVietnam Tower, 1-5 Le Duan Street, Ben Nghe Ward, District1, HCM City, VietNam Investor Relations 103 Tel: (+84).8.39102828 PVS Stock 104 Fax: (+84).8.39102929 STOCK CODE Website: www.ptsc.com.vn FINANCIAL REPORT 108
www.ptsc.com.vn 3 ALONG WITH PERFORMING INTERIOR PROJECTS EFFECTIVELY AND SAFELY, WE ALSO STEPPED UP SERVICES TO EXTERNAL AND OVERSEA MARKET TO SEEK WORK WHICH MADE UP FOR LOST BY OIL PRICE FALLING. THIS IS A DISTINGUISHED POINT IN 2016
MESSAGE FROM Along with performing interior projects effectively and With our ever - effort, creation, activation to overcome safely, we also stepped up services to external and difficulties and challenges, we steered the business CHAIRMAN oversea market to seek work which made up for lost through the hardest time in 2016. I am confident by oil price falling. This is a distinguished point in PTSC will well accomplish business plan assigned by 2016. In international market, PTSC won bidding for shareholders’ meeting. projects: Danman - India; putting out housing barge to lease in Myanmar; supplying manpower to work On behalf of PTSC’s management team and staff, I in Brunei, Qatar… In interior market, PTSC performed would like to express my sincere thanks to our Parent these projects: manufacturing DK platform for Ministry Company - Petrovietnam, fellow shareholders, esteemed of Defense; Long Phu 1 Power Plant; procurement partners and clients for your contribution, belief and packages of Nghi Son project, NPK, NH3, GPP support during what has been a very difficult year in Ca Mau, Duyen Hai – Tra Vinh Power Center… We the oil and gas industry and we are hoping for your ensured jobs for our employees and continued to continued support in the coming year. maintain our stable development in tough period.
Ladies and gentlemen, Dear Fellow Shareholders, In such tough environment, we ran into difficulties to CHAIRMAN OF BOARD OF DIRECTORS perform our business plan in 2016. For achieving our In 2016, the crude oil prices strongly descended business target entrusted by the shareholders’ meeting, Oil price’s signal seems to be more positive in 2017, and maintained to its low level after 2 years of falling executive board viewed and assessed the situation, built however, it is still another tough year. Recognizing this, crude oil pressure which not only impacted on global business action plans and solutions to steer the business a general strategic plan has been made by executive oil and gas activities but also on Vietnamese oil and through difficult times and to best perform our goals. board to maintain sustainable development target and gas industry. Most of oil field exploration, development We also encouraged our staff to share difficulties with to adapt to international competition and integration, in and production projects interior and in region have the executive board to take actions included increasing which we focus on 4 solutions: (1) stepping up market Thai Quoc Hiep been canceled or deferred to consider financial target practice and reducing operating expenses in order to expanding and services to external and oversea market; or wait for oil price lifting. As a result, the working aim at the target. Therefore, PTSC ended FY 2016 with (2) developing manpower resources with international volume and price in technical service market was commendable result: total revenue was 19,293 billion standards; (3) standardizing management system; (4) seriously reduced, fierce competition was created by dong reached 87,7%, profit before tax was 1,256 strictly carrying out economical policy, cutting down unwanted resources. Facing to the danger of going billion dong reached 104,7% (in point of fact, Brent operational expense and reducing service cost. bankruptcy, series of big technical services companies averaging 45 USD per barrel 75% equivalent of year had to cut down operating scale or performed their plant built with averaging 60 USD per barrel). Although In such hard time, PTSC’s management team and staff, business moderately. In spite of getting great support the result is not as good as we expected, I believe that more than ever, determined to sustain the leading from Petrovietnam, its’ service supply subsidiaries met our esteemed shareholders have acknowledged our advanced technology service supplier in Vietnam as lots of challenges because of declining working volume staffs’ ever - effort, our managing team’s decision and well as to affirm our strong brand name in international and technical service cost. flexibility in implementing 2016 - business plan. market.
4 ANNUAL REPORT 2016 www.ptsc.com.vn 5 BUSINESS FIELDS
SEISMIC, GEO, SURVEY AND ROV
OFFSHORE SUPPORT VESSELS
EPC FOR INDUSTRIAL, PLANTS
EPCI FOR OFFSHORE FACILITIES
FSO/FPSO
PORT & SUPPLY BASE
INSTALLATION, OPERATION AND MAINTENANCE OFFSHORE FACILITIES
6 ANNUAL REPORT 2016 www.ptsc.com.vn 7 GENERAL OVERVIEW History of Establishment & Development Partners, Clients Organizational Structure, Management System Business Field Organization Resources Development Strategies
8 ANNUAL REPORT 2016 www.ptsc.com.vn 9 HISTORY OF ESTABLISHMENT & DEVELOPMENT
1993 1994 - 2005 2006 - 2010
• 09/02/1993: Foundation of Petroleum • Separation of: Parts of Hotel services from PTSC’s core • 2006: Implementing equitization process, • 2010: Technical Services Company (PTSC) by merg- business and found PetroSetco, Offshore Technical Work- successfully offered IPO stock to public. ing 2 companies PSC & GPTS. It is the unique shop & Drilling Team from PTSC Marine and found PetroVi- - Being awarded the title of “Hero of government business enterprise supplies oil etnam Drilling (PVD). • 01/01/2007: Officially operating busi- Labor in the innovation-time” granted by and gas technical services with the initial core ness as joint stock company model. Vietnamese Party and Government. business: offshore support vessels; port and • Developing fleet of offshore support vessels and expand- supply base and technical manpower supply ing PTSC Vung Tau Supply base. • Officially notice of PTSC’s stock in HNX - The first time PTSC’s turnover has ever for oil and gas contractors. with stock code PVS. reached USD 1 billion. • Successfully performing accommodation block LQ-CPC 99 for Vietsopetro, laying the foundation of strong devel- • Operating business under joint stock com- - Initial public offering to increase charter oping oil and gas mechanical fabrication and construction pany structure and steering the business in capital up to 2,978 billion VND. service. the form of Parent company– Affiliated com- panies in which Parent company directly • Investing in the first seismic survey vessel - • Performing O&M contract for Dinh Co Gas Processing accomplished core business by transferring 2D with ROV units, GEO vessel, improved Plant, 370 km 2 phase gas pipeline and Lan Tay Tech- Key subsidiaries back to PetroVietnam Tech- competitive ability in marking high technol- nological Platform which set foundation of O&M services. nical Services Corporation as dependent ogy services - seismic survey, GEO Survey companies. and Subsea Services. • Signing shareholding agreement of investment in FPSO Ruby Princess by and between PTSC, PVI and PVFC, begin- • Restructuring business by transferring petro- • Participating in main contractor consortium ning of a potential service, FSO/FPSO. leum trading enterprises to PV Oil in order to for Long Phu Power Plant 1, affirming ability concentrate on core business. in performing EPC industry and plant.
• Joining with MISC to invest in FSO Orkid and FPSO Ruby, affirming ability in FSO/ FPSO field.
10 ANNUAL REPORT 2016 www.ptsc.com.vn 11 HISTORY OF ESTABLISHMENT & DEVELOPMENT
2011 - 2015 2016
• Organizing the 20th year anniversary ceremo- • Receiving the award:Vietnam Gold Star for 7 times • Receiving the award Vietnam Value for the 5th time • Launching, transporting, installing PIP Platform ny “20 years of building and firm development” in succession; Vietnam Value for 4 times in succession; in succession. Module 1 and Module 2 of Su Tu Trang development (09/02/1993-09/02/2013 and the first Grade La- Top 100 Vietnam Brands; Top 10 Golden Star Award project - stage 1 on September 5th, 2016. STTFFD-P1 bor Medal Granting ceremony. of typical social responsibility and PTSC was one of • Continuing control business stably in tough environment successfully launched which continued affirm PTSC’s two big service enterprises given Silver prize for the of oil crisis condition. prestige and leading brand in field of EPCI For • The first time revenue exceeded 30,000 bilion VND, award National Quality Awardgiven by the Prime Min- Offshore Facilities with high quality service in Vietnam profit exceeded 2,000 VND in 2014.Completing the ister. • Implementing solution system and innovation; and region. charter capital increase up to 4,467 billion VND. cutting down operation expense; improving ability, • Implemented drastically and successfully organization competitive ability, especially technical, engineering, • Winning bidding and signing contract for supplying • Joining with CGGV to supply and operate seismic restructure project in the period of 2011-2015: con- managing ability; stepping up activities in science disconnection FMB platform for Technip in Quata and survey service 2D, 3D, gradually mastering technology solidated administrative document system; completed and technology, invention, innovation; expanding to HUC Su Tu Trang. in 3D, 4D seismic survey. and applied competitive ability project; completed develop industrial service market and supply services to withdrawal target pursuant to organization restructure international market. • Joining with Yinson to invest in PTSC FSO Bien Đong project. 01 and FPSO Lam Son which led PTSC to master • Performing industrial projects in safety, environmental building and operating FSO/FPSO and to become the • Many large scale industrial projects were won and protection, quality, rate of progress and meeting clients’ leading company in supply, management, operation have been well performed such as: Fertilizer Plant pro- demand these following projects: Long Phu Power Plant and maintenance FSO/FPSO in Vietnam and region. ject NPK; Amoniac workshop Expanding project NH3 1, Bidding packages B2, SMP9A of Nghi Son Refinery from PVFCCo investor; Ca Mai Gas Treatment Plant Plant Project, NPK, NH3, GPP Ca Mau, port dredging • EPCI performing ability and competitive ability in from PVGAS investor All of the above achievements project for Duyen Hai - Tra Vinh Power Center…in oil and gas mechanical in international market was have proved PTSC’s prestige and ability to implement which NPK/NH3 projects reached 1,000,000 hours continued to affirm and improved by winning Interna- business development strategy in onshore industrial pro- in safety recorded by investors and related sides. tional competitive bidding and successfully performed jects. projects: HRD Platform; Maharaja Lela South (MLS) in Brunei for Total E&P; Dai Hung Disconnect.
12 ANNUAL REPORT 2016 www.ptsc.com.vn 13 PARTNERS, CLIENTS
PTSC IS ALWAYS THE BEST CHOICE FOR CLIENTS
14 ANNUAL REPORT 2016 www.ptsc.com.vn 15 ORGANIZATIONAL STRUCTURE SHAREHOLDERS’ MEETING
BOARD OF BOARD OF DIRECTORS SUPERVISORS
MANAGE- MENT BOARD
HUMAN FINANCIAL AND GENERAL PLANNING AND TECHNICAL & COMMERCIAL INDUSTRIAL RESOURCES ACCOUNTING ADMINISTRATION INVESTMENT OPERATION HSEQ DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
JOINT VENTURE BRANCHES SUBSIDIARIES COMPANIES
PTSC Mechanical PTSC Thanh Hoa PTSC Geos Survey Malaysia Vietnam Malaysia Vietnam & Construction Limited Port Joint Stock PTSC Marine PTSC Power Company Ltd (PTSC Offshore Floating Offshore Terminal Company Company (PTSC CGGV) Terminal (VOFT) Limited (MVOT) (PTSC M&C) Thanh Hoa)
PTSC Geos and PTSC Quang Ngai PTSC Production PTSC South East Asia RongDoi Joint Venture Subsea Services PTSC Supply Base PTSC E & C Joint Stock Company Services Joint Stock Joint-venture Company Company (RongDoi Company Ltd (PTSC QuangNgai) Company (PPS) (PTSC SEA) MV 12) (PTSC G&S)
Petrovietnam PTSC Dinh Vu PTSC Asia Petro Hotel PTSC Offshore Services Marine Shipyard Petroleum Services Port Pacific Joint-Venture PTSC Da Nang PTSC Hanoi Company Ltd ( PTSC Joint Stock Company Joint Stock Joint Stock Company Company (PTSC Asia Petro Hotel) (POS) Company (PTSC Dinh Vu) Pacific) (PV Shipyard)
PTSC Labuan PTSC Phu My Port PTSC Quang Binh Technical Service Ltd Joint Stock Company PV Security (PVS) (PTSC Labuan) (PTSC PhuMy)
Sao Mai - Ben Dinh Petroleum Investment Joint Stock Company (PVSB)
16 ANNUAL REPORT 2016 www.ptsc.com.vn 17 MANAGEMENT ORGANIZATION BOARD OF DIRECTORS Mr. NGUYEN VAN MAU MEMBER
DOB: 1970 in Hai Duong Province, Vietnam. Qualification: Master of Business Administration, Bachelor of Financial and Accounting.
Mr. THAI QUOC HIEP CHAIRMAN
DOB: 1958 in Ha Tinh Province, Vietnam. Qualification: Geophysical Engineer; Mr. PHAM VAN DUNG Bachelor of Business of Management. MEMBER
DOB: 1969 in Hai Duong Province, Vietnam. Qualification: Marine Engineer, Economic Engineer.
Mr. PHAN THANH TUNG Ms. NGUYEN THANH HUONG MEMBER MEMBER
DOB: 1970 in Hai Phong City, Vietnam. DOB: 1961 inHa Noi, Vietnam. Qualification: Master of Engineering (Professional), Mechanical Engineer, Bachelor of Business Qualification: Master of Economy, Management, Bachelor of English language. Electrical Engineer.
Mr. DOAN MINH MAN Mr. DO QUOC HOAN MEMBER MEMBER
DOB: 1958 in Ben Tre Province, Vietnam. BO:1969 in Hai Phong City, Vietnam. Qualification: Bachelor of Accounting, Qualification: Master of Economy, Engineer of Maritime Transportation, Bachelor of Business Administration. Engineer of Marine Controlling.
18 ANNUAL REPORT 2016 www.ptsc.com.vn 19 MANAGEMENT ORGANIZATION MANAGEMENT BOARD Mr. NGUYEN VAN MAU VICE PRESIDENT
DOB: 1970 in Hai Duong Province, Vietnam. Qualification: Master of Business Administration, Bachelor of Financial and Accounting.
Mr. PHAN THANH TUNG PRESIDENT & CEO
DOB: 1970 in Hai Phong City, Vietnam. Qualification: Master of Engineering (Professional), Mr. NGUYEN HUU HAI Mechanical Engineer, Bachelor of Business VICE PRESIDENT Management, Bachelor of English language.
DOB: 1962 in Bac Ninh Province, Vietnam. Qualification: Engineer of Electronics and Telecommunications, Enterprise Management Engineer.
TA DUC TIEN Mr. NGUYEN TRAN TOAN Mr. VICE PRESIDENT VICE PRESIDENT
DOB: 1964 in Hai Phong City, Vietnam DOB: 1968 in Thai Binh Province, Vietnam Qualification: Marine Machinery Engineer, Qualification: Marine Machinery Engineer, Bachelor of Business Aministration. Bachelor of Business Administration.
Mr. LE MANH CUONG Mr. NGUYEN XUAN CUONG VICE PRESIDENT VICE PRESIDENT
DOB: 1974 in Hai Duong City, Vietnam. DOB:1977 in Ha Noi, Vietnam. Qualification: Master of Business Administration, Qualification: Bachelor of Financial& Accounting. Marine Engineer.
20 ANNUAL REPORT 2016 www.ptsc.com.vn 21 MANAGEMENT ORGANIZATION OUTSTANDING AWARDS MANAGEMENT BOARD (Continued) AND TITLES
Mr. NGUYEN QUANG CHANH ACTING GENERAL MANAGER OF FINANCIAL AND ACCOUNTING DIVISION
DOB: 1981 in Ving Long Province, Vietnam. Qualification: Bachelor of Accounting, Bachelor of Business Administration
MANAGEMENT ORGANIZATION HERO OF LABOR IN THE INDEPENDENCE MEDAL INDEPENDENCE MEDAL INNOVATION-TIME - SECOND RATE - FIRST RATE BOARD OF SUPERVISORS Ms. HO THI OANH CHIEF OF BOARD OF SUPERVISORS
DOB: 1972 in Thai Binh Province, Vietnam. Qualification: Bachelor of Accounting.
VIETNAM VALUE IN 2016 TOP 100 - VIETNAMESE BRAND SILVER AWARD AND TOP 10 - TYPICAL ENTERPRISE OF “NATIONAL VALUE” IN 2015 OF SOCIAL RESPONSIBILITY Mr. TRIEU VAN NGHI IN 2015 MEMBER OF BOARD OF SUPERVISORS
DOB: 1983 in Phu Tho Province, Vietnam. Qualification: Bachelor of Economy.
Ms. BUI THU HA STANDING MEMBER OF BOARD OF SUPERVISORS
DOB: 1980 in Thai Nguyen City, Vietnam. TOP 50 - THE BEST ANNUAL “BEST ENTERPRISES” OF EUROPEAN Qualification: Bachelor of Accounting REPORTS IN 2016 BUSINESS ASSOCIATE (EBA) IN 2014
22 ANNUAL REPORT 2016 www.ptsc.com.vn 23 BUSINESS FIELD ORGANIZATION
CHARTER CAPITAL No. COMPANY NAME ADDRESS / INVESTMENT RATIO CORE BUSINESS
BRANCH
Directly under 1 Branch of PTSC - PTSC Marine 73, Road 30/4, Ward 9, VungTau, Vietna - Management, operation and supply of service vessels. Parent Company
Directly under Management, Operation, Trading and Exploitation of PTSC 2 Branch of PTSC - PTSC Supply Base 65A, 30/4 street Thang Nhat Ward, Vung Tau - Parent Company Supply Base.
No 11, 3- 2 Road, ThuanPhuoc Ward; Directly under Management, Operation, 3 Branch of PTSC - PTSC Da Nang - Hai Chau District, Da Nang City Parent Company Trading and Exploitation of General port.
Hon La Port, Quang Dong Commune, Directly under Management, Operation, 4 Branch of PTSC - PTSC Quang Binh - Quang Trach District, Quang Binh Province Parent Company Trading and Exploitation of General port.
Management and performance of Engineering, Procurement and Thanh Duc Hamlet , Long Duc Commune, Directly under 5 Branch of PTSC - PTSC Power - Construction, Installation, Hook-up and Commissioning (EPCIC) Long Phu District, Soc Trang Province Parent Company of power plant projects and industrial facilities.
Branch of PTSC - Engineering & No. 45B, 30/4 Road, Ward 9, Vung Tau City, Directly under Management, Organization basic construction projects, 6 - Construction Division Ba Ria - Vung Tau Province Parent Company performing industrial facilities.
No. 42 Nguyen Khuyen Street, Dong Da District, Directly under 7 Branch of PTSC - Hanoi - Performing business development, production projects and others. Hanoi Capital Parent Company
SUBSIDIARIES
PTSC Mechanical & Construction No. 31, 30/4 Street, Ward 9, Vung Tau City, Ba Ria 1 628 billion VND 100% Fabrication and assembly of oil & gas facilities. Services Company Ltd., - Vung Tau Province
PTSC Geos and Subsea Services Operation seismic survey 2D, 3D; Geophysical & seismic survey; 2 No 9 - 11 Hoang Dieu Street, Ward 1, Vung Tau City 300 billion VND 100% Company Ltd. ROV subsea survey & repair.
24 ANNUAL REPORT 2016 www.ptsc.com.vn 25 BUSINESS FIELD ORGANIZATION (Continued)
CHARTER CAPITAL No. COMPANY NAME ADDRESS / INVESTMENT RATIO CORE BUSINESS
PTSC Geos Survey Company Ltd. Room No. 460, PetroVietnam Tower, No. 08 Hoang 1,171 billion Provision of offshore seismic data acquisition in 2D&3D services 3 51% (PTSC CGGV) Dieu, Ward 1, Vung Tau City, S.R Vietnam VND inside and outside Vietnam territory.
• Management, operation and supply of service vessels Management, Operation, Trading and Exploitation of General port PTSC Quang Ngai Petroleum Services 4H, Ton Duc Thang Street, Le Hong Phong Ward, • Transportation, chartering, port exploitation, ship brokerage, pe- 4 300 billion VND 95,19% Joint Stock Company Quang Ngaiprovince troleum logistic base, construction of industrial and civil engineer- ing projects, installation of machinery and industrial equipment. • Fabrication, assembly, repair and maintenance oil & gas and industrial facilities
PTSC Offshore Services Company Phu My Industrial Zone, Tan Thanh Dist., Transportation, installation, hook-up, commissioning services for oil 5 400 billion VND 84,95% Joint Stock Company Ba Ria - Vung Tau Province and gas projects; removal and clean-up of oil and gas projects.
Phu My Industrial Zone, Tan Thanh Dist., 6 PTSC Phu My Port Joint Stock Company 350 billion VND 59,61% Management, Operation and Exploitation of General Port. Ba Ria - Vung Tau Province
• Management, Operation and Exploitation of General Port PTSC Thanh Hoa Port Joint Stock Nghi Son Commune, Tinh Gia District, Thanh Hoa 7 400 billion VND 54,69% • Fabrication, assembly, repair and maintenance oil & gas and Company Province. industrial facilities.
Dinh Vu Industry Zone, Dong Hai II Ward, Management, Operation and Exploitation of General & Container 8 PTSC Dinh Vu Port Joint Stock Company 400 billion VND 51% Hai An District, Hai Phong City Port.
PTSC Production Services Joint Stock 6th floor PetroVIetnam Tower, 08 Hoang Dieu Str., Management, operation and maintenance of FPSO/FSO; Provi- 9 200 billion VND 51% Company Vung Tau City, Ba Ria – Vung Tau Province sion of manpower supply services for oil and gas industry.
Sao Mai - Ben Dinh Petroleum No. 9-11, Hoang Dieu Street, Distric 1, Vung Tau City, 10 500 billion VND 51% Management, Operation and Exploitation of General Port. Investment Joint Stock Company Ba Ria - Vung Tau Province
No. 9-11 Hoang Dieu, Ward 1, Vung Tau City, Provision of tourism and cartering servicesfor oil and gas companies 11 PTSC Petro Hotel Company Ltd. 20 billion VND 100% S.R Vietnam in the country and abroad.
26 ANNUAL REPORT 2016 www.ptsc.com.vn 27 BUSINESS FIELD ORGANIZATION (Continued)
CHARTER CAPITAL No. COMPANY NAME ADDRESS / INVESTMENT RATIO CORE BUSINESS
9th Floor, Room No. 66, Lucky BuildingNo. 66 Tran PetroVietnam Security Services Joint 12 Thai Tong Street, Dich Vong Ward, Cau Giay District, 20 billion VND 51% Provision of security services. Stock Company Ha Noi Capital
PTSC Labuan Technical Service Ltd Unit 3A-25, U0350, 3rd Floor, Labuan Times Square, 572,565 13 100% Supply of service vessels for oil and gas exploitation. (PTSC Labuan) 87007 Labuan F.T, Malaysia USD
JOINT - VENTURE COMPANIES
Suite 8,05 Level 8, The Garden North Tower, Mid Vietnam Offshore Floating Terminal 54,640,000 1 Valley City, Ling Karan Syed Putra 59200 Kuala Lumpur, 60% Investment and provision of FPSO for PCVL. (VOFT) USD Malaysia
PTSC South East Asia Joint - Venture 37,329,582 2 No.18, Sungel Kadult Way, Singapore 51% Investment and provision of FSO for Bien Dong POC. Company USD
PTSC Asia Pacific Join - Venture 119,996,426 3 No.18, Sungel Kadult Way, Singapore 51% Investment and provision of FPSO for Lam Son JOC. Company USD
Suite 8.05 Level 8, The Garden North Tower, Mid Malaysia Vietnam Offshore Terminal 35,222,268 4 Valley City, Ling Karan Syed Putra 59200 Kuala Lumpur, 49% Investment and provision of FSO for TML. (MVOT) USD Malaysia
No.02, International Business Park, Unit 02-06/7 4,716,854 5 RongDoi Joint Venture Company 33% Investment and provision of FSO for KNOC. The Strategy Tower, Singapore USD
Petrovietnam Marine Shipyard Joint Fabrication, repairing, conversion oil and gas exploration, 6 65A2, 30/4 Road, Thang Nhat Ward , Vung Tau City 595 billion VND 28,75% Stock Company (PV Shipyard) production platform.
28 ANNUAL REPORT 2016 www.ptsc.com.vn 29 RESOURCES
GENERAL RESOURCES 01 Transportation Barge 26 Subsidiaries and Joint venture companies domestically and internationally 02 Seismic survey vessels 2D & 3D 8,976 Employees 02 Geographic survey vessels 100% Engineers are Vietnamese 03 ROV 60 EPC, EPCI projects are managed and performed 05 FSO, FPSO 3,000 Tons of structure per year - average production carried out in platform fabrication area 08 Ports & Supply Bases
3,000,000 Tons per year - load and unload ability 15 Offshore Support Vessels
01 Accommodation Barge 61 Ha - fabrication area
30 ANNUAL REPORT 2016 www.ptsc.com.vn 31 RESOURCES (Continued)
HUMAN RESOURCES
2,5% 10,6% 10,9%
Under 25 From 25-35 Age group 27% 49% From 35-45 PTSC ALWAYS CONSIDERS HUMAN RESOURCES From 45-55 AS VALUABLE PROPERTY AND A KEY TO SUCCESS 8,976 AND SUSTAINABLE DEVELOPMENT. Over 55 Total number of employees
2,7% 16% 21% Postgraduate University Qualification 37% Male College Gender Female Technical workers
33,7% Unskilled workers to be trained 84%
5,6%
32 ANNUAL REPORT 2016 www.ptsc.com.vn 33 RESOURCES (Continued)
MAIN RESOURCES AND FACILITIES Floating storage and offloading (FSO) & floating production storage and offloading (FPSO) PTSC OWNS LEADING OIL AND GAS FACILITIES IN VIETNAM. WE ARE ABLE TO SUPPLY PACKAGE OF HIGH TECHNIQUE SERVICE FOR OIL AND GAS ACTIVITIES, EPC/EPCI MAIN CONTRACTOR, CAPACITY MECHANICAL AND INDUSTRIAL PROJECTS. No. NAME OF FSO/FPSO OPERATING FIELD (Unit: Barrel) Marine service Marine service vessels vessels 1 FSO Orkid 745,000 PM3 CAA 15 2 FPSO Ruby II 645,000 Hong Ngoc
PTSC owns and manages largest fleet of 15 high technology service vessels in Vietnam, such as Anchor Handling Tug Supply vessels (AHTS), Dynamic Positioning vessels (DP), 3 FSO Bien Dong 01 350,000 Hai Thach & MocTinh diving support vessels, firefighting vessels, standby rescue/ field support vessels, operated by experienced local and international crew members. Beside the owned current vessels, we have 05 long term leasing contracts for bareboat 4 FPSO Lam Son 350,000 Thang Long - Dong Do operating under the brand of PTSC to meet the domestic and international market demands which included:
No. NAME OF THE VESSELS CAPACITY 5 FSO MV12 300,000 Rong Doi 1 An Bang (AHTS) 7,040 HP 2 An Phong (AHTS) 7,040 HP 3 Phong Lan (AHTS) 5,300 HP 4 Phong Nha (AHTS DP1) 5,300 HP 5 Binh Minh (AHTS DP2) 5,506 HP 6 Binh An (AHTS) 8,900 HP 7 PTSC Vung Tau (AHTS DP1) 7,080 HP 8 PTSC Hai Phong (AHTS DP1) 5,220 HP 9 PTSC Thai Binh (AHTS DP2) 8,080 HP 10 PTSC Thang Long (AHTS DP2) 7,200 HP 11 PTSC Tien Phong (AHTS) 7,080 HP 12 PTSC Ngan nam TLHN - 02 (Utility towing) 3,500 HP 13 PTSC Ngan nam TLHN - 03 (Utility towing)) 4,750 HP 14 PTSC 04 (Utility towing) 2,140 HP 15 Bach Ho (Utility towing) 980 HP
• AHTS: Anchor Handling Tug Supply vessels • DP1: Having Dynamic Positioning DP 1 • Utility towing: Towing vessels • DP2: Having Dynamic Positioning DP 2
34 ANNUAL REPORT 2016 www.ptsc.com.vn 35 RESOURCES (Continued)
Ports & Supply Base No. SUPPLY BASES / PORTS ADDRESS SCALE
Currently, PTSC has been Area: 4,2 ha managing, operating and investing Number of wharf: 02 Binh Son District - + Wharf number 1: length 210m, capacity in a system of 08 ports & supply 4 Dung Quat Port bases and located along the Quang Ngai Province 50,000 DWT, Hydroelectric depth -10m. + Wharf number 2: length 90m, capacity country, from the North to the South 2,000 DWT, Hydroelectric depth -4,2m of Vietnam which fully provide logistic and port services for operating oil and gas exploration for companies, contractors in Vietnam as well as for other economy elements of the local area. Area: 10 ha 5 Son Tra Port Da Nang City Number of wharf: 01, Length: 200m, Capacity: 20,000 DWT
PORTS & SUPPLY BASE 08 From the North to the Area: 8,8 ha Quang Dong ward, South of Vietnam Number of wharf: 01, length: 215m, 6 Hon La Port Quang Trach district, Capacity: 10,000 DWT Quang Binh province Hydroelectric depth: -7,8m
No. SUPPLY BASES / PORTS ADDRESS SCALE
Area: 82,2 ha Number of wharf: 09 65A, 30/4 Road, Area: 35 ha Total length of wharf: 750m Vung Tau Downstream Thang Nhat Ward, Number of wharf: 02 1 Capacity: Port/ PTSC Supply Base Vung Tau City, Ba Ria - Tinh Gia District, + Wharf number 1: length 165m, capacity + Vessel: 10,000 DWT 7 Nghi Son Port Vung Tau Province. Thanh Hoa Province 20,000 DWT, Hydroelectric depth -9,5m. + Barge: 10,000 DWT + Wharf number 2: length 225m, capacity Hydroelectric depth: -6,5m to -9m 50,000 DWT, Hydroelectric depth -12m
Area: 26,5 ha Number of wharf: 03 No. 3 Road, Phu My + Wharf number 1: length 385m, capacity Industrial Zone, Tan 70,000 DWT, Hydroelectric depth -10,5m. 2 Phu My service Port Thanh Ward, Ba Ria - + Wharf number 2: length 130m, capacity Vung Tau province 1,500 DWT, Hydroelectric depth -2,7m Dinh Vu Industrial Zone Area: 15,2 ha Dong Hai II Ward, Number of wharf: 01, length: 330m, + Wharf number 3: length 130m, capacity 8 Dinh Vu Port 2,500 DWT, Hydroelectric depth -3,3m Hai An District, capacity: 20,000 DWT, Hai PhongCity Hydroelectric depth: -7,8m
Ba Ria - Vung Tau 3 Sao Mai Ben Dinh Port Area: 163 ha Province
36 ANNUAL REPORT 2016 www.ptsc.com.vn 37 RESOURCES (Continued)
Facilities for fabrication and construction of oil and Facilities for transportation, hook up, installation, gas projects and industrial projects maintenance and repair of offshore projects
The investment in facilities for transportation, hook up, installation, maintenance and repair of offshore project can meet basic demand of customers on PTSC services, the major facilities are listed as follows:
No. FACILITIES/ EQUIPMENT SPECIFICATION
Accommodation Barge This barge is not a self-propelled one; length 111,6 m, width 31,7m, 1 with 300 occupants - PTSC depth 7,3m, water lever 4,5m, weight of 9,582 tons, and be equipped Offshore 01 a barge cranewith the lifting capacity of 300 tons.
Barge with capacity of 5,000 tons uses for transportation of WHP 2 5000 tons barge PTSC 01 platform, jacket, and other components for offshore constructing, repairing, maintaining and renovation.
The 11,462 m² workshop with modern facilities and equipmentprovides Mechanical and different kind of technical services such as repair and maintenance, 3 maintenance workshop conversion, upgrade and manufacture up to 500 tons of structural components. Mechanical fabrication Construction site of nearly 21 hectares, includes workshops, and construction of offshore warehouse and modern office: construction and assembly projects is one of the most workshop (150,000m2), canopy workshop (19,000m2), important services of PTSC, blasting and cleaning workshop (8,000m2), painting a major contribution to workshop (3,500m2)… PTSC’s revenue and profit. For implementing the projects, PTSC owns oil & gas projects construction Five segments wharf with the total of 410 meters (5 sections) site in Vung tau with in length and 28 meters in width, lifting capacity from 125 the facilities, port, base, tons to 1,000 tons, the water depth of 10-15 meters, load warehouse, cranes, lifting per pipe of 263-271 tons. Especially, the wharf has 3 skid equipment and other basic ways and loading capacity up to 25,000 tons. machinery and equipment which always meet all the customer requirements.
Many vihicles, machinery and equipment are used for oil & gas project fabrication such as: crane car of 50 tons to 550 tons, forklift, welding machines, generators, air compressors and other specialized equipment.
38 ANNUAL REPORT 2016 www.ptsc.com.vn 39 RESOURCES (Continued)
Facilities for Seismic survey service, geological and geophysical survey service, and subsea services DEVELOPMENT STRATEGIES
Seismic survey service, geological and Objectives for the period 2016 - 2020 geophysical survey service, and subsea services In long term: maintaining its objective of becoming a strong corporation using Remote Operated Vehicle (ROV) are with reputable trademark nationwide and worldwide in the core services: high and complex technology services with oil and gas technical services, surveys, marine services, industrial projects, providing, management and operation of 2D in which the oil and gas technical services will play the key and fundamental and 3D seismic vessels, geological survey role. PTSC looks to become a prestigious and leading industrial and oil & vessels, supplying and operation of ROV and gas technical service provider in the Southeast Asian region. other specialized survey vehicles. PTSC is In short and medium term: Controlling business stably in tough environment dominating and controlling a Single-member of oil crisis condition; taking advantages of every investment opportunity to limited liability company and a Joint Venture improve ability and wait for oil prize lifting. with relatively complete resources and facilities to perform surveying tasks in different sea areas Striving for rate of profit before tax/charter capital of Mother company to reach 10% per year. on continental shelf of Vietnam and other regions in the world.
No. FACILITIES AND EQUIPMENT SPECIFICATIONS
Seismic survey vessel Implementing seismic survey with 2D technology on continental 1 2D - Binh Minh 02 shelf ofevery sea areas. Vision
Seismic survey vessel Implementing seismic survey with 3D technology on continental Becoming an oil and gas 2 3D - Amadeus shelf ofevery sea areas. technical service supplier, robust and competitive EPCI/ EPC international contractor for Capable of drilling for geological surveys at the water levels from industrial, plants with production Geophysical survey vessel - 3 7m to 300m and performing geological surveys at the water and service filling with content of PTSC Surveyor intelligence, high value added. levels from 7m to 500m.
Capable of performing geological surveys at the water level up Survey Vessel - PTSC 4 to 1000m and oceanographic surveys in different sea areas on Researcher continental shelf of Vietnam and other local region.
5 Oil & Gas 105 vessel 1,600 HP vessel assists survey diving work. Development viewpoint Stable and sustainable development; maintaining a close connection ROV Panther Plus 911 and ROV Panther Plus 954 are used for Survey Vehicles ROV between business operation and environmental protection and national 6 taking surveys and repairing subsea works. The vehicles can go security, utilizing the advantage of being a member of Vietnam National Observation (02 unit) as deep as 2000m underwater. Oil and Gas Group. Maintaining a close cooperation with partners oil and gas industry to ROV Quasar Compact 007 is used for taking surveys and exploit and utilize the general resources. Survey Vehicle ROV Work 7 repairing subsea works. The vehicle can go as deep as 2000m Class (01) Creating joint ventures, affiliates with local and foreign companies to underwater. reduce competitions and direct business confrontation; gradually obtain the technology transfer, heading towards mastering the know-how to become the local market leader and expand to overseas markets.
40 ANNUAL REPORT 2016 www.ptsc.com.vn 41 SUSTAINABLE DEVELOPMENT REPORT
42 ANNUAL REPORT 2016 www.ptsc.com.vn 43 SUSTAINABLE DEVELOPMENT REPORT MESSAGE OF SUSTAINABLE DEVELOPMENT PTSC’S CERTIFICATE OF SUSTAINABLE DEVELOPMENT COMPLYING WITH INTERNATIONAL STANDARD The year 2016 marked acknowledged effort of PTSC’s leadership and staff to overcome difficulties in the context that oil and gas industry had to face series of uneasy challenges created by the dramatic drop in oil prices. In such tough environment, PTSC commits to sustainable development target: “ Connecting resources and business development to environment, community and society development. This is PTSC’s culture character inherited, reserved and developed by PTSC’s generation of labourer throughout sustainable development stage.
BUILDING, APPLYING THROUGH SYSTEM OF SOLUTIONS TO DEVELOP RESOURCES AND BUSINESS
In current period, PTSC clearly defines the development of internal force and business is the top target since stable development of internal force, business will create potential resources to contribute, develop society and environment. For achieving such target, PTSC has effectively built, applied the whole system of following solutions:
SOLUTIONS OF CUTTING DOWN OPERATION EXPENSE AND REDUCING SERVICE COST:
In 2016, we economized on 557,201 million VND, reached 101% of the year economy plan.
TO MAINTAIN STABLE AND SUSTAINABLE DEVELOPMENT, DEDICATE BENEFIT FOR PTSC’S LABOURER AND RELATED SIDES, PTSC DEFINED AGAIN THE DEVELOPMENT TARGETS IN 2016 ARE AS FOLLOWS: Million VND Million VND Million VND Million VND Million VND Million VND 140,224 187,301 159,493 8,978 20,640 40,565
Economizing on Economizing on Economizing by Economizing by Economizing by Economizing by management materials, fuel, reducing the cost application of science, investment activities, self-repairing, expense energy of purchasing technology, initiative, performance projects commissioning goods and technical innovation in safety and on rate machine and BUILDING, APPLYING DEVELOPING DEVELOPING BUSINESS services of progress equipment THROUGH SYSTEM OF PROFESSIONAL WORKING CONNECTED WITH SOLUTIONS TO DEVELOP ENVIRONMENT, HUMAN ENVIRONMENTAL RESOURCES AND BUSINESS. RESOURCES WITH HIGH PROTECTION AND SOLUTIONS QUALIFICATION AND COMMUNITY, SOCIETY OF INVESTMENT: INTERNATIONAL LEVEL. RESPONSIBILITY.
Being affected by oil prize dropping, so our investment focused on well performing unfinished projects, researching, updating, evaluating market situation for planned projects and then made decision of canceling or investing. With positive signal in the coming year, the effort of PTSC’s leadership and staff, the support of esteemed shareholders, partners and clients, we commit to perform green, sustainable development as well as to maximize benefit value for related sides, community and society.
44 ANNUAL REPORT 2016 www.ptsc.com.vn 45 SUSTAINABLE DEVELOPMENT REPORT (Continued)
SOLUTIONS OF MARKETING, JOINT VENTURE, DEVELOPING PROFESSIONAL WORKING ENVIRONMENT, BUSINESS DEVELOPMENT AND EXPANDING BUSINESS TO INTERNATIONAL MARKET: HUMAN RESOURCES WITH HIGH QUALIFICATION AND INTERNATIONAL LEVEL. For taking advantage of strong points to maintain and hold fast current market together with stepping up business development in oil & gas and industrial HUMAN RESOURCES IS ALWAYS A CRUCIAL FACTOR IN SUSTAINABLE area, expanding business to international market. Promoting to cooperate with DEVELOPMENT STRATEGY FOR ENTERPRISE. THEREFORE, FOR PTSC IN SUCH domestic and foreign partners/clients to perform projects with competitive cost TOUGH ENVIRONMENT, DEVELOPING PROFESSIONAL WORKING ENVIRONMENT, as well as to increase bid wining capacity and not to depend on protective HUMAN RESOURCES QUALITY IMPROVEMENT, LABORERS’ BENEFIT CARING, policy. LABORERS’ POLICY AND RIGHT ENSURING CONSIDERED TO BE FIRM FOUNDATION TO OVERCOME DIFFICULTIES AND STABLY DEVELOP. SOLUTIONS OF DIVERSIFYING PRODUCTION AND SERVICE FORMS, PROMOTING RESEARCH AND DEVELOPMENT:
For promoting to join in project, onshore industrial projects performance, to produce equipment, offshore and industrial system. Diversifying production and service forms, even supporting services for large and modern producers.
SOLUTIONS OF RESTRUCTURING, INNOVATING SCIENCE AND TECHNOLOGY SYSTEM, PAY, ALLOWANCE AND IMPROVING MANAGEMENT SYSTEM: TRAINING POLICY
With the target of drastically implementing restructure, utilizing competitive Up to the date December 31st, 2016, PTSC’s human workforce reaches ability project, applying science, technology, initiative, invention, innovation, Million VND/ 8,976 people with average income of 15,500,000 VND/person/month. information and technology on business activities. In 2016, PTSC has built and person/month This is such acknowledged result of PTSC’s leadership and staff comparing applied software: such fact difficulties that we faced to. 15,5 • Online library, administrative information system, human resource average income For achieving such result and meeting the requirement of management, job, management system, enterprise resource planning (ERP). business development, international standards when doing business with international contractors as well as to be able to compete with working • Customer relation management (CRM). force in the region, PTSC applied the following personnel solutions:
• Supply chain management (SCM). Training • Making payment and allowance pursuant to employee’s practical Sessions workload and result; • Initiative, invention to be acknowledged: 912 in which 801 initiatives and invents were applied. Total benefit: 8,978 million VND. 12,000 • Applying attractive policy for high technology and skilful human Participated resources; training courses • Implementing, completing mechanism and policy; increasing reasonably and explicitly allowance and payment in the way of SOLUTIONS OF COMPREHENSIVE COMPARISON BETWEEN admitting difference. STATE CAPITAL ENTERPRISES, COMPETITORS AND OTHER ENTERPRISE FORMS: In the trend of deep integration of international economy and violent Billion VND competition in technical services, PTSC clearly knows that building up high Such solutions gave effect in right assessment of competitors’ ability, PTSC’s technology and skillful human workforce to create advantaged competition advantages and disadvantages. Therefore, PTSC could make appropriate 25 is through training investment. In 2016, PTSC organized 12,000 training solutions to improve competitive ability in business development and in bidding Total training sessions participated in planned and demanded training courses with total to have more business, contracts including the smallest business. courses expenses expenses of 25 billion VND, obtained 100% of the year plan.
46 ANNUAL REPORT 2016 www.ptsc.com.vn 47 SUSTAINABLE DEVELOPMENT REPORT (Continued)
WELFARE POLICY DEVELOPING BUSINESS CONNECTED WITH ENVIRONMENTAL PROTECTION AND COMMUNITY, Along with pay and allowance policy, in order to compete in the market, PTSC s always cares employees’ social welfare policy. Depending on SOCIETY RESPONSIBILITY business result, employees can get the best welfare possible:
DEVELOPING BUSINESS CONNECTED WITH ENVIRONMENTAL PROTECTION • Health care policy: All of employees can get: Health examination once per year; health and life insurance (PVI care) and employees Maintaining, improving and developing HSEQ system are also supported for their relatives’ health care package from PVI. Being a leading technical service supplier of PetroVietnam, along with • Social welfare: PTSC ensure social insurance, health insurance and developing business, PTSC always considers to maintain and to continue life insurance regulations according to labor law. innovating, HSEQ management system development is a key issue in enterprise administration system. PTSC has maintained effectively systems: OHSAS 18001:2007 (Occupational, Health and Safety management • Vacation: Depending on business performance result, Employees System), ISO 14001:2004 (Environmental Management System) and ISO participate in vacation program once per year. 9001: 2008 (Quality Management System) which were all certified by BSI – Bristish Standard Institution. • Other welfare policies: Employees also receive welfare on PTSC’s foundation day, on Tet and national holidays; Besides, PTSC Aiming at creating safety working environment, drastically preventing organizes canteen to serve meal for employees with strict food safety working accident, occupational disease and losing property; not damaging regulation and arranges accommodation for employees participating and polluting environment; Ensuring to meet clients’ demands, in 2016, projects. PTSC had following achievements:
• There was no working accident, property lost which interrupted production.
• Frequency injury and incident damaged to property/1million working hours reduced comparing to the last year.
• Environmental management was ensured to comply with the law. There was no breaking environmental protection law case.
• Performing NPK/NH3 projects for PVFCCo reached 1,000,000 hours in safety.
• Performing GPP Ca Mau project for PV Gas reached 2,500,000 hours in safety.
48 ANNUAL REPORT 2016 www.ptsc.com.vn 49 SUSTAINABLE DEVELOPMENT REPORT (Continued)
Managing, utilizing effectively productive materials and DEVELOPING BUSINESS CONNECTED WITH energy COMMUNITY AND SOCIETY RESPONSIBILITY
For specializing in oil and gas technical service supply, it is hard to calculate Social security activities detailed utilization productive materials source for manufacturing products and services as other enterprises. Core productive material and energy Throughout PTSC’s history of building and development, we always participated in manufacturing products and services as follows: consider social security activities as one of important contents of sustainable development and business development is always connected with community and society responsibility. Along with making every effort to • All kinds of semi-finished product iron and steel, coating vanish … find solutions to face with difficulties caused by crude oil price crisis, PTSC serving for mechanics, maintenance and repair productive equipment often takes responsibility to social security. In 2016, with the total amount and materials. for supporting social security is 19 billion VND, PTSC effectively deployed social security from Petrovietnam’s assignment including: • Gasoline, diesel DO, industrial gas, electric to operate equipment, machine, means serving for productive operation. Implemented Billion VND • PTSC supported to build schools in Phu Yen, Thai Binh, Yen Bai; Productive materials and energy management and utilization were strictly Supported for social security fund in An Giang, Kien Giang, national controlled by quality management process, technical norm, operation fund for Vietnamese children. 138 guiding to ensure safety as well as to minimize elimination to the 19 norms of fuel and environment. For reducing maximum energy consumption, we issued and for supporting social energy consumption implemented 138 norms of fuel and energy consumption, in which 10 security • Supporting for in the middle of Vietnam people who suffered from new regulations and norms were issued in 2016. For operation of support disasters and floods. vessels fleet, PTSC has been effectively applied energy management system of International Maritime Organization (IMO) and inspected, supervised, certified by Vietnam Register for effective utilization of energy. • Sponsoring for medical, education quality improvement in local areas For energy consumption, PTSC utilizes direct energy such as petrol, industrial gas and indirect energy as electrical energy for production. For water resources consumption, PTSC utilizes running water serving for everyday life and for oil and gas drilling platforms and vessels. Total quantity of water Voluntary activities for community life, homeland consumption is about 627,000 m3 per year. All of wastewater is collected, protection, security and politics conservation, social order processed, controlled and strictly complies with current waste treatment and security of PTSC Youth Union regulation, environment protection regulation, international convention on offshore production activities before eliminating. Bringing into play PTSC’s tradition of “ The leaves protect tattered ones”, politics and union organizations together with PTSC’s staff are always enthusiastic, responsible to implement well social security and voluntary activities: Voluntary activities for community life
• Mobilizing borderless charity movement and encouraging foreign partners to support PTSC’s social security.
• Organizing blood donation “One drop of blood creating million hearts”.
• Cooperating to organize medical examination, medicine supply for poor people in Dat Do district, Ba Ria - Vung Tau province.
• Organizing programs: “Humane red envelop” in Binh Son – Quang Ngai province, Nghi Son – Thanh Hoa province.
50 ANNUAL REPORT 2016 www.ptsc.com.vn 51 SUSTAINABLE DEVELOPMENT REPORT (Continued)
• Taking care for whole life Ms. Nguyen Thi Danh, Vietnamese Heroic Mother’s in Binh Thuan commune, Binh Son district, Quang Ngai province.
• Organizing programs “PTSC love halo - Tet holiday for poor people”; cooperating with sub-contractors to build 1,500 m road in Long Duc commune, Long Phu district, Soc Trang province.
• Cooperating to organize program “Love Spring”; organizing Chung cake cooking competition and offering gift for poor people in Vung Tau city.
• Organizing charitable rice cooking and supplying rations to workers who have rough lives.
Voluntary activities for homeland protection, security and politics conservation, social order and security
Implementing “Island frontier affection” and activities of heading to the Island frontier which always attracted participation of Union members. PTSC Your Union organized donation collection for army and people in Truong Sa island district and platform accommodation DK1 with total amount of 50 million VND; Visiting and giving gifts for elementary schools in Ly Son commune: An Vinh No.2, An Hai.
Organizing activities responded to International Environmental Day and Week of Beach and Island in 2016; organizing cycling tour to respond to Earth Hour Campaign; tidying up the mountain road VIBA, Nghinh Phong in Vung Tau city and clean up environment in Dung Quat, Quang Ngai Implemented province; organizing program “ Let’s clean up beaches”.
Organizing effectively propagandize education activities of environmental 50 protection, energy saving; organizing programs: “Volunteer Saturday”, Voluntary activities of “Green Sunday”, “Tree planting on Tet holiday”; tidying up in working PTSC Youth Union places, worksites, projects; maintaining activities to conserve traffic safety and order in entrance Supply Base.
Participating educational propaganda and traffic safety and order conservation activities; building up cultural lifestyle and preventing social evil.
52 ANNUAL REPORT 2016 www.ptsc.com.vn 53 BUSINESS ACTIVITIES IN 2016 Business Performance Result in 2016 Report From The Board of Management Assessment From The Board of Directors
54 ANNUAL REPORT 2016 www.ptsc.com.vn 55 BUSINESS PERFORMANCE RESULT IN 2016 PARENT COMPANY BUSINESS PERFORMANCE RESULT DURING FY 2016 Billion VND Billion VND BUDGET ACTUAL ACTUAL 2016 No. DESCRIPTION UNIT 2016 (C) VS (B) (C) VS. (A) 20135(A) (C) 19,293 1,256 (B) Total Consolidated Profit Before Tax Revenue in 2016 1 Owner Capital Billion 4,467,0 4,467,0 4,467,0 100,0% 100,0% VND
2 Revenue and Billion 13,102,7 10,500,0 10,941,7 104,2% 83,5% other incomes VND
3 Profit before tax Billion 1,066,1 800,0 621,1 77,6% 58,3% TOTAL BUSINESS PERFORMANCE VND
RESULT IN 2016 4 Profit after tax Billion 951,6 730,0 618,7 84,7% 65,0% VND ACTUAL BUDGET ACTUAL No. DESCRIPTION UNIT 2015 2016 2016 (C) VS (B) C) VS. (A) 5 Investment Billion 629,0 934,0 36,0 3,9% 5,7% (A) (B) (C) VND
Total 6 Profit after tax/ % 21,3% 16,3% 13,8% 84,7% 65,0% Billion 1 consolidated 23,879,4 22,000,0 19,292,6 87,7% 80,8% Owner Capital VND Revenue
Profit before Billion 2 2,015,1 1,200,0 1,256,1 104,7% 62,3% tax VND 1,401,0 Billion 3 Profit after tax 1,493,5 960,0 909,7 94,8% 60,9% VND
1,066,1 2,544,0 1,199,4
2,015,1 31,922,3 13,467,8 13,102,7 1,991,2 621,1 951,6 23,879,4 10,941,7 1,256,1 1,493,5 19,292,6
618,7 909,7
2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 Parent company revenue Profit before tax Consolidated Revenue Profit before tax Profit after tax Profit after tax
56 ANNUAL REPORT 2016 www.ptsc.com.vn 57 BUSINESS PERFORMANCE RESULT IN 2016 (Continued) MAIN FINANCIAL RATIOS
DESCRIPTION UNIT 2015 2016
Payment quota
• Short term payment ratio time 1,62 1,56
• Quick payment ratio time 1,50 1,39
Liability structure quota
• Debt to Total Asset time 0,55 0,54
• Debt to owner capital time 1,23 1,17
Activity Analysis quota
• Inventory turnover ratio day 26,28 13,15
• Net revenue/Total asset time 0,88 0,73
Profitability Analysis Ratio
• Profit after tax/ Net Revenue % 6,39% 4,87%
• Profit after tax/ Owner capital % 13,08% 7,70%
• Profit after tax/ Total Asset % 5,65% 3,56%
• Business activity profit/net revenue % 8,28% 5,16%
58 ANNUAL REPORT 2016 www.ptsc.com.vn 59 REPORT FROM THE BOARD OF MANAGEMENT
Program, organized to perform many solutions aim to Although crude oil average price in fact was lower REPORT FROM BOARD increase business activities; cut cost, saved money 20% than plan, service supplying activities under (cut down on salary, benefit, bonus, labor, lengthen pressure of decreasing price, reducing job quantities depreciation period…) aim to minimize expenses in demand of clients, PTSC had been enhancing to OF DIRECTORS such difficult situation. deploy the solutions of increasing business activities, saving costs in order to gain consolidated revenue less 12% than year plan based on estimated crude oil price at 60USD/barrel; excess of profit before tax over 5% year plan. PTSC services always ensure safety, saving environment, quality, rate of progress and meet all requirements of PetroVietnam, international & domestic contractors, gains clients’ faith as well as their high appreciation.
CONSOLIDATED REVENUE IN YEAR PTSC has gained such good business results 2016 REACHED 19,293 BILLION VND, due to making progresses on all activities CONSOLIDATED PROFIT BEFORE TAX in year 2016, such as: REACHED 1,256 BILLION VND. THESE RESULTS • Labor force with solidarity and initiative informed PROVE PTSC‘S GREAT EFFORT IN PROMOTING comprehensive solutions, saved cost at all divisions. BUSINESS ACTIVITIES, GETTING JOBS FOR NEARLY 9,000 LABOURS WHILE THE QUANTITY • Board of Directors encouraged labor force to OF JOBS WAS EXTREMELY DECLINE. try hard, show their all abilities; fortified company culture: clear, equitable, civilized.
• Initiative and innovative movements promoted General business activities with a lot of practical and effective ideas. PTSC highly appreciated initiatives of PTSC‘s member as well as consultant company and they would be As a technical services supplier for oil & gas contractors popularized to all subsidiaries in order to apply in so we build business plan base on advantages, right condition and situation with high effectiveness. difficulties and opportunities in 2016 with estimate crude oil price fluctuate at average of 60 USD/barrel. • Market development activities had many But in fact, the crude oil price was only 45 USD/ conformable improvements, market analysis barrel, lower 25% than estimate price. focused on major points combined with setting up joint venture, cooperated with domestic and The crude oil price was at low level in a long time cause international contractors, partners. serious influence to PSTC business, such as: almost new projects of developing offshore oil & gas fields • Human resource training & developing were were delayed & postponed; the exploring & exploiting deployed in many forms aim to meet the demand enterprises (contractors) were such unprofitable that of human resource such as updating or upgrading narrowed scope of production… skill as well as knowledge so that they could control high technology services. In 2016, PTSC’s business activities run into difficulties caused of: oil & gas contractors strictly performed • Engineer, technician and science management the solutions of saving costs, maximum reducing real quantity was much lower than estimated quantity The result of general turnover and consolidate revenue forces had been received special care in order to jobs as well as operating expenses, high pressure so that almost services of PTSC could not reach the reached 19,293 billion VND equal 87.7% year plan, develop in works and projects. from competition of oversea contractors and private target (with assuming oil price at 60usd/barrel). decreased 19.2% y-y; profit before tax reached 1,256 enterprise with low price services. They even supplied billion VND equal 104.7% year plan, decreased with unprofitable price, dumping price. Many potential Recognizing the hard of business activities in 2016, 37.7% y-y. service contracts were postponed or reduced price, the PTSC had found directions and carried out Implementing
60 ANNUAL REPORT 2016 www.ptsc.com.vn 61 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
Business activities FPSOs/FSOs:
PTSC carried on provision, management & operation FPSOs/FSOs safely and effectively; met clients’ demand; well performed the contracts of supplying crew for FPSOs/FSOs; continuously cooperated with relative Billion VND partners; followed information from clients of FSO Yetagun in Myanmar, FPSO Ca Rong Do Offshore support Other services 3,625 vessels Revenue of this service Revenue of this service in 2016 was 3,625 billion VND, reached 101% in 2016, reached 101% year plan year plan, decreased 3% y-y.
FPSOs/FSOs Seismic, GEO survey and ROV
Installation, Operation & Port & supply base Maintenance offshore facilities
EPCI for offshore facilities Epc for industrial plants
EPCI FOR OFFSHORE FACILITIES:
OFFSHORE SUPPORT VESSELS: PTSC continued to perform projects of EPCI for offshore facilities: Su Tu Trang Billion VND Full Field Development Phase 1, Ghana FPSO, Daman - Phase 2…ensured In 2016, because of crude oil price reducing, the contractors cut down safety, protected environment, quality, rate of progress according to clients’ costs so that a lot of vessel contracts were reduced the price, impacted 5,233 demand and project effect. Particular of Daman- Phase 2 had been halted Billion VND to these vessels activities. Almost oil and gas projects were postponed or Revenue of this service in since Sep 01st, 2016 due to the main contractor Swiber did not do payment get slowdown so the demanding on this service was decreased. PTSC 2016, reached 101% as well as supply equipment for execution. PTSC had been keeping contact 2,165 promoted in using existing resources, limited to use bareboat in order to year plan with the owner ONGC aim to find out solution to finish this project. Revenue of Offshore reducing cost. PTSC executed service vessels with 4,950 on-hire days, support vessels in 2016, decreased 19% in comparison with 2015. We met a lot of difficulties Besides that, PTSC enhanced to promote the business development activities, reached 70% year plan in negotiating and processing contract of supplying vessels caused big approached the potential projects to maintain jobs in the near future, such as: influence in business effect of this service. Sao Vang – Dai Nguyet project, Ca Rong Do, Su Tu Trang FF - Phase 2, Block B… Revenue of Offshore support vessels in 2016 was 2,165 billion VND, reached 70% year plan, reduced 55 % y-y. Revenue from EPCI for offshore facilities service was 5,233 billion VND, reached 101% year plan, decreased 12% y-y.
62 ANNUAL REPORT 2016 www.ptsc.com.vn 63 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
EPC FOR INDUSTRIAL PLANTS: PORTS & SUPPLY BASE:
Carrying on the projects of EPC for industrial plants includes: Long Phu 1 The serious reducing demand of using services of Vung Tau Supply Base thermal Power Plant, B2 package, SMP9 package in Nghi Son Refinery influenced to business results on port & supply base service, such as: Plant project, NPK project, NH3 project, GPP Ca Mau project, Dredging Billion VND work for Channel and Habour Duyen Hai Centre Power Plant... ensured • Operation activities were maintained and focused on supplying safety, protected environment, quality, rate of progress according to clients’ service for traditional clients (included 11 main contractors and 7 service 5,217 demand. companies). However, clients’ business decreased so demand on supply Revenue of this service base services as well as other supporting services decreased, such as: in 2016, reached Safely carried on and ensuring rate of progress of the projects confirmed supplying material & equipment, shipping agency, supplying industrial gas, 106% year plan ability of organizing, managing and performing EPC for industrial plants handling garbage… projects. It also took part in effectively using material facilities, human Billion VND resources in order to assume job for labors in situation of crude oil price • All developing field drill and exploration activities of main contractors reducing. 1,637 were postponed/reduced rate of progress. In 2016, quantity of exploration Revenue of this service drill contractor reduced 50% in comparison with 2015; drill plan was not in 2016, reach 91% stable; few oil-wells were drilled; time for drilling was limited. Besides that, Project Owner Main contractor Scope of work year plan in order to support clients, PTSC considered discounting for more than 35 Long Phu 1 Therma Power Join name of contractors EPC Long Phu 1 Therma Power Plant PVN clients. Plant PTSC-PM main contractor Join name of contractors EPC Phu My NPK Plant main General port service was operated safely and stably at such ports: Phu My, NPK PVFCCo TKIS-PTSC contractor Dung Quat, Hon La (Quang Binh), Dinh Vu (Hai Phong), Nghi Son (Thanh Hoa)… Particular Son Tra port operation was unprofitable due to it was newly Join name of contractors EPC NH3 Workshop of PVFCCo NH3 PVFCCo operated, took pressure of depreciation and high loan interest while there were TECHNIP -PTSC Plant main contractor not many works to do. Join name of contractors EPC main contractor for GPP Ca GPP Ca Mau PV Gas Posco Engineering (PEN)- Revenue of this service in 2016 was 1,637 billion VND, reach 91% year Mau PTSC plan, reduced 36% y-y. Package No. 8 - Dredging work Dredging work for Channel for Channel (Common and Private Join name of contractors and Habour Duyen Hai GENCO1 Chanels) and Habour from -6,5m PTSC - Phu Xuan Centre Power Plant (CD) to -9,5m (CD) - Second Stage - Duyen Hai Centre Power Plant
Revenue in 2016: 5,217 billion VND, reached 106% year plan, increased 20% in comparison with 2015.
64 ANNUAL REPORT 2016 www.ptsc.com.vn 65 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
INSTALLATION, OPERATION & MAINTENANCE OFFSHORE SEISMIC, GEO SURVEY AND ROV: FACILITIES: With situation of falling crude oil price maintained, 2D and 3D seismic In 2016, PTSC carried on and accomplished Badamyar project - Phase 1: survey activities were reuded and cut off considerably, almost of seismic supplying manpower, material, equipment for Hyundai (HHI) in Myanmar survey projects in Vietnam as well as in region ceased leading to got big revenue in this service. Besides that, PTSC put in the tenders and Billion VND competitive pressure in such service. General quantity of 2D seismic sucessed in some projects, such as: tie-in for FMB platform of Technip at survey operation in 2016 was 8,479,6 km line, decreased 42% y-y. Qatar, HUC Su Tu Trang… 1,648 General quantity of 3D seismic survey operation in 2016 was 1,801 Revenue from this service km line, decreased 56% y-y. Both 2 vessels were jobless in 60% time of Organized and implemented manpower supplying contracts in long term in 2016, reached 66% year effect sereously to business performance. Billion VND year plan for clients: JVPC, KNOC, Cuu Long JOC, Rosneft, PVEP POC… as well as in short term for other clients. Safely operated the accommodation barge In 2016, Geological, geophysics survey, subsea services by ROV 1,818 PTSC offshore 1 (on-hired 252 days, increased 77% y-y) and transportation were reduced in quantity as well as in price. Besides, pressure from Revenue from this service barge PTSC 01 (on-hired 101 days, increased 3% y-y). other companies in country and region caused many difficulties in these in 2016, reached 101% year plan services. Total quantity of ROV on-hired days was 299, decreased 60% Revenue from this service in 2016 was 1,818 billion VND reached 101% y-y. year plan, decreased 58% y-y. Revenue from this service in 2016 was 1,648 billion VND, reached 66% year plan, decreased 32% y-y.
OTHER SERVICES:
Hotel service, security service has still stably developed:
• Effectively operated Petro Hotel Da Nang, Petro Hotel in Vung Tau Billion VND to meet demand of hotel, conference, meetings for PetroVietnam and subsidiaries and tourist companies as well as local tourists. However, 613 business result in 2016 decreased in comparison with 2015 becaused Revenue from this service of saving cost policy of contractors leaded to reducing on demand of in 2016, reached 102% year plan hotel service.
• Effectively and safely operated security contracts for security target, especially the major targets.
Revenue from other services in 2016 was 613 billion VND, reached 102% year plan, decreased 54% y-y.
66 ANNUAL REPORT 2016 www.ptsc.com.vn 67 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
Facilities and capital construction investment ORGANIZATION STRUCTURE, POLICY, MANAGEMENT INNOVATIONS Since the crude oil prices descended to its lowest levels, PTSC’s investment Administration system and expand business activities; ensure the compact, professional and connective in each activities concentrated on perform projects transited from 2015 and division, PTSC always focus on innovating the organization structure, policies and management system. researched, updated, evaluated market situation for investment projects as planned and approved. Main investment activities in 2016 as follows:
• Performing investment procedure for Phu Quoc general petroleum service port. PTSC has completed the Possibility Research Report and continue to perform the next investment procedure
• Performing bidding procedure, negotiating and landing the fleet of service vessels contract for Nghi Son refinery project. Moreover, PTSC is performing the investment procedure for building 8 new service Billion VND vessels as part of the contract.
35,6 • Processing the disbursement of facilities investment and procurement. Investment Performance in 2016 obtained 3,8% Investment result of Mother Company was 35,6 billion VND, reached 3,8 of the year plan % of the year budget. Invested projects were not completed as planned in 2016 as follows:
• Delay to invest the service vessel 10,000 BHP due to the current difficult situation (invested project was 22,5 million USD in 2016). Completing the organization structure • Improving the application of IT in PTSC’s business • Not completing the disbursement of Phu Quoc service port investment operations and enterprise management towards project in 2016 (300 billion VND) due to updated work in process. • Renaming Legal Division to Industry Division in order to building softwares such as e-library, work and meet the requirements of business managing, improve information management, human resources, ERP, CRM, the human resources, complete the organization SCM,... structure and expand business activities • Improving the Competitive Capacity Project in • Establishing PTSC Labuan Limited Company in bidding process and drastically applying the inventions Malaysia in order to supply service vessels for operating and innovations programe on PTSC. activities in overseas. • Promoting the R&D; researching the Development Reforming internal regulations of Manufacture Project to improve new services and products. • Reforming regulation and internal administration regulation towards devolving and jurisdictional defining Reforming the Pay and Allowance Policy organizational structure of each devision. Reforming the Pay and Allowance Policy in order to • Consolidating and applying the system of regulations create justice, competitiveness assurance, finance for Technology, Inventions and Innovations in order to balance and motivation to improve labor productivity. improve abilities and creation of employees Meanwhile, the policy is well-obeyed the official bylaw such as: Labor Law, Community Insurance Law,..with effect from 01st Jan 2016
FACING THE PRESSURE OF FALLING CRUDE OIL PRICE AND THE TREMENDOUS IMPACT ON OIL&GAS INDUSTRY, PTSC CONCENTRATE ON COMPLETING THE MANAGEMENT STRUCTURE, REFORMING CURRENT POLICIES AND ENSURING TO RE-STRUCTURE SYSTEM TOWARD COMPACT TREND.
68 ANNUAL REPORT 2016 www.ptsc.com.vn 69 REPORT FROM THE BOARD OF MANAGEMENT (Continued) BUSINESS PLAN IN 2017 Focus tasks Concentrating on all of resources on developing business activities, esuring the high quality of oil & Target in 2017 gas technical services, meeting the requirements of contractors, improving the business development, 1 participating in bidding process and landing new contracts to ensure business for laborforce. Moreover, PTSC has also focused on local market and expanded the overseas markets. Building professional Consolidated financial plan in 2017 connection system application, promoting business trade activities and creating joint ventures, affiliates relationship which Is well-suited with the advantages of PTSC is also the most important tasks BUDGET IN No. TARGET UNIT 2017 Controlling strictly the investment activities as approval; focusing on 7 core business investment followed 2 the market demand; improving abilities and competitive capacity in important projects such as service vessel investment, FSO Ca Rong Do, Phu Quoc general petroleum service port,... 1 Consolidated Revenue Billion VND 13,000 Continuously performing the general re-structrure project in 2016-2020 period which is well-suite with 3 the one of PVN. 2 Profit before tax Billion VND 700 Dividing budgets reasonably, developing human resources with international skills to meet requirement 4 of the high petroleum technical services as strategic plans of PTSC. 3 Profit after tax Billion VND 560 Monitoring and raising accountability of PTSC’S representatives at other subsidiaries; enhancing the 5 internal auditing activities; promoting the saving in managing business; reducing expences and prices 4 Taxes and amounts payable to the State budget Billion VND 470 to improve competitiveness; supporting subsidiaries when they get trouble in business activities.
Maintaining and developing effectively management of integrated HSEQ; promoting the research 6 of technologies, inventions, innovations to the business operations; updating the application of IT in Budget for Parent Company in 2017 business management.
BUDGET IN No. TARGET UNIT 2017
1 Consolidated Revenue Billion VND 7,900
2 Profit before tax Billion VND 420
3 Profit after tax Billion VND 410
4 Taxes and amounts payable to the State budget Billion VND 200
5 Dividend payout ratio (%) % 7
6 Construction Investment & facilities procurement Billion VND 1,126
The business plan made on oil price forecast of average price of 50USD/barrel in 2017
70 ANNUAL REPORT 2016 www.ptsc.com.vn 71 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
Detail tasks of each service field Solutions for effectuate plans
SERVICES FUNCTION PROMOTING THE MANAGING ABILITY, ENHANCING THE Managing & operating safely, effectively PTSC’s owned & hired fleet of service BUSINESS DEVELOPMENT, SETTING UP THE PROFESSIONAL HUMAN Offshore support vessels vessels; supplying and meeting all clients’ the demands of service vessel & security RESOURCES AND OPTIMIZING THE OPERATING COSTS ARE THE CORE guard vessels for domestic market. SOLUTIONS FOR DEVELOPING PTSC IN 2017.
Deploying effectively, safely, quality and timely the projects such as: Su Tu Trang project FFD Phase 1, Daman Phase 2 project, DK platform fabrication project for EPCI for offshore facilities - Ministry of National Defence, Long Phu 1 therma power plant project, Nghi Son EPC for industrial, plants refinery project, NH3 revamping - NPK plant project, GPP Ca Mau project, port dredging project of Duyen Hai – Tra Vinh power center,..PTSC continue to maitain prestige and ability in EPCI for offshore facilities and onshore industrial projetcs.
Managing & operating safely & effectively FSO Bien Dong, FPSO Lam Son, FPSO FSO/FPSO Ruby II,..,ensuring to meet the requirements of clients. Well supplying human resources for running FSO Orkid, Thai Binh VN, MV12.
Continuously managing and operating infrastructure resouces and current facilities at Vung Tau Supply base; ensuring to meet the demand of jetty, warehouse, equipment, open storage space and office for lease..for contractors; promoting the business development; expanding markets in new services such as logictics, Ports & Supply base forwarding,..to serve for both companies inside and outside oil and gas industry in order to cover the decreasing petroleum service demand. Continuously operating safely and effectively Phu My port, Dung Quat port, Hon La port (Quang Binh, Dinh Vu port (Hai Phong), Nghi Son port (Thanh Hoa), Son Tra port (Da Nang),…
COMPLETING THE MANAGING SYSTEM / ENHANCING THE BUSINESS Organising to deploy safely, effectively, timely and quality transportation, installation, Installation, Operation ADMINISTRATION hook-up, commissionging, operation & maintenance oil & gas project, meeting and Maintenance offshore the demand of contractors. Operating safely and effectively accomodation PTSC • Executing business re-structure, completing the projects. Accordingly, the power was delegated to facilities Offshore 1 barge and 5,000 tons PTSC-01 barge. managing system by regulating the human resources, project managers, human resource was regulated improving efficiency, applying strict discipline, explicit flexible in each projects and treated based on their business environment, treating the personnel according contribution in job. Besides, high service’s quality to their contribution. and competitive price were focused in international Managing, operating safely & effectively the seismic survey vessels 2D Binh integration period. Seismic, GEO survey and Minh 02, 3D CGGV Amadeus, PTSC Surveyor, PTSC Reseacher. Maitaining • Comparing PTSC - a state - owned enterprise ROV controlling ROV service which support for drilling & in water survey; expanding with private enterprises to realize the differences in • Information technology in business activities such as: market for construction supporting in domestic and international. input & output factors, structure, managing method, e-library, information management system software, thenceforth, finding out the solutions to improve the human resource management system software, capacity and competition of PTSC equal or better than Enterprise Resource Planning (ERP), Customer Continuously developing other services such as: hotel, security,..to meet the private enterprises. Relationship Management (CRM), Supply Chain Other services requirement of clients and ensure the growth rate followed the general strategy of Management (SCM)… PVN. • Applying Competitive Capacity Project, Production Development Project in managing and operating
72 ANNUAL REPORT 2016 www.ptsc.com.vn 73 REPORT FROM THE BOARD OF MANAGEMENT (Continued)
ENHANCING THE BUSINESS DEVELOPMENT IN OIL AND GAS REGION, AND INDUSTRIAL DEVELOPING THE HUMAN RESOURCE WITH HIGH TECHNICAL LEVEL, ENHANCING THE PLANTS; MAINTAINING THE DOMESTIC MARKET AND DEVELOPING IN FOREIGN MARKET; R&D, APPLYING TECHNOLOGY, INNOVATION, INFORMATION TECHNOLOGY IN BUSINESS PROMOTING R&D IN NEW PRODUCTS AND SERVICES. ACTIVITIES IN ORDER TO INCREASING CAPACITY AND EFFECT OF LABOUR.
• Improving professional, experienced and appropriate • Focusing on cooperation method, diversifying all kind of human resource in business development activities. product and service, supplementary product and service Deploying the working method in order that the related of considerable manufacturers from Europe, USA, Japan, information is collected and updated appropriately and Korea… (agency, selling, manufacturing, maintaining, effectively. fixing, after-sale services…)
• Promoting R&D, applying Production Development • Taking advantage of being a member of Vietnam Oil Project in business activities with the aim of optimizing and Gas Group with well-known trade name, workforce PTSC’s resources. Cooperating with professional domestic and know-how resources, management system…, and foreign partners to manufacture new products and PTSC conducted the complicated projects. Engineering services with competitive price and independent to the capacity was manifested in PTSC’s products and services. Protective Policy.
CHECKING, APPLYING APPROPRIATE SOLUTIONS, REDUCING PRICE OF PRODUCTS AND SERVICES OF PTSC, SATISFYING THE CUSTOMERS. • Standardizing the management activities, developing • Training the human resource from working level work force with the international standard, to adapt to to management level, improving the professional • Reducing cost of products and services in order to have • Controlling the list of all cost, setting the improvement the standard of foreign partners as well as to compete knowledge, skill, foreign knowledge as PTSC’s a competitive price. plan, reduction level with time and person in charge. with work force in region. developing requirement. Setting up training, re- training and internal training program appropriately, • Optimizing the internal services in order to have a • Evaluating the nature of cost, the quality of human • Improving the policy to attract the professional encouraging learning environment in PTSC. competitive price. resource goes with competitive salary and current Vietnamese labor in management level, O&M expert, Regulation. engineering expert, captain, chief mechanic…; • Applying Scientific Technology Regulation, Innovation, • Checking the property depreciation period, reducing increasing appropriate and satisfied treatment in spite Invention in PTSC in order to encourage related the depreciation cost in accordance with current • Continuously updating new technology, norm system. of the differences, leading to the increased effective business activities. Speeding up technology, innovation, Regulation in order to have a competitive service price. Adjusting the flat rate based on the Competitive Capacity productivity. information technology in business activities to increase Project with the high production and automation. productivity.
74 ANNUAL REPORT 2016 www.ptsc.com.vn 75 REPORT FROM THE BOARD OF MANAGEMENT (Continued) ASSESSMENT FROM THE BOARD OF DIRECTORS
CHECKING THE INVESTMENT PROJECTS, PRIORITIZING THE RESOURCE IN PROJECTS OF THE CORE BUSINESS; FOLLOWING THE MARKET CLOSELY TO CATCH UP THE GREAT GENERAL ASSESSMENT OF OPPORTUNITIES TO INVEST AND TO INCREASE THE EFFECT IN BUSINESS ACTIVITIES BUSSINESS PERFORMANCE IN 2016 • Updating, completing rules and regulation, • Supervising the projects closely accordingly to the decentralizing internal investment to support investing current regulation. Economical effect must be evaluated activities in PTSC. before be invested.
• Classifying the investment projects, prioritizing the • Evaluating the effect of property usage, in order to projects of the core business. The projects which make good the shortcomings and to improve the next were high risk, ineffective or lack of feasible capital investment. arrangement, were not invested.
FINANCIAL STRUCTURE COMPLETION, EFFECTIVE CAPITAL MANAGEMENT
• Diversifying capital mobilization, using risk manage- • Managing the flow of money by maintaining the ment tools in managing the mobilized capital and satis- central account system; controlling the price of product fying the business activities ‘s requirement. and service, financial management, debt management, leading to the increase in competitive capacity. • Managing the investment in subsidiaries, branches Maintaining the appropriate debt factor for financial and joint venture companies. Supervising the capital safety. representative in subsidiaries. Internal control was reinforced accordingly to financial regulations.
In 2016, PTSC continued to face to negative impact caused by oil price falling which made business result strongly reduced and caused difficult to manage and steer business toward the target that was assigned by the shareholders’ meeting while still ensured jobs, income for employees and maintained business performance to seek for opportunity to overcome tough period. Some of general results in 2016 as follows:
• Reaching the plan of consolidated profit before tax • PTSC’s financial position was remained stable, and ensuring share dividend rate that assigned by wholesome. the shareholder meeting. Although some of revenue and investment targets were not completed, the result • Initiative and innovative research was deployed widely we achieved was worth to acknowledge since tough in every activity which contributed to management impact from oil price reducing. system upgrading, operation expense saving and competitive ability improving. • Business activities were performed safely, effectively and complied with related regulations of the law. In • Operation structure and management ability was the condition of rough traditional service market, PTSC more and more perfected and improved to be reasonably utilized maximum available resources appropriate with structure in which Mother Company to successfully performed onshore industry projects, directly performs business and operates the whole core affirmed our right policy in industrial project strategy business. serving exterior oil and gas clients. PTSC still maintained its prestige of being a leading technical service supplier • Well performed employees’ lives care and social in Vietnam and region. security programs.
76 ANNUAL REPORT 2016 www.ptsc.com.vn 77 ASSESSMENT FROM THE BOARD OF DIRECTORS (Continued) ASSESSMENT OF MANAGEMENT BOARD’S ACTIVITY
MANAGEMENT BOARD’S PERSONNEL INCLUDING 07 MEMBERS OF WHOM THE PRESIDENT & CEO AND VICE PRESIDENT ARE ALSO MEMBERS OF THE BOARD OF DIRECTORS. ALL OF THE MEMBERS HAVE QUALIFICATION, ABILITY AND EXPERIENCE OF THE OPERATION FIELD THAT THEY UNDERTAKE RELATING TO ACTIVITIES OF BUSINESS, FINANCE, PLANNING, INVESTMENT, HUMAN RESOURCES AND ADMINISTRATION.
In 2016, The Board of Directors highly appreciated The Board of Management’s effort, ability and responsibility to drastically face to difficulties and challenges of economics, politics in general and of the oil and gas industry in particular in order to perform assigned duty and achieved positive result in such a rough year which shown as follows:
1 2 3 4 5
Following up and directing to Managing, operating every Utilizing effectively and balanc- Maintaining our position and Continuously stepping up initia- perform resolutions, decisions of activity under the authority with ing reasonably current resourc- market share in business and tive and innovation movement, the shareholders’ meeting and clear assignment and arrange- es, drastically cutting down productivity of utilizing property applying effectively informatics The Board of Directors basing ment between management hi- operation expense, improving since our service and production technology. on the practice. Deploying effec- erarchy. quality service, reducing service quality obtains the highest stand- tively core solutions approved cost to meet clients’ demand and ard. by The Board of Directors. to share difficulty with the clients The achievement obtained by as well as to ensure PTSC’s long Management Board created benefit. stable step in performance pro- cess five year - plan of 2016- 2020 and made premise 10 9 8 7 6 for successfully implementing PTSC’s development strategy to the year 2025 and orienting to Maintaining the overall payment Stepping up training and Actively stepping up market de- All working items of the restruc- Posting transactions of entries the year 2035. of the market, reasonable com- self-training to improve man- velopment, new production and ture project was implemented and controlling finance clearly, pensation and benefits for em- power resources in order to service development. well and on schedule affirmed conforming the law, ensuring ployees; having clear commend meet increasing demands of Mother Company’s decisive safety and upholding source of and reward policy; improving the market as well as clients. role toward the whole complex capital and fund; processing employees’ discipline and profes- in directly performing business. drastically bad debt and doubt- sionalism. ful debt.
78 ANNUAL REPORT 2016 www.ptsc.com.vn 79 CORPORATE GOVERNANCE Activities in 2016 and the plan of the board of Directors in 2017 Supervisory Board’s Activities in 2016 and Action plan in 2017 Remuneration and other benefits of The Board of Directors, The Supervisory Board, and The Board of Management in 2016 Risks management
80 ANNUAL REPORT 2016 www.ptsc.com.vn 81 ACTIVITIES IN 2016 AND THE PLAN OF THE BOARD OF DIRECTORS IN 2017 MEMBERS AND STRUCTURE OF THE BOARD ASSISTANT DIVISION OF THE BOARD OF DIRECTOR OF DIRECTORS
PTSC’S PERSONNEL STRUCTURE OF THE BOARD OF DIRECTORS AND INFORMATION REGARDING THE POSITIONS CURRENTLY HELD BY MEMBERS OF THE BOARD OF DIRECTORS IN OTHER COMPANIES ARE AS FOLLOWS:
No. FULL NAME POSITION IN PTSC NOTES
1 Thai Quoc Hiep Chairman of the Board of Directors -
Member of the Board of Directors/ 2 Phan Thanh Tung - President and CEO
Removed from duty since 3 Nguyen Van Dan Member of the Board of Directors 08/11/2016
Member of the Board of 4 Doan Minh Man Member of the Board of Directors Directors at PVcomBank
Removed from duty since 5 Nguyen Thanh Huong Member of the Board of Directors 08/11/2016
6 Pham Van Dung Member of the Board of Directors -
Orther position: Member of the Board of Directors/ In 2016, Assistant Division of The Board of Directors well completed its duty to ensure the administrative operation 7 Nguyen Van Mau Chairman of the Board of Vice Preident of The Board of Directors in accordance to PTSC’s strategic trends and to ensure maximum benefits for shareholders Directors at PTSC Phu My and related sides as well as to improve enterprise administration. Secretary Division of the Board of Directors includes General Secretary Department and Internal Supervisor Department with 05 experienced members who 8 Do Quoc Hoan Member of the Board of Directors Appointed from 08/11/2016 implement the following duties:
• Updating, researching new legal regulations, • Assisting to draft administrative documents and enterprise administration routine. reports.
• Organizing meetings of The Board of Directors; • Following, updating information in stock market Collecting documented opinions from members of and PTSC’s share. The Board of Directors; advising implementation of decision procedure. • Managing, supplying and keeping secret information and implement other tasks assigned by • Assisting to communicate with shareholders, funds The Board of Directors. and investors.
• Assisting to supervise activities of The Management Board and representatives in subsidiaries.
82 ANNUAL REPORT 2016 www.ptsc.com.vn 83 ACTIVITIES IN 2016 AND THE PLAN OF THE BOARD OF DIRECTORS IN 2017 (Continued)
In respect of building and issuing internal document manangement is ACTIVITIES OF THE BOARD OF DIRECTORS considered as important means in management and operation activitiy, in order to define the responsibility for the browser, coordinate method, resource IN 2016 utilization, the Board of Directors guided to complete document management GUIDEILINE TO system as follows: COMPLETE THE DOCUMENT • After PTSC’s new Regulation was approved in the shareholders’ meeting 2016, The Board of Directors guided assisted division completed and MANAGEMENT issued PTSC’s Regulation, checked the content of regulations related to SYSTEM arrange authority in accordance with new Regulations.
• The Board of Directors has promulgated the Science and Technology Policy System, Innovation andI nitiative to ensure that the Corporation’s activities in research, development, application of science and technology, inventions and innovations are strictly adhered to the current regulations and the highest utilization of the resources of the Corporation.
• In order to enhance the management and evaluation of the Corporation’s representatives in the units, the Board of Directors issued the regulation on the assessment of the fulfillment of the representative’s duties. In addition, in order to create favorable conditions for the representatives to fulfill their “IN EXECUTION OF THE TASKS OF THE AGENDA OF COMMITTEE IN THE YEAR 2016, functions and tasks in ensuring the efficient management, preservation THE BOARD OF DIRECTORS HAS IMPLEMENTED AND COMPLETED THE CONTENT DESCRIBED of capital and capital development of the Corporation, creating a IN THE YEAR-WORK PROGRAM: prerequisite for the sustainable development, the Board of Directors has issued a resolution approving the signing of authorization documents between the Board of Directors and the representatives of the units.
The Board of Directors guides the Board of Managers to continue implementing • The Board of Directors has coordinated with the Standing Committee the objectives set forth in the five-year plan 2016-2020 and the development of the Party and the President & CEO to complete and promulgate the GUIDELINE OF strategy up to 2025 with the orientation of 2035 set by the Corporation. Regulation on Working Relations between the Standing Committee of the Party and the Board of Directors - President & CEO of the Corporation. FORMING THE The Board of Directors has issued a decision to establish PTSC Labuan in CORPORATION Malaysia to maintain and develop the long-term business performance of DEVELOPMENT’S the manufacturing corporation in the foreign market and just enhance the development of the product/ service granted to the shore industry. The Board of Directors guided to research and develop a plan for STRATEGY corporationrestructure period 2016-2020 to achieve the following main objectives: MAINTAINING • Being a corporation with high business efficiency, optimizing available The Board of Directors has directed the Board of Managers to review and TO GUIDE TO resources, attractting domestic and foreign investmentand focussing on finalize the Report on Researching Investment in Construction of Phu Quoc EFFECTIVELY the main business. Apartment - Phase I and Report on Researching Investment Projects and Business IMPLEMENT THE GUIDELINE OF Teams Coasts of Nghi Son Petroleum Refinery riverside to ensure that the • Improving competitiveness, acquiring gradually, taking over technology performance of the two projects is at the highest level. RESTRUCTURE OF transfer to move forward to master technology to dominate domestic INVESTMENT PLAN THE CORPORATION market and expand overseas. Sustainable development, ensures The Board of Directors has requested the board of Managers resources for to overcome challenges in the context of international integration, standard jobs the related project to the state of the State Warehouse, contain adaptable to market movements. and export crude raw materials (FPSO) of Red Dragon fish - the key project in 2017 of total. • Restructuring parent-subsidiary company in the direction of reinforcing and empowering the parent company. The parent company must directly Basing on the approval for investment plan in 2016, the Board of Directors participate and hold controlling stakes in key business units identified in closely supervised investment activities of Parent Company and its subsidiaries. the strategy. Improve the efficiency of using capital and assets..
84 ANNUAL REPORT 2016 www.ptsc.com.vn 85 ACTIVITIES IN 2016 AND THE PLAN OF THE BOARD OF DIRECTORS IN 2017 (Continued)
The Board of Directors has directed the assistant division to periodically update the database of staff who are appointed as representatives of the Corporation THE BOARD OF DIRECTORS’ ACTION PLAN at the Unit; Re-appoint the staff under the management of the Board of Directors PTSC’S according to regulations, timely change and add representatives to meet the IN 2017 REPRESENTATIVE management requirements of the Corporation in the units. MANAGEMENT The Board of Directors has guided to review and supplement the relevant Basing on the assessment of the situation in 2017, closely following the corporation’s strategic development IN OTHER management documents to comply with the current regulations in order to objectives, the Board of Directors set out the workprogram in 2017 as follows: enhance the representative’s responsibility for the preservation and development ENTERPRISES of capital of the Corporation, at the units or authorized / assigned to the management representative as well as perform other tasks at the request of the Corporation.
Companying with the Executive Board to direct business activities, to complete Apart from the annual plan activities, the Board of Directors has carried out production and business targets assigned by the Shareholders’Meeting. regular tasks in accordance with their functions and tasks according to the 1 Charter and actual arising in the course of operation of the Corporation, ROUTINE TASK concretely:
• Directing the organization of the annual shareholder meeting of the Making decision and supervissing investment activities in an effective manner, Corporation and the Annual General Meeting of the Corporation. in line with the strategy of development and implementation of capital solutions 2 for large investment projects in the year. • Supervising and directing to remove difficulties in big units and projects.
• Conducting relations with shareholders, investors. Improving the management system: reviewing, updating, amending and • Promulgating resolutions related to the normal management of the supplementing internal regulations in accordance with the provisions of law Corporation’s operation: Approving the 2015 salary fund of the parent 3 and the situation of production and business activities of the Corporation. company and its member units; approving Training Plan 2016; approving the handling of outstanding debts of the Corporation; approving and issue technical norms for ships, equipment; approving the profit distribution plan 2015 for the member units ... Strongly promoting supervision, risk management, management evaluation, REMARKS ON THE BOARD 4 utilization and preservation capital and assets. OF DIRECTORS’ ACTIVITIES The management of the Corporation is in compliance with the prevailing laws and regulations, transparent information in accordance with the standards and create confidence of shareholders, employees, state management agencies and Consolidating and restructuring division, subsidiaries in the direction of raising customers. their competitiveness, utilizing effectively resources conformity with actual 5 production and business. On the basis of the 2016’s plan, the works assigned by the General Shareholders’ Meeting and actual results of implementation, The Board of Directors has evaluated the activities in 2016 as duly competent and efficient. The Board has made clear, appropriate assignment and hierarchy to timely address issues under the jurisdiction.
The arrangement of meetings of the Board of Directors, the written comments of the Board of Directors have been carried out in accordance with the law and focused on the key issues related to the direction of adopting the Resolution for Annual Shareholders’ Meeting in 2016; implementing the plan in 2016; implementing the development strategy of the Corporation; strengthening the organizational apparatus, senior personnel of the Corporation, implementation of the Restructure Corporation.
The Board of Directors’ decisions are in line with actual business situation and are an important orientation to support the Board of Directors in the management process, to coordinate well and create favorable conditions for union organizations’ operation.
86 ANNUAL REPORT 2016 www.ptsc.com.vn 87 SUPERVISORY BOARD’S ACTIVITIES IN 2016 AND ACTION PLAN IN 2017 SUPERVISORY RESULTS ON THE IMPLEMENTA- ACTIVITIES IN 2016 TION OF 2016 ANNUAL GENERAL MEETING’S
Organizational structure of supervisory board RESOLUTIONS Activities complies with the Law on Enterprises, No. NAME TITLE NOTE Resolutions of the General Meeting of Shareholders
Head of Supervisory Board 1 Ms. Ho Thi Oanh Specialized In 2016, members of the Supervisory Board have properly exercised their rights and obligations under the Enterprise Law.
On the basis of the operation plan approved by the General Meeting of Shareholders in Resolution 277 / NQ- Member of Supervisory 2 Ms. Bui Thu Ha Board Specialized DVKT- DHDCD dated 28/4/2016, the members of Supervisory Board conducted the inspection and supervision activities of PTSC Corporation.
In 2016, the Supervisory Board held 04 direct meetings and issued 01 Resolution related to the activities of the Member of Supervisory Deputy Head of Internal Audit, 3 Mr. Trieu Van Nghi Supervisory Board: Resolution No. 207 / NQ-DVKT-BKS dated 08/4/2016 on the appointment Ms Bui Thu Ha Board Associated PvcomBank’s Internal Audit Department to a fulltime member of the Supervisory Board.
Executed activities
In 2016, the Supervisory Board initiated the core team working with the Parent company, Subsidiaries undertakings as follows: and Affiliates; reviewed inspection reports, internal controls of the Corporation and feedback of the • Inspected the preservation of capital, cash flow Board of Managment; management, operational efficiency of the business; • Coordinated with the Board of Directors, the • Supervised the execution of the Charter, the Board of Management in managing equity, implementation of the Resolution of the General and supervising PTSC’s capital invested in other Shareholders’ Meeting, the Board of Directors of businesses for the purpose of capital preservation PTSC; and development;
• Inspected and supervised PTSC’s implementation • Performed other tasks of the Supervisory Board’s of the Regulations, Resolutions, Decisions and 2016 action plan. Periodically review, review, make Directives of PVN; reports on inspection, supervision and evaluation of compliance with the Statute of the Corporation, • Inspected and supervised the implementation of resolutions of the General Meeting of Shareholders; investment projects; Assessed the compliance with the provisions of the State law, the implementation and compliance with • Inspected and supervised the implementation of the resolutions, decisions and directives of owners the restructureprojectsof the Corporation; related to the operation of PTSC.
• Inspected and supervised the implementation of The inspection and supervision of PTSC’s Supervisory cost-cutting measures; Board has been conducted continuously and systematically in order to catch up with the current • Reviewed the quarterly and annually financial situation and performance of the Corporation and the reports; Subsidiaries, so as to assist the company to realize and overcome existing shortcomings in the management, • Monitored the implementation of recommendation operation and internal control systems. presented on the Minutes of inspection teams, audits
88 ANNUAL REPORT 2016 www.ptsc.com.vn 89 SUPERVISORY BOARD’S ACTIVITIES IN 2016 AND ACTION PLAN IN 2017 (Continued) Activities by assigned field SUPERVISORY BOARD’S ACTION PLAN In 2016, the members of the Supervisory Board have fulfilled their responsibilities according to each assigned field, as follows: IN 2017
MEETING FULL NAME AGENDA Continuing inspecting and supervising the operation and management of the business according to the functions and tasks prescribed by the Enterprise Law Have performed well the responsibilities related to the work and the 1 and the Statute of PTSC; The implementation of the Regulations, resolutions and field: General organization of the Board of Supervisors; to monitor and decisions of the General Meeting of Shareholders and the Board of Directors urge the implementation of the inspection and supervision activities of PTSC, the implementation of resolutions, decisions and directives of the of the Control Board; to direct, support and urge the performance Members’ Council of Vietnam Oil and Gas Group; of tasks assigned by members of the Control Board; approved the reports required by the Vietnam Oil and Gas Group; be in charge of Inspecting and supervise of the implementation of production, business and tasks not assigned to other members of the Control Board under the investment activities of the Corporation; supervise the elaboration of techno- functions, tasks and powers of the Control Board. 2 economic norms and measures to reduce management costs and reduce production costs under directives of the Government and the Vietnam Oil and Ms. Ho Thi Oanh Executed the inspection and supervision of activities: capital Gas Corporation; preservation, cash flow management, business efficiency; 4/4 Head of Supervisory implement the Charter, implement the resolution of the General Appraising financial statements, evaluating the performance and solvency Board Specialized Meeting of Shareholders, PTSC Board of Directors; implement of debts, management, preservation and development of owners’ equity; the regulations, resolutions, decisions and orders of the Vietnam 3 Coordinate with representatives of the capital of the Vietnam Oil and Gas Oil and Gas Corporation to PTSC; situation of implementation of Group in managing the capital of the Group in PTSC and the capital of PTSC investment projects; restructuring work; implementation of measures investing in other enterprises; Supervision of capital balance and cash flow management; to reduce costs; appraisal of quarterly and annual financial reports; implementation of the recommendations in the minutes of inspection and audit teams for the Corporation and its member units; consider Monitoring the implementation of the PTSC restructuring plan for 2016- the internal inspection and control reports of the Corporation and the 4 2020; feedback of the General Directorate of the Corporation.
Implemented and performed well the inspection and supervision of Coordinating with the State functional agencies, internal inspection and audit activities: Capital preservation, cash flow management, business teams of the Group and the Corporation in inspecting and supervising the efficiency; implement the Charter, implement the resolution of 5 management and activities of production and business at the units, supervise the General Meeting of Shareholders, PTSC BOD; implement the the implementation of the recommendations in the minutes of inspection and Ms. Bui Thu Ha regulations, resolutions, decisions and orders of the Vietnam Oil and audit teams; Gas Corporation to PTSC; situation of implementation of investment 4/4 Member of projects; restructuring work; implement measures to reduce costs; Supervisory Board appraisal of quarterly and annual financial reports; implement the Specialized recommendations in the minutes of inspection and audit teams for the 6 Performing other duties of the Board of Supervisors at the request of the General Corporation and its member units; consider the internal inspection Meeting of Shareholders, the Vietnam Oil and Gas Corporation and the current and control reports of the Corporation and the feedback of the regulations. General Directorate of the Corporation.
Mr. Trieu Van Nghi Well implemented and fully gave comments on the inspection and 4/4 Member of supervision of activities and domains assigned to the Control Board. Supervisory Board Specialized
90 ANNUAL REPORT 2016 www.ptsc.com.vn 91 REMUNERATION AND OTHER BENEFITS OF THE BOARD OF DIRECTORS, THE SUPERVISORY BOARD, AND THE BOARD OF MANAGEMENT IN 2016
Salaries, bonuses, remuneration and other benefits for each member of the Board of Directors, the Supervisory Board, the Board of Management and the managerial officials are tranparently published:
WAGE AND FULL NAME TITLE OTHER BENEFITS (unit: VND)
THE BOARD OF DIRECTORS
Thai Quoc Hiep Chairman 1,427,617,500
Phan Thanh Tung Member/President and CEO 1,413,822,000
Nguyen Van Dan Member 872,654,000
Pham Van Dung Member 991,878,500
Nguyen Thanh Huong Member 938,518,000
Doan Minh Man Member 218,000,000
Nguyen Van Mau Member/Deputy General Director 1,290,398,500
Do Quoc Hoan Member 418,193,000
THE SUPERVISORY BOARD
Ho Thi Oanh Head of the Board 902,205,000
Bui Thu Ha Member 446,766,500
Trieu Van Nghi Member 117,000,000
THE BOARD OF MANAGEMENT
Nguyen Tran Toan Deputy General Director 1,030,398,500
Nguyen Tan Hoa Deputy General Director 279,849,000
Nguyen Huu Hai Deputy General Director 1,041,698,500
Le Manh Cuong Deputy General Director 1,117,398,500
Ta Duc Tien Deputy General Director 514,117,500
Nguyen Xuan Cuong Chief Accountant 965,640,000
92 ANNUAL REPORT 2016 RISK MANAGEMENT
RISK MANAGEMENT IS CONSIDERED AS ONE OF CRUCIAL ELEMENTS IN EFFECTIVE MANAGEMENT AND IMPORTANT ROLE IN SUSTAINABLE DEVELOPMENT. RISK MANAGEMENT WILL HELP ENTERPRISES TO ELEVATE BUSINESS EFFECTIVENESS BY IDENTIFYING, EVALUATING, PLANNING AND MINIMIZE THE POSSIBLE RISKS IN ORDER TO OPTIMIZE RESOURCES, INCREASE PROFIT AND ACHIEVE STRATEGIC TARGETS.
MARKET RISK
We hereby present main risks that PTSC has been facing to and how they have been managed:
PRODUCTION Possible Impacts: The oil price maintains at low level for a long period make oil SAFETY LEGAL AND exploration, production, field development, investment in oil and gas industry MANAGEMENT POLICY RISK keep at limited extent or temporary halt, PTSC constantly faced the pressure RISK MARKET of cutting charter rate and services from clients. Especially, the tendencies of reducing protection for state-owned enterprises, creating favourable conditions RISK for other enterprises, international commitments (WTO, TPP…) gradually in force increase the competition not only in domestic but also in international markets. RISK Those matters lead to the decrease in revenue as well as profit. MANAGEMENT Risk mitigation solutions: PTSC has been performed onshore industrial projects to compensate the deficit from offshore projects, improves capability, invests productively, elevates competiveness, controls costs effectively to overcome obstacles, limit risks in 2017 and the following years. TECHNOLOGY RISK OF MATERIAL RISK
Possible Impacts: With the business nature of supplying hi-tech services for CREDIT, EXCCHANGE onshore and offshore projects in oil and gas services, using large number of RATE AND INTEREST manpower and machinery in a harsh working environment with high intensity, RATE RISK there are risks of fire explosions, occupational accidents, marine safety failure or PRODUCTION damage high-value assets of the Companyor even environment pollution to the SAFETY exent of environment disasters
MANAGEMENT Risk mitigation solutions: PTSC has constantly innovated and advanced RISK management system on Safety Health Environment and Quality toward international standards to meet production requirements; has frequent training programs to develop safe and professional working behaviors; uses tools, softwares to monitor the machinery and equipment health checks to maintain the technical safety and quality optimization for production; has insurance contracts for employees, assets, operation to compensate for unwanted losses during operation.
94 ANNUAL REPORT 2016 www.ptsc.com.vn 95 RISK MANAGEMENT (Continued)
Possible Impacts: For Foreign exchange rate risk: This risk has been managed by PTSC’s obtaining licenses of directly receipt foreign currency payment from the State Obsolete technologies: Non-control technology, lack of information about new Bank of Vietnam and the balance of foreign currency inflows-outflows in order TECHNOLOGY technology lead to the risk of purchasing obsolete technologies which degrade to minimize exchange rate risk by signing back-to-back contract with clients competiveness, impact to the success of projects ie. Behind schedule, not meet according to the amount of reciprocal foreign currency payable to suppliers RISK quality requirements, increase operation, maintainance cost… Employees have and flexibly adjusting the price of goods and services if there were significant no training, research in new technologies that limits the implication of new fluctuations in exchange rates. technologies as well as self-research and develop technologies.
Technology development speed: with the development pace with circle of 5 years, Technology usually gains new development steps which leads to changes, Possible Impacts:With the possession and management of a large-scale vessel updates in standards, technical requirements. It is a cost-consuming process to along with a number of modern facilities, diverse equipment and on-going follow the advanced technologies, it also impact on competiveness and leads to machinery projects, the amount of fuel and material consumption serving for the the risk unsynchronized system lowering project quality. RISK OF fabrication, operation, repair and annual maintenance of PTSC is immense. Any fluctuation in fuel and material prices will directly affect the outcome of PTSC’s No investment or unsynchronized investment in facilities, insfrustructures, softwares… MATERIAL business activities. to serve business operation, no implementation of advanced technologies, inadequate of qualified spare parts, high fuel and material consumption norms, Risk mitigation solutions: PTSC has managed these risks by contracting with outdated standards and norms, obsolete machines with many broken-down clients with a term allowing for flexible contract price adjustments when there is hours… are reasons for high cost of goods sold. a substantial fluctuation in the price of materials
Risk mitigation solutions: PTSC has focused its investment in technological innovation, alternative facilities and modern equipments with the consideration of development tendency of technology, avoiding wasting resources ie. Replace Possible Impacts: or upgrade recently implemented systems; has many training courses to equip knowledge for employees as well as help them develop their interests in Besides the the tendencies of reducing protection for state-owned enterprises, researching, upgrading and implementing technologies in business operation; creating favourable conditions for other enterprises, international commitments improve management skills, technical levels to enhance PTSC’s competitiveness, LEGAL AND (WTO, TPP…) gradually in force increase the market competition, PTSC has to maintain the domestic market leader position as well as expand business to POLICY RISK face not only the harsh competition from international suppliers with outstanding region and all over the world. technologies and financial ability in domestic market but also the competition from other domestic enterprises or even inner-group competition. Shortcomings in tax policy, regulations on the procedures produce obstacles for PTSC in supplying goods, services and investing oversea. The regulations of Bidding Law in oil and gas industry have not encouraged domestic production and Possible Impacts:Credit risk occurs when a client or partner fails to perform the services as well as development of special niche services. contractual obligations resulting in financial loss to PTSC; besides, the increase of input interest rate from financial institutions will lead to the uplift of borrowing Risk mitigation solution: CREDIT, interest rate which represents the interest rate risk. The foreign exchange rate fluctuation in the background of unstable oil price may impact directly to business PTSC has intensely improved system of internal regulations and rules, business EXCCHANGE operation of the Company. procedures, updated the content to ensure legal compliance, creating a RATE AND solid legal basis in the management and administration, especially form up Risk mitigation solutions: comphensive and flexible project management processes to improve project INTEREST RATE efficiency.At the same time, PTSC has also involved in the construction of law, RISK For credit risk: PTSC has implemented an appropriate credit policy for each actively contributed ideas to the relevant legislation expected to have an impact client groups based on their business fields and locations, evaluate Feasibility on PTSC’s activities from the draft stage. As for the strains and shortcomings study of the projects as well as control closely contract terms. On the other in applying policies and laws, PTSC has actively proposed to PVN and other hand, PTSC regularly monitors credit risks to evaluate the impact and level of the relevant authorities such as recommendations on specific mechanism of oil and impact of credit risks on the financial viability of PTSC. gas industry, the mechanism for products or services on the main business line of PVN, the contractors tax policy for the oil and gas service provider; proposals For interest rate risk: PTSC surveys, approaches and arranges loan facilities from on priority policy for services development in domestic as well as in oversea, international monetory market with low cost of interest. On the other hand, PTSC proposals on setting up standards, technical barriers, proper protection for participates in derivatives contracts to fix interest rate, balance the level between domestic service providers. fixed facilities and non-fixed facilities.
96 ANNUAL REPORT 2016 www.ptsc.com.vn 97 PVS SECURITIES Shareholders Investor Relations PVS Stock
98 ANNUAL REPORT 2016 www.ptsc.com.vn 99 SHAREHOLDER SHAREHOLDER STRUCTURE INTERNAL STOCKHOLDERS LIST AND STOCK CHANGES IN PERIOD
0.40% TRANSACTION IN NOTE CURRENT THE PERIOD No. NAME POSITION HOLDING 27.1% SELL BUY
Vietnam organizations Chairman of the 1 Thai Quoc Hiep 357,233 - - Board of Directors 58.2% Vietnam individuals Foreign individuals Member of the 2 Phan Thanh Tung Board of Directors/ 45,375 - - Foreign organizations President
Member of the Resigned from 3 Nguyen Van Dan 6,956 - - 14.3% Board of Directors November 8th, 2016
Member of the 4 Pham Van Dung 1,295 - - Board of Directors Member of the 5 Nguyen Van Mau Board of Directors/ 40,000 - - Vice President
Member of the Resigned from 6 Nguyen Thanh Huong - - - st Board of Directors December 1 , 2016 MAJOR SHAREHOLDERS Member of the Appointed from 7 Do Quoc Hoan 10,680 Board of Directors November 8th, 2016
OWNERSHIP Head of Board of No. NAME NUMBER OF SHARES 8 Ho Thi Oanh 87 - - RATIO Supervisors Member of Board of 9 Bui Thu Ha - - - Supervisors 1 Vietnam Oil& Gas Group 229,500,000 51.38% Member of Board of 10 Trieu Van Nghi 172 - - Supervisors Resigned from 11 Nguyen Tan Hoa Vice President 219 - - March 1st, 2016 2 Dragon Capital Group Funds 35,270,450 7.89% 12 Nguyen Tran Toan Vice President 3,546 - -
VinaCapital Corporate Finance Vietnam-Representing 13 Le Manh Cuong Vice President 51,799 - - 3 23,617,422 5.29% for related Investment Funds 14 Nguyen Huu Hai Vice President 51,069 - -
Appointed from 15 Ta Duc Tien Vice President 13,830 - - th 4 VietinBank Capital 12,013,400 2.69% March 15 , 2016 16 Nguyen Xuan Cuong Vice President 18 - -
st (Data collected as at March 21 2017) 17 Nguyen Duc Thuy Announcer - - -
(Data collected as at March 21st, 2017)
100 ANNUAL REPORT 2016 www.ptsc.com.vn 101 SHAREHOLDER (Continued) INVESTOR RELATIONS TRANSACTION CONTRACT WITH THE “ENHANCEMENT OF COMMUNICATION, CORPORATION’S INTERNAL STOCKHOLDERS ASSURANCE OF INFORMATION TRANSPARENCY, PROTECTION OF THE Based on the regulations of the corporation, the integrity interest, which they may receive through the legal responsibility and the prevention of interest conflicts are entities, the transactions or other individuals. defined as below: SHAREHOLDERS’ RIGHTS AND BENEFITS” The Corporation does not issue loan facilities or The member of the Board of Director, Board of guarantees for The member of the Board of Director, THE ENHANCEMENT OF COMMUNICATION, ASSURANCE OF THE TRANSPARENCY OF Supervisors, CEO and other members of Board of Board of Supervisors, CEO, other members of Board INFORMATION AND HIGHEST PROTECTION OF SHAREHOLDERS’ RIGHTS AND BENEFITS, EQUAL Management are not permitted to use good business of Management and individuals related to those TREATMENT TO ALL OF SHAREHOLDERS CREATING BILATERAL RELATIONSHIP BETWEEN THE chances for the Corporation due to personal interest; as mentioned above members or legal entity which those CORPORATION AND THE RELATED PARTY CONTRIBUTE TO BUILDING THE TRUST AND SUPPORT well as are not allowed to use confidential information, members have financial interest with; except that OF SHAREHOLDERS, INVESTORS WHEN IMPLEMENTING LONG-TERM STRATEGY AND EFFECTIVELY gained from their job position, for their own interest or Shareholders’ Meeting reach to an agreement on those for other organizations and individuals’ interest. loan facilities or guarantees. FUNDRAISING ON THE STOCKMARKET; KEEPING THE COMPANY PRESTIGE AND INCREASING ENTERPRISE VALUE THAT PTSC HAS ALWAYS AIMED TO ACHIEVE OVER THE PAST YEARS. The member of the Board of Director, Board of In 2016, there was no transaction between the Supervisors, CEO and other members of Board of Corporation and the member of the Board of Director, Enhancement of communication: In 2016, Protection of the shareholders’ rights and Management take the responsibility of informing about Board of Supervisors and Board of Management. in addition to the usual meetings with Investors in order benefits: To achieve the aim of the Corporation that all of their own interest conflicting with The corporation’s to provide information and updates on the business “Ensuring the highest protection of shareholders’ rights operation of PTSC every quarter, PTSC is honoured to and benefits, equal treatment between major and minor receive a great number of Investors from top tier securities shareholders, between foreign and Vietnam shareholders, companies, fund management companies of Vietnam and between internal and external shareholders”, the foreign fund management at the Headquarter of PTSC. department in charge of shareholder relationship at PTSC Besides, PTSC regularly responds to matters related to the is always working with the highest responsibility, meeting rights and benefits of the shareholders, provides sufficient highest requirements, flexibly and quickly dealing with information in accordance with the current regulations on all of the requests from stockholders about the execution the business operations of PTSC via email, telephones etc. of shareholders’ rights such as: the registration of stock ownership, share transfer, procuring additional shares Transparency of information: In order to ensure issued, accessing the information related to the operation the information declared to the shareholders is transparent of the Corporation, the rights of attending and voting at and timely communicated, PTSC has applied a variety the shareholders’ meetings, granting authority to obtain of information technology solutions such as: using the the shareholder’s rights, receiving the profits from the information declaration system via CIMS of the Ho Chi Corporation… Currently, the shareholder relationship Minh City Stock Exchange, uploading and updating the department of PTSC is carrying out research on electronic information publicized on the official website of PTSC, vote (e-voting) to bring advantages to shareholders on and using the information declaration service on the stock executing the voting rights about the issues belonging to market – Ezsearch. At the same time, the Corporation the jurisdiction of the shareholders’ meeting in the future. cooperates with securities companies, media in order to update and provide sufficient information transparently about the current regulations on the business operations of PTSC. EVENTS RELATING TO SHAREHOLDERS’ INTERESTS
No. DATE EVENT 1 March 23rd, 2016 Fixing shareholder list attending Shareholders’ annual meeting 2016 2 April 28th, 2016 Organizing Shareholders’ annual meeting 2016 3 July 22nd, 2016 Fixing shareholder list receiving dividends of 2015 by cash (12%) 4 December 07th, 2016 Fixing shareholder list receiving dividends of 2016 by cash in advance (5%)
102 ANNUAL REPORT 2016 www.ptsc.com.vn 103 PVS STOCK PVS - PRINCIPAL INFORMATION HISTORY OF SHARE OFFER FOR INCREASING PTSC CHARTERED CAPITAL
QUANTITY CHARTERED CAPITAL YEAR DESCRIPTION (share) (VND)
2006 IPO 100,000,000 1,000,000,000,000
2008 Issuing to existing shareholders 73,803,431 1,738,034,310,000
2009 Separately issuing to strategic shareholders 25,000,000 1,988,034,310,000
2010 Issuing to existing shareholders 98,998,663 2,978,020,940,000
2012 Issuing to existing shareholders 148,898,327 4,467,004,210,000
HISTORY OF DIVIDEND PAYMENT
Outstanding shares 446,700,421 YEAR PAYMENT RATIO CUT-OFF DATE
Listed shares 446,700,421 2007 14% Mar 14th, 2008
2008 (1st payment) 10% Nov 20th, 2008 Treasury shares 0 2008 (2nd payment) 5% Jun 25th, 2009 Market capitalization (billion VND) 7,817,26 2009 20% May 12th, 2010
Foreign room (%) 20.91% 2010 15% Dec 13th, 2010
2011 20% May 25th, 2012 Basic EPS (thousand VND) 2.21 2012 (1st payment) 10% Jan 17th, 2013
P/E 8.19 2012 (2nd payment) 5% Sep 5th, 2013
th Book value per share (thousand VND) 22.99 2013 12% Jul 28 , 2014
2014 12% Jul 31st, 2015 Highest price in 2016 (thousand VND) 22.10 2015 12% Jul 22nd, 2016
Lowest price in 2016 (thousand VND) 12.50 2016 (1st interim payment) 5% Dec 7th, 2016
(Data collected as at 17 March 2017)
104 ANNUAL REPORT 2016 www.ptsc.com.vn 105 PVS STOCK (Continued) PVS’S RECOVERY
Oil price chart
Stock price chart
THE STOCK MARKET OF THE YEAR 2016 CLOSED WITH JOYS FOR INVESTORS. IN A YEAR WITH MANY SIGNIFICANT EVENTS LIKE BREXIT, THE U.S PRESIDENTIAL ELECTION…, THE PRINCIPAL INDEXES OF VIETNAM STOCK MARKET ACHIEVED EXCELLENT GROWTH BEYOND THE EXPECTATION. AT 2016 CLOSING TRADE SESSION, VN-INDEX GAINED ITS 8-YEAR RECORD (688,99 POINTS, INCREASED 14.7% OVER THE PROJECTED INDEX)
In the year 2016, despite the strong growth vibe from basic materials, FMCG, The stock market starts the year of 2017 with The trend of oil price is still unpredictable when the Pharmaceutical and the not-market-leader positions like previous years, the PTSC’s both hopes and fears. On global perspective, the affecting factors of oil&gas industry have no significant stock and Oil&Gas stocks in general put their impacts on investors. The 26-USD- populism trend and domestic protection are getting changes (supply variation, national reserves of top bottom of oil price pulled the PVS stock price to the lowest level from 2012 more popular and challenge the globlisation trend consumers, availability of alternative energies…). (at 12,500 VND per share). After that, the growth up trend of stock price was which has been supported for decades. The changes Therefore, the oil & gas stocks will share the rhythm supported by the strong recovery of international oil price and achieved the pace of in policy systems of world powers, especially trade of oil price. For PVS stock, optismistic signals from 76% and won the year-record of 22,100VND per share in 18 August 2016. PVS policies and monetary systems may impact negatively oil&gas services from the beginning of the year bring also overcomed the most challenging event of the year – Brexit (VN-index closed on emerging markets. In Viet Nam, the business hopes to Shareholders and investors for a “bright” the trade session panically with the downturn of 34 points equivalent to -5.47%). structure at significant state-owned enterprises as well 2017. At the closing session, PVS fixed at 16,500 VND per share. In general, despite as IPOs from big corporations create many choices the macroeconomic events and unsupported information from business operation, for investors. It will lead to the bigger differentiation the oil price played as the key maker to the PVS stock price. However, in the point among stock groups. of view of investors, PVS is considered as a “safe house” for them to avoid market significant changes.
106 ANNUAL REPORT 2016 www.ptsc.com.vn 107 FINANCIAL REPORT
108 ANNUAL REPORT 2016 www.ptsc.com.vn 109 STATEMENT OF THE BOARD OF MANAGEMENT STATEMENT OF THE BOARD OF MANAGEMENT (Continued)
The Board of Management of PetroVietnam Technical Services Corporation (the “Parent Company”) and its BOARD OF MANAGEMENT’S STATEMENT OF RESPONSIBILITY subsidiaries (the Parent Company and the subsidiaries are referred to as “the Corporation”) presents this report together with the Corporation’s consolidated financial statements for the year ended 31 December 2016. The Board of Management of the Corporation is responsible for preparing the consolidated financial statements, which give a true and fair view of the consolidated financial position of the Corporation as at 31 December 2016, THE BOARDS OF DIRECTORS AND MANAGEMENT and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial The members of the Boards of Directors and Management of the Corporation who held office during the year and reporting. In preparing these consolidated financial statements, the Board of Management is required to: to the date of this report are as follows: • Select suitable accounting policies and then apply them consistently; Board of Directors • Make judgments and estimates that are reasonable and prudent; Mr. Thai Quoc Hiep Chairman • State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the consolidated financial statements; Mr. Phan Thanh Tung Member
• Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume Mr. Nguyen Van Mau Member that the Corporation will continue in business; and
Mr. Pham Van Dung Member • Design and implement an effective internal control system for the purpose of properly preparing and presenting the consolidated financial statements so as to minimise errors and frauds. Ms. Nguyen Thanh Huong Member The Board of Management is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the consolidated financial position of the Corporation and that the consolidated Mr. Doan Minh Man Member financial statements comply with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting. The Board of Management is also responsible for safeguarding the assets Mr. Do Quoc Hoan Member (appointed on 8 November 2016) of the Corporation and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities. Mr. Nguyen Van Dan Member (resigned on 8 November 2016) The Board of Management confirms that the Corporation has complied with the above requirements in preparing these consolidated financial statements. Board of Management For and on behalf of the Board of Management, Mr. Phan Thanh Tung President and CEO
Mr. Nguyen Tran Toan Vice President
Mr. Nguyen Van Mau Vice President
Mr. Le Manh Cuong Vice President
Mr. Nguyen Huu Hai Vice President
Mr. Ta Duc Tien Vice President (appointed on 15 March 2016) Phan Thanh Tung President and CEO Mr. Nguyen Xuan Cuong Vice President (appointed on 12 January 2017) 17 March 2017 Ho Chi Minh City, S.R. Vietnam Mr. Do Quoc Hoan Vice President (resigned on 8 November 2016)
Mr. Nguyen Tan Hoa Vice President (resigned on 1 March 2016)
110 ANNUAL REPORT 2016 www.ptsc.com.vn 111 INDEPENDENT AUDITORS’ REPORT No.: 607/VN1A-HN-BC INDEPENDENT AUDITORS’ REPORT (Continued) No.: 607/VN1A-HN-BC
To: The Shareholders Opinion The Board of Directors and Board of Management of PetroVietnam Technical Services Corporation In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Corporation as at 31 December 2016, its consolidated financial performance and its consolidated We have audited the accompanying consolidated financial statements of PetroVietnam Technical Services cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for Corporation (the “Parent Company”) and its subsidiaries (the Parent Company and its subsidiaries are referred to enterprises and legal regulations relating to financial reporting. as the “Corporation”) prepared on 17 March 2017 as set out from page 5 to page 46, which comprise the consolidated balance sheet as at 31 December 2016, the consolidated statements of income, consolidated cash flows for the year then ended and a summary of significant accounting policies and other explanatory information.
Board of Management’s Responsibility for the Consolidated Financial Statements
The Board of Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting and for such internal control as the Board of Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Vo Thai Hoa Dao Thai Thinh Audit Partner Auditor Auditors’ Responsibility Audit Practising Registration Certificate Audit Practising Registration Certificate No. 0138-2013-001-1 No. 1867-2013-001-1 Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we For and on behalf of comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether DELOITTE VIETNAM COMPANY LIMITED the consolidated financial statements are free from material misstatement. 17 March 2017 Ho Chi Minh City, S.R. Vietnam An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Corporation’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
112 ANNUAL REPORT 2016 www.ptsc.com.vn 113 CONSOLIDATED BALANCE SHEET FORM B 01-DN/HN CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN As at 31 December 2016 Issued under Circular No.202/2014/TT-BTC As at 31 December 2016 Issued under Circular No.202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance dated 22 December 2014 of the Ministry of Finance
Unit: VND Unit: VND
ASSETS Codes Notes 31/12/2016 31/12/2015 ASSETS Codes Notes 31/12/2016 31/12/2015
A. CURRENT ASSETS 100 15,151,148,411,971 16,000,729,197,810 1. Long-term advances to suppliers 212 45,043,576,977 56,227,502,258
I. Cash and cash equivalents 110 5 5,883,669,671,740 7,991,387,356,724 2. Other long-term receivables 216 9 22,150,305,671 25,694,602,823
1. Cash 111 2,646,758,096,799 3,982,903,553,183 II. Fixed assets 220 4,150,439,107,437 4,727,816,332,623
2. Cash equivalents 112 3,236,911,574,941 4,008,483,803,541 1. Tangible fixed assets 221 12 4,133,766,907,309 4,701,785,351,363
II. Short-term financial investments 120 911,017,446,191 570,070,000,000 - Cost 222 11,927,166,182,310 11,653,416,894,534 1. Held-to-maturity investments 123 6 911,017,446,191 570,070,000,000 - Accumulated depreciation 223 (7,793,399,275,001) (6,951,631,543,171) III. Short-term receivables 130 6,125,027,352,428 5,725,328,822,123 2. Intangible assets 227 13 16,672,200,128 26,030,981,260 1. Short-term trade receivables 131 7 4,766,279,842,961 4,229,681,576,031 - Cost 228 76,843,823,475 71,167,554,725
2. Short-term advances to suppliers 132 346,760,133,285 475,565,519,498 - Accumulated amortisation 229 (60,171,623,347) (45,136,573,465) 3. Receivables from construction contracts under percentage of 134 8 438,107,372,763 4,765,479,848 III. Investment properties 230 14 197,541,863,907 202,277,135,763 completion method - Cost 231 229,280,786,454 229,280,786,454 4. Short-term loan receivables 135 - 28,757,555,368 - Accumulated amortisation 232 (31,738,922,547) (27,003,650,691) 5. Other short-term receivables 136 9 667,479,061,085 1,142,556,125,176 IV. Long-term assets in progress 240 15 498,672,582,913 424,420,945,500 6. Provision for short-term doubtful 137 (93,599,057,666) (155,997,433,798) debts 1. Long-term work in progress 241 370,485,940,489 369,678,895,035 IV. Inventories 140 10 1,650,744,923,057 1,190,080,622,597 2. Construction in progress 242 128,186,642,424 54,742,050,465 1. Inventories 141 1,655,953,765,876 1,195,777,537,746 V. Long-term financial investments 250 4,733,712,583,228 4,203,786,295,223 2. Provision for devaluation of 149 (5,208,842,819) (5,696,915,149) 1. Investments in joint ventures, inventories 252 16 4,707,276,291,641 4,166,493,636,903 associates V. Other short-term assets 150 580,689,018,555 523,862,396,366 2. Equity investments in other entities 253 17 51,030,000,000 61,030,000,000 1. Short-term prepayments 151 11 24,369,143,651 23,353,448,130 3. Provision for impairment of long- 254 17 (24,593,708,413) (23,737,341,680) term financial investments 2. Value added tax deductibles 152 505,596,222,039 460,395,529,830 VI. Other long-term assets 260 742,401,394,669 796,100,974,894
3. Taxes and other receivables from 153 20 50,723,652,865 40,113,418,406 1. Long-term prepayments 261 11 697,468,980,357 746,045,339,983 the State Budget
B. NON-CURRENT ASSETS 200 10,389,961,414,802 10,436,323,789,084 2. Long-term reserved spare parts 263 44,932,414,312 50,055,634,911
I. Long-term receivables 210 67,193,882,648 81,922,105,081 TOTAL ASSETS (270=100+200) 270 25,541,109,826,773 26,437,052,986,894
114 ANNUAL REPORT 2016 The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements www.ptsc.com.vn 115 CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN CONSOLIDATED BALANCE SHEET (Continued) FORM B 01-DN/HN As at 31 December 2016 Issued under Circular No.202/2014/TT-BTC As at 31 December 2016 Issued under Circular No.202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance dated 22 December 2014 of the Ministry of Finance
Unit: VND Unit: VND
RESOURCES Codes Notes 31/12/2016 31/12/2015 RESOURCES Codes Notes 31/12/2016 31/12/2015
C. LIABILITIES 300 13,788,657,616,607 14,562,178,949,277 7. Long-term provisions 342 26 1,355,709,901,710 1,280,954,820,004
I. Current liabilities 310 9,743,162,837,038 9,872,435,220,921 8. Scientific and technological 343 61,883,884,794 48,011,377,818 development fund 1. Short-term trade payables 311 18 4,051,838,898,443 4,355,312,301,426 D. EQUITY 400 11,752,452,210,166 11,874,874,037,617
2. Short-term advances from customers 312 19 1,431,502,690,033 987,427,659,341 I. Owners’ equity 410 27 11,752,452,210,166 11,874,874,037,617 3. Taxes and amounts payable to the 313 20 128,092,850,261 175,425,464,475 State budget 1. Owners’ contributed capital 411 4,467,004,210,000 4,467,004,210,000
4. Payables to employees 314 385,076,069,091 443,398,334,923 - Ordinary shares carrying voting rights 411a 4,467,004,210,000 4,467,004,210,000
5. Short-term accrued expenses 315 21 2,063,212,809,649 1,779,598,558,385 2. Share premium 412 39,617,060,000 39,545,660,000 6. Payables relating to construction contracts under percentage of 317 8 238,298,386,212 20,520,328,878 3. Investment and development fund 418 2,626,119,682,700 2,418,539,906,053 completion method
7. Short-term unearned revenue 318 20,721,879,131 11,613,862,192 4. Retained earnings 421 3,188,956,067,975 3,326,188,546,305
8. Other current payables 319 22 625,935,472,506 1,038,096,538,745 - Retained earnings accumulated to the 421a 2,390,099,035,058 1,831,264,703,174 prior year end 9. Short-term loans 320 23 432,147,165,556 684,347,404,258
- Retained earnings of the current year 421b 798,857,032,917 1,494,923,843,131 10. Short-term provisions 321 62,820,128,025 83,201,867,977
5. Non-controlling interests 429 29 1,430,755,189,491 1,623,595,715,259 11. Bonus and welfare funds 322 303,516,488,131 293,492,900,321
II. Long-term liabilities 330 4,045,494,779,569 4,689,743,728,356 TOTAL RESOURCES (440=300+400) 440 25,541,109,826,773 26,437,052,986,894
1. Long-term trade payables 331 18 - 66,267,935,109
2. Long-term advances from customers 332 19 801,016,151,506 1,226,805,535,537
3. Long-term unearned revenue 336 211,887,162,632 221,204,931,276
4. Other long-term payables 337 22 204,067,385 203,242,385
5. Long-term loans 338 24 1,143,508,611,250 1,563,412,865,200 Duong Thi Ngoc Quy Nguyen Quang Chanh Phan Thanh Tung Preparer Head of Accounting President and CEO 6. Deferred tax liabilities 341 25 471,285,000,292 282,883,021,027 Department 17 March 2017 Ho Chi Minh City, S.R. Vietnam
116 ANNUAL REPORT 2016 The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements www.ptsc.com.vn 117 CONSOLIDATED INCOME STATEMENT FORM B 02-DN/HN CONSOLIDATED CASH FLOW STATEMENT FORM B 03-DN/HN For the year ended 31 December 2016 Issued under Circular No.202/2014/TT-BTC For the year ended 31 December 2016 Issued under Circular No.202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance dated 22 December 2014 of the Ministry of Finance
Unit: VND Unit: VND
ITEMS Codes Notes 2016 2015 ITEMS Codes 2016 2015
1. Gross revenue from goods sold and 01 31 18,682,080,522,528 23,356,897,865,989 I. CASH FLOWS FROM OPERATING ACTIVITIES services rendered 1. Profit before tax 01 1,256,136,010,764 2,015,080,006,009 2. Net revenue from goods sold and services 10 18,682,080,522,528 23,356,897,865,989 rendered (10=01) 2. Adjustments for:
3. Cost of goods sold and services rendered 11 32 17,899,327,840,481 21,181,966,606,269 Depreciation and amortisation of fixed assets 02 870,764,893,967 904,020,669,964 Provisions 03 (7,656,739,975) 336,524,471,771 4. Gross profit from goods sold and services 20 782,752,682,047 2,174,931,259,720 rendered (20=10-11) Foreign exchange loss arising from translating 04 39,733,506,386 45,086,595,470 foreign currency items 5. Financial income 21 34 306,321,814,062 377,947,935,838 6. Financial expenses 22 35 159,594,948,095 378,085,339,930 Gain from investing activities 05 (897,868,661,163) (947,048,021,972) - In which: Interest expense 23 55,841,878,387 70,937,160,828 Interest expense 06 55,841,878,387 70,937,160,828 7. Income from associates, joint ventures 24 36 667,105,854,738 753,186,652,840 Other adjustments 07 13,872,506,976 18,208,231,720 3. Operating profit before movements in working 8. Selling expenses 25 37 91,959,953,182 98,571,639,097 08 1,330,823,395,342 2,442,809,113,790 capital 9. General and administration expenses 26 37 540,231,230,547 896,467,983,169 Changes in receivables 09 (609,823,896,516) 2,423,557,330,327 10. Operating profit (30=20+(21-22)+24- 30 964,394,219,023 1,932,940,886,202 (25+26)) Changes in inventories 10 (455,860,052,985) (677,968,559,417) 11. Other income 31 38 304,151,849,725 144,558,270,036 Changes in payables 11 56,367,184,831 (1,999,111,919,808) 12. Other expenses 32 39 12,410,057,984 62,419,150,229 Changes in prepaid expenses 12 47,560,664,105 (67,638,283,727) 13. Profit from other activities (40=31-32) 40 291,741,791,741 82,139,119,807 Interest paid 14 (62,003,800,061) (76,563,627,232) 14. Profit before tax (50=30+40) 50 1,256,136,010,764 2,015,080,006,009 Corporate income tax paid 15 (206,556,951,661) (442,942,805,801) 15. Current corporate income tax expense 51 40 157,989,589,078 350,424,712,724 Other cash inflows 16 403,068,550 5,546,411,696 16. Deferred corporate income tax expense 52 25 188,401,979,265 171,116,435,819 Other cash outflows 17 (177,196,561,038) (185,478,789,954) 17. Profit after tax (60=50-51-52) 60 909,744,442,421 1,493,538,857,466 Net cash (used in)/generated by operating activities 20 (76,286,949,433) 1,422,208,869,874 18. Profit after tax of the Parent Company 61 1,038,743,379,556 1,517,394,760,704 II. CASH FLOWS FROM INVESTING ACTIVITIES 19. Loss after tax of non-controlling interests 62 29 (128,998,937,135) (23,855,903,238) 1. Acquisition and construction of fixed assets 21 (447,570,715,035) (772,995,240,381)
20. Basic earnings per share 70 41 2,122 2,915 2. Proceeds from sale, disposal of fixed assets 22 1,037,212,560 5,598,152,126
3. Cash outflow for lending, buying debt 23 (1,245,394,000,000) (867,070,000,000) instruments of other entities 4. Cash recovered from lending, selling debt 24 918,029,044,621 793,484,145,852 instruments of other entities 5. Investments in other entities and other long-term 25 - (38,412,998,000) investments 6. Cash recovered from investments in other entities 26 5,000,000,000 47,524,303,246
Duong Thi Ngoc Quy Nguyen Quang Chanh Phan Thanh Tung 7. Interest earned, dividends and profits received 27 217,921,395,605 158,688,237,098 Preparer Head of Accounting President and CEO Department 17 March 2017 Net cash used in investing activities 30 (550,977,062,249) (673,183,400,059) Ho Chi Minh City, S.R. Vietnam
118 ANNUAL REPORT 2016 The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements www.ptsc.com.vn 119 NOTES TO THE CONSOLIDATED FINANCIAL
CONSOLIDATED CASH FLOW STATEMENT (Continued) FORM B 03-DN/HN STATEMENTS FORM B 09-DN/HN For the year ended 31 December 2016 Issued under Circular No.202/2014/TT-BTC Issued under Circular No.202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance dated 22 December 2014 of the Ministry of Finance
Unit: VND These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements ITEMS Codes 2016 2015
III. CASH FLOWS FROM FINANCING ACTIVITIES 1.GENERAL INFORMATION 1. Proceeds from borrowings 33 59,165,312,670 358,910,191,041 Structure of ownership of petroleum products; Shipping agency services and 2. Repayment of borrowings 34 (735,067,925,898) (786,478,291,675) maritime brokerage; Chartering, shipping brokerage, 3. Dividends paid 36 (808,800,203,900) (578,772,068,210) PetroVietnam Technical Services Corporation (the towage and salvage services; Manufacturing, trading “Parent Company”) and its subsidiaries (the Parent of petroleum products, fertilizer and chemicals for Net cash used in financing activities 40 (1,484,702,817,128) (1,006,340,168,844) Company and the subsidiaries are referred to as agriculture (except chemicals banned by the State). Net decrease in cash (50=20+30+40) 50 (2,111,966,828,810) (257,314,699,029) the “Corporation”) was established under Business Registration Certificate No. 0103015198 dated 29 Normal production and business cycle Cash and cash equivalents at the beginning of the 60 7,991,387,356,724 8,194,248,685,277 December 2006 issued by the Department of Planning year and Investment of Hanoi City and other amended The Corporation’s normal production and business Effects of changes in foreign exchange rates 61 4,249,143,826 54,453,370,476 Certificates issued by the Department of Planning and cycle is carried out for a time period of 12 months or Cash and cash equivalents at the end of the year Investment of Ho Chi Minh City. The stocks of the Parent less. 70 5,883,669,671,740 7,991,387,356,724 (70=50+60+61) company have been listed in the Hanoi Stock Exchange on 20 September 2007 with the stock code of PVS. The Company’s structure Vietnam Oil and Gas Group is the main shareholder and the holding company. Details of the Corporation’s branches, subsidiaries, associates and joint ventures as at 31 December 2016 The number of the Corporation’s employees as at 31 are as follows: December 2016 was 8,976 (as at 31 December 2015: 9,655). Branches:
Principal activities • Branch of PetroVietnam Technical Services Corporation - PTSC Marine; Supplying oil and gas services; Management, business Duong Thi Ngoc Quy Nguyen Quang Chanh Phan Thanh Tung and operation of the technology service vessels; • Branch of PetroVietnam Technical Services Preparer Head of Accounting President and CEO Supplying port based services; Supplying ship services, Corporation - PTSC Supply Base; tallying services and freight forwarding; Management, Department 17 March 2017 Ho Chi Minh City, S.R. Vietnam business and operation of the floating storage and • Branch of PetroVietnam Technical Services offloading (FSO), floating production storage and Corporation - PTSC Da Nang; offloading (FPSO); Management and implementation of marine engineering activities; Machining, assembly, • Branch of PetroVietnam Technical Services fabrication of components, oil and gas equipment; Corporation - PTSC Hanoi; Fabrication and installation of all types of petroleum storage tanks, liquefied gas pipelines and other types of • Branch of PetroVietnam Technical Services oil and gas; Repair shipping vessels and the offshore oil Corporation - Engineering and Construction and gas projects; Seismic survey services, geophysical Division; and geological survey services, diving, and subsea services by using Remote operated vehicle (ROV) • Branch of PetroVietnam Technical Services for oil and gas exploration, exploitation, production Corporation - Long Phu Power Project and industrial buildings, civil; Maintenance, repair, Management Board; building and conversion of floating facilities; Export and import of equipment for oil and gas supplies; • Branch of PetroVietnam Technical Services Production and supply of petroleum materials and Corporation - Quang Binh General Petroleum equipment; Supply of petroleum specialized labour; Services Port. Operation and maintenance of oil and gas exploitation projects; Supply hotels, housing, office services ; Sales
120 ANNUAL REPORT 2016 The accompanying notes are an integral part of these consolidated financial statements www.ptsc.com.vn 121 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Proportion Proportion Proportion Proportion Place of Place of of of voting of of voting Name incorporation Principal activities Name incorporation Principal activities ownership power held ownership power held and operation and operation interest % % interest % %
Sao Mai - Ben Dinh Petroleum Investment Subsidiaries Vietnam 51.00 51.00 Supply base service Joint Stock Company Seismic survey, Geo PTSC Geos and Subsea Services Vietnam 100.00 100.00 survey and Subsea Company Limited services PTSC Labuan Company Limited (*) Malaysia 100.00 100.00 Marine services
PTSC Mechanical & Construction Construction in oil and Vietnam 100.00 100.00 Associates, Joint Ventures Company Limited gas field
PTSC CGGV Geophysical Survey 2D and 3D seismic Rong Doi MV12 Private Limited Singapore 33.00 33.00 FSO services Vietnam 51.00 51.00 Company Limited data acquisition service
Malaysia Vietnam Offshore Terminal Malaysia 49.00 49.00 FPSO/FSO services (Labuan) Limited Petro Hotel Company Limited Vietnam 100.00 100.00 Hotel services
Vietnam Offshore Floating Terminal (Ruby) Malaysia 60.00 60.00 FPSO/FSO services Limited Operation and PTSC Offshore Services Joint Stock Vietnam 84.95 84.95 maintainance of oil and Company gas projects PTSC South East Asia Private Limited Singapore 51.00 51.00 FPSO/FSO services
PTSC Quang Ngai Joint Stock Company Vietnam 95.19 95.19 Oil and gas services PTSC Asia Pacific Private Limited Singapore 51.00 51.00 FPSO/FSO services
PetroVietnam Marine Shipyard Joint Stock Building, installation of PTSC Thanh Hoa Port Joint Stock Company Vietnam 54.69 54.69 Supply base services Vietnam 28.75 28.75 Company oil construction
Dinh Vu Petroleum Services Port Joint Stock Vietnam 51.00 51.00 Supply base services Thi Vai General Port Joint Stock Company Vietnam 21.46 21.46 Supply base services Company
PTSC Production Services Joint Stock (*) PTSC Labuan Company Limited was established according to Resolution No. 498/NQ-DVKT-HDQT dated 24 Vietnam 51.00 51.00 FPSO/FSO services Company August 2016 of the Board of Management of PetroVietnam Technical Services Corporation. The charter capital of PTSC Labuan Company Limited is USD 572,565.12, in which, contributed by PTSC Hai Phong Vessel with net book value of USD 406,548.43, equivalent to VND 9,055,866,278. In 2016, the Parent Company has PTSC Phu My Port Joint Stock Company Vietnam 59.61 59.61 Supply base services contributed to PTSC Labuan Company Limited by net book value of the PTSC Hai Phong Vessel.
Disclosure of information comparability in the consolidated financial statements
PetroVietnam Security Joint Stock Company Vietnam 51.00 51.00 Security services Comparative figures are the figures of the audited consolidated financial statements for the year ended 31 December 2015.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Non-controlling interests in the net assets of consolidated eliminated to the extent of the Corporation’s interest in 2. ACCOUNTING CONVENTION AND FINANCIAL YEAR subsidiaries are identified separately from the parent’s the relevant associate. ownership interests in them. Non-controlling interests consist of the amount of those non-controlling interests Interests in joint ventures Accounting convention are not intended to present the consolidated financial at the date of the original business combination (see position, consolidated results of operations and consoli- below) and the non-controlling interests’ share of A joint venture is a contractual arrangement whereby The accompanying consolidated financial statements, dated cash flows in accordance with accounting princi- changes in equity since the date of the combination. the Parent Company and other parties undertake an expressed in Vietnam Dong (VND), are prepared under ples and practices generally accepted in countries and Losses in subsidiaries are respectively attributed to the economic activity that is subject to joint control, i.e., the historical cost convention and in accordance with jurisdictions other than Vietnam. non-controlling interests even if this results in the non- the strategic financial and operating policy decisions Vietnamese Accounting Standards, accounting regime controlling interests having a deficit balance. relating to the activities require the unanimous consent for enterprises and legal regulations relating to financial Financial year of the parties sharing control. reporting. Business combinations The Corporation’s financial year begins on 1 January Joint venture arrangements that involve the establishment The accompanying consolidated financial statements and ends on 31 December. On acquisition, the assets and liabilities and contingent of a separate entity in which each venturer has an interest liabilities of a subsidiary are measured at their fair are referred to as jointly controlled entities. The Parent values at the date of acquisition. Any excess of the Company reports its interests in jointly controlled entities 3. ADOPTION OF NEW ACCOUNTING GUIDANCE cost of acquisition over the fair values of the identifiable using the equity method of accounting. Accordingly, net assets acquired is recognised as goodwill. Any the joint venture is presented in consolidated balance On 21 March 2016, the Ministry of Finance issued financial years beginning on or after 1 January 2016. deficiency of the cost of acquisition below the fair sheet at cost and adjusted for changes in share capital Circular No. 53/2016/TT-BTC (“Circular 53”) The Board of Management has adopted Circular 53 in values of the identifiable net assets acquired is credited of the Parent Company in the net assets of the joint amending and supplementing certain articles of Cir- the preparation and presentation of the Corporation’s to profit and loss in the period of acquisition. venture after the date of capital contribution in the joint cular No. 200/2014/TT-BTC dated 22 December consolidated financial statements for the year ended venture company. 2014 of the Ministry of Finance guiding the accounting 31 December 2016. The non-controlling interests are initially measured at the regime for enterprises. Circular 53 is effective for the non-controlling shareholders’ proportion of the net fair Financial instruments value of the assets, liabilities and contingent liabilities recognised. Initial recognition 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies, which have been adopted by the Corporation in the preparation of these Investments in associates Financial assets: At the date of initial recognition, consolidated financial statements, are as follows: financial assets are recognized at cost plus transaction An associate is an entity over which the Corporation costs that are directly attributable to the acquisition of Estimates enterprises controlled by the Parent Company (its has significant influence and that is neither a subsidiary the financial assets. Financial assets of the Corporation subsidiaries) up to 31 December each year. Control nor an interest in joint venture. Significant influence is comprise cash and cash equivalents, trade and other The preparation of consolidated financial statements is achieved where the Parent Company has the power the power to participate in the financial and operating receivables, loan receivables, deposits and financial in conformity with Vietnamese Accounting Standards, to govern the financial and operating policies of an policy decisions of the investee but not control or joint investments. accounting regime for enterprises and legal regulations investee enterprise so as to obtain benefits from its control over those policies. relating to financial reporting requires the Board of activities. Financial liabilities: At the date of initial recognition Management to make estimates and assumptions that The results and assets and liabilities of associates financial liabilities are recognized at cost plus affect the reported amounts of assets, liabilities and The results of subsidiaries acquired or disposed of are incorporated in these consolidated financial transaction costs that are directly attributable to the disclosures of contingent assets and liabilities at the during the year are included in the consolidated income statements using the equity method of accounting. issue of the financial liabilities. Financial liabilities of date of the consolidated financial statements and the statement from the effective date of acquisition or up to Interests in associates are carried in the balance sheet the Corporation comprise trade and other payables, reported amounts of revenues and expenses during the the effective date of disposal, as appropriate. at cost as adjusted by post-acquisition changes in the accrued expenses, provisions and borrowings. financial year. Although these accounting estimates are Corporation’s share of the net assets of the associate. based on the Board of Management’s best knowledge, Where necessary, adjustments are made to the Losses of an associate in excess of the Corporation’s Subsequent measurement after initial actual results may differ from those estimates. financial statements of subsidiaries to bring the interest in that associate (which includes any long-term recognition accounting policies used in line with those used by the interests that, in substance, form part of the Corporation’s Basis of consolidation Parent Company. net investment in the associate) are not recognised. Currently there are no requirements for the subsequent measurement of the financial instruments after initial The consolidated financial statements incorporate Intragroup transactions and balances are eliminated in Where a group entity transacts with an associate of recognition. the financial statements of the Parent Company and full on consolidation. the Corporation, unrealised profits and losses are
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Cash and cash equivalents Receivables by competent authorities. Tangible fixed assets are when they are put into use. depreciated using the straight-line method over the Cash and cash equivalents comprise cash on hand, Receivables represent the amounts recoverable from estimated useful lives as follow: According to the State’s regulations on investment cash in bank and short-term, highly liquid investments customers or other debtors and are stated at book value and construction management, the settled costs of that are readily convertible to known amounts of cash less provision for doubtful debts. Years completed construction projects are subject to approval and which are subject to an insignificant risk of changes by appropriate levels of competent authorities. The in value. Buildings and structures 03 - 45 final costs of these completed construction projects may vary depending on the final approval by competent Financial investments Provision for doubtful debts is made for receivables that Machinery and equipment 03 - 20 authorities. are overdue for six months or more or when the debtor is Motor vehicles 06 - 10 Held-to-maturity investments in dissolution, in bankruptcy, or is experiencing similar Prepayments difficulties and so may be unable to repay the debt. Office equipment 03 - 10 Held-to-maturity investments comprise investments that Prepayments are expenses which have already been the Corporation has the positive intent or ability to Inventories Others 04 - 14 paid but relate to results of operations of multiple hold to maturity, including term deposits, loans held accounting periods. Long-term prepayments consist of to maturity to earn periodic interest and other held-to- Inventories are stated at the lower of cost and net Intangible assets and amortisation land use rights, prepaid land rentals, office rentals, maturity investments. realisable value. Cost comprises direct materials costs for equipment mainternance and other long-term and where applicable, direct labour costs and those Intangible assets represent land use rights and computer prepayments. Land rentals are allocated over their Held-to-maturity investments are recognised on a trade overheads that have been incurred in bringing the software that are stated at cost less accumulated useful lives. date basis and are initially measured at acquisition inventories to their present location and condition. Cost amortisation. Land use rights with indefinite duration price plus directly attributable transaction costs. is calculated using the weighted average method. Net are not amortised according to current regulations. The office rental at PetroVietnam Tower No. 1-5 Le Duan Post-acquisition interest income from held-to-maturity realisable value represents the estimated selling price Computer software is amortised within 3 years. Street, District 1, Ho Chi Minh City is from October investments is recognised in the income statement on less all estimated costs to completion and costs to be 2010, over 50 years. The Corporation allocates this accrual basis. Pre-acquisition interest is deducted from incurred in marketing, selling and distribution. Investment property rental to the consolidated income statement pursuant to the cost of such investments at the acquisition date. the lease term and annual using areas. The evaluation of necessary provision for inventory Investment properties, which are composed of Held-to-maturity investments are measured at cost less obsolescence follows current prevailing accounting infrastructures held by the Corporation to earn rentals The cost of site clearance at Son Tra Port is transferred to provision for doubtful debts. regulations which allow provisions to be made for or for capital appreciation, are stated at cost less Branch of PetroVietnam Technical Services Corporation obsolete, damaged, or sub-standard inventories and accumulated depreciation. The cost of purchased - PTSC Da Nang from 20 December 2015 with the Provision for doubtful debts relating to held-to-maturity for those which have costs higher than net realisable investment properties comprises its purchase price duration of 42 years. The Corporation allocates this site investments is made in accordance with prevailing values as at the balance sheet date. and any directly attributable expenditures, such as clearance cost to the consolidated income statement accounting regulations. professional fees for legal services, property transfer over the annual lease term. Tangible fixed assets and depreciation taxes and other related transaction costs. The costs Loan receivables of self-constructed investment properties are the finally Other long-term prepayments comprise tools and The costs of purchased tangible fixed assets comprise accounted construction or development costs of the supplies which are expected to provide future economic Loan receivables are measured at cost less provision for their purchase prices and any directly attributable costs properties. benefits to the Corporation for one year or more. Other doubtful debts. Provision for doubtful debts relating to of bringing the assets to their working conditions and long-term prepayments are charged to the consolidated loan receivables is made in accordance with prevailing locations for their intended use. The costs of tangible Investment properties are depreciated using the straight- income statement using straight-line method over 3 accounting regulations. fixed assets formed from construction investment line method over the lease term. years.. by contractual mode or self-construction or self- Equity investments in other entities generating process are the settled costs of the invested Construction in progress Payable provisions construction projects in accordance with the prevailing Equity investments in other entities represent the State’s regulations on investment and construction Properties in the course of construction for production, Payable provisions are recognised when the Corporation’s investments in ordinary shares of the management, directly-related expenses and registration rental and administrative purposes or for other purposes Corporation has a present obligation as a result of entities over which the Corporation has no control, joint fee (if any). In the event the construction project has are carried at cost. The cost includes any costs that a past event, and it is probable that the Corporation control, or significant influence. been completed and put into use but the settled costs are necessary to form the asset including construction will be required to settle that obligation. Provisions are thereof have not been approved, the cost of tangible cost, equipment cost, other directly attributable costs in measured at the Board of Management’s best estimate Equity investments in other entities are carried at cost fixed assets is recognised at the estimated cost based accordance with the Corporation’s accounting policy. of the expenditure required to settle the obligation as at less provision for impairment. on the actual cost incurred. The estimated cost will Such costs will be included in the estimated costs of the the balance sheet date. be adjusted according to the settled costs approved fixed assets (if settled costs have not been approved)
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Leasing transaction involving the rendering of services is balances of monetary items denominated in foreign in the consolidated financial statements and the attributable to several years, revenue is recognised in currencies as at the balance sheet date are retranslated corresponding tax bases used in the computation of Leases where substantially all the rewards and risks of each year by reference to the percentage of completion at the exchange rates on the same date. Exchange taxable profit and is accounted for using balance sheet ownership of assets remain with the leasing company of the transaction at the balance sheet date of that year. differences arising from the translation of these accounts liability method. Deferred tax liabilities are generally are accounted for as operating leases. The outcome of a transaction can be measured reliably are recognised in the consolidated income statement. recognised for all temporary differences and deferred when all four (4) following conditions are satisfied: tax assets are recognised to the extent that it is probable The Corporation as lessor Borrowing costs that taxable profit will be available against which (a) the amount of revenue can be measured reliably; deductible temporary differences can be utilised. Rental income from operating leases is recognised Borrowing costs directly attributable to the acquisition, on a straight-line basis over the term of the relevant (b) it is probable that the economic benefits construction or production of qualifying assets, which Deferred tax is calculated at the tax rates that are lease. Initial direct costs incurred in negotiating and associated with the transaction will flow to the are assets that necessarily take a substantial period of expected to apply in the period when the liability is arranging an operating lease are recognized to the Corporation; time to get ready for their intended use or sale, are settled or the asset realised. Deferred tax is charged or carrying amount of the leased asset and recognised on added to the cost of those assets, until such time as the credited to profit or loss, except when it relates to items a straight-line basis over the lease term. (c) the percentage of completion of the transaction assets are substantially ready for their intended use or charged or credited directly to equity, in which case at the balance sheet date can be measured reliably; sale. the deferred tax is also dealt with in equity. The Corporation as lessee and Other borrowing costs are recognised in the Rentals payable under operating leases are charged (d) the costs incurred for the transaction and the consolidated income statement when incurred. to the consolidated income statement on a straight- costs to complete the transaction can be measured Deferred tax assets and liabilities are offset when there line basis over the term of the relevant lease. Benefits reliably. Taxation is a legally enforceable right to set off current tax assets received and receivable as an incentive to enter into an against current tax liabilities and when they relate to operating lease are also recognized on a straight-line Interest income is accrued on a time basis, by reference Income tax expense represents the sum of the tax income taxes levied by the same tax authority and the basis over the lease term. to the principal outstanding and at the applicable currently payable and deferred tax. Corporation intends to settle its current tax assets and interest rate. Dividend income from investments is liabilities on a net basis. Revenue recognition recognised when the Corporation’s right to receive The tax currently payable is based on taxable income payment has been established (excluding investments for the year. Taxable income differs from profit before The determination of the tax currently payable is based Revenue from the sale of goods is recognised when all in subsidiaries, associates, joint ventures). tax as reported in the consolidated income statement on the current interpretation of tax regulations. However, five (5) following conditions are satisfied: because it excludes items of income or expense that these regulations are subject to periodic variation and Construction contracts are taxable or deductible in other years (including loss their ultimate determination depends on the results of (a) the Corporation has transferred to the buyer the carried forward, if any) and it further excludes items that the tax authorities’ examinations. significant risks and rewards of ownership of the Where the outcome of a construction contract can be are never taxable or deductible. goods; estimated reliably, revenue and costs are recognised Other taxes are paid in accordance with the prevailing by reference to the stage of completion of the contract Deferred tax is recognised on significant differences tax laws in Vietnam. (b) the Corporation retains neither continuing activity at the balance sheet date as measured by between carrying amounts of assets and liabilities managerial involvement to the degree usually the proportion that contract costs incurred for work associated with ownership nor effective control over performed to date relative to the estimated total contract the goods sold; costs, except where this would not be representative of the stage of completion. Variations in contract work, (c) the amount of revenue can be measured reliably; claims and incentive payments are included to the extent that they have been agreed with the customer. (d) it is probable that the economic benefits associated with the transaction will flow to the Where the outcome of a construction contract cannot Corporation; be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable (e) the costs incurred or to be incurred in respect of of recovery. the transaction can be measured reliably. Foreign currencies Revenue of a transaction involving the rendering of services is recognised when the outcome of such Transactions arising in foreign currencies are translated transactions can be measured reliably. Where a at exchange rates ruling at the transaction date. The
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
5. CASH AND CASH EQUIVALENTS 8. RECEIVABLES/PAYABLES FROM CONSTRUCTION CONTRACTS UNDER PERCENTAGE OF COMPLETION METHOD 31/12/2016 31/12/2015 31/12/2016 31/12/2015 VND VND VND VND Cash on hand 7,238,713,722 10,845,491,662 Contracts in progress as at the balance sheet date: Cash in bank 2,639,386,081,536 3,965,301,277,854 Receivables from construction contracts under percentage 438,107,372,763 4,765,479,848 Cash in transit 133,301,541 6,756,783,667 of completion method Cash equivalents 3,236,911,574,941 4,008,483,803,541 Payables relating to construction contracts under (238,298,386,212) (20,520,328,878) 5,883,669,671,740 7,991,387,356,724 percentage of completion method
Cash equivalents as at 31 December 2016 represent time deposits in local commercial banks with the term less 199,808,986,551 (15,754,849,030) than 3 months and interest rates ranging from 4.3% to 5.4% per annum (as at 31 December 2015: interest rates from 4% to 5.3% per annum). Contract costs incurred plus recognised profits less 1,526,279,421,270 51,121,985,399 6. HELD-TO-MATURITY INVESTMENTS recognised losses Held-to-maturity investments represent deposits with the terms more than 3 months and less than 1 year in commercial Less: progress billings (1,326,470,434,719) (66,876,834,429) banks with interest rates ranging from 5.1% to 6.5% per annum (as at 31 December 2015: interest rates from 5.3% to 6.6% per annum). 199,808,986,551 (15,754,849,030) 7. SHORT-TERM TRADE RECEIVABLES As at 31 December 2016, the Corporation has recorded revenue, expenses according to Vietnamese Accounting 31/12/2016 31/12/2015 Estándar - No. 15 - Construction Contract for projects: NPK Plant Project, NH3 Revamped PlantProject and Ca VND VND Mau Gas Processing Project. Cuu Long Joint Operating Company 709,819,148,346 117,488,200,592 Bien Dong Petroleum Operating Company 477,128,220,848 610,194,370,810 Lam Son Joint Operating Company 376,822,653,997 392,380,965,986 Power Plant 3 Project Management Board 349,773,514,217 - PetroVietnam Gas Joint Stock Corporation 291,425,001,609 161,969,108,539 Swiber Offshore (India) Private Limited 220,970,649,030 - Petroleum Domestic Exploration Production Operating 183,869,463,677 198,158,212,048 Company Limited CGG Services SA Corporation 177,473,488,941 -
PetroVietnam Fertilizer and Chemicals Corporation 172,978,117,164 73,573,917,895
JGCS Consortium 149,958,747,824 142,396,652,665
PetroVietnam Exploration Production Corporation 121,244,498,956 188,288,143,102
Long Phu 1 Power Plant Project Management Board 40,973,825,781 483,710,619,276
Others 1,493,842,512,571 1,861,521,385,118 4,766,279,842,961 4,229,681,576,031
The significant balances of trade receivables from the related parties are presented in Note 44.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
9. OTHER RECEIVABLES (I) Receivable from Long Phu 1 Power Plant Project (VI) Receivable from Lilama Corporation represents Management Board includes the accrued revenue the accrued revenue relating to Song Hau 1 Power 31/12/2016 31/12/2015 based on the percentage of completion relating to Plant Project. VND VND Long Phu 1 Power Plant. a) Short-term (VII) Receivable from Petroluem Domestic Exploration (II) Receivable from JGCS Consortium represents the Production Operating Company represents Long Phu 1 Power Plant Project Management Board (i) 206,879,316,776 12,575,464,419 accrued revenue related to the services rendered receivable relating to fuel fee on service vessels and to Nghi Son Refinery and Petrochemical Complex the payment on behalf for shipping agency services. JGCS Consortium (ii) 86,542,209,070 160,751,821,743 Project. Vietnam Oil and Gas Group (iii) 59,514,542,073 40,811,003,545 (VIII) Receivable from Nghi Son Refinery and (III) Receivables from Vietnam Oil and Gas Group Petrochemical Complex Project Management Malaysia Vietnam Offshore Terminal (Labuan) Limited (iv) 44,531,200,000 77,003,500,000 represent the accrued revenue relating to the 2D/3D Board represents the accrued revenue for completed seismic survey services rendered that belong to progress of Nghi Son Port dredging services. Undeductible VAT 40,926,117,807 67,529,647,074 PVN12, PVN15 projects and other receivables. PetroVietnam Insurance Corporation (v) 30,970,354,115 - (IX) In 2016, the Corporation offset the receivable Lilama Corporation (vi) 26,746,568,852 9,299,083,063 (IV) Receivable from Malaysia Vietnam Offshore from Nhon Trach Shipyard Joint Stock Company Terminal (Labuan) Limited is related to the profit and Dung Quat Shipbuilding Industry Company Interest of time-deposits 25,931,332,538 14,265,945,718 shared for the year ended 31 December 2016 with the payable to Vietnam Oil and Gas Group Petroleum Domestic Exploration Production Operating Company based on the declaration of Malaysia Vietnam relating to Nhon Trach Shipbuilding Factory Project 22,579,091,739 5,925,839,415 (vii) Offshore Terminal (Labuan) Limited. according to the Official Dispatch No. 917/DVKT- TCKT dated 27 June 2016 sent to Vietnam Oil and Nghi Son Refinery and Petrochemicals Company Limited (viii) 21,529,260,315 90,847,767,158 (V) Receivable from PetroVietnam Insurance Gas Group. Bien Dong Petroleum Operating Company 16,690,612,452 12,624,211,512 Corporation represents the compensation receivable relating to CGG Amadues vessel. Petroleum Oversea Exploration Production Operating Company 10,061,561,353 - CGG Services SA Corporation 9,780,223,190 - Mortages, deposits 8,352,302,646 23,557,303,823 10. INVENTORIES Toisa Company Limited 4,869,745,252 - Lam Son Joint Operating Company 2,943,698,601 5,618,032,041 31/12/2016 31/12/2015 Talisman Malaysia Company Limited 1,983,372,593 20,293,373,860 Nhon Trach Shipyard Joint Stock Company (ix) - 230,819,875,570 Cost Provision Cost Provision Dung Quat Shipbuilding Industry Company (ix) - 124,740,417,492 VND VND VND VND Representative office in Ho Chi Minh City - Idemtisu Kosan - 179,567,269,713 Company Limited (Block 39&40/02) Goods in transit 1,445,317,815 - 25,661,984,631 - Japan Vietnam Petroleum Corporation - 14,151,516,545
Representative office in Ho Chi Minh City - Eni Vietnam B.V - 13,900,487,576 Raw materials 87,207,081,315 (5,208,842,819) 75,506,120,923 (5,696,915,149) Saipem Asia Sdn Bhd - 7,033,848,822 Tools and supplies 25,911,872,334 - 43,569,400,889 - Others receivables 46,647,551,713 31,239,716,087 667,479,061,085 1,142,556,125,176 Work in progress (*) 1,539,522,556,112 - 1,046,524,633,778 -
b) Long-term Merchandise 1,253,234,720 - 4,515,397,525 - Electronics Communciations Technology Investment Development 11,516,550,273 11,516,550,273 Corporation Goods on 613,703,580 - - - Deposits and mortages 9,720,826,709 3,131,717,694 consignment Others receivables 912,928,689 11,046,334,856 1,655,953,765,876 (5,208,842,819) 1,195,777,537,746 (5,696,915,149) 22,150,305,671 25,694,602,823
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
(*) Details of work in progress are as follows: 11. PREPAYMENTS
31/12/2016 31/12/2015 31/12/2016 31/12/2015 VND VND Recoverable Recoverable Cost Cost a. Short-term amount amount Spare parts expense of CGG Amadeus vessel, Binh Minh 02 4,557,043,774 4,789,313,798 VND VND VND VND vessel Su Tu Trang Full Field 1,309,513,731,020 1,309,513,731,020 535,463,865,959 535,463,865,959 Insurance cost for FPSO Ruby II 3,054,650,795 4,568,862,973 project Tools and supplies cost 6,240,421,794 6,424,673,304 Nghi Son Refinery and Insurance cost 3,595,824,301 2,105,904,819 Petrochemical Complex 77,498,206,903 77,498,206,903 37,493,934,879 37,493,934,879 project - SMP9 Other short-term prepayments 6,921,202,987 5,464,693,236 package 24,369,143,651 23,353,448,130 Nghi Son Refinery and b. Long-term Petrochemical Complex 6,483,349,859 6,483,349,859 1,162,312,348 1,162,312,348 Office rental at No. 1-5 Le Duan Street (i) 304,399,782,199 308,895,368,087 project - SMP8 package Land rental in Dinh Vu Economic Zone (ii) 116,908,164,683 120,762,280,007 Site clearance cost at Son Tra Harbour (iii) 102,554,699,731 105,042,820,015 Nghi Son Refinery and Equipment and spare parts expense of CGG Amadeus vessel, Petrochemical Complex 3,414,150,812 3,414,150,812 9,698,679,483 9,698,679,483 71,565,751,496 112,252,844,716 project - Tank package Binh Minh 02 vessel (iv) Maintenance cost awaiting allocation 32,330,917,843 40,327,860,499 Nghi Son Refinery and Repair expense for the restaurant at 1st Floor, PetroVietnam Petrochemical Complex - - 43,686,567,588 43,686,567,588 13,916,757,594 - Hotel project - Port package Repair expense for Binh Minh 02 and CGG Amadues vessel 9,758,152,279 - Nghi Son Refinery and Petrochemical Complex - - 22,828,786,197 22,828,786,197 Tools awaiting allocation 8,561,332,439 6,471,403,674 project - SSF2 package Pre-operation expense of FPSO Lam Son 7,327,715,605 24,914,233,081
Low Pressure Gas Son Tra harbour rental fee 3,491,936,308 3,576,530,076 42,930,280,702 42,930,280,702 64,164,153,447 64,164,153,447 Distribution project Repair cost of PTSC Researcher 106 vessel - 9,916,260,348 Other long-term prepayments 26,653,770,180 13,885,739,480 HUC Su Tu Trang 11,308,249,902 11,308,249,902 - - project 697,468,980,357 746,045,339,983 Long Phu 1 Thermal 10,623,728,307 10,623,728,307 518,115,454 518,115,454 (I) Prepayment for office rental at No. 1-5 Le Duan (III) The site clearance cost regarding Son Tra Power Plant project Street started since October 2010 with the lease Harbour transferred to Branch of PetroVietnam Badamyar - Huyndai 9,789,163,621 9,789,163,621 - - term of 50 years. The Corporation allocates this Technical Services Cor–oration - PTSC Da Nang project prepayment into the consolidated income statement since 20 December 2015 with the duration of 42 Ca Mau GPP project 7,225,688,903 7,225,688,903 - - based on the lease term and annual using area. years. The Corporation allocates this site clearance cost to the consolidated income statement over the Maharaja Lela South - - 143,146,645,256 143,146,645,256 (II) Dinh Vu Petroleum Services Port Joint Stock annual lease term. project (MLS) Company has rent an area of 138,269 m2 in Dinh PVN Tie-lines project - - 86,967,265,455 86,967,265,455 Vu Economic Zone – Hai Phong City from Dinh Vu (IV) Equipment and spare part expense of CGG Development Limited Company (now known as Dinh Amadeus vessel, Binh Minh 02 vessel represents On fabrication for - - 21,761,976,344 21,761,976,344 Vu Industrial Zone Joint Stock Company) to build up the cost of repair, mainternance for equipment Sapura project the Base of PetroVietnam Technical Services and on CGG Amadeus vessel, Binh Minh 02 vessel. Thai Binh Ham Rong - - 1,193,226,209 1,193,226,209 Supply Base for the Industry Zone. The lease term These prepayments are allocated using straight line Pipeline project is from October 2007 to April 2047. The value method from 2 years to 6 years. Others 60,736,006,083 60,736,006,083 78,439,105,159 78,439,105,159 of land use rights is amortised using straight line method from July 2008 to the end of the contract 1,539,522,556,112 1,539,522,556,112 1,046,524,633,778 1,046,524,633,778 term.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN Total VND 13. INCREASE, DECREASE IN INTANGIBLE ASSETS
36,807,334 Computer Land use rights Others Total 535,509,091 software (3,519,287,678) (6,116,459,342) (6,600,703,596) (3,626,749,290) 22,129,654,844 851,366,671,516 4,133,766,907,309 4,701,785,351,363 7,793,399,275,001 261,311,576,727 11,927,166,182,310 6,951,631,543,171 11,653,416,894,534 VND VND VND VND - - - - - VND Others COST (167,186) 47,728,520 954,679,645 3,849,484,479 16,496,133,623 19,343,042,751 16,795,361,807 33,291,495,430 have decreased by the same amount. As at 31/12/2015 1,310,220,000 68,908,471,925 948,862,800 71,167,554,725 12,946,044,514 32,289,087,265 - -
VND Purchase in the year - 1,119,968,750 36,000,000 1,155,968,750 supplies
36,807,334 Transfer from construction in 535,509,091
and equipments - 4,974,860,000 - 4,974,860,000 (219,231,528) (219,231,528) 30,640,741,474 32,440,913,989 progress 1,606,800,000 21,817,022,414 93,545,155,043 17,911,348,142 115,179,753,263 145,820,494,737 Management tools, 125,986,069,032 - - - Other decreases - (454,560,000) - (454,560,000) VND
As at 31/12/2016 1,310,220,000 74,548,740,675 984,862,800 76,843,823,475 Motor vehicles 50,768,385,271 (5,250,301,839) (2,735,589,762) (4,687,653,735) (2,735,589,762) 482,762,768,559 1,878,703,692,536 2,310,135,427,720 4,694,137,656,663 6,572,841,349,199 4,219,360,779,705 6,529,496,207,425 ACCUMULATED AMORTISATION - - VND As at 31/12/2015 - 44,522,573,537 613,999,928 45,136,573,465 equipment Machinery and (771,321,833) (564,466,388) (671,928,000) Charge for the year - 14,593,950,595 69,000,000 14,662,950,595 5,321,202,287 723,401,642,260 720,094,943,883 (1,404,612,321) 192,050,915,479 936,580,350,435 190,777,163,669 1,127,295,477,693 1,850,697,119,953 1,656,675,294,318 - - - - Other increases - 372,099,287 - 372,099,287 VND
structures As at 31/12/2016 - 59,488,623,419 682,999,928 60,171,623,347 Buildings and 900,000,000 (94,668,484) (508,437,540) 15,153,924,037
150,886,480,585 NET BOOK VALUE 1,484,524,697,416 1,619,771,023,020 1,839,991,025,575 3,324,515,722,991 1,689,199,213,474 3,308,970,236,494
As at 31/12/2015 1,310,220,000 24,385,898,388 334,862,872 26,030,981,260
As at 31/12/2016 1,310,220,000 15,060,117,256 301,862,872 16,672,200,128 As at 31/12/2016 NET BOOK VALUE As at 31/12/2015 As at 31/12/2016 Others decreases Disposal Other increases Charge for the year ACCUMULATED DEPRECIATION As at 31/12/2015 As at 31/12/2016 Other decreases Disposal Other increases Transfer from construction in progress Purchase in the year COST As at 31/12/2015 As stated in Note 24, the Corporation pledged its tangible fixed assets which were formed from the loans with the cost of VND 2,414,332 million as at 31 December 2016 (as at 31 December 2015: VND 4,368,643 million) to secure banking facilities granted the Corporation. The cost of the Corporation’s tangible fixed assets includes VND Accordingly, 2,942,914 million) which have been fully depreciated but are still in use. years. 3,580,222 10 to million 07 from of equipment fixed machines, some assets of depreciation as of time at the 31 changed has December Limited Company 2016 Services Subsea (as and Geos at PTSC 31 year, the December During 2015: VND if the Corporation had applied previous depreciation rates, its expense charged during year presented in t he consolidated financial statement would have increased by VND 7,732,856,478 and the profit before tax presented in consolidated financial statements would 12. INCREASE, DECREASE IN TANGIBLE FIXED ASSETS 136 ANNUAL REPORT 2016 www.ptsc.com.vn 137 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN ------14. INVESTMENT PROPERTIES VND VND amount Infrastructure Recoverable 31/12/2015 815,349,005
VND 54,742,050,465 4,169,324,942 1,733,200,000 1,413,480,790 2,173,867,943 4,740,000,000 2,718,983,969 3,723,232,409 369,678,895,035 17,995,830,691 15,258,780,716 68,370,454,546 301,308,440,489 - - - - COST - VND VND Cost
As at 31/12/2015 and 31/12/2016 229,280,786,454 31/12/2015
ACCUMULATED AMORTISATION 31/12/2016 2,793,745,719 4,900,535,713 5,092,185,049 6,003,592,042 7,601,069,920 7,797,320,829 9,793,265,376 128,186,642,424 369,678,895,035 10,571,718,859 11,909,817,032 15,258,780,716 46,464,611,169 As at 31/12/2015 27,003,650,691 68,370,454,546 301,308,440,489
Charge for the year 4,735,271,856 VND amount As at 31/12/2015 31,738,922,547 Recoverable NET BOOK VALUE 370,485,940,489 69,177,500,000 301,308,440,489 As at 31/12/2015 202,277,135,763 VND Cost
As at 31/12/2015 197,541,863,907 31/12/2016
Details of investment property cost are as follows: 370,485,940,489 69,177,500,000 31/12/2016 301,308,440,489
VND
39.8 hectare - infrastructure project (i) 131,881,668,267
23 hectare - infrastructure project (ii) 97,399,118,187
229,280,786,454
(I) Investment property represents 39.8 hectare land by Petroleum Equipment Assembly & Metal Structure and infrastructure at Sao Mai - Ben Dinh marine Joint Stock Company in 2010. This investment service base of Sao Mai Ben Dinh project which property is depreciated using the straight-line was completed in 2009 and then has been rented method over 49 years. by PetroVietnam Marine Shipyard Joint Stock Company since 2010. This investment property is The Corporation’s income for the year ended 31 depreciated using the straight-line method over the December 2016 from the investment properties lease term of 48 years. is VND 5,203,799,784. Direct operating expense arising on the investment properties (II) Investment property represents 23 hectare land for the year ended 31 December 2016 is VND and infrastructure at Sao Mai - Ben Dinh marine 4,735,271,856. service base of Sao Mai Ben Dinh project rented Others Video conference system Renovation of wastewater treatment Vung Tau Petro Hotel Renovation and upgrading document storage Electronic generator 100KVA Renovation of the restaurant on first floor Vung Tau Petro Hotel Sao Mai - Ben Dinh petroleum service project at square of 35 hectare Renovation and development the office at PTSC Quang Ngai Joint Stock Company Software for operating activities Wharf extension of Dinh Vu port project Litronic TCC300 crane at Phu My Port Ballistic, spray painting system in Quang Ngai Ores warehouse No.2 Hon La Harbour at Quang Binh Expansion of mechanic, painting factory at Dung Quat project Sao Mai - Ben Dinh Marine services base construction project Sao Mai - Ben Dinh levelling port No.1 project b. Construction in progress a. Long-term work in progress Long Phu 1 Thermal Power Plant Project Bio Ethanol Project 15. LONG-TERM ASSETS IN PROGRESS
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
16. INVESTMENTS IN JOINT VENTURES, ASSOCIATES
(I) Malaysia Vietnam Offshore Terminal (Labuan) (IV) Joint venture PTSC Asia Pacific Private Limited is 31/12/2016 31/12/2015 Limited is a jointly controlled venture company a jointly controlled venture company established in established between the Corporation and 2012 by the Corporation and its partner, Yinson VND VND its partner, Malaysia International Shipping Holding Berhad, under the Foreign Investment Corporation Berhard in 2009 to invest in FSO Certificate No. 561/BKHDT-DTRNN dated 19 Cost of investments in joint ventures, associates 2,479,809,740,787 2,479,809,740,787 “Orkid” with the capacity of 650,000 barrels of October 2012 issued by the Ministry of Planning oil for Talisman Malaysia Limited to rent within 10 and Investment to contribute to investment capital years for offshore oil exploitation at PM-3 bounded in floating storage, production and processing of Net income from associates, joint ventures: trade area between Vietnam and Malaysia. FSO oil (FPSO) for Lam Son Joint Operating Company “Orkid” has operated since 2009. (“Lam Son JOC”) to rent to develop Blocks 01/97 Accumulated in the prior years 1,686,683,896,116 1,063,518,743,276 and 02/97 of the low-lying delta in Vietnam’s (II) Vietnam Offshore Floating Terminal (Ruby) Limited water. The project has a total investment capital is a jointly controlled venture company established of USD 429,977,481, equivalent to VND Income from associates, joint ventures during the year 667,105,854,738 753,186,652,840 between the Corporation and its partner, Malaysia 9,113,372,709,795, in which, the capital International Shipping Corporation Berhard in contribution of each party is USD 119,996,426 Less: Dividend received (126,323,200,000) (130,021,500,000) 2009, in which, the Corporation owns 60% of taking up 27.9% of the investment capital, the the charter capital to own, manage and operate remaining is the borrowing capital. In which, FPSO “Ruby II” for oil exploration and production the Corporation contributed USD 61,198,177, 4,707,276,291,641 4,166,493,636,903 of Petronas. FPSO “Ruby II” has started its operation equivalent to VND 1,272,922,081,600, taking and exploitation since June 2010. up 51% of the charter capital. As at 31 December Details of these associates, joint ventures as at 31 December 2016 are as follows: 2016, the Corporation made capital contributions (III) PTSC South East Asia Private Limited is a to joint venture PTSC Asia Pacific Private Limited Proportion of ownership jointly controlled venture company, established with an amount of USD 51,000,000 equivalent to interest % in September 2011 by the Corporation and its VND 1,069,026,300,000. partner, Yinson Holdings Berhad (Malaysia), Name of entity Location under Foreign Investment Certificate No. 474/ (V) Thi Vai General Port Joint Stock Company is Per Investment Per actual Principal activity Certificate contribution BKHDT-DTRNN issued by the Ministry of Planning a joint stock company which was established in and Investment dated 31 October 2011 to invest accordance with Business Registration Certificate and provide FSO service for Bien Dong 1 Project. No. 3502259121 dated 21 July 2014 issued Total investment capital of the project is USD by Department of Planning and Investment of Rong doi MV12 Pte. Ltd. Singapore 33.00 33.00 FSO services 149,318,329, equivalent to VND 3,071,478 Ba Ria - Vung Tau Province with the registered million, in which, the capital contributions of joint charter capital of VND 60,000,000,000. PTSC Malaysia Vietnam Offshore Terminal venture parties are USD 37,329,582, taking up Phu My Port Joint Stock Company holds 36% of Malaysia 49.00 49.00 FSO/FPSO services (Labuan) Limited (i) 25% of its investment capital, the remaining is the charter capital of Thi Vai General Port Joint Stock borrowing capital. In which, the capital contribution Company in accordance with Business Registration Vietnam Offshore Floating Terminal (Ruby) of the Parent Company is USD 19,038,087, Certificate. As a result, the Parent Company has an Malaysia 60.00 60.00 FSO/FPSO services Limited (ii)) equivalent to VND 391,613 million, taking up indirect ownership of 21.46% of charter capital of 51% of its charter capital. The principal activities Thi Vai General Port Joint Stock Company. Based PetroVietnam Marine Shipyard Joint Stock Building, installation of the jointly controlled venture are to invest and on Circular No. 202/2014/TT–BTC, as at 31 Việt Nam 28.75 28.75 Company of oil construction own FSO “PTSC Bien Dong 01”. PTSC South East December 2016, Thi Vai General Port Joint Stock Asia Private Limited started its operating in 2011. Company became an associate of the Corporation As at 31 December 2016, the Corporation has in accordance with the prevailing regulations. PTSC South East Asia Private Limited (iii) Singapore 51.00 51.00 FSO/FPSO services contributed to PTSC South East Asia Private Limited with an amount of USD 16,320,000, equivalent to VND 340,800,232,500. PTSC Asia Pacific Private Limited (iv) Singapore 51.00 51.00 FSO/FPSO services
Thi Vai General Port Joint Stock Company (v) Việt Nam 21.46 21.46 Supply base services
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
- 18. TRADE PAYABLES VND
Fair value 31/12/2016 31/12/2015 Amount able Amount able Amount Amount 37,292,658,320 3,600,000,000 2,531,242,381 to be paid off to be paid off 31,161,415,939 VND VND VND VND
VND a) Short-term trade payables Provision PTSC Asia Pacific 423,650,464,009 423,650,464,009 416,809,680,000 416,809,680,000 Private Limited 468,757,619 468,757,619 6,400,000,000 6,400,000,000 6,338,584,061 6,338,584,061 23,737,341,680 23,737,341,680 10,530,000,000 Waterway Construction 337,619,339,653 337,619,339,653 - - VND Cost Consultants Joint 31/12/2015 Stock Company
PTSC South East 287,344,889,040 287,344,889,040 218,518,898,640 218,518,898,640 Asia Private Limited 3,000,000,000 61,030,000,000 10,000,000,000 37,500,000,000 10,530,000,000 - - SapuraKencana TL
VND 242,109,710,855 242,109,710,855 263,724,256,796 263,724,256,796 Offshore Sdn. Bhd VND Amount
CGG Services Fair value (Singapore) Private 134,469,045,326 134,469,045,326 66,068,595,467 66,068,595,467 (661,957,589) 7,256,366,733 38,576,819,722 23,737,341,680 24,593,708,413 Limited (1,400,000,000) (5,000,000,000) 11,038,668,464 10,530,000,000 2,386,678,465 26,436,291,587 (35,746,188,917)
24,049,613,122 PetroVietnam Exploration -
132,535,870,219 132,535,870,219 145,554,690,702 145,554,690,702 Production VND Corporation
Provision CGG Services SA 112,836,799,432 112,836,799,432 49,156,712,427 49,156,712,427 Corporation
613,321,535 613,321,535 Joint Venture 94,429,555,668 94,429,555,668 158,846,890,173 158,846,890,173 13,450,386,878 10,530,000,000 24,593,708,413 24,593,708,413 Vietsovpetro - Lilama Corporation 93,800,866,366 93,800,866,366 24,765,202,868 24,765,202,868 VND Cost 31/12/2016 Saipem Asia Sdn. 39,545,075,691 39,545,075,691 107,980,161,683 107,980,161,683 Bhd 3,000,000,000 51,030,000,000 Others 2,153,497,282,184 2,153,497,282,184 2,903,887,212,670 2,903,887,212,670 37,500,000,000 10,530,000,000
4,051,838,898,443 4,051,838,898,443 4,355,312,301,426 4,355,312,301,426
b) Long-term trade payables PetroVietnam Exploration - - 66,267,935,109 66,267,935,109 Production Corporation
The significant balances of trade payables to the related parties are presented in Note 44. Indochina Petroleum Transportation Joint Stock Company (i) Nhon Trach Shipyard Joint Stock Company Duyen Hai PetroVietnam Investment and Construction Joint Stock Company Hightech Concrete Investment Joint Stock Company (i) According to Resolution No. 136/NQ-DVKT-HDQT dated 2 February 2015 of the Board of approving capital withdrawal from Indochina Petroleum Transportation Joint Stock Company, as at 31 December 2016, the Corporati on entirely withdrew Directors of PetroVietnam Technical Services Corporation on capital from Indochina Petroleum Transportation Joint Stock Company by selling shares to other shareholders on the Exchange. as follows: Details of movement provision for impairment long-term financial investments during the year and previous years were As at 01/01/2015 Provision made for the year Increase from investing and transforming form of ownership Reversal for the year Compensating for divested investments As at 31/12/2015 Provision made for the year Reversal for the year Compensating for divested investments As at 31/12/2016 17. EQUITY INVESTMENTS IN OTHER ENTITIES
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
19. ADVANCES FROM CUSTOMERS Details of the implementation of the State obligations according to each type of tax are as follows:
Short-term advances from customers as at 31 December 2016 mainly represent advancefrom Cuu Long Joint Operating Company for Su Tu Trang Full Field Project with the amount of VND 918,149,733,492 (as at 31 Payable/adjustment Paid 31/12/2015 31/12/2016 December 2015: VND 238,691,230,949) and other advances. during the year during the year
Long-term advances from customers as at 31 December 2016 mainly represent advance from Long Phu 1 Power Plant Management Board for Long Phu Power Plant Project with the amount of VND 791,695,089,681 (as at 31 VND VND VND VND December 2015: VND 1,051,381,785,330) and other advances. VAT on domestic goods 10,126,900,479 181,587,829,667 183,937,189,466 7,777,540,680 20. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET VAT on imported goods - 44,465,885,579 44,465,885,579 -
Import-export duties - 9,518,904,373 9,518,904,373 - 31/12/2016 31/12/2015
Corporate income tax 59,132,803,497 157,989,589,078 206,556,951,661 10,565,440,914
VND VND Personal income tax 22,060,008,060 137,371,822,586 139,067,642,424 20,364,188,222
Resource tax - 349,200,000 349,200,000 -
Value added tax 7,860,062,497 10,126,900,479 Land tax 4,213,486,783 (903,902,463) 3,309,584,320 -
Exercise tax - 54,000,000 54,000,000 -
Corporate income tax 61,558,178,834 99,109,437,000 Other taxes 39,778,847,250 310,823,291,071 311,940,110,741 38,662,027,580
Others - 30,931,209 30,931,209 -
Personal income tax 20,378,121,072 22,078,518,431 135,312,046,069 841,287,551,100 899,230,399,773 77,369,197,396
In which
Tax and other Others 38,296,487,858 44,110,608,565 receivables from the 40,113,418,406 50,723,652,865 State Budget
Taxes and amounts payable to the State 175,425,464,475 128,092,850,261 128,092,850,261 175,425,464,475 budget
144 ANNUAL REPORT 2016 www.ptsc.com.vn 145 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
21. SHORT-TERM ACCRUED EXPENSES
31/12/2016 31/12/2015 31/12/2016 31/12/2015 Cost for Thai Binh T&I Project 14,771,393,352 14,771,393,352 VND VND
Cost for Bien Dong Project 374,778,638,924 299,504,178,883 Cost for seismic and geological servey services 9,926,180,478 17,475,490,781
Cost for dredging for water-front area of Cost for provision of Long Phu 1 Thermal Power Plant Project 231,128,430,307 231,128,430,307 8,159,637,483 - PTSC Supply Base
Cost for Ca Mau GPP Project 217,880,698,572 1,889,144,760 Cost for project of dredging Nghi Son port 8,117,122,541 10,740,479,804
Cost for Su Tu Nau Project 176,519,134,415 176,519,134,415 Cost for marine services rendered to Bien Dong POC 6,920,255,989 15,513,795,645 Cost for Long Phu 1 Thermal Power Plant Project 139,304,121,277 52,438,032,663 Interest payables to PVEP due to receiving transfer of Binh Cost for packages of Nghi Son Refinery and Petrochemical 6,626,793,514 9,940,190,266 92,138,952,951 106,806,214,999 Minh 02 vessel Complex Project Cost for land rental at Son Tra Harbour 6,335,686,568 - Cost for operating of CGG Amadues vessel, Binh Minh 02 85,944,577,772 97,166,073,548 vessel Cost for operating of FPSO Lam Son, FSO Bien Dong 01, 6,987,608,986 - FPSO Ruby II Cost for NH3 Project 82,515,821,353 28,134,735,905 Cost for SOFEL Project 4,594,190,885 -
Cost for Maharaja Lela South Project (MLS) 69,191,265,079 15,736,205,478 Interest expense payable to the credit institutions 3,369,463,919 9,550,821,209
Cost for Hai Su Trang Den Project 64,593,419,068 64,593,419,068 Cost for Song Hau Power Plant construction 2,796,540,000 -
Cost for Daman Project 61,414,140,978 - Cost of processing components for TSA rig 2,188,702,724 -
Cost for NPK Project 61,222,182,630 15,476,352,091 Cost for supplying materials to Dung Quat Oil Refinery 1,852,167,074 -
Cost for Su Tu Vang 6X Project 49,161,840,000 49,161,840,000 Cost for Su Tu Trang Full Field Project 24,287,000 48,547,509,167
Cost for Thai Binh Ham Rong Project 44,429,260,212 202,090,860,645 Cost of service rendered to Talisman Vietnam Company - 24,991,255,825 Limited Cost for Heera Ceter Technology Project (HRD) 37,188,998,400 51,597,502,775 Cost for Dai Hung, Tam Dao 05, and Chim Sao Projects - 10,615,867,760 Cost for Ghana Yinson Project 33,517,500,000 50,763,803,907 Maintenance cost of drilling rigs - 10,592,449,760 Cost for Bio Ethanol Project 29,150,440,587 28,542,446,554
Cost for H5 Topside Project 23,062,094,580 - Cost for repair of PTSC 01 and POS 01 barges - 9,077,803,890
Cost for Ghana Kanfa Project 18,323,004,878 49,566,360,713 Other accruals 74,078,257,153 66,666,764,215
Cost for land rental at Nghi Son shipbuilding 15,000,000,000 10,000,000,000 2,063,212,809,649 1,779,598,558,385 industry zone
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
22. OTHER PAYABLES
31/12/2016 31/12/2015 31/12/2016 31/12/2015
VND VND Malaysia Vietnam Offshore Terminal (Labuan) Limited 1,169,382,840 6,655,616,068 a. Current payables Short-term deposits received 839,713,197 508,838,739 Vietnam Shipbuilding Industry Corporation (i) 411,828,898,922 402,177,441,565 PC Vietnam Limited 67,527,210 14,219,767,472 Salary and bonus payables 52,392,565,726 35,020,333,214 Vietnam Oil and Gas Group (iv) - 349,068,201,763 Bien Dong Petroleum Operating Company 19,939,346,487 - Cuu Long Joint Operating Company - 3,759,479,209 Dividend payable (ii) 15,145,283,073 12,285,493,723
Asia Investment and Asset Management Join Stock Company - 1,880,480,066 Lam Son Joint Operating Company 13,980,607,544 -
Vietnam Waterway Construction Corporation (iii) 9,057,781,235 58,209,744,759 Thang Long Securities Joint Stock Company - 3,078,500,783
Withhold PIT of employees 8,347,896,267 8,814,464,483 Dung Quat Port Customs Department - 828,428,160
PetroVietnam Construction Corporation (iii) 7,826,660,837 49,873,999,702 Others 45,264,816,492 61,673,358,602
625,935,472,506 1,038,096,538,745 OffShore Limited Company 7,552,986,709 7,552,986,709 b. Long-term payables Trade union fee 7,324,055,689 2,687,070,993 Long-term deposits received 204,067,385 203,242,385 Nordic Maritime Private Limited 6,837,000,000 6,762,000,000 204,067,385 203,242,385 Petroleum Domestic Exploration Production Operating Company 4,143,598,682 3,043,358,432 - Block 05.1a (I) Payable to Vietnam Shipbuilding Industry project of dredging of Nghi Son port which are Corporation is the last payment for the project of kept in accordance with the signed partnership PISICO Quang Nam Joint Stock Company 4,000,000,000 - building FSO5 vessel; in which, the Corporation agreement. is the investor and Vietnam Shipbuilding Industry Global Petroleum and Maritime Service Joint Stock Company 3,250,953,390 - Corporation is the constructor. (IV) In 2016, the Corporation offset the receivable from Nhon Trach Shipyard Joint Stock Company (II) Dividend payable to shareholders represent and Dung Quat Shipbuilding Industry Company Social, health, unemployment insurance 2,604,992,170 105,550,648 dividend of the years which custody shareholders with the payable to Vietnam Oil and Gas Group have not received. relating to Nhon Trach Shipbuilding Factory Project Yen Son Diversified Company Limited 2,327,854,549 9,891,423,655 according to the Official Dispatch No. 917/DVKT- (III) Payable to PetroVietnam Construction TCKT dated 27 June 2016 sent to Vietnam Oil and Corporation, Vietnam Waterway Construction Gas Group (as presented in Point ix, Note 9). Petroleum Maritime Service Vietnam Joint Stock Company 2,033,551,487 - Corporation is the payable amount related to the
148 ANNUAL REPORT 2016 www.ptsc.com.vn 149 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN VND VND paid off paid off Amount able to be 432,147,165,556 Amount able to be 432,147,165,556 251,813,597,118 891,695,014,132 1,143,508,611,250 VND 31/12/2016 VND Amount 31/12/2016 Amount 432,147,165,556 432,147,165,556 251,813,597,118 891,695,014,132 1,143,508,611,250 VND VND Decreases VND Decreases (736,481,356,671) 31/12/2015 (736,481,356,671) (81,590,289,050) (486,338,742,176) (404,748,453,126) 684,347,404,258 360,590,577,503 112,931,314,711 2,247,760,269,458 1,563,412,865,200 Trong năm (684,347,404,258) 1,089,890,972,986 VND In the year VND Increases Increases VND 484,281,117,969 484,281,117,969 66,434,488,226 33,587,750,000 32,846,738,226 31/12/2016 VND VND 79,318,663,921 paid off 432,147,165,556 781,851,494,483 282,338,452,846 paid off 1,575,655,776,806 1,143,508,611,250 (432,147,165,556) Amount able to be 684,347,404,258 684,347,404,258 Amount able to be 299,816,136,168 1,563,412,865,200 1,263,596,729,032 VND 31/12/2015 VND Amount 31/12/2015 Amount 684,347,404,258 684,347,404,258 299,816,136,168 1,563,412,865,200 1,263,596,729,032 Within one year In the second year In the third to fifth year inclusive After five years Less: Amount due for settlement within 12 months (presented in Note 23) Amount due for settlement after 12 months Long-term loans represent loans in VND which were obtained from the domestic commercial banks. These loans bear interest rates ranging from 4.1% to 9.3% per 9.3% to 4.1% from ranging rates interest bear loans These banks. commercial domestic the from obtained were which VND in loans represent loans Long-term annum. Long-term loans represent in USD which were obtained from the domestic commercial banks and branches of foreig n Vietnam. These loans bear interest rates ranging from 1.7% to 5.65% per annum. The purpose of the long-term is invest in fixed asset s including port, oil and gas vessel service, specialized equipment for petroleum technical services and contribute the capital in joint ventures of FSO/FPSO proje cts with foreign partners. These loans are guaranteed by Vietnam Oil and Gas Group or are secured by fixed assets and construction in progress formed from the loans as noted in Note 12 or unsecured. Long-term loans are repayable as follows: 23. SHORT-TERM LOANS 24. LONG-TERM LOANS Vietnam Dong United States Dollar Current portion of long-term loans (Note 24)
150 ANNUAL REPORT 2016 www.ptsc.com.vn 151 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN Total VND 26. LONG-TERM PROVISIONS
31/12/2016 31/12/2015 (4,609,223,314) (282,883,021,027) (471,285,000,292) (107,157,361,894) (171,116,435,819) (188,401,979,265)
- VND VND VND
Profit from Warranty provision for the construction works joint venture and associates
poses as follows: - Bien Dong project 525,047,170,282 525,047,170,282 (88,476,540,772) (289,191,722,947) (413,784,944,933) (200,715,182,175) (124,593,221,986) 80,081,875)
VND - Su Tu Nau project 305,716,586,414 305,716,586,414 fixed assets
Depreciation of - Hai Su Trang - Den project - 155,860,354,444 26,508,626,632 10,926,294,578 (4,609,223,314) 49,281,556,595 (18,163,706,649) (15,582,332,054) - - - - - Chim Sao project - 100,390,150,982 VND Accrued
cost of sales - Su Tu Vang 6X project 84,525,593,656 84,525,593,656 VND (8,586,056,140) (8,586,056,140) - - -
- - HRD project 54,028,471,982 54,028,471,982 VND 31/12/2015 revenue
Unearned - Su Tu Trang project 46,462,217,152 30,492,733,169 16,220,332,069 -(282,883,021,027) -(299,103,353,096) 9,004,431,140 9,004,431,140 - Thai Binh Ham Rong project - 9,844,800,000 - - VND profit
VND - Maharaja Lela South project 132,446,433,030 - Unrealised 265,459,955 (265,459,955) 3,713,389,259 31/12/2016 (3,447,929,304) - H05 Topside project 96,130,757,059 - - 21,663,023,459 VND -(471,285,000,292)
-(492,948,023,751) - Ghana Yinson project 55,087,141,058 - difference Unrealised 1,732,297,741
foreign exchange - Ghana Kanfa project 19,702,996,906 - (9,911,630,149) 11,643,927,890 (6,844,234,017) (3,067,396,132) -
VND - Quata project 6,464,616,021 - provisions
Provisions for overhaul expenses of FPSO Lam Son 30,097,918,150 15,048,959,075 Accruals and other 47,407,108,444 (10,553,754,518) (70,577,022,678) vesse (57,960,862,962) (60,023,268,160)
1,355,709,901,710 1,280,954,820,004 - PTSC Quang Ngai Joint Stock Company of VND 311,122,584,331 (as at 31 December 2015: 378,076,922,653) - PTSC CGGV Geophysical Survey Company Limited of VND 876,168,719,551 (as at 31 December 2015: 459,0 25. DEFERRED TAX LIABILITIES current and prior years. The following are the deferred tax assets and liabilities recognized by Corporation, movements thereon, during As at 01 January 2015 Charged to the consolidated income statement Increase from investing and transforming form of ownership As at 31 December 2015 Charged to the consolidated income statement As at 31 December 2016 Deferred tax assets and liabilities have been offset in accordance with the prevailing accounting policies for financial reporting pur Deferred tax liabilities Deferred tax assets As at 31 December 2016, the subsidiaries of the Corporation have unsued tax losses available for offset against to future profits as belows: As at 31 December 2016, the subsidiaries of Corporation have unsued tax losses available for offset against to future profits PTSC Quang Ngai Joint Stock Company and PTSC CGGV Geophysical Survey Company Limited have not recognised deferred tax assets of these tax losses due to the to due losses tax these of assets tax deferred recognised not have Limited Company Survey Geophysical CGGV PTSC and Company Stock Joint Ngai Quang PTSC uncertainty of future profits to utilise these tax losses. 152 ANNUAL REPORT 2016 www.ptsc.com.vn 153 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN Total 27. OWNERS’ EQUITY VND
Share 31/12/2016 31/12/2015 81,199,999 (846,114,015) 3,620,520,000 3,280,000,000 909,744,442,421 275,174,870,988 (815,287,165,700) (220,580,824,171) (586,570,005,200) (264,638,112,072) 11,874,874,037,617 10,954,934,540,450 1,493,538,857,466 11,752,452,210,166 - - Number of shares registered 446,700,421 446,700,421 - VND
- Number of shares issued to public 446,700,421 446,700,421 223,350,210,500. (567,462,238) (442,689,671) Retained earnings (22,470,917,573) 3,326,188,546,305 3,159,343,755,210 (759,390,715,700) (416,017,679,948) (536,040,505,200) (791,595,857,165) 3,188,956,067,975 1,038,743,379,556 1,517,394,760,704 - Number of shares in circulation 446,700,421 446,700,421 VND interests The Corporation has only one type of ordinary share which carries no right to fixed income with par value of VND 3,369,263
10,000/share. The shareholders of ordinary shares are entitled to receive dividends as declared from time to time 577,262,237 Non-controlling 3,620,520,000 and are entitled to one vote per share at the Corporation’s shareholders’ meetings. All shares rank equally with 3,280,000,000 (55,896,450,000) (12,142,920,870) (50,529,500,000) (22,307,884,709) (23,855,903,238) 275,174,870,988 1,623,595,715,259 regard to the Corporation’s net assets. 1,441,830,762,955 (128,998,937,135) 1,430,755,189,491 ------Details of the contributed capital as at 31 December 2016 and as at 31 December 2015 were as follows: VND
According to the amended Investment Certificate, the Corporation’s contributed capital is VND 4,467,004,210,000
(as at 31 December 2015: VND 4,467,004,210,000). As at 31 December 2016 and 31 December 2015, Investment and (406,793,607) the capital was fully contributed by the shareholders as follows: development fund 22,470,917,573 207,579,776,647 549,265,629,802 2,418,539,906,053 1,847,210,152,285 2,626,119,682,700 ------Contributed capital - VND 31/12/2016 31/12/2015
% VND % VND 71,400,000 Share premium 39,545,660,000 39,545,660,000 39,617,060,000 Vietnam Oil and Gas Group 51.38 2,295,000,000,000 51.38 2,295,000,000,000 ------VND Vina Capital Corporate Financial 5.29 236,174,220,000 6.12 273,403,700,000 Vietnam Company Limited Owners’
FTIF-Templeton Frontier Markets 0.50 22,462,000,000 5.79 258,800,740,000 Fund group contributed capital 4,467,004,210,000 4,467,004,210,000 4,467,004,210,000 Dragon Capital Funds 7.94 354,833,500,000 3.98 177,988,500,000
Other shareholders 34.89 1,558,534,490,000 32.73 1,461,811,270,000
100.00 4,467,004,210,000 100.00 4,467,004,210,000 According to the Resolution No. 277/NQ-DVKT-DHDCD dated 28 April 2016 of the General Meeting of Shareholders of PetroVietnam Technical Services Corporation, Services Technical PetroVietnam of Shareholders of Meeting General the of 2016 April 28 dated 277/NQ-DVKT-DHDCD No. Resolution the to According welfare the of appropriation distribution, dividend the approved Corporation the of shareholders the subsidiaries, of Shareholders of Meeting General of Resolutions the and bonus funds investment development fund from profit of 2015. approved Corporation Services Technical PetroVietnam of Directors of Board the 2016, November 21 dated 670/NQ-DVKT-HDQT No. Resolution the to According the temporary advance of dividend 2016 to shareholders at rate 5% per par value with total amount VND As at 31 December 2016, the Corporation and subsidiaries appropriated funds, paid dividend of 2015 temporary advance 2016 to shareholders in accordance with prevailing regulations. As at 31 December 2016 Others Dividends paid Fund appropriation Profit for the year Capital contribution As at 31 Decemeber 2015 Others Dividends paid Fund appropriation Profit for the year Adjustment for purchasing Sao Mai - Ben Dinh Capital contribution As at 01 January 2015 Movement in owners’ equity
154 ANNUAL REPORT 2016 www.ptsc.com.vn 155 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN Total 28. OFF BALANCE SHEET ITEMS Total Unit: VND
Foreign currencies: Unit: VND (41,147,918,747) 1,523,361,857,420 2,226,923,104,000 3,750,284,961,420 (170,146,855,882) 31/12/2016 31/12/2015 (128,998,937,135) United States Dollar
82,501,397 120,476,279 49.00% (USD) Sao Mai - Ben Dinh Petroleum Investment Joint Stock Company Sao Mai - Ben 969,234,258 494,309,472 Euro (EUR) 1,020,958 3,930 474,924,786 Dinh Petroleum Investment Joint Stock Company 245,000,000,000 255,000,000,000 500,000,000,000 British Pound (GBP) 248,230 319,468 46.85% Company PetroVietnam Security Joint PetroVietnam 8,424,290,265 6,983,794,213 Stock Company 15,408,084,478 Security Joint Stock 13,486,320,000 15,300,000,000 28,786,320,000 48.97% PTSC CGGV PTSC CGGV Company Limited Company Limited Geophysical Survey Geophysical Survey 573,681,537,420 597,817,104,000 (212,802,431,372) (417,013,426,975) (204,210,995,603) 1,171,498,641,420 Dinh Vu 49.00% Petroleum Stock Company 2,295,152,787 4,500,299,582 2,205,146,795 Stock Company Services Port Joint Services Port Joint Dinh Vu Petroleum 196,000,000,000 204,000,000,000 400,000,000,000 Company 45.31% Company Port Joint Stock PTSC Thanh Hoa 16,020,747,941 29,292,002,105 13,271,254,164 Port Joint Stock PTSC Thanh Hoa 181,227,000,000 218,773,000,000 400,000,000,000 Company 40.39% Company PTSC Phu My Port Joint Stock PTSC Phu My Port Joint Stock 22,013,581,000 36,927,572,432 14,913,991,432 141,355,000,000 208,645,000,000 350,000,000,000 4.81% Company Company PTSC Quang PTSC Quang Ngai Joint Stock 2,349,938,988 46,542,612,255 48,892,551,243 Ngai Joint Stock 14,419,000,000 285,581,000,000 300,000,000,000 49.00% Company Services Joint Stock Company PTSC Production 27,531,048,754 53,982,448,538 26,451,399,784 PTSC Production 98,000,000,000 Services Joint Stock 102,000,000,000 200,000,000,000 Company 15.05% Company PTSC Offshore 8,561,608,306 48,332,770,151 56,894,378,457 PTSC Offshore Services Joint Stock 60,193,000,000 Services Joint Stock 339,807,000,000 400,000,000,000 The Corporation’s profit/(loss) Profit/(loss) in the year Non-controlling interests’ profit/(loss) 29. NON-CONTROLLING INTERESTS Non-controlling interests in subsidiaries’ profit and loss during the year are as follows: Percentage of non-controlling interests Attributable to Non-controlling interests In which: Attributable to the Corporation Charter capital of subsidiaries Non-controlling interests represents other shareholders’ share to the subsidiaries’ net assets and the result from operation of subsidiaries. The non-controlling interests are as follows: 156 ANNUAL REPORT 2016 www.ptsc.com.vn 157 Total NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN Unit: VND 99,577,163,198 429,740,849,152 1,430,755,189,491 (192,183,831,127) (558,726,996,796) 1,523,361,857,420 3,750,284,961,420 3,621,298,813,776 4,082,729,991,104 7,704,028,804,880 Total Unit: VND 7,704,157,003 13,788,657,616,607 21,589,705,119 15,722,769,394 44,060,622,692 274,293,862,122 2,227,466,550,854 3,527,033,440,571 1,521,573,979,824 Sao Mai - Ben Dinh 19,786,609,835,348 25,541,109,826,773 12,267,083,636,783 245,000,000,000 500,000,000,000 559,783,392,086 259,336,069,380 819,119,461,466 Petroleum Investment Joint Stock Company Company Elimination PetroVietnam 4,334,528,203 2,638,026,396 7,766,748,200 20,458,874,598 Security Joint Stock 13,486,320,000 13,096,871,806 28,786,320,000 49,649,940,006 88,349,085,929 137,999,025,935 (2,173,675,665,819) (2,173,675,665,819) - - PTSC CGGV Other services Company Limited 286,004,894,151 Geophysical Survey 573,681,537,420 584,042,405,207 (287,676,643,269) (587,456,236,213) 398,367,929,880 400,544,163,841 1,171,498,641,420 1,206,349,360,643 1,790,391,765,850 gas project Stock Company 8,234,674,284 4,976,067,792 Services Port Joint Dinh Vu Petroleum Repair, maintenance 16,805,457,722 10,155,240,391 209,210,742,076 196,000,000,000 400,000,000,000 426,960,698,113 191,273,677,306 618,234,375,419 and installment oil 2,276,470,855,063 1,752,157,269,980 construction Mechanical & 28,942,441,758 11,219,076,742 63,881,081,203 24,762,484,050 221,388,518,500 181,227,000,000 400,000,000,000 488,643,565,253 189,022,947,519 677,666,512,772 Joint Stock Company PTSC Thanh Hoa Port 8,358,550,376,537 6,838,877,716,705 services Operation Management, business and operation the technology service vessels Supply of Floating storage and offloading (FSO) production offloading (FPSO) Supply, operation, management of seismic survey vessels 2D, 3D; Geophysical and geological and Geophysical 3D; 2D, vessels survey seismic of management operation, Supply, survey services, diving, and subsea services by using Remote operated vehicle (ROV) Supply base services, offices rental, logistic and supply chain management and hook-up installation, and transportation construction, engineering, Fabrication, commissioning Repair, maintenance, install oil and gas projects Providing other services for oil and gas industry Supply base 9,423,758,463 PTSC Phu My Port 14,913,991,432 36,927,572,432 23,333,560,624 165,692,749,895 141,355,000,000 350,000,000,000 410,261,133,056 114,000,506,772 524,261,639,828 Joint Stock Company 3,157,663,703,888 1,418,967,305,106 services 21,821,505 226,246,152 454,015,639 4,707,250,551 PTSC Quang Ngai 14,419,000,000 survey and Subsea (14,623,424,647) 300,000,000,000 885,651,571,130 886,105,586,769 Joint Stock Company Seismic survey, Geo (304,253,234,912) 2,110,756,812,360 1,483,518,234,913 Company PTSC Production 3,043,869,420 6,211,978,409 25,854,107,025 98,000,000,000 52,763,483,724 126,897,976,445 Services Joint Stock 200,000,000,000 258,975,462,133 262,905,989,889 521,881,452,022 FPSO/FSO services 3,852,932,368,373 1,539,242,668,965 Marine services 20,132,337,085 46,460,413,115 60,193,000,000 126,785,750,200 133,785,238,048 308,742,964,235 400,000,000,000 842,528,202,283 885,840,782,536 Joint Stock Company 1,728,368,984,819 PTSC Offshore Services 1,805,543,455,066 1,007,451,943,092 Retained earnings/ (Accumulated loss) Investment and development fund Non-controlling interests Detail as follows: Investment capital Retained earnings/ (Accumulated loss) Investment and development fund Detail as follows: Investment capital Net assets Total liabilities Assets Segment assets Interest in associates Unallocated assets Consolidated assets Liabilities Segment liabilities Unallocated liabilities Consolidated liabilities Total assets Non-controlling interests in subsidiaries’ net assets as at 31 December 2016 are follows: 30. BUSINESS AND GEOGRAPHICAL SEGMENTS For management purposes, the Corporation is currently organised into seven operating divisions as follows: Business segment Items Marine services Floating storage and offloading (FSO) production offloading (FPSO) services Seismic survey, geophysical and geological survey subsea services Supply base services Mechanical & construction Repair, maintenance and installment oil gas project Other services The Corporation has prepared the segment report for seven segments as follow: As at 31 December 2016:
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
- - Total Total Unit: VND Unit: VND 909,744,442,421 782,752,682,047 188,401,979,265 157,989,589,078 667,105,854,738 291,741,791,741 297,288,364,285 146,726,865,967 632,191,183,729 17,899,327,840,481 18,682,080,522,528 1,256,136,010,764 14,562,178,949,277 26,437,052,986,894 2,159,182,872,123 2,402,996,077,154 1,686,683,896,116 5,197,790,172,318 17,899,327,840,481 18,682,080,522,528 19,552,578,918,460 ------Elimination Elimination (3,192,635,146,094) (3,274,651,971,062) (3,192,635,146,094) (3,274,651,971,062) (3,671,137,338,202) (3,671,137,338,202) ------Other services Other services 6,704,564,001 78,807,363,294 525,780,027,755 613,426,115,502 446,972,664,461 453,677,228,462 159,748,887,040 443,632,113,730 259,157,543,388 ------gas project gas project 136,512,909,521 605,765,273,499 742,278,183,020 Repair, maintenance 1,681,331,147,665 1,817,844,057,186 Repair, maintenance and installment oil 1,075,565,874,166 1,075,565,874,166 and installment oil 2,756,831,977,632 1,780,713,156,457 ------construction construction Mechanical & Mechanical & 215,962,930,571 10,233,526,952,344 10,450,271,149,488 1,087,432,640,899 9,146,094,311,445 9,362,057,242,016 1,088,213,907,472 8,795,033,118,190 7,843,459,031,566 ------services services Supply base Supply base 275,342,403,239 183,511,189,645 183,516,140,160 1,361,401,067,214 1,636,748,420,968 3,488,666,350,843 1,815,002,502,375 1,177,889,877,569 1,453,232,280,808 ------services services survey and Subsea survey and Subsea Seismic survey, Geo Seismic survey, Geo (249,157,789,067) 354,186,492,456 354,186,492,456 1,897,434,832,920 1,648,277,043,853 2,561,209,974,527 1,523,995,892,922 1,543,248,340,464 1,294,090,551,397 ------138,751,297,611 FPSO/FSO services FPSO/FSO services 352,625,674,219 352,625,674,219 3,486,242,603,318 3,624,993,900,929 3,133,616,929,099 3,272,368,226,710 3,275,134,639,378 1,441,515,456,088 ------Marine services Marine services 60,505,911,415 60,794,995,550 258,636,366,170 1,906,246,355,359 2,165,171,805,664 1,845,740,443,944 2,104,376,810,114 1,903,208,082,362 1,166,476,627,529 Profit for the year Deferred tax expense Corporate income tax expense Profit before tax Share of profit associates Profit from other activities Operating profit Net profit from financing activities Selling and administrative expenses Gross profit Segment profit Inter-segment cost of goods sold Total cost of goods sold Cost of goods sold External cost of goods sold Revenue External sales Inter-segment sales Total revenue Items For the year ended 31 December 2016 as follows: As at 31 December 2015: Items Assets Segment assets Unallocated liabilities Consolidated liabilities Interest in associates Unallocated assets Consolidated assets Liabilities Segment liabilities 160 ANNUAL REPORT 2016 www.ptsc.com.vn 161 NOTES TO THE CONSOLIDATED FINANCIAL NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN - - Total 31. REVENUE FROM GOODS SOLD AND SERVICES RENDERED Unit: VND (137,404,092) 82,139,119,807 995,039,622,266 753,186,652,840 350,424,712,724 171,116,435,819 2,174,931,259,720 1,493,538,857,466
23,356,897,865,989 Năm 2016 Năm 2015 21,181,966,606,269 1,179,754,233,362 2,015,080,006,009 23,356,897,865,989 21,181,966,606,269 ------VND VND
Sales of merchandise sold 1,624,986,787,184 2,565,739,077,774 Elimination
Sales of services rendered 14,890,662,513,164 16,390,114,472,699 (6,113,975,214,550) (6,014,663,405,552) (6,113,975,214,550) (6,014,663,405,552) Sales of construction contracts 2,166,431,222,180 4,401,044,315,516 ------18,682,080,522,528 23,356,897,865,989
Other services 32. COST OF GOODS SOLD AND SERVICES RENDERED 21,694,383,342 75,079,372,410 174,391,181,408 1,323,034,004,862 1,202,027,812,522 1,148,642,823,454 1,126,948,440,112 Năm 2016 Năm 2015 ------VND VND
gas project Cost of merchandise sold 1,541,611,821,735 2,315,141,454,218 259,583,836,880
Repair, maintenance Cost of services rendered 14,256,260,104,589 14,879,189,270,119 4,318,446,656,337 4,058,862,819,457 and installment oil 1,525,669,351,473 2,792,777,304,864 1,266,085,514,593 2,792,777,304,864 ------Cost of construction contracts 2,101,455,914,157 3,987,635,881,932 17,899,327,840,481 21,181,966,606,269 construction Mechanical &
739,245,612,838 33. PRODUCTION COST BY NATURE 9,571,910,542,715 10,311,156,155,553 8,523,327,678,624 1,787,828,476,929 7,784,082,065,786 1,787,828,476,929
------Năm 2016 Năm 2015 services VND VND Supply base Raw materials and consumables 2,444,636,657,326 3,391,403,563,228 493,246,719,876 2,571,971,190,399 2,078,724,470,523 381,902,048,495 381,902,048,495 2,190,069,141,904 1,696,822,422,028 Labour 2,633,609,040,237 2,792,820,102,335 ------Depreciation and amortisation 870,764,893,967 904,020,669,964 services Outsource services 11,783,501,132,741 14,333,198,900,369
survey and Subsea Other expenses 581,774,435,998 817,982,142,865 (58,106,284,582) Seismic survey, Geo 234,844,630,188 234,844,630,188 2,408,765,650,521 2,466,871,935,103 2,173,921,020,333 2,232,027,304,915 18,314,286,160,269 22,239,425,378,761 ------34. FINANCIAL INCOME
Năm 2016 Năm 2015 159,176,841,759 FPSO/FSO services 470,424,791,598 470,424,791,598 3,750,797,266,593 3,591,620,424,834 3,280,372,474,995 3,121,195,633,236 VND VND ------
Deposit interest and interest income from lending 224,475,761,923 162,246,149,733
Marine services Dividends and profits received 4,829,760,000 4,487,280,000 560,090,149,607 4,786,702,156,274 4,226,612,006,667 271,806,781,068 271,806,781,068 Foreign exchange gain 76,171,535,177 168,998,748,103 4,514,895,375,206 3,954,805,225,599 Others 844,756,962 42,215,758,002 306,321,814,062 377,947,935,838 Items For the year ended 31 December 2015 as follows: The Corporation mostly operates in Vietnam. Consequently, the has not presented geographical segment report. Revenue External sales Inter-segment sales Total revenue Cost of goods sold External cost of goods sold Inter-segment cost of goods sold Total cost of goods sold Gross profit Segment profit Selling and administrative expenses Net loss from financing activities Operating profit Profit from other activities Share of profit associates Profit before tax Corporate income tax expense Deferred tax expense Profit for the year
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
35. FINANCIAL EXPENSES 37. SELLING EXPENSES AND GENERAL AND ADMINISTRATION EXPENSES 2016 2015
VND VND 2016 2015
Interest expenses 55,841,878,387 70,937,160,828 VND VND Foreign exchange loss 91,244,218,513 210,494,663,049 Selling expenses
Margin of investment in Petroleum Technical Services - 41,557,748,054 and Son Tra port Joint Stock Company Salary expenses 10,932,830,812 16,573,821,516
Provision for impairment of long-term investments 5,856,366,733 10,376,710,875 Advertising expenses 59,492,551,315 50,543,295,333
Others 21,534,571,055 31,454,522,248 Others 6,652,484,462 44,719,057,124
159,594,948,095 378,085,339,930 91,959,953,182 98,571,639,097
36. INCOME/(LOSS) FROM JOINT VENTURES, ASSOCIATES 2016 2015
2016 2015 VND VND
VND VND Admin expenses
PetroVietnam Marine Shipyard Joint Stock Company (115,317,926,850) 11,121,620,923 Salary expenses 204,100,533,152 225,810,519,386
Rong Doi MV12 Private Limited (4,150,928,603) 14,883,742,658 Out source service expenses 196,442,368,919 275,762,544,926
Malaysia VietNam Offshore Terminal (Labuan) Limited 176,509,631,110 162,331,298,360 Social insurance, health insurance, union expenses 32,948,381,796 33,190,906,486
Vietnam Offshore Floating Terminal (Ruby) Limited 3,209,281,838 4,388,467,001 Depreciation expenses 37,291,526,969 43,589,942,951
(Reversal)/made provision (56,471,138,800) 103,406,731,337 PTSC South East Asia Private Limited 300,134,789,896 288,171,011,414
Others 125,919,558,511 214,707,338,083 PTSC Asia Pacific Private Limited 306,721,007,347 272,290,512,484
667,105,854,738 753,186,652,840 540,231,230,547 896,467,983,169
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
38. OTHER INCOME 40. CURRENT CORPORATE INCOME TAX EXPENSE
2016 2015 2016 2015
VND VND VND VND Revesal of payables related to Berth No, 1, 2 of Nghi Son - 39,338,750,137 Port Profit before tax 1,256,136,010,764 2,015,080,006,009 Disposal of fixed assets 1,683,167,117 8,931,389,015
Penalty, compensation 37,601,960,689 13,942,533,529 Addition adjustments (916,429,441,856) 481,337,695,346
Margin of investment to Sao Mai - Ben Dinh Petroleum - 62,856,534,599 Investment Joint Stock Company Deduction adjustments 453,948,876,143 (845,701,159,952)
Income from supply of chemicals, oil lube to Lam Son Joint - 4,478,813,641 Operating Company Assessable income 793,655,445,051 1,650,716,541,403
Reversal of guarantee provision 256,250,505,426 - for projects Tax loss carried forward (66,954,338,322) (29,262,502,487) Others 8,616,216,493 15,010,249,115
Taxable income 726,701,106,729 1,621,454,038,916 304,151,849,725 144,558,270,036
39. OTHER EXPENSES Corporate income tax 145,340,221,346 356,719,888,562
2016 2015 Tax deductions (i) (4,965,726,656) (12,556,224,430) VND VND
Additional tax and late payment 2,822,266,185 23,279,639,237 Additional corporate income tax 17,933,091,784 6,261,048,592
Penalty, compensation cost 1,441,926,682 2,311,431,381 Tax adjustments (317,997,396) - Disposal of fixed assets 225,882,615 3,102,236,161
Welfare expense - 2,721,464,294 Net current corporate income tax expense 157,989,589,078 350,424,712,724
Construction expense of 266 Le Loi project - 11,792,020,639
Reversal insurance fee for FPSO Ruby II vessel from The Parent Company and its subsidiaries are obliged to pay corporate income tax at the rate of 20% of its taxable - 4,626,828,036 09/6/2010 to 31/3/2011 income since 1 January 2016.
Others 7,919,982,502 14,585,530,481 (i) Tax deductions primarily represent the exempted amount for 4 years from the first year of having taxable income and 50% reduction of the tax payable in the next 9 years of Dinh Vu Petroleum Services Port Joint Stock Company 12,410,057,984 62,419,150,229 and PTSC Thanh Hoa Port Joint Stock Company.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
41. BASIC EARNINGS PER SHARE 43. FINANCIAL INSTRUMENTS
The calculation of the basic earnings per share attributable to the ordinary equity holders of the Parent Company is based on the following data: Capital risk management
2016 2015 The Corporation manages its capital to ensure that the Corporation will be able to continue as a going concern VND VND while maximising the return to shareholders through the optimisation of the debt and equity balance.
Profit for the year attributable to ordinary shareholders of 1,038,743,379,556 1,517,394,760,704 The capital structure of the Corporation consists of net debt (borrowings disclosed in Note 23 and Note 24, offset the Corporation by cash and cash equivalents) and equity attributable to shareholders of the Corporation (comprising owners’ contributed capital, share premium, investment and development fund and retained earnings). Less: Appropriation of bonus and welfare fund 90,775,446,381 215,077,583,166 as budget Gearing ratio Profit for calculating basis earnings per share 947,967,933,175 1,302,317,177,538 The gearing ratio of the Corporation as at the balance sheet date was as follows: Weighted average number of ordinary shares 446,700,421 446,700,421
Basic earnings per share 2,122 2,915 Closing balance Opening balance 42. OPERATING LEASE COMMITMENTS
2016 2015 VND VND
VND VND
Minimum lease payments under operating leases 1,028,808,421,285 1,173,897,588,278 Borrowingst 1,575,655,776,806 2,247,760,269,458 recognised in the consolidated income statement for the year At the balance sheet date, the Corporation had outstanding commitments under non-cancellable operating leas- es, which fall due as follows: Less: Cash and cash equivalents 5,883,669,671,740 7,991,387,356,724 31/12/2016 31/12/2015
VND VND Net debt - - Within one year 572,211,593,275 619,232,648,790
In the second to fifth year inclusive 815,987,318,971 863,946,754,265
After five years 1,117,678,939,193 874,327,953,275 Equity 11,752,452,210,166 11,874,874,037,617
2,505,877,851,439 2,357,507,356,330
Net debt to equity ratio - - As at 31 December 2016, the Corporation had commitments under non-cancellable operating leases of ship; land in Vung Tau City for the purpose of building an office for PTSC Supply Base and PTSC Mechanical & Construction Company Limited; of land for the purpose of providing services of Phu My Port Joint Stock Company; Sao Mai – Ben Dinh Petroleum Investment Joint Stock Company of property for the purpose of hotel services of Petro Hotel Significant accounting policies Company Limited. Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases The ship leases are signed for a period from 1 year to 5 years since 2013. The land lease in Vung Tau City was of measurement, and the bases for recognition of income and expenses) for each class of financial asset, financial signed for 50 years since 2002. liability and equity instrument are disclosed in Note 4.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Foreign currency risk management Categories of financial instruments The Corporation undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange Carrying amount rate fluctuations arise. The Corporation has managed these risks by signing contract with customers with the respective Closing balance Opening balance currency with suppliers and adjust the selling price when there is significant fluctuation of exchange rate. VND VND The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities at the Financial assets end of the year were as follows: Cash and cash equivalents 5,883,669,671,740 7,991,387,356,724 Assets Liabilites Trade and other receivables 5,336,116,236,209 5,140,224,852,743 Loan receivables - 28,757,555,368 31/12/2016 31/12/2016 31/12/2016 31/12/2016 Financial investments 937,453,737,778 607,352,658,320 VND VND VND VND
Deposits 10,647,044,637 31,971,408,873 United States Dollar 5,589,794,767,537 6,209,965,379,842 3,458,489,081,707 4,325,123,704,974 (“USD”) 12,167,886,690,364 13,799,693,832,028 Bristish Pound (“GBP”) 6,916,415,798 30,156,577,071 35,371,625 4,290,141,023
Financial liabilities Euro (EUR) 24,234,864,366 87,159,122 938,980,803 27,432,488,908
Singapore Dollar Borrowings 1,575,655,776,806 2,247,760,269,458 - - 2,419,883,743 13,332,847,863 (“SGD”) Trade and other payables 4,606,699,068,194 5,427,466,442,539 Foreign currency sensitivity analysis Accrued expenses 2,063,212,809,649 1,779,598,558,385 The Corporation is mainly exposed to United States Dollar. Provisions 1,418,530,029,735 1,364,156,687,981 The following table details the Corporation’s sensitivity to a 2% increase and decrease in Vietnam Dong against 9,664,097,684,384 10,818,981,958,363 USD. 2% is the sensitivity rate used when reporting foreign currency risk internally to the Board of Management and represents the Board of Management’s assessment of the reasonably possible change in foreign exchange The Corporation has not determined fair value of its financial assets and liabilities as at the balance sheet date since rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts there is no comprehensive guidance under Circular No. 210/2009/TT-BTC issued by the Ministry of Finance on 6 their translation at the year end for a 2% change in foreign currency rates. For a 2% increase/decrease in USD November 2009 (“Circular 210”) and other relevant prevailing regulations to determine fair value of these financial against Vietnam Dong, the Corporation profit before tax in the year would have increased/decreased by the same assets and liabilities. While Circular 210 refers to the application of International Financial Reporting Standards (“IFRS”) amount as follows: on presentation and disclosures of financial instruments, it did not adopt the equivalent guidance for the recognition and measurement of financial instruments, including application of fair value, in accordance with IFRS. Current year Prior year
Financial risk management objectives VND VND
United States Dollar (“USD”) 42,626,113,717 18,848,416,749 The Corporation has set up risk management system to identify and assess the risks exposed by the Corporation and designed control policies and procedures to manage those risks at an acceptable level. Risk management system is reviewed on a regular basis to reflect changes in market conditions and the Corporation’s operations. Based on the similar analysis for other currencies, there is no significant impact on the results of operations of the Corporation. Financial risks include market risk (including foreign currency risk, interest rate risk, share price risk and commodity price risk), credit risk and liquidity risk. Interest rate risk management
Market risk The Corporation has significant interest rate risks arising from interest bearing loans which are arranged. The Corporation is exposed to interest rate risk as the Corporation and its subsidiaries borrows at both fixed and The Corporation’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest floating interest rates. The risk is managed by the Corporation by maintaining an appropriate mix between fixed rates and prices. and floating rate borrowings..
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Interest rate sensitivity Less than 1 year From 1- 5 years After 5 years Total VND VND VND VND The loan’s sensitivity to interest rate changes which may arise at an appropriate level is presented as below. 31/12/2016 Assuming all other variables were held constant, if interest rates applicable to floating interest bearing loans had Cash and cash 5,883,669,671,740 - - 5,883,669,671,740 been 200 basis points higher/lower, the Corporation’s profit before tax for year ended 31 December 2016 equivalents would have decreased/ increased by VND 18,319,472,310 (for the year ended 31 December 2015: VND Trade and other 5,313,965,930,538 22,150,305,671 - 5,336,116,236,209 44,955,205,389). receivables Loan receivables - - - - Share price risk management Financial investments 935,067,059,313 2,386,678,465 - 937,453,737,778 Deposits 1,194,377,020 9,452,667,617 - 10,647,044,637 The Corporation is exposed to equity price risks arising from investments in subsidiaries and associates. The 12,133,897,038,611 33,989,651,753 - 12,167,886,690,364 Corporation’s Boad of Management assesses and approves decisions on investments in subsidiaries and associates such as operating industry, investees, etc. Investments in subsidiaries and associates are held for long-term strategic 31/12/2016 investments rather than trading purposes. The Corporation does not have intention to trade these investments in the Borrowings 432,147,165,556 1,064,189,947,329 79,318,663,921 1,575,655,776,806 foreseeable future. Trade and other 4,606,495,000,809 204,067,385 - 4,606,699,068,194 payables Commodity price risk management Accrued expenses 2,063,212,809,649 - - 2,063,212,809,649 Provisions 92,918,046,175 1,325,611,983,560 - 1,418,530,029,735 The Corporation purchases materials, commodities from local and foreign suppliers for business purpose. Therefore, 7,194,773,022,189 2,390,005,998,274 79,318,663,921 9,664,097,684,384 the Corporation is exposed to the risk of changes in selling prices of materials, commodities.
Credit risk Net liquidity gap 4,939,124,016,422 (2,356,016,346,521) (79,318,663,921) 2,503,789,005,980
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Corporation. The Corporation has a credit policy in place and the exposure to credit risk is monitored on an Less than 1 year From 1- 5 years After 5 years Total ongoing basis. The Corporation does not have any significant credit risk exposure to any counterparty because VND VND VND VND receivables consist of a large number of customers, spread across diverse industries and geographical areas. 31/12/2015 Cash and cash Liquidity risk management 7,991,387,356,724 - - 7,991,387,356,724 equivalents Trade and other The purpose of liquidity risk management is to ensure the availability of funds to meet present and future financial 5,120,569,735,057 19,655,117,686 - 5,140,224,852,743 receivables obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in Loan receivables 28,757,555,368 - 28,757,555,368 any year is kept to manageable levels relative to the amount of funds that the Corporation believes can generate within that year. The Corporation policy is to regularly monitor current and expected liquidity requirements to ensure Financial investments 570,070,000,000 37,282,658,320 - 607,352,658,320 that the Corporation maintains sufficient reserves of cash, borrowings and adequate committed funding from its Deposits 29,281,984,607 2,689,424,266 - 31,971,408,873 shareholders to meet its liquidity requirements in the short and longer term. 13,740,066,631,756 59,627,200,272 - 13,799,693,832,028
The following table details the Company’s remaining contractual maturity for its non-derivative financial assets and 31/12/2015 financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted Borrowings 684,347,404,258 1,450,481,550,489 112,931,314,711 2,247,760,269,458 Trade and other cash flows of financial assets and undiscounted cash flows of financial liabilities based on the earliest date on 5,294,871,024,465 132,595,418,074 - 5,427,466,442,539 which the Company can be required to pay. payables Accrued expenses 1,779,598,558,385 - - 1,779,598,558,385 Provisions 108,095,627,052 1,256,061,060,929 1,364,156,687,981 7,866,912,614,160 2,839,138,029,492 112,931,314,711 10,818,981,958,363
Net liquidity gap 5,873,154,017,596 (2,779,510,829,220) (112,931,314,711) 2,980,711,873,665
The Board of Management assessed the liquidity risk at low level. The Board of Management believes that the Corporation will be able to generate sufficient funds to meet its financial obligations as and when they fall due.
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
44. RELATED PARTY TRANSACTIONS AND BALANCES During the year, the Corporation entered into the following significant transactions with related parties:
List of related parties Relationship 2016 2015 VND VND Vietnam Oil and Gas group Holding Company Sales Nghi Son Refinery and Petrochemical Complex Project Management Board Company in Group PetroVietnam Gas Joint Stock Corporation 1,593,984,861,175 1,223,936,498,745 Long Phu 1 Power Plant Project Management Board 629,681,297,991 634,743,699,147 Vung Ang - Quang Trach Power Plant Project Management Board Company in Group Vietnam Oil and Gas group 497,629,715,205 27,691,665,219 Thai Binh II Power Plant Project Management Board Company in Group PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 443,693,451,925 309,816,168,482 Long Phu 1 Power Plant Project Management Board Company in Group Binh Son Refining and Petrochemical Company Limited 314,966,474,648 239,466,159,790 PetroVietnam Drilling and Well Services Corporation 77,997,990,791 92,183,826,193 Dung Quat Oil Refinery Factory – Project Management Unit Company in Group PetroVietnam Exploration Production Corporation 77,078,223,539 348,149,983,303 PetroVietnam Insurance Corporation Company in Group Drilling Mud Joint Stock Corporation 29,592,627,645 35,568,152,639 Dung Quat Shipbuilding Industry Company Limited Company in Group Dung Quat Shipbuilding Industry Company Limited 19,364,328,237 10,203,240,533 Binh Son Refining and Petrochemical Company Limited Company in Group PetroVietnam General Service Joint Stock Corporation 17,736,795,865 21,701,614,724 PetroVietnam Ca Mau Fertilizer Joint stock Company 14,499,944,498 13,258,441,170 Vietnam Public Joint Stock Commercial Bank Company in Group PetroVietnam Construction Joint Stock Company 12,229,344,280 58,978,595,640 PetroVietnam General Service Joint Stock Corporation Company in Group PetroVietnam Manpower Training College 11,202,397,416 11,932,786,009 PetroVietnam Drilling and Well Services Corporation Company in Group PetroVietnam Power Corporation 10,069,076,036 11,569,997,407 PetroVietnam Transportation Corporation 5,560,300,421 7,962,386,666 PetroVietnam Transportation Corporation Company in Group PetroVietnam Oil Corporation 1,944,948,213 1,269,717,999 PetroVietnam Construction Joint Stock Company Company in Group Thai Binh II Power Plant Project Management Board 758,088,000 758,088,000 PetroVietnam Energy Technology Corporation Company in Group Vietnam Public Joint Stock Commercial Bank 725,614,949 283,613,637 PetroVietnam Insurance Corporation 589,378,845 81,614,545 Drilling Mud Joint Stock Corporation Company in Group Vung Ang - Quang Trach Power Plant Project 582,272,731 1,055,604,108 PetroVietnam Gas Joint Stock Corporation Company in Group Management Board
PetroVietnam Fertilizer and Chemicals Joint Stock Corporation Company in Group PetroVietnam Engineering Corporation 4,158,000 327,170,008 Nghi Son Refinery and Petrochemical Complex Project - 172,328,109,940 PetroVietnam Exploration Production Corporation Company in Group Management Board PetroVietnam Manpower Training College Company in Group
PetroVietnam Engineering Corporation Company in Group 2016 2015 PetroVietnam Oil Corporation Company in Group VND VND
PetroVietnam General Service Joint Stock Corporation Company in Group Loan interest Vietnam Public Joint Stock Commercial Bank 18,452,382,046 27,682,463,399 Petrovietnam Petrochemical and Textile Fiber Joint Stock Company Company in Group
PetroVietnam Ca Mau Fertilizer Joint stock Company Company in Group Remuneration of the Board of Directors, Board of Management and Board of Supervisors during the year as follows: PetroVietnam Power Corporation Company in Group 2016 2015 Bien Dong Petroleum Operating Company Company in Group VND VND Salary and benefits in kinds 14,523,115,000 14,379,173,230
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STATEMENTS (Continued) FORM B 09-DN/HN STATEMENTS (Continued) FORM B 09-DN/HN
Significant related party balances as at the balance sheet date were as follows: 31/12/2016 31/12/2015 31/12/2016 31/12/2015 VND VND VND VND Trade receivables Trade payables Bien Dong Petroleum Operating Company 477,128,220,848 610,194,370,810 PetroVietnam Exploration Production Corporation 132,535,870,219 211,822,625,811 PetroVietnam Gas Joint Stock Corporation 291,425,001,609 161,969,108,539 PetroVietnam Construction Joint Stock Company 93,800,866,366 24,765,202,868 PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 172,978,117,164 73,573,917,895 PetroVietnam Drilling and Well Services Corporation 39,992,050,431 27,089,929,607 PetroVietnam Exploration Production Corporation 121,244,498,956 188,288,143,102 Nghi Son Refinery and Petrochemical Complex Project PetroVietnam General Service Joint Stock Corporation 26,290,563,147 91,491,347,204 73,350,037,636 5,566,760,597 Management Board PetroVietnam Gas Joint Stock Corporation 14,002,376,774 498,013,200 Long Phu 1 Power Plant Project Management Board 40,973,825,781 483,710,619,276 Binh Son Refining and Petrochemical Company Limited 36,676,914,093 31,623,836,255 PetroVietnam Engineering Corporation 9,957,874,090 21,450,017,085 PetroVietnam Drilling and Well Services Corporation 30,377,251,450 21,649,783,631 PetroVietnam Manpower Training College 6,787,941,876 2,201,815,875
Drilling Mud Joint Stock Corporation 7,538,840,510 694,189,510 PetroVietnam Oil Corporation 5,689,117,078 17,769,324,088 Dung Quat Shipbuilding Industry Company Limited 3,524,400,695 4,572,629,721 PetroVietnam Transportation Corporation 715,043,213 208,266,420 PetroVietnam Ca Mau Fertilizer Joint stock Company 3,190,491,561 1,101,169,794 PetroVietnam Construction Joint Stock Company 2,090,161,369 16,880,289,452 PetroVietnam Energy Technology Corporation 375,777,841 2,358,470,558 PetroVietnam General Service Joint Stock Corporation 1,820,941,473 1,816,549,869 Dung Quat Shipbuilding Industry Company Limited 329,566,952 627,599,808
PetroVietnam Manpower Training College 1,601,398,204 10,462,387,004 PetroVietnam Insurance Corporation 309,314,549 1,266,003,566 Vietnam Oil and Gas Group 1,159,136,846 774,874,440 PetroVietnam Fertilizer and Chemicals Corporation 125,717,790 287,940,125 PetroVietnam Transportation Corporation 1,036,817,183 2,969,848,022 PetroVietnam Power Corporation 496,953,710 459,689,267 PetroVietnam Oil Corporation 357,832,182 259,884,767 Advances from customers Long Phu 1 Power Plant Project Management Board 791,695,089,681 1,051,381,785,330 Advances to suppliers PetroVietnam Fertilizer and Chemicals Corporation 216,400,185,333 312,666,955,829 PetroVietnam General Service Joint Stock Corporation - 1,003,405,822 PetroVietnam Gas Joint Stock Corporation 135,440,143,319 244,585,600,839 PetroVietnam Energy Technology Corporation - 1,171,233,209 PetroVietnam Gas Joint Stock Corporation - 4,678,763,094 PetroVietnam Central Biofuels Joint Stock Company 50,466,725,642 50,466,725,642
PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 165,000,000 - Bien Dong Petroleum Operating Company - 76,022,200,000 Drilling Mud Joint Stock Corporation 163,112,452 -
Other payables Other receivables Long Phu 1 Power Plant Project Management Board 206,879,316,776 12,575,464,419 Vietnam Oil and Gas Group - 349,068,201,763 Vietnam Oil and Gas Group 59,514,542,073 40,811,003,545 Bien Dong Petroleum Operating Company 19,939,346,487 - Nghi Son Refinery and Petrochemical Complex Project 21,529,260,315 90,847,767,158 PetroVietnam Construction Joint Stock Company 7,826,660,837 49,873,999,702 Management Board Bien Dong Petroleum Operating Company 16,690,612,452 12,624,211,512 PetroVietnam Exploration Production Corporation 329,077,036 - Long-term loans
PetroVietnam Gas Joint Stock Corporation 155,200,000 - Vietnam Public Joint Stock Commercial Bank 182,852,571,127 492,543,919,502 Dung Quat Shipbuilding Industry Company Limited - 355,560,293,062
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STATEMENTS (Continued) FORM B 09-DN/HN
45. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Supplemental non-cash disclosures
Dividend paid to shareholders excluded an amount of VND 15,145,283,073 which has not yet been paid as at 31 December 2016 (as at 31 December 2015: VND 12,285,493,723).
In addition, as at 31 December 2016, the profit and dividend received from investments excluded amount of VND 44,531,200,000 that has not yet received (as at 31 December 2015: VND 77,003,500,000); and the accrued interest income of VND 25,931,332,538 (as at 31 December 2015: VND 14,265,945,718).
These transactions do not have impact on the cash flows during the year and consequently, are not presented in the consolidated financial statements.
46. COMPARATIVE FIGURES
Certain reclassifications have been made to the prior year’s figures to enhance their comparability with the current year’s presentation. Details are as follows:
Previously Amount after Codes Reclassification reported amount reclassification
VND VND VND
1. Cash equivalents 112 4,013,766,200,897 (5,282,397,356) 4,008,483,803,541
2. Other long-term receivables 216 20,412,205,467 5,282,397,356 25,694,602,823
Duong Thi Ngoc Quy Nguyen Quang Chanh Phan Thanh Tung Preparer Head of Accounting President and CEO Department 17 March 2017 Ho Chi Minh City, S.R. Vietnam
178 ANNUAL REPORT 2016 5th Floor, PetroVietnam Tower, 1-5 Le Duan Street, Ben Nghe Ward, District1, HCM City, Vietnam Tel: (+84).8.39102828 | Fax: (+84).8.39102929 | E-mail: [email protected] www.ptsc.com.vn