petrovietnam technical services corporation...perform our business plan in 2016. for achieving our...

PETROVIETNAM TECHNICAL SERVICES CORPORATION

3www.ptsc.com.vn

GENERAL OVERVIEWHistory of Establishment & Development

Partners, Clients

Organizational Structure, Management System

Business Field Organization

Resources

Development Strategies

SUSTAINABLE DEVELOPMENT REPORT

BUSINESS ACTIVITIES IN 2016Business Performance Result in 2016Report From The Board of Management

Assessment From The Board of Directors

CORPORATE GOVERNANCEActivities 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

Ricks management

PVS SECURITIESShareholder

Investor Relations

PVS Stock

FINANCIAL REPORT

0810

14

16

24

30

41

42

5456

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77

8082

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92

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TABLE OF CONTENTS

STOCK CODE

Domestic trading name: Tổng công ty Cổ phần Dịch vụ Kỹ thuật Dầu khí Việt NamForeign trading name: Petrovietnam Technical Services Corporation Trading name abbreviation: PTSCTax code: 0100150577Address: 5th Floor, PetroVietnam Tower, 1-5 Le Duan Street,

Ben Nghe Ward, District1, HCM City, VietNamTel: (+84).8.39102828 Fax: (+84).8.39102929Website: www.ptsc.com.vn

4 ANNUAL REPORT 2016 5www.ptsc.com.vn

Ladies and gentlemen,

In 2016, the crude oil prices strongly descended and maintained to its low level after 2 years of falling crude oil pressure which not only impacted on global oil and gas activities but also on Vietnamese oil and gas industry. Most of oil field exploration, development and production projects interior and in region have been canceled or deferred to consider financial target or wait for oil price lifting. As a result, the working volume and price in technical service market was seriously reduced, fierce competition was created by unwanted resources. Facing to the danger of going bankruptcy, series of big technical services companies had to cut down operating scale or performed their business moderately. In spite of getting great support from Petrovietnam, its’ service supply subsidiaries met lots of challenges because of declining working volume and technical service cost.

In such tough environment, we ran into difficulties to perform our business plan in 2016. For achieving our business target entrusted by the shareholders’ meeting, executive board viewed and assessed the situation, built business action plans and solutions to steer the business through difficult times and to best perform our goals. We also encouraged our staff to share difficulties with the executive board to take actions included increasing practice and reducing operating expenses in order to aim at the target. Therefore, PTSC ended FY 2016 with commendable result: total revenue was 19,293 billion dong reached 87,7%, profit before tax was 1,256 billion dong reached 104,7% (in point of fact, Brent averaging 45 USD per barrel 75% equivalent of year plant built with averaging 60 USD per barrel). Although the result is not as good as we expected, I believe that our esteemed shareholders have acknowledged our staffs’ ever - effort, our managing team’s decision and flexibility in implementing 2016 - business plan.

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. In international market, PTSC won bidding for projects: Danman - India; putting out housing barge to lease in Myanmar; supplying manpower to work in Brunei, Qatar… In interior market, PTSC performed these projects: manufacturing DK platform for Ministry of Defense; Long Phu 1 Power Plant; procurement packages of Nghi Son project, NPK, NH3, GPP Ca Mau, Duyen Hai – Tra Vinh Power Center… We ensured jobs for our employees and continued to maintain our stable development in tough period.

Dear Fellow Shareholders,

Oil price’s signal seems to be more positive in 2017, however, it is still another tough year. Recognizing this, a general strategic plan has been made by executive board to maintain sustainable development target and to adapt to international competition and integration, in which we focus on 4 solutions: (1) stepping up market expanding and services to external and oversea market; (2) developing manpower resources with international standards; (3) standardizing management system; (4) strictly carrying out economical policy, cutting down operational expense and reducing service cost.

In such hard time, PTSC’s management team and staff, more than ever, determined to sustain the leading advanced technology service supplier in Vietnam as well as to affirm our strong brand name in international market.

With our ever - effort, creation, activation to overcome difficulties and challenges, we steered the business through the hardest time in 2016. I am confident PTSC will well accomplish business plan assigned by shareholders’ meeting.

On behalf of PTSC’s management team and staff, I would like to express my sincere thanks to our Parent Company - Petrovietnam, fellow shareholders, esteemed partners and clients for your contribution, belief and support during what has been a very difficult year in the oil and gas industry and we are hoping for your continued support in the coming year.

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

CHAIRMAN OF BOARD OF DIRECTORS

Thai Quoc Hiep

MESSAGE FROMCHAIRMAN

7www.ptsc.com.vn6 ANNUAL REPORT 2016

PORT & SUPPLY BASE

OFFSHORE SUPPORT VESSELS

EPCI FOR OFFSHORE FACILITIES

BUSINESS FIELDS

INSTALLATION, OPERATION AND MAINTENANCE OFFSHORE FACILITIES

FSO/FPSO

EPC FOR INDUSTRIAL, PLANTS

SEISMIC, GEO, SURVEY AND ROV


History of Establishment & Development

Partners, Clients

Organizational Structure, Management System

Business Field Organization

Resources

Development Strategies

GENERAL OVERVIEW


• 09/02/1993: Foundation of Petroleum Technical Services Company (PTSC) by merg-ing 2 companies PSC & GPTS. It is the unique government business enterprise supplies oil and gas technical services with the initial core business: offshore support vessels; port and supply base and technical manpower supply for oil and gas contractors.

• Separation of: Parts of Hotel services from PTSC’s core business and found PetroSetco, Offshore Technical Work-shop & Drilling Team from PTSC Marine and found PetroVi-etnam Drilling (PVD).

• Developing fleet of offshore support vessels and expand-ing PTSC Vung Tau Supply base.

• Successfully performing accommodation block LQ-CPC 99 for Vietsopetro, laying the foundation of strong devel-oping oil and gas mechanical fabrication and construction service.

• Performing O&M contract for Dinh Co Gas Processing Plant, 370 km 2 phase gas pipeline and Lan Tay Tech-nological Platform which set foundation of O&M services.

• Signing shareholding agreement of investment in FPSO Ruby Princess by and between PTSC, PVI and PVFC, begin-ning of a potential service, FSO/FPSO.

1993 1994 - 2005

HISTORY OF ESTABLISHMENT & DEVELOPMENT

• 2006: Implementing equitization process, successfully offered IPO stock to public.

• 01/01/2007: Officially operating busi-ness as joint stock company model.

• Officially notice of PTSC’s stock in HNX with stock code PVS.

• Operating business under joint stock com-pany structure and steering the business in the form of Parent company– Affiliated com-panies in which Parent company directly accomplished core business by transferring Key subsidiaries back to PetroVietnam Tech-nical Services Corporation as dependent companies.

• Restructuring business by transferring petro-leum trading enterprises to PV Oil in order to concentrate on core business.

• Joining with MISC to invest in FSO Orkid and FPSO Ruby, affirming ability in FSO/FPSO field.

• 2010:

- Being awarded the title of “Hero of Labor in the innovation-time” granted by Vietnamese Party and Government.

- The first time PTSC’s turnover has ever reached USD 1 billion.

- Initial public offering to increase charter capital up to 2,978 billion VND.

• Investing in the first seismic survey vessel - 2D with ROV units, GEO vessel, improved competitive ability in marking high technol-ogy services - seismic survey, GEO Survey and Subsea Services.

• Participating in main contractor consortium for Long Phu Power Plant 1, affirming ability in performing EPC industry and plant.

2006 - 2010


• Organizing the 20th year anniversary ceremo-ny “20 years of building and firm development” (09/02/1993-09/02/2013 and the first Grade La-bor Medal Granting ceremony.

• The first time revenue exceeded 30,000 bilion VND, profit exceeded 2,000 VND in 2014.Completing the charter capital increase up to 4,467 billion VND.

• Joining with CGGV to supply and operate seismic survey service 2D, 3D, gradually mastering technology in 3D, 4D seismic survey.

• Joining with Yinson to invest in PTSC FSO Bien Đong 01 and FPSO Lam Son which led PTSC to master building and operating FSO/FPSO and to become the leading company in supply, management, operation and maintenance FSO/FPSO in Vietnam and region.

• EPCI performing ability and competitive ability in oil and gas mechanical in international market was continued to affirm and improved by winning Interna-tional competitive bidding and successfully performed projects: HRD Platform; Maharaja Lela South (MLS) in Brunei for Total E&P; Dai Hung Disconnect.

• Receiving the award:Vietnam Gold Star for 7 times in succession; Vietnam Value for 4 times in succession; Top 100 Vietnam Brands; Top 10 Golden Star Award of typical social responsibility and PTSC was one of two big service enterprises given Silver prize for the award National Quality Awardgiven by the Prime Min-ister.

• Implemented drastically and successfully organization restructure project in the period of 2011-2015: con-solidated administrative document system; completed and applied competitive ability project; completed withdrawal target pursuant to organization restructure project.

• Many large scale industrial projects were won and have been well performed such as: Fertilizer Plant pro-ject NPK; Amoniac workshop Expanding project NH3 from PVFCCo investor; Ca Mai Gas Treatment Plant from PVGAS investor All of the above achievements have proved PTSC’s prestige and ability to implement business development strategy in onshore industrial pro-jects.

2011 - 2015

• Receiving the award Vietnam Value for the 5th time in succession.

• Continuing control business stably in tough environment of oil crisis condition.

• Implementing solution system and innovation; cutting down operation expense; improving ability, competitive ability, especially technical, engineering, managing ability; stepping up activities in science and technology, invention, innovation; expanding to develop industrial service market and supply services to international market.

• Performing industrial projects in safety, environmental protection, quality, rate of progress and meeting clients’ demand these following projects: Long Phu Power Plant 1, Bidding packages B2, SMP9A of Nghi Son Refinery Plant Project, NPK, NH3, GPP Ca Mau, port dredging project for Duyen Hai - Tra Vinh Power Center…in which NPK/NH3 projects reached 1,000,000 hours in safety recorded by investors and related sides.

• Launching, transporting, installing PIP Platform Module 1 and Module 2 of Su Tu Trang development project - stage 1 on September 5th, 2016. STTFFD-P1 successfully launched which continued affirm PTSC’s prestige and leading brand in field of EPCI For Offshore Facilities with high quality service in Vietnam and region.

• Winning bidding and signing contract for supplying disconnection FMB platform for Technip in Quata and HUC Su Tu Trang.

2016

HISTORY OF ESTABLISHMENT & DEVELOPMENT


PARTNERS, CLIENTS

PTSC IS ALWAYS THE BEST CHOICE FOR CLIENTS


MANAGE-MENT BOARD

PLANNING AND INVESTMENT

DIVISION

FINANCIAL AND ACCOUNTING

DIVISION

HUMAN RESOURCES

DIVISION

SHAREHOLDERS’ MEETING

BOARD OF DIRECTORS

BRANCHES

PTSC Marine

PTSC Da Nang

PTSC Supply Base

PTSC Power

PTSC Hanoi

PTSC E & C

GENERAL ADMINISTRATION

DIVISION

ORGANIZATIONAL STRUCTURE

Malaysia Vietnam Offshore Floating Terminal (VOFT)

PTSC Asia Pacific Joint-Venture

Company (PTSC Asia Pacific)

PTSC South East Asia Joint-venture Company

(PTSC SEA)

Malaysia Vietnam Offshore Terminal Limited (MVOT)

RongDoi Joint Venture Company (RongDoi

MV 12)

Petrovietnam Marine Shipyard

Joint Stock Company

(PV Shipyard)

BOARD OF SUPERVISORS

HSEQ DIVISION INDUSTRIAL DIVISION

TECHNICAL & OPERATION

DIVISION

COMMERCIAL DIVISION

PTSC Geos and Subsea Services Company Ltd (PTSC G&S)

SUBSIDIARIESJOINT VENTURE COMPANIES

PTSC Mechanical & Construction Limited

Company (PTSC M&C)

Petro Hotel Company Ltd ( PTSC

Petro Hotel)

PTSC Thanh Hoa Port Joint Stock

Company (PTSC Thanh Hoa)

PTSC Dinh Vu Petroleum Services Port Joint Stock Company

(PTSC Dinh Vu)

PTSC Labuan Technical Service Ltd

(PTSC Labuan)

PTSC Phu My Port Joint Stock Company

(PTSC PhuMy)

PTSC Geos Survey Company Ltd (PTSC

CGGV)

PTSC Offshore Services Joint Stock Company

(POS)

PTSC Quang Ngai Joint Stock Company (PTSC QuangNgai)

PTSC Production Services Joint Stock

Company (PPS)

PV Security (PVS)

Sao Mai - Ben Dinh Petroleum

Investment Joint Stock Company (PVSB)

PTSC Quang Binh


MANAGEMENT ORGANIZATIONBOARD OF DIRECTORS

Mr. THAI QUOC HIEPCHAIRMAN

DOB: 1958 in Ha Tinh Province, Vietnam.Qualification: Geophysical Engineer;Bachelor of Business of Management.

Mr. PHAN THANH TUNGMEMBER

DOB: 1970 in Hai Phong City, Vietnam.Qualification: Master of Engineering (Professional),

Mechanical Engineer, Bachelor of Business Management, Bachelor of English language.

Mr. DOAN MINH MANMEMBER

DOB: 1958 in Ben Tre Province, Vietnam.Qualification: Bachelor of Accounting, Bachelor of Business Administration.

Mr. PHAM VAN DUNGMEMBER

DOB: 1969 in Hai Duong Province, Vietnam.Qualification: Marine Engineer,

Economic Engineer.

Ms. NGUYEN THANH HUONGMEMBER

DOB: 1961 inHa Noi, Vietnam.Qualification: Master of Economy, Electrical Engineer.

Mr. NGUYEN VAN MAUMEMBER

DOB: 1970 in Hai Duong Province, Vietnam.Qualification: Master of Business Administration, Bachelor of Financial and Accounting.

Mr. DO QUOC HOANMEMBER

BO:1969 in Hai Phong City, Vietnam.Qualification: Master of Economy,

Engineer of Maritime Transportation, Engineer of Marine Controlling.


Mr. PHAN THANH TUNGPRESIDENT & CEO

DOB: 1970 in Hai Phong City, Vietnam.Qualification: Master of Engineering (Professional), Mechanical Engineer, Bachelor of Business Management, Bachelor of English language.

Mr. NGUYEN TRAN TOANVICE PRESIDENT

DOB: 1964 in Hai Phong City, VietnamQualification: Marine Machinery Engineer,

Bachelor of Business Aministration.

Mr. LE MANH CUONGVICE PRESIDENT

DOB: 1974 in Hai Duong City, Vietnam.Qualification: Master of Business Administration, Marine Engineer.

MANAGEMENT ORGANIZATIONMANAGEMENT BOARD

Mr. NGUYEN VAN MAUVICE PRESIDENT

DOB: 1970 in Hai Duong Province, Vietnam.Qualification: Master of Business Administration,Bachelor of Financial and Accounting.

Mr. NGUYEN HUU HAIVICE PRESIDENT

DOB: 1962 in Bac Ninh Province, Vietnam.Qualification: Engineer of Electronics and

Telecommunications, Enterprise Management Engineer.

Mr. NGUYEN XUAN CUONGVICE PRESIDENT

DOB:1977 in Ha Noi, Vietnam.Qualification: Bachelor of Financial& Accounting.

Mr. TA DUC TIENVICE PRESIDENT

DOB: 1968 in Thai Binh Province, VietnamQualification: Marine Machinery Engineer, Bachelor of Business Administration.


Ms. HO THI OANHCHIEF OF BOARD OF SUPERVISORS

DOB: 1972 in Thai Binh Province, Vietnam.Qualification: Bachelor of Accounting.

Mr. TRIEU VAN NGHIMEMBER OF BOARD OF SUPERVISORS

DOB: 1983 in Phu Tho Province, Vietnam. Qualification: Bachelor of Economy.

Mr. NGUYEN QUANG CHANHACTING GENERAL MANAGER OF FINANCIAL AND ACCOUNTING DIVISION

DOB: 1981 in Ving Long Province, Vietnam.Qualification: Bachelor of Accounting, Bachelor of Business Administration

Ms. BUI THU HASTANDING MEMBER OF BOARD OF SUPERVISORS

DOB: 1980 in Thai Nguyen City, Vietnam.Qualification: Bachelor of Accounting

MANAGEMENT ORGANIZATIONMANAGEMENT BOARD (Continued)

MANAGEMENT ORGANIZATIONBOARD OF SUPERVISORS

OUTSTANDING AWARDS AND TITLES

TOP 50 - THE BEST ANNUAL REPORTS IN 2016

“BEST ENTERPRISES” OF EUROPEAN BUSINESS ASSOCIATE (EBA) IN 2014

HERO OF LABOR IN THE INNOVATION-TIME

INDEPENDENCE MEDAL - FIRST RATE

INDEPENDENCE MEDAL - SECOND RATE

VIETNAM VALUE IN 2016 TOP 100 - VIETNAMESE BRAND AND TOP 10 - TYPICAL ENTERPRISE

OF SOCIAL RESPONSIBILITY IN 2015

SILVER AWARD OF “NATIONAL VALUE” IN 2015

No. COMPANY NAME ADDRESSCHARTER CAPITAL

/ INVESTMENT RATIO CORE BUSINESS

BRANCH

1 Branch of PTSC - PTSC Marine 73, Road 30/4, Ward 9, VungTau, Vietna Directly under Parent Company - Management, operation and supply of service vessels.

2 Branch of PTSC - PTSC Supply Base 65A, 30/4 street Thang Nhat Ward, Vung Tau Directly under Parent Company - Management, Operation, Trading and Exploitation of PTSC

Supply Base.

3 Branch of PTSC - PTSC Da Nang No 11, 3- 2 Road, ThuanPhuoc Ward; Hai Chau District, Da Nang City

Directly under Parent Company - Management, Operation,

Trading and Exploitation of General port.

4 Branch of PTSC - PTSC Quang Binh Hon La Port, Quang Dong Commune, Quang Trach District, Quang Binh Province

Directly under Parent Company - Management, Operation,

Trading and Exploitation of General port.

5 Branch of PTSC - PTSC Power Thanh Duc Hamlet , Long Duc Commune,Long Phu District, Soc Trang Province

Directly under Parent Company -

Management and performance of Engineering, Procurement and Construction, Installation, Hook-up and Commissioning (EPCIC) of power plant projects and industrial facilities.

6 Branch of PTSC - Engineering & Construction Division

No. 45B, 30/4 Road, Ward 9, Vung Tau City, Ba Ria - Vung Tau Province

Directly under Parent Company - Management, Organization basic construction projects,

performing industrial facilities.

7 Branch of PTSC - Hanoi No. 42 Nguyen Khuyen Street, Dong Da District, Hanoi Capital

Directly under Parent Company - Performing business development, production projects and others.

SUBSIDIARIES

1 PTSC Mechanical & Construction Services Company Ltd.,

No. 31, 30/4 Street, Ward 9, Vung Tau City, Ba Ria - Vung Tau Province 628 billion VND 100% Fabrication and assembly of oil & gas facilities.

2 PTSC Geos and Subsea Services Company Ltd. No 9 - 11 Hoang Dieu Street, Ward 1, Vung Tau City 300 billion VND 100% Operation seismic survey 2D, 3D; Geophysical & seismic survey;

ROV subsea survey & repair.


BUSINESS FIELD ORGANIZATION

BUSINESS FIELD ORGANIZATION (Continued)



3 PTSC Geos Survey Company Ltd. (PTSC CGGV)

Room No. 460, PetroVietnam Tower, No. 08 Hoang Dieu, Ward 1, Vung Tau City, S.R Vietnam

1,171 billion VND 51% Provision of offshore seismic data acquisition in 2D&3D services

inside and outside Vietnam territory.

4 PTSC Quang Ngai Petroleum Services Joint Stock Company

4H, Ton Duc Thang Street, Le Hong Phong Ward, Quang Ngaiprovince 300 billion VND 95,19%

• Management, operation and supply of service vesselsManagement, Operation, Trading and Exploitation of General port• Transportation, chartering, port exploitation, ship brokerage, pe-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

5 PTSC Offshore Services Company Joint Stock Company

Phu My Industrial Zone, Tan Thanh Dist., Ba Ria - Vung Tau Province 400 billion VND 84,95% Transportation, installation, hook-up, commissioning services for oil

and gas projects; removal and clean-up of oil and gas projects.

6 PTSC Phu My Port Joint Stock Company Phu My Industrial Zone, Tan Thanh Dist., Ba Ria - Vung Tau Province 350 billion VND 59,61% Management, Operation and Exploitation of General Port.

7 PTSC Thanh Hoa Port Joint Stock Company

Nghi Son Commune, Tinh Gia District, Thanh Hoa Province. 400 billion VND 54,69%

• Management, Operation and Exploitation of General Port• Fabrication, assembly, repair and maintenance oil & gas and industrial facilities.

8 PTSC Dinh Vu Port Joint Stock Company Dinh Vu Industry Zone, Dong Hai II Ward, Hai An District, Hai Phong City 400 billion VND 51% Management, Operation and Exploitation of General & Container

Port.

9 PTSC Production Services Joint Stock Company

6th floor PetroVIetnam Tower, 08 Hoang Dieu Str., Vung Tau City, Ba Ria – Vung Tau Province 200 billion VND 51% Management, operation and maintenance of FPSO/FSO; Provi-

sion of manpower supply services for oil and gas industry.

10 Sao Mai - Ben Dinh Petroleum Investment Joint Stock Company

No. 9-11, Hoang Dieu Street, Distric 1, Vung Tau City, Ba Ria - Vung Tau Province 500 billion VND 51% Management, Operation and Exploitation of General Port.

11 PTSC Petro Hotel Company Ltd. No. 9-11 Hoang Dieu, Ward 1, Vung Tau City, S.R Vietnam 20 billion VND 100% Provision of tourism and cartering servicesfor oil and gas companies

in the country and abroad.


http://www.petrohotel.vn/index.php?lang=vn



12 PetroVietnam Security Services Joint Stock Company

9th Floor, Room No. 66, Lucky BuildingNo. 66 Tran Thai Tong Street, Dich Vong Ward, Cau Giay District, Ha Noi Capital

20 billion VND 51% Provision of security services.

13 PTSC Labuan Technical Service Ltd (PTSC Labuan)

Unit 3A-25, U0350, 3rd Floor, Labuan Times Square, 87007 Labuan F.T, Malaysia

572,565USD 100% Supply of service vessels for oil and gas exploitation.

JOINT - VENTURE COMPANIES

1 Vietnam Offshore Floating Terminal (VOFT)

Suite 8,05 Level 8, The Garden North Tower, Mid Valley City, Ling Karan Syed Putra 59200 Kuala Lumpur, Malaysia

54,640,000 USD 60% Investment and provision of FPSO for PCVL.

2 PTSC South East Asia Joint - Venture Company No.18, Sungel Kadult Way, Singapore 37,329,582

USD 51% Investment and provision of FSO for Bien Dong POC.

3 PTSC Asia Pacific Join - Venture Company No.18, Sungel Kadult Way, Singapore 119,996,426

USD 51% Investment and provision of FPSO for Lam Son JOC.

4 Malaysia Vietnam Offshore Terminal (MVOT)

Suite 8.05 Level 8, The Garden North Tower, Mid Valley City, Ling Karan Syed Putra 59200 Kuala Lumpur, Malaysia

35,222,268 USD 49% Investment and provision of FSO for TML.

5 RongDoi Joint Venture Company No.02, International Business Park, Unit 02-06/7The Strategy Tower, Singapore

4,716,854 USD 33% Investment and provision of FSO for KNOC.

6 Petrovietnam Marine Shipyard Joint Stock Company (PV Shipyard) 65A2, 30/4 Road, Thang Nhat Ward , Vung Tau City 595 billion VND 28,75% Fabrication, repairing, conversion oil and gas exploration,

production platform.

BUSINESS FIELD ORGANIZATION (Continued)



RESOURCES

26 Subsidiaries and Joint venture companies domestically and internationally

8,976 Employees

100% Engineers are Vietnamese

60 EPC, EPCI projects are managed and performed

3,000 Tons of structure per year - average production carried out in

platform fabrication area

3,000,000 Tons per year - load and unload ability

01 Accommodation Barge

GENERAL RESOURCES01 Transportation Barge

02 Seismic survey vessels 2D & 3D

02 Geographic survey vessels

03 ROV

05 FSO, FPSO

08 Ports & Supply Bases

15 Offshore Support Vessels

61 Ha - fabrication area

HUMAN RESOURCES


2,7%

37%

5,6%

33,7%

21%PostgraduateUniversityCollegeTechnical workersUnskilled workers to be trained

Qualification

RESOURCES (Continued)

PTSC ALWAYS CONSIDERS HUMAN RESOURCES AS VALUABLE PROPERTY AND A KEY TO SUCCESS AND SUSTAINABLE DEVELOPMENT.8,976

Total number of employees

Under 25From 25-35From 35-45From 45-55Over 55

10,6%

49%27%

10,9%

2,5%

Age group

MaleFemale

84%

16%

Gender


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), 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 operating under the brand of PTSC to meet the domestic and international market demands which included:

No. NAME OF THE VESSELS CAPACITY

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

MAIN RESOURCES AND FACILITIES

Marine service vessels

• AHTS: Anchor Handling Tug Supply vessels• Utility towing: Towing vessels

• DP1: Having Dynamic Positioning DP 1• DP2: Having Dynamic Positioning DP 2

15Marine service

vessels

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, MECHANICAL AND INDUSTRIAL PROJECTS. No. NAME OF FSO/FPSO CAPACITY

(Unit: Barrel) OPERATING FIELD

1 FSO Orkid 745,000 PM3 CAA

2 FPSO Ruby II 645,000 Hong Ngoc

3 FSO Bien Dong 01 350,000 Hai Thach & MocTinh

4 FPSO Lam Son 350,000 Thang Long - Dong Do

5 FSO MV12 300,000 Rong Doi

Floating storage and offloading (FSO) & floating production storage and offloading (FPSO)



Ports & Supply Base

08PORTS

& SUPPLY BASE

From the North to the South of Vietnam

Currently, PTSC has been managing, operating and investing in a system of 08 ports & supply bases and located along the country, from the North to the South 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.

No. SUPPLY BASES / PORTS ADDRESS SCALE

1 Vung Tau Downstream Port/ PTSC Supply Base

65A, 30/4 Road, Thang Nhat Ward, Vung Tau City, Ba Ria - Vung Tau Province.

Area: 82,2 haNumber of wharf: 09Total length of wharf: 750mCapacity:+ Vessel: 10,000 DWT+ Barge: 10,000 DWTHydroelectric depth: -6,5m to -9m

2 Phu My service Port

No. 3 Road, Phu My Industrial Zone, Tan Thanh Ward, Ba Ria - Vung Tau province

Area: 26,5 haNumber of wharf: 03+ Wharf number 1: length 385m, capacity 70,000 DWT, Hydroelectric depth -10,5m.+ Wharf number 2: length 130m, capacity 1,500 DWT, Hydroelectric depth -2,7m+ Wharf number 3: length 130m, capacity 2,500 DWT, Hydroelectric depth -3,3m

3 Sao Mai Ben Dinh Port Ba Ria - Vung Tau Province Area: 163 ha

No. SUPPLY BASES / PORTS ADDRESS SCALE

4 Dung Quat Port Binh Son District - Quang Ngai Province

Area: 4,2 haNumber of wharf: 02+ Wharf number 1: length 210m, capacity 50,000 DWT, Hydroelectric depth -10m.+ Wharf number 2: length 90m, capacity 2,000 DWT, Hydroelectric depth -4,2m

5 Son Tra Port Da Nang CityArea: 10 haNumber of wharf: 01, Length: 200m, Capacity: 20,000 DWT

6 Hon La PortQuang Dong ward, Quang Trach district, Quang Binh province

Area: 8,8 haNumber of wharf: 01, length: 215m, Capacity: 10,000 DWTHydroelectric depth: -7,8m

7 Nghi Son Port Tinh Gia District, Thanh Hoa Province

Area: 35 haNumber of wharf: 02+ Wharf number 1: length 165m, capacity 20,000 DWT, Hydroelectric depth -9,5m.+ Wharf number 2: length 225m, capacity 50,000 DWT, Hydroelectric depth -12m

8 Dinh Vu Port

Dinh Vu Industrial ZoneDong Hai II Ward, Hai An District, Hai PhongCity

Area: 15,2 haNumber of wharf: 01, length: 330m, capacity: 20,000 DWT, Hydroelectric depth: -7,8m



Facilities for fabrication and construction of oil and gas projects and industrial projects

Construction site of nearly 21 hectares, includes workshops, warehouse and modern office: construction and assembly workshop (150,000m2), canopy workshop (19,000m2), blasting and cleaning workshop (8,000m2), painting workshop (3,500m2)…

Five segments wharf with the total of 410 meters (5 sections) in length and 28 meters in width, lifting capacity from 125 tons to 1,000 tons, the water depth of 10-15 meters, load per pipe of 263-271 tons. Especially, the wharf has 3 skid ways and loading capacity up to 25,000 tons.

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.

Mechanical fabrication and construction of offshore projects is one of the most important services of PTSC, a major contribution to PTSC’s revenue and profit. For implementing the projects, PTSC owns oil & gas projects construction site in Vung tau with the facilities, port, base, warehouse, cranes, lifting equipment and other basic machinery and equipment which always meet all the customer requirements.

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:

Facilities for transportation, hook up, installation, maintenance and repair of offshore projects

No. FACILITIES/ EQUIPMENT SPECIFICATION

1Accommodation Barge with 300 occupants - PTSC Offshore 01

This barge is not a self-propelled one; length 111,6 m, width 31,7m, depth 7,3m, water lever 4,5m, weight of 9,582 tons, and be equipped a barge cranewith the lifting capacity of 300 tons.

2 5000 tons barge PTSC 01Barge with capacity of 5,000 tons uses for transportation of WHP platform, jacket, and other components for offshore constructing, repairing, maintaining and renovation.

3 Mechanical and maintenance workshop

The 11,462 m² workshop with modern facilities and equipmentprovides different kind of technical services such as repair and maintenance, conversion, upgrade and manufacture up to 500 tons of structural components.




Facilities for Seismic survey service, geological and geophysical survey service, and subsea services

Seismic survey service, geological and geophysical survey service, and subsea services using Remote Operated Vehicle (ROV) are high and complex technology services with providing, management and operation of 2D and 3D seismic vessels, geological survey vessels, supplying and operation of ROV and other specialized survey vehicles. PTSC is dominating and controlling a Single-member limited liability company and a Joint Venture with relatively complete resources and facilities to perform surveying tasks in different sea areas on continental shelf of Vietnam and other regions in the world.

No. FACILITIES AND EQUIPMENT SPECIFICATIONS

1 Seismic survey vessel2D - Binh Minh 02

Implementing seismic survey with 2D technology on continental shelf ofevery sea areas.

2 Seismic survey vessel3D - Amadeus

Implementing seismic survey with 3D technology on continental shelf ofevery sea areas.

3 Geophysical survey vessel -PTSC Surveyor

Capable of drilling for geological surveys at the water levels from 7m to 300m and performing geological surveys at the water levels from 7m to 500m.

4 Survey Vessel - PTSC Researcher

Capable of performing geological surveys at the water level up to 1000m and oceanographic surveys in different sea areas on continental shelf of Vietnam and other local region.

5 Oil & Gas 105 vessel 1,600 HP vessel assists survey diving work.

6 Survey Vehicles ROV Observation (02 unit)

ROV Panther Plus 911 and ROV Panther Plus 954 are used for taking surveys and repairing subsea works. The vehicles can go as deep as 2000m underwater.

7 Survey Vehicle ROV Work Class (01)

ROV Quasar Compact 007 is used for taking surveys and repairing subsea works. The vehicle can go as deep as 2000m underwater.

Development viewpoint

DEVELOPMENT STRATEGIES

Objectives for the period 2016 - 2020In long term: maintaining its objective of becoming a strong corporation with reputable trademark nationwide and worldwide in the core services: oil and gas technical services, surveys, marine services, industrial projects, in which the oil and gas technical services will play the key and fundamental role. PTSC looks to become a prestigious and leading industrial and oil & gas technical service provider in the Southeast Asian region.In short and medium term: Controlling business stably in tough environment of oil crisis condition; taking advantages of every investment opportunity to improve ability and wait for oil prize lifting. Striving for rate of profit before tax/charter capital of Mother company to reach 10% per year.

VisionBecoming an oil and gas technical service supplier, robust and competitive EPCI/EPC international contractor for industrial, plants with production and service filling with content of intelligence, high value added.

Stable and sustainable development; maintaining a close connection between business operation and environmental protection and national security, utilizing the advantage of being a member of Vietnam National Oil and Gas Group.Maintaining a close cooperation with partners oil and gas industry to exploit and utilize the general resources.Creating joint ventures, affiliates with local and foreign companies to 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.


SUSTAINABLE DEVELOPMENT

REPORT


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:

BUILDING, APPLYING THROUGH SYSTEM OF

SOLUTIONS TO DEVELOP RESOURCES AND BUSINESS.

DEVELOPING PROFESSIONAL WORKING ENVIRONMENT, HUMAN RESOURCES WITH HIGH QUALIFICATION AND

INTERNATIONAL LEVEL.

DEVELOPING BUSINESS CONNECTED WITH ENVIRONMENTAL PROTECTION AND

COMMUNITY, SOCIETY RESPONSIBILITY.

SUSTAINABLE DEVELOPMENT REPORT

MESSAGE OF SUSTAINABLE DEVELOPMENTThe 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.

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.

BUILDING, APPLYING THROUGH SYSTEM OF SOLUTIONS TO DEVELOP RESOURCES AND BUSINESS

PTSC’S CERTIFICATE OF SUSTAINABLE DEVELOPMENT COMPLYING WITH INTERNATIONAL STANDARD

In 2016, we economized on 557,201 million VND, reached 101% of the year economy plan.

SOLUTIONS OF CUTTING DOWN OPERATION EXPENSE AND REDUCING SERVICE COST:

Economizing on management

expense

Economizing on materials, fuel,

energy

Economizing by reducing the cost

of purchasing goods and

services

Economizing by investment activities, performance projects in safety and on rate

of progress

Economizing by self-repairing, commissioning machine and equipment

140,224Million VND

187,301Million VND

159,493Million VND

20,640 40,565Million VND Million VND

8,978Million VND

Economizing by application of science, technology, initiative, technical innovation

SOLUTIONS OF INVESTMENT:

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.

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:

SUSTAINABLE DEVELOPMENT REPORT (Continued)


SOLUTIONS OF DIVERSIFYING PRODUCTION AND SERVICE FORMS, PROMOTING RESEARCH AND DEVELOPMENT:

SOLUTIONS OF RESTRUCTURING, INNOVATING SCIENCE AND TECHNOLOGY SYSTEM, IMPROVING MANAGEMENT SYSTEM:

SOLUTIONS OF COMPREHENSIVE COMPARISON BETWEEN STATE CAPITAL ENTERPRISES, COMPETITORS AND OTHER ENTERPRISE FORMS:

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.

With the target of drastically implementing restructure, utilizing competitive ability project, applying science, technology, initiative, invention, innovation, information and technology on business activities. In 2016, PTSC has built and applied software:

Such solutions gave effect in right assessment of competitors’ ability, PTSC’s advantages and disadvantages. Therefore, PTSC could make appropriate solutions to improve competitive ability in business development and in bidding to have more business, contracts including the smallest business.

SOLUTIONS OF MARKETING, JOINT VENTURE, BUSINESS DEVELOPMENT AND EXPANDING BUSINESS TO INTERNATIONAL MARKET:

For taking advantage of strong points to maintain and hold fast current market together with stepping up business development in oil & gas and industrial area, expanding business to international market. Promoting to cooperate with domestic and foreign partners/clients to perform projects with competitive cost as well as to increase bid wining capacity and not to depend on protective policy.

• Online library, administrative information system, human resource management system, enterprise resource planning (ERP).

• Customer relation management (CRM).

• Supply chain management (SCM).

• Initiative, invention to be acknowledged: 912 in which 801 initiatives and invents were applied. Total benefit: 8,978 million VND.

Up to the date December 31st, 2016, PTSC’s human workforce reaches 8,976 people with average income of 15,500,000 VND/person/month. This is such acknowledged result of PTSC’s leadership and staff comparing such fact difficulties that we faced to.

For achieving such result and meeting the requirement of management, job, business development, international standards when doing business with international contractors as well as to be able to compete with working force in the region, PTSC applied the following personnel solutions:

In the trend of deep integration of international economy and violent competition in technical services, PTSC clearly knows that building up high technology and skillful human workforce to create advantaged competition is through training investment. In 2016, PTSC organized 12,000 training sessions participated in planned and demanded training courses with total expenses of 25 billion VND, obtained 100% of the year plan.

15,5

Million VND/person/month

average income

12,000

Training Sessions

25Billion VND

DEVELOPING PROFESSIONAL WORKING ENVIRONMENT, HUMAN RESOURCES WITH HIGH QUALIFICATION AND INTERNATIONAL LEVEL.

HUMAN RESOURCES IS ALWAYS A CRUCIAL FACTOR IN SUSTAINABLE DEVELOPMENT STRATEGY FOR ENTERPRISE. THEREFORE, FOR PTSC IN SUCH TOUGH ENVIRONMENT, DEVELOPING PROFESSIONAL WORKING ENVIRONMENT, HUMAN RESOURCES QUALITY IMPROVEMENT, LABORERS’ BENEFIT CARING, LABORERS’ POLICY AND RIGHT ENSURING CONSIDERED TO BE FIRM FOUNDATION TO OVERCOME DIFFICULTIES AND STABLY DEVELOP.

PAY, ALLOWANCE AND TRAINING POLICY

Participated training courses

Total training courses expenses

• Making payment and allowance pursuant to employee’s practical workload and result;

• Applying attractive policy for high technology and skilful human resources;

• Implementing, completing mechanism and policy; increasing reasonably and explicitly allowance and payment in the way of admitting difference.



Along with pay and allowance policy, in order to compete in the market, PTSC s always cares employees’ social welfare policy. Depending on business result, employees can get the best welfare possible:

WELFARE POLICY

• Health care policy: All of employees can get: Health examination once per year; health and life insurance (PVI care) and employees are also supported for their relatives’ health care package from PVI.

• Social welfare: PTSC ensure social insurance, health insurance and life insurance regulations according to labor law.

• Vacation: Depending on business performance result, Employees participate in vacation program once per year.

• Other welfare policies: Employees also receive welfare on PTSC’s foundation day, on Tet and national holidays; Besides, PTSC organizes canteen to serve meal for employees with strict food safety regulation and arranges accommodation for employees participating projects.

DEVELOPING BUSINESS CONNECTED WITH ENVIRONMENTAL PROTECTION

DEVELOPING BUSINESS CONNECTED WITH ENVIRONMENTAL PROTECTION AND COMMUNITY, SOCIETY RESPONSIBILITY

Maintaining, improving and developing HSEQ system

Being a leading technical service supplier of PetroVietnam, along with developing business, PTSC always considers to maintain and to continue 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 System), ISO 14001:2004 (Environmental Management System) and ISO 9001: 2008 (Quality Management System) which were all certified by BSI – Bristish Standard Institution.

Aiming at creating safety working environment, drastically preventing working accident, occupational disease and losing property; not damaging and polluting environment; Ensuring to meet clients’ demands, in 2016, 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.


Managing, utilizing effectively productive materials and energy

For specializing in oil and gas technical service supply, it is hard to calculate detailed utilization productive materials source for manufacturing products and services as other enterprises. Core productive material and energy participated in manufacturing products and services as follows:

Productive materials and energy management and utilization were strictly controlled by quality management process, technical norm, operation guiding to ensure safety as well as to minimize elimination to the environment. For reducing maximum energy consumption, we issued and implemented 138 norms of fuel and energy consumption, in which 10 new regulations and norms were issued in 2016. For operation of support 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.

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 consumption is about 627,000 m3 per year. All of wastewater is collected, processed, controlled and strictly complies with current waste treatment regulation, environment protection regulation, international convention on offshore production activities before eliminating.

138norms of fuel and

energy consumption

Implemented

• All kinds of semi-finished product iron and steel, coating vanish …serving for mechanics, maintenance and repair productive equipment and materials.

• Gasoline, diesel DO, industrial gas, electric to operate equipment, machine, means serving for productive operation.

Social security activities

Throughout PTSC’s history of building and development, we always 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 find solutions to face with difficulties caused by crude oil price crisis, PTSC often takes responsibility to social security. In 2016, with the total amount for supporting social security is 19 billion VND, PTSC effectively deployed social security from Petrovietnam’s assignment including:

19Billion VND

for supporting social security

DEVELOPING BUSINESS CONNECTED WITH COMMUNITY AND SOCIETY RESPONSIBILITY

• PTSC supported to build schools in Phu Yen, Thai Binh, Yen Bai; Supported for social security fund in An Giang, Kien Giang, national fund for Vietnamese children.

• Supporting for in the middle of Vietnam people who suffered from disasters and floods.

• Sponsoring for medical, education quality improvement in local areas

• 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.

Voluntary activities for community life, homeland protection, security and politics conservation, social order and security of PTSC Youth Union

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



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 province; organizing program “ Let’s clean up beaches”.

Organizing effectively propagandize education activities of environmental protection, energy saving; organizing programs: “Volunteer Saturday”, “Green Sunday”, “Tree planting on Tet holiday”; tidying up in working 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.

• 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.

50Implemented

Voluntary activities of PTSC Youth Union



Business Performance Result in 2016

Report From The Board of Management

Assessment From The Board of Directors

BUSINESS ACTIVITIESIN 2016


Profit before taxProfit after tax

TOTAL BUSINESS PERFORMANCE RESULT IN 2016

No. DESCRIPTION UNITACTUAL

2015(A)

BUDGET 2016

(B)

ACTUAL 2016

(C)(C) VS (B) C) VS. (A)

1Total consolidated Revenue

Billion VND 23,879,4 22,000,0 19,292,6 87,7% 80,8%

2 Profit before tax

Billion VND 2,015,1 1,200,0 1,256,1 104,7% 62,3%

3 Profit after tax Billion VND 1,493,5 960,0 909,7 94,8% 60,9%

BUSINESS PERFORMANCE RESULT IN 2016

2014 2015 2016

2,544,0

1,991,2

2,015,1

1,256,11,493,5

909,7

2014 2015 2016

31,922,3

19,292,6

23,879,4

Consolidated Revenue

1,256Billion VND

Profit Before Tax19,293

Billion VND

Total Consolidated Revenue in 2016

PARENT COMPANY BUSINESS PERFORMANCE RESULT DURING FY 2016

No. DESCRIPTION UNIT ACTUAL 20135(A)

BUDGET 2016

(B)

ACTUAL 2016(C) (C) VS (B) (C) VS. (A)

1 Owner Capital Billion VND

4,467,0 4,467,0 4,467,0 100,0% 100,0%

2 Revenue and other incomes

Billion VND

13,102,7 10,500,0 10,941,7 104,2% 83,5%

3 Profit before tax Billion VND

1,066,1 800,0 621,1 77,6% 58,3%

4 Profit after tax Billion VND

951,6 730,0 618,7 84,7% 65,0%

5 Investment Billion VND

629,0 934,0 36,0 3,9% 5,7%

6 Profit after tax/ Owner Capital

% 21,3% 16,3% 13,8% 84,7% 65,0%

Profit before taxProfit after tax

2014 2015 2016

13,467,8

10,941,7

13,102,7

Parent company revenue

2014 2015 2016

1,401,0

1,199,4

1,066,1

621,1951,6

618,7

58 ANNUAL REPORT 2016

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%

59www.ptsc.com.vn

BUSINESS PERFORMANCE RESULT IN 2016 (Continued)


REPORT FROM THE BOARD OF MANAGEMENT

REPORT FROM BOARD OF DIRECTORS

General business activities

As a technical services supplier for oil & gas contractors so we build business plan base on advantages, difficulties and opportunities in 2016 with estimate crude oil price fluctuate at average of 60 USD/barrel. But in fact, the crude oil price was only 45 USD/barrel, lower 25% than estimate price.

The crude oil price was at low level in a long time cause serious influence to PSTC business, such as: almost new projects of developing offshore oil & gas fields were delayed & postponed; the exploring & exploiting enterprises (contractors) were such unprofitable that narrowed scope of production…

In 2016, PTSC’s business activities run into difficulties caused of: oil & gas contractors strictly performed the solutions of saving costs, maximum reducing jobs as well as operating expenses, high pressure from competition of oversea contractors and private enterprise with low price services. They even supplied with unprofitable price, dumping price. Many potential service contracts were postponed or reduced price, the

real quantity was much lower than estimated quantity so that almost services of PTSC could not reach the target (with assuming oil price at 60usd/barrel).

Recognizing the hard of business activities in 2016, PTSC had found directions and carried out Implementing

CONSOLIDATED REVENUE IN YEAR 2016 REACHED 19,293 BILLION VND, CONSOLIDATED PROFIT BEFORE TAX REACHED 1,256 BILLION VND. THESE RESULTS PROVE PTSC‘S GREAT EFFORT IN PROMOTING BUSINESS ACTIVITIES, GETTING JOBS FOR NEARLY 9,000 LABOURS WHILE THE QUANTITY OF JOBS WAS EXTREMELY DECLINE.

Program, organized to perform many solutions aim to increase business activities; cut cost, saved money (cut down on salary, benefit, bonus, labor, lengthen depreciation period…) aim to minimize expenses in such difficult situation.

The result of general turnover and consolidate revenue reached 19,293 billion VND equal 87.7% year plan, decreased 19.2% y-y; profit before tax reached 1,256 billion VND equal 104.7% year plan, decreased 37.7% y-y.

Although crude oil average price in fact was lower 20% than plan, service supplying activities under pressure of decreasing price, reducing job quantities demand of clients, PTSC had been enhancing to 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.

PTSC has gained such good business results due to making progresses on all activities in year 2016, such as:

• Labor force with solidarity and initiative informed comprehensive solutions, saved cost at all divisions.

• Board of Directors encouraged labor force to try hard, show their all abilities; fortified company culture: clear, equitable, civilized.

• Initiative and innovative movements promoted 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 popularized to all subsidiaries in order to apply in right condition and situation with high effectiveness.

• Market development activities had many conformable improvements, market analysis focused on major points combined with setting up joint venture, cooperated with domestic and international contractors, partners.

• Human resource training & developing were deployed in many forms aim to meet the demand of human resource such as updating or upgrading skill as well as knowledge so that they could control high technology services.

• Engineer, technician and science management forces had been received special care in order to develop in works and projects.


Business activities

OFFSHORE SUPPORT VESSELS:

In 2016, because of crude oil price reducing, the contractors cut down costs so that a lot of vessel contracts were reduced the price, impacted to these vessels activities. Almost oil and gas projects were postponed or get slowdown so the demanding on this service was decreased. PTSC promoted in using existing resources, limited to use bareboat in order to reducing cost. PTSC executed service vessels with 4,950 on-hire days, decreased 19% in comparison with 2015. We met a lot of difficulties in negotiating and processing contract of supplying vessels caused big influence in business effect of this service.

Revenue of Offshore support vessels in 2016 was 2,165 billion VND, reached 70% year plan, reduced 55 % y-y.

2,165Billion VND

Revenue of Offshore support vessels in 2016, reached 70% year plan

Offshore support vessels

FPSOs/FSOs

EPCI for offshore facilities

Port & supply base

Installation, Operation & Maintenance offshore facilities

Epc for industrial plants

Seismic, GEO survey and ROV

Other services

EPCI FOR OFFSHORE FACILITIES:

PTSC continued to perform projects of EPCI for offshore facilities: Su Tu Trang Full Field Development Phase 1, Ghana FPSO, Daman - Phase 2…ensured safety, protected environment, quality, rate of progress according to clients’ demand and project effect. Particular of Daman- Phase 2 had been halted since Sep 01st, 2016 due to the main contractor Swiber did not do payment as well as supply equipment for execution. PTSC had been keeping contact with the owner ONGC aim to find out solution to finish this project.

Besides that, PTSC enhanced to promote the business development activities, approached the potential projects to maintain jobs in the near future, such as: Sao Vang – Dai Nguyet project, Ca Rong Do, Su Tu Trang FF - Phase 2, Block B…

Revenue from EPCI for offshore facilities service was 5,233 billion VND, reached 101% year plan, decreased 12% y-y.

3,625Billion VND

Revenue of this service in 2016, reached

101% year plan

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 partners; followed information from clients of FSO Yetagun in Myanmar, FPSO Ca Rong Do

Revenue of this service in 2016 was 3,625 billion VND, reached 101% year plan, decreased 3% y-y.

5,233Billion VND

Revenue of this service in 2016, reached 101%

year plan

REPORT FROM THE BOARD OF MANAGEMENT (Continued)


EPC FOR INDUSTRIAL PLANTS:

Carrying on the projects of EPC for industrial plants includes: Long Phu 1 thermal Power Plant, B2 package, SMP9 package in Nghi Son Refinery Plant project, NPK project, NH3 project, GPP Ca Mau project, Dredging work for Channel and Habour Duyen Hai Centre Power Plant... ensured safety, protected environment, quality, rate of progress according to clients’ demand.

Safely carried on and ensuring rate of progress of the projects confirmed ability of organizing, managing and performing EPC for industrial plants projects. It also took part in effectively using material facilities, human resources in order to assume job for labors in situation of crude oil price reducing.

Project Owner Main contractor Scope of workLong Phu 1 Therma Power Plant PVN Join name of contractors

PTSC-PMEPC Long Phu 1 Therma Power Plant main contractor

NPK PVFCCo Join name of contractors TKIS-PTSC

EPC Phu My NPK Plant main contractor

NH3 PVFCCo Join name of contractors TECHNIP -PTSC

EPC NH3 Workshop of PVFCCo Plant main contractor

GPP Ca Mau PV GasJoin name of contractors Posco Engineering (PEN)-PTSC

EPC main contractor for GPP Ca Mau

Dredging work for Channel and Habour Duyen Hai Centre Power Plant

GENCO1 Join name of contractors PTSC - Phu Xuan

Package No. 8 - Dredging work for Channel (Common and Private Chanels) and Habour from -6,5m (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.

5,217Billion VND

Revenue of this service in 2016, reached

106% year plan

1,637Billion VND

Revenue of this service in 2016, reach 91%

year plan

PORTS & SUPPLY BASE:

The serious reducing demand of using services of Vung Tau Supply Base influenced to business results on port & supply base service, such as:

• Operation activities were maintained and focused on supplying service for traditional clients (included 11 main contractors and 7 service companies). However, clients’ business decreased so demand on supply base services as well as other supporting services decreased, such as: supplying material & equipment, shipping agency, supplying industrial gas, handling garbage…

• All developing field drill and exploration activities of main contractors were postponed/reduced rate of progress. In 2016, quantity of exploration drill contractor reduced 50% in comparison with 2015; drill plan was not stable; few oil-wells were drilled; time for drilling was limited. Besides that, in order to support clients, PTSC considered discounting for more than 35 clients.

General port service was operated safely and stably at such ports: Phu My, 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 operated, took pressure of depreciation and high loan interest while there were not many works to do.

Revenue of this service in 2016 was 1,637 billion VND, reach 91% year plan, reduced 36% y-y.



INSTALLATION, OPERATION & MAINTENANCE OFFSHORE FACILITIES:

In 2016, PTSC carried on and accomplished Badamyar project - Phase 1: supplying manpower, material, equipment for Hyundai (HHI) in Myanmar got big revenue in this service. Besides that, PTSC put in the tenders and sucessed in some projects, such as: tie-in for FMB platform of Technip at Qatar, HUC Su Tu Trang…

Organized and implemented manpower supplying contracts in long term for clients: JVPC, KNOC, Cuu Long JOC, Rosneft, PVEP POC… as well as in short term for other clients. Safely operated the accommodation barge PTSC offshore 1 (on-hired 252 days, increased 77% y-y) and transportation barge PTSC 01 (on-hired 101 days, increased 3% y-y).

Revenue from this service in 2016 was 1,818 billion VND reached 101% year plan, decreased 58% y-y.

1,818Billion VND

Revenue from this service in 2016, reached 101%

year plan

613Billion VND


year plan

OTHER SERVICES:

Hotel service, security service has still stably developed:

• Effectively operated Petro Hotel Da Nang, Petro Hotel in Vung Tau to meet demand of hotel, conference, meetings for PetroVietnam and subsidiaries and tourist companies as well as local tourists. However, business result in 2016 decreased in comparison with 2015 becaused of saving cost policy of contractors leaded to reducing on demand of 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.

1,648Billion VND


year plan

SEISMIC, GEO SURVEY AND ROV:

With situation of falling crude oil price maintained, 2D and 3D seismic survey activities were reuded and cut off considerably, almost of seismic survey projects in Vietnam as well as in region ceased leading to competitive pressure in such service. General quantity of 2D seismic survey operation in 2016 was 8,479,6 km line, decreased 42% y-y. General quantity of 3D seismic survey operation in 2016 was 1,801 km line, decreased 56% y-y. Both 2 vessels were jobless in 60% time of year effect sereously to business performance.

In 2016, Geological, geophysics survey, subsea services by ROV were reduced in quantity as well as in price. Besides, pressure from other companies in country and region caused many difficulties in these services. Total quantity of ROV on-hired days was 299, decreased 60% y-y.

Revenue from this service in 2016 was 1,648 billion VND, reached 66% year plan, decreased 32% y-y.



Since the crude oil prices descended to its lowest levels, PTSC’s investment activities concentrated on perform projects transited from 2015 and 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 vessels as part of the contract.

• Processing the disbursement of facilities investment and procurement.

Investment result of Mother Company was 35,6 billion VND, reached 3,8 % 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).

• Not completing the disbursement of Phu Quoc service port investment project in 2016 (300 billion VND) due to updated work in process.

35,6Billion VND

Investment Performance in 2016 obtained 3,8%

of the year plan

Facilities and capital construction investment

Completing the organization structure

• Renaming Legal Division to Industry Division in order to meet the requirements of business managing, improve the human resources, complete the organization structure and expand business activities

• Establishing PTSC Labuan Limited Company in Malaysia in order to supply service vessels for operating activities in overseas.

Reforming internal regulations

• Reforming regulation and internal administration regulation towards devolving and jurisdictional defining organizational structure of each devision.

• Consolidating and applying the system of regulations for Technology, Inventions and Innovations in order to improve abilities and creation of employees

• Improving the application of IT in PTSC’s business operations and enterprise management towards building softwares such as e-library, work and information management, human resources, ERP, CRM, SCM,...

• Improving the Competitive Capacity Project in bidding process and drastically applying the inventions and innovations programe on PTSC.

• Promoting the R&D; researching the Development of Manufacture Project to improve new services and products.

Reforming the Pay and Allowance Policy

Reforming the Pay and Allowance Policy in order to create justice, competitiveness assurance, finance balance and motivation to improve labor productivity. Meanwhile, the policy is well-obeyed the official bylaw such as: Labor Law, Community Insurance Law,..with effect from 01st Jan 2016

ORGANIZATION STRUCTURE, POLICY, MANAGEMENT INNOVATIONSAdministration system and expand business activities; ensure the compact, professional and connective in each division, PTSC always focus on innovating the organization structure, policies and management system.

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.



BUSINESS PLAN IN 2017Target in 2017

Consolidated financial plan in 2017

Budget for Parent Company in 2017

No. TARGET UNIT BUDGET IN 2017

1 Consolidated Revenue Billion VND 13,000

2 Profit before tax Billion VND 700

3 Profit after tax Billion VND 560

4 Taxes and amounts payable to the State budget Billion VND 470

No. TARGET UNIT BUDGET IN 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

Focus tasksConcentrating on all of resources on developing business activities, esuring the high quality of oil & gas technical services, meeting the requirements of contractors, improving the business development, 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 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

Controlling strictly the investment activities as approval; focusing on 7 core business investment followed 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,...

Continuously performing the general re-structrure project in 2016-2020 period which is well-suite with the one of PVN.

Dividing budgets reasonably, developing human resources with international skills to meet requirement of the high petroleum technical services as strategic plans of PTSC.

Monitoring and raising accountability of PTSC’S representatives at other subsidiaries; enhancing the internal auditing activities; promoting the saving in managing business; reducing expences and prices to improve competitiveness; supporting subsidiaries when they get trouble in business activities.

Maintaining and developing effectively management of integrated HSEQ; promoting the research of technologies, inventions, innovations to the business operations; updating the application of IT in business management.

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SERVICES FUNCTION

Offshore support vesselsManaging & operating safely, effectively PTSC’s owned & hired fleet of service vessels; supplying and meeting all clients’ the demands of service vessel & security guard vessels for domestic market.

EPCI for offshore facilities - EPC for industrial, plants

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 Ministry of National Defence, Long Phu 1 therma power plant project, Nghi Son 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.

FSO/FPSOManaging & operating safely & effectively FSO Bien Dong, FPSO Lam Son, FPSO Ruby II,..,ensuring to meet the requirements of clients. Well supplying human resources for running FSO Orkid, Thai Binh VN, MV12.

Ports & Supply base

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, 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),…

Installation, Operation and Maintenance offshore facilities

Organising to deploy safely, effectively, timely and quality transportation, installation, hook-up, commissionging, operation & maintenance oil & gas project, meeting the demand of contractors. Operating safely and effectively accomodation PTSC Offshore 1 barge and 5,000 tons PTSC-01 barge.

Seismic, GEO survey and ROV

Managing, operating safely & effectively the seismic survey vessels 2D Binh Minh 02, 3D CGGV Amadeus, PTSC Surveyor, PTSC Reseacher. Maitaining controlling ROV service which support for drilling & in water survey; expanding market for construction supporting in domestic and international.

Other servicesContinuously developing other services such as: hotel, security,..to meet the requirement of clients and ensure the growth rate followed the general strategy of PVN.

Detail tasks of each service field Solutions for effectuate plans

• Executing business re-structure, completing the managing system by regulating the human resources, improving efficiency, applying strict discipline, explicit business environment, treating the personnel according to their contribution.

• Comparing PTSC - a state - owned enterprise with private enterprises to realize the differences in input & output factors, structure, managing method, thenceforth, finding out the solutions to improve the capacity and competition of PTSC equal or better than private enterprises.

• Applying Competitive Capacity Project, Production Development Project in managing and operating

projects. Accordingly, the power was delegated to project managers, human resource was regulated flexible in each projects and treated based on their contribution in job. Besides, high service’s quality and competitive price were focused in international integration period.

• Information technology in business activities such as: e-library, information management system software, human resource management system software, Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain Management (SCM)…

COMPLETING THE MANAGING SYSTEM / ENHANCING THE BUSINESS ADMINISTRATION

PROMOTING THE MANAGING ABILITY, ENHANCING THE BUSINESS DEVELOPMENT, SETTING UP THE PROFESSIONAL HUMAN RESOURCES AND OPTIMIZING THE OPERATING COSTS ARE THE CORE SOLUTIONS FOR DEVELOPING PTSC IN 2017.


https://www.ptsc.com.vn/en/dich-vu/operation-maintenance-om-ti-huc-modification-decomissioning-services




ENHANCING THE BUSINESS DEVELOPMENT IN OIL AND GAS REGION, AND INDUSTRIAL PLANTS; MAINTAINING THE DOMESTIC MARKET AND DEVELOPING IN FOREIGN MARKET; PROMOTING R&D IN NEW PRODUCTS AND SERVICES.

• Reducing cost of products and services in order to have a competitive price.

• Optimizing the internal services in order to have a competitive price.

• Checking the property depreciation period, reducing the depreciation cost in accordance with current Regulation in order to have a competitive service price.

• Controlling the list of all cost, setting the improvement plan, reduction level with time and person in charge.

• Evaluating the nature of cost, the quality of human resource goes with competitive salary and current Regulation.

• Continuously updating new technology, norm system. Adjusting the flat rate based on the Competitive Capacity Project with the high production and automation.

CHECKING, APPLYING APPROPRIATE SOLUTIONS, REDUCING PRICE OF PRODUCTS AND SERVICES OF PTSC, SATISFYING THE CUSTOMERS.

• Improving professional, experienced and appropriate human resource in business development activities. Deploying the working method in order that the related information is collected and updated appropriately and effectively.

• Promoting R&D, applying Production Development Project in business activities with the aim of optimizing PTSC’s resources. Cooperating with professional domestic and foreign partners to manufacture new products and services with competitive price and independent to the Protective Policy.

• Focusing on cooperation method, diversifying all kind of product and service, supplementary product and service of considerable manufacturers from Europe, USA, Japan, Korea… (agency, selling, manufacturing, maintaining, fixing, after-sale services…)

• Taking advantage of being a member of Vietnam Oil and Gas Group with well-known trade name, workforce and know-how resources, management system…, PTSC conducted the complicated projects. Engineering capacity was manifested in PTSC’s products and services.

• Standardizing the management activities, developing work force with the international standard, to adapt to the standard of foreign partners as well as to compete with work force in region.

• Improving the policy to attract the professional Vietnamese labor in management level, O&M expert, engineering expert, captain, chief mechanic…; increasing appropriate and satisfied treatment in spite of the differences, leading to the increased effective productivity.

• Training the human resource from working level to management level, improving the professional knowledge, skill, foreign knowledge as PTSC’s developing requirement. Setting up training, re-training and internal training program appropriately, encouraging learning environment in PTSC.

• Applying Scientific Technology Regulation, Innovation, Invention in PTSC in order to encourage related business activities. Speeding up technology, innovation, information technology in business activities to increase productivity.

DEVELOPING THE HUMAN RESOURCE WITH HIGH TECHNICAL LEVEL, ENHANCING THE R&D, APPLYING TECHNOLOGY, INNOVATION, INFORMATION TECHNOLOGY IN BUSINESS ACTIVITIES IN ORDER TO INCREASING CAPACITY AND EFFECT OF LABOUR.



• Diversifying capital mobilization, using risk manage-ment tools in managing the mobilized capital and satis-fying the business activities ‘s requirement.

• Managing the investment in subsidiaries, branches and joint venture companies. Supervising the capital representative in subsidiaries. Internal control was reinforced accordingly to financial regulations.

• Managing the flow of money by maintaining the central account system; controlling the price of product and service, financial management, debt management, leading to the increase in competitive capacity. Maintaining the appropriate debt factor for financial safety.

CHECKING THE INVESTMENT PROJECTS, PRIORITIZING THE RESOURCE IN PROJECTS OF THE CORE BUSINESS; FOLLOWING THE MARKET CLOSELY TO CATCH UP THE GREAT OPPORTUNITIES TO INVEST AND TO INCREASE THE EFFECT IN BUSINESS ACTIVITIES

FINANCIAL STRUCTURE COMPLETION, EFFECTIVE CAPITAL MANAGEMENT

• Updating, completing rules and regulation, decentralizing internal investment to support investing activities in PTSC.

• Classifying the investment projects, prioritizing the projects of the core business. The projects which were high risk, ineffective or lack of feasible capital arrangement, were not invested.

• Supervising the projects closely accordingly to the current regulation. Economical effect must be evaluated before be invested.

• Evaluating the effect of property usage, in order to make good the shortcomings and to improve the next investment.

ASSESSMENT FROM THE BOARD OF DIRECTORS

GENERAL ASSESSMENT OF BUSSINESS PERFORMANCE IN 2016

• Reaching the plan of consolidated profit before tax and ensuring share dividend rate that assigned by the shareholder meeting. Although some of revenue and investment targets were not completed, the result we achieved was worth to acknowledge since tough impact from oil price reducing.

• Business activities were performed safely, effectively and complied with related regulations of the law. In the condition of rough traditional service market, PTSC reasonably utilized maximum available resources to successfully performed onshore industry projects, affirmed our right policy in industrial project strategy serving exterior oil and gas clients. PTSC still maintained its prestige of being a leading technical service supplier in Vietnam and region.

• PTSC’s financial position was remained stable, wholesome.

• Initiative and innovative research was deployed widely in every activity which contributed to management system upgrading, operation expense saving and competitive ability improving.

• Operation structure and management ability was more and more perfected and improved to be appropriate with structure in which Mother Company directly performs business and operates the whole core business.

• Well performed employees’ lives care and social security programs.

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:



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.

ASSESSMENT FROM THE BOARD OF DIRECTORS (Continued)

Following up and directing to perform resolutions, decisions of the shareholders’ meeting and The Board of Directors basing on the practice. Deploying effec-tively core solutions approved by The Board of Directors.

Stepping up training and self-training to improve man-power resources in order to meet increasing demands of the market as well as clients.

Maintaining the overall payment of the market, reasonable com-pensation and benefits for em-ployees; having clear commend and reward policy; improving employees’ discipline and profes-sionalism.

Managing, operating every activity under the authority with clear assignment and arrange-ment between management hi-erarchy.

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:

The achievement obtained by Management Board created stable step in performance pro-cess five year - plan of 2016-2020 and made premise for successfully implementing PTSC’s development strategy to the year 2025 and orienting to the year 2035.

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Posting transactions of entries and controlling finance clearly, conforming the law, ensuring safety and upholding source of capital and fund; processing drastically bad debt and doubt-ful debt.

All working items of the restruc-ture project was implemented well and on schedule affirmed Mother Company’s decisive role toward the whole complex in directly performing business.

Actively stepping up market de-velopment, new production and service development.

Utilizing effectively and balanc-ing reasonably current resourc-es, drastically cutting down operation expense, improving quality service, reducing service cost to meet clients’ demand and to share difficulty with the clients as well as to ensure PTSC’s long benefit.

Maintaining our position and market share in business and productivity of utilizing property since our service and production quality obtains the highest stand-ard.

Continuously stepping up initia-tive and innovation movement, applying effectively informatics technology.

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CORPORATE GOVERNANCEActivities 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


ACTIVITIES IN 2016 AND THE PLAN OF THE BOARDOF DIRECTORS IN 2017

MEMBERS AND STRUCTURE OF THE BOARD OF DIRECTOR

No. FULL NAME POSITION IN PTSC NOTES

1 Thai Quoc Hiep Chairman of the Board of Directors -

2 Phan Thanh Tung Member of the Board of Directors/ President and CEO -

3 Nguyen Van Dan Member of the Board of Directors Removed from duty since 08/11/2016

4 Doan Minh Man Member of the Board of Directors Member of the Board of Directors at PVcomBank

5 Nguyen Thanh Huong Member of the Board of Directors Removed from duty since 08/11/2016

6 Pham Van Dung Member of the Board of Directors -

7 Nguyen Van Mau Member of the Board of Directors/ Vice Preident

Orther position:Chairman of the Board of Directors at PTSC Phu My

8 Do Quoc Hoan Member of the Board of Directors Appointed from 08/11/2016

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:

• Updating, researching new legal regulations, enterprise administration routine.

• Organizing meetings of The Board of Directors; Collecting documented opinions from members of The Board of Directors; advising implementation of decision procedure.

• Assisting to communicate with shareholders, funds and investors.

• Assisting to supervise activities of The Management Board and representatives in subsidiaries.

• Assisting to draft administrative documents and reports.

• Following, updating information in stock market and PTSC’s share.

• Managing, supplying and keeping secret information and implement other tasks assigned by The Board of Directors.

ASSISTANT DIVISION OF THE BOARD OF DIRECTORS

In 2016, Assistant Division of The Board of Directors well completed its duty to ensure the administrative operation of The Board of Directors in accordance to PTSC’s strategic trends and to ensure maximum benefits for shareholders 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 implement the following duties:


ACTIVITIES OF THE BOARD OF DIRECTORS IN 2016

The Board of Directors guides the Board of Managers to continue implementing the objectives set forth in the five-year plan 2016-2020 and the development strategy up to 2025 with the orientation of 2035 set by the Corporation.

The Board of Directors has issued a decision to establish PTSC Labuan in Malaysia to maintain and develop the long-term business performance of 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 has directed the Board of Managers to review and finalize the Report on Researching Investment in Construction of Phu Quoc Apartment - Phase I and Report on Researching Investment Projects and Business Teams Coasts of Nghi Son Petroleum Refinery riverside to ensure that the performance of the two projects is at the highest level.

The Board of Directors has requested the board of Managers resources for standard jobs the related project to the state of the State Warehouse, contain and export crude raw materials (FPSO) of Red Dragon fish - the key project in 2017 of total.

Basing on the approval for investment plan in 2016, the Board of Directors closely supervised investment activities of Parent Company and its subsidiaries.

GUIDELINE OF FORMING THE

CORPORATION DEVELOPMENT’S

STRATEGY

GUIDELINE OF INVESTMENT PLAN

“IN EXECUTION OF THE TASKS OF THE AGENDA OF COMMITTEE IN THE YEAR 2016, THE BOARD OF DIRECTORS HAS IMPLEMENTED AND COMPLETED THE CONTENT DESCRIBED IN THE YEAR-WORK PROGRAM:

In respect of building and issuing internal document manangement is considered as important means in management and operation activitiy, in order to define the responsibility for the browser, coordinate method, resource utilization, the Board of Directors guided to complete document management system as follows:

• After PTSC’s new Regulation was approved in the shareholders’ meeting 2016, The Board of Directors guided assisted division completed and issued PTSC’s Regulation, checked the content of regulations related to 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 functions and tasks in ensuring the efficient management, preservation of capital and capital development of the Corporation, creating a 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 has coordinated with the Standing Committee of the Party and the President & CEO to complete and promulgate the Regulation on Working Relations between the Standing Committee of the Party and the Board of Directors - President & CEO of the Corporation.

GUIDEILINE TO COMPLETE THE

DOCUMENT MANAGEMENT

SYSTEM

MAINTAINING TO GUIDE TO EFFECTIVELY

IMPLEMENT THE RESTRUCTURE OF

THE CORPORATION

The Board of Directors guided to research and develop a plan for corporationrestructure period 2016-2020 to achieve the following main objectives:

• Being a corporation with high business efficiency, optimizing available resources, attractting domestic and foreign investmentand focussing on the main business.

• Improving competitiveness, acquiring gradually, taking over technology transfer to move forward to master technology to dominate domestic market and expand overseas. Sustainable development, ensures to overcome challenges in the context of international integration, adaptable to market movements.

• Restructuring parent-subsidiary company in the direction of reinforcing and empowering the parent company. The parent company must directly participate and hold controlling stakes in key business units identified in the strategy. Improve the efficiency of using capital and assets..

ACTIVITIES IN 2016 AND THE PLAN OF THE BOARDOF DIRECTORS IN 2017 (Continued)


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 customers.

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.

REMARKS ON THE BOARD OF DIRECTORS’ ACTIVITIES

PTSC’S REPRESENTATIVE

MANAGEMENT IN OTHER

ENTERPRISES

ROUTINE TASK

The Board of Directors has directed the assistant division to periodically update the database of staff who are appointed as representatives of the Corporation at the Unit; Re-appoint the staff under the management of the Board of Directors according to regulations, timely change and add representatives to meet the management requirements of the Corporation in the units.

The Board of Directors has guided to review and supplement the relevant management documents to comply with the current regulations in order to enhance the representative’s responsibility for the preservation and development 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.

Apart from the annual plan activities, the Board of Directors has carried out regular tasks in accordance with their functions and tasks according to the Charter and actual arising in the course of operation of the Corporation, concretely:

• Directing the organization of the annual shareholder meeting of the Corporation and the Annual General Meeting of the Corporation.

• Supervising and directing to remove difficulties in big units and projects.

• Conducting relations with shareholders, investors.

• Promulgating resolutions related to the normal management of the Corporation’s operation: Approving the 2015 salary fund of the parent 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 ...

THE BOARD OF DIRECTORS’ ACTION PLAN IN 2017Basing on the assessment of the situation in 2017, closely following the corporation’s strategic development objectives, the Board of Directors set out the workprogram in 2017 as follows:

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Companying with the Executive Board to direct business activities, to complete production and business targets assigned by the Shareholders’Meeting.

Making decision and supervissing investment activities in an effective manner, in line with the strategy of development and implementation of capital solutions for large investment projects in the year.

Improving the management system: reviewing, updating, amending and supplementing internal regulations in accordance with the provisions of law and the situation of production and business activities of the Corporation.

Strongly promoting supervision, risk management, management evaluation, utilization and preservation capital and assets.

Consolidating and restructuring division, subsidiaries in the direction of raising their competitiveness, utilizing effectively resources conformity with actual production and business.

ACTIVITIES IN 2016 AND THE PLAN OF THE BOARDOF DIRECTORS IN 2017 (Continued)


ACTIVITIES IN 2016

No. NAME TITLE NOTE

1 Ms. Ho Thi Oanh Head of Supervisory Board Specialized

2 Ms. Bui Thu Ha Member of Supervisory Board Specialized

3 Mr. Trieu Van Nghi Member of Supervisory Board Associated

Deputy Head of Internal Audit, PvcomBank’s Internal Audit Department

Organizational structure of supervisory board

SUPERVISORY BOARD’S ACTIVITIES IN 2016 AND ACTION PLAN IN 2017

In 2016, the Supervisory Board initiated the core undertakings as follows:

• Inspected the preservation of capital, cash flow management, operational efficiency of the business;

• Supervised the execution of the Charter, the implementation of the Resolution of the General Shareholders’ Meeting, the Board of Directors of PTSC;

• Inspected and supervised PTSC’s implementation of the Regulations, Resolutions, Decisions and Directives of PVN;

• Inspected and supervised the implementation of investment projects;

• Inspected and supervised the implementation of the restructureprojectsof the Corporation;

• Inspected and supervised the implementation of cost-cutting measures;

• Reviewed the quarterly and annually financial reports;

• Monitored the implementation of recommendation presented on the Minutes of inspection teams, audits

team working with the Parent company, Subsidiaries and Affiliates; reviewed inspection reports, internal controls of the Corporation and feedback of the Board of Managment;

• Coordinated with the Board of Directors, the Board of Management in managing equity, and supervising PTSC’s capital invested in other businesses for the purpose of capital preservation and development;

• Performed other tasks of the Supervisory Board’s 2016 action plan. Periodically review, review, make reports on inspection, supervision and evaluation of compliance with the Statute of the Corporation, resolutions of the General Meeting of Shareholders; Assessed the compliance with the provisions of the State law, the implementation and compliance with the resolutions, decisions and directives of owners related to the operation of PTSC.

The inspection and supervision of PTSC’s Supervisory Board has been conducted continuously and systematically in order to catch up with the current situation and performance of the Corporation and the Subsidiaries, so as to assist the company to realize and overcome existing shortcomings in the management, operation and internal control systems.

Executed activities

SUPERVISORY RESULTS ON THE IMPLEMENTA-TION OF 2016 ANNUAL GENERAL MEETING’S RESOLUTIONS

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-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 Supervisory Board: Resolution No. 207 / NQ-DVKT-BKS dated 08/4/2016 on the appointment Ms Bui Thu Ha to a fulltime member of the Supervisory Board.

Activities complies with the Law on Enterprises, Resolutions of the General Meeting of Shareholders


Activities by assigned field

MEETING FULL NAME AGENDA

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Ms. Ho Thi Oanh

Head of Supervisory Board Specialized

Have performed well the responsibilities related to the work and the field: General organization of the Board of Supervisors; to monitor and urge the implementation of the inspection and supervision activities of the Control Board; to direct, support and urge the performance of tasks assigned by members of the Control Board; approved the reports required by the Vietnam Oil and Gas Group; be in charge of tasks not assigned to other members of the Control Board under the functions, tasks and powers of the Control Board.

Executed the inspection and supervision of activities: capital preservation, cash flow management, business efficiency; implement the Charter, implement the resolution of the General Meeting of Shareholders, PTSC Board of Directors; implement the regulations, resolutions, decisions and orders of the Vietnam Oil and Gas Corporation to PTSC; situation of implementation of investment projects; restructuring work; implementation of measures 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 the internal inspection and control reports of the Corporation and the feedback of the General Directorate of the Corporation.

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Ms. Bui Thu Ha

Member of Supervisory Board Specialized

Implemented and performed well the inspection and supervision of activities: Capital preservation, cash flow management, business efficiency; implement the Charter, implement the resolution of the General Meeting of Shareholders, PTSC BOD; implement the regulations, resolutions, decisions and orders of the Vietnam Oil and Gas Corporation to PTSC; situation of implementation of investment projects; restructuring work; implement measures to reduce costs; appraisal of quarterly and annual financial reports; implement the recommendations in the minutes of inspection and audit teams for the Corporation and its member units; consider the internal inspection and control reports of the Corporation and the feedback of the General Directorate of the Corporation.

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Mr. Trieu Van Nghi

Member of Supervisory Board Specialized

Well implemented and fully gave comments on the inspection and supervision of activities and domains assigned to the Control Board.

In 2016, the members of the Supervisory Board have fulfilled their responsibilities according to each assigned field, as follows:

Performing other duties of the Board of Supervisors at the request of the General Meeting of Shareholders, the Vietnam Oil and Gas Corporation and the current regulations.

SUPERVISORY BOARD’S ACTION PLAN IN 2017

Continuing inspecting and supervising the operation and management of the business according to the functions and tasks prescribed by the Enterprise Law and the Statute of PTSC; The implementation of the Regulations, resolutions and decisions of the General Meeting of Shareholders and the Board of Directors of PTSC, the implementation of resolutions, decisions and directives of the Members’ Council of Vietnam Oil and Gas Group;

Inspecting and supervise of the implementation of production, business and investment activities of the Corporation; supervise the elaboration of techno-economic norms and measures to reduce management costs and reduce production costs under directives of the Government and the Vietnam Oil and Gas Corporation;

Appraising financial statements, evaluating the performance and solvency of debts, management, preservation and development of owners’ equity; Coordinate with representatives of the capital of the Vietnam Oil and Gas Group in managing the capital of the Group in PTSC and the capital of PTSC investing in other enterprises; Supervision of capital balance and cash flow management;

Monitoring the implementation of the PTSC restructuring plan for 2016-2020;

Coordinating with the State functional agencies, internal inspection and audit teams of the Group and the Corporation in inspecting and supervising the management and activities of production and business at the units, supervise the implementation of the recommendations in the minutes of inspection and audit teams;

1

2

3

4

5

6

SUPERVISORY BOARD’S ACTIVITIES IN 2016 AND ACTION PLAN IN 2017 (Continued)


FULL NAME TITLEWAGE AND

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

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:

REMUNERATION AND OTHER BENEFITS OF THE BOARD OF DIRECTORS, THE SUPERVISORY BOARD, AND THE BOARD OF MANAGEMENT IN 2016


RISK MANAGEMENT

PRODUCTION SAFETY

MANAGEMENT RISK

MARKET RISK

CREDIT, EXCCHANGE RATE AND INTEREST

RATE RISK

LEGAL AND POLICY RISK

TECHNOLOGY RISK RISK OF MATERIAL

RISK MANAGEMENT

We hereby present main risks that PTSC has been facing to and how they have been managed:

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.

Possible Impacts: The oil price maintains at low level for a long period make oil exploration, production, field development, investment in oil and gas industry keep at limited extent or temporary halt, PTSC constantly faced the pressure of cutting charter rate and services from clients. Especially, the tendencies of reducing protection for state-owned enterprises, creating favourable conditions for other enterprises, international commitments (WTO, TPP…) gradually in force increase the competition not only in domestic but also in international markets.Those matters lead to the decrease in revenue as well as profit.

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.

MARKET RISK

Possible Impacts: With the business nature of supplying hi-tech services for onshore and offshore projects in oil and gas services, using large number of manpower and machinery in a harsh working environment with high intensity, there are risks of fire explosions, occupational accidents, marine safety failure or damage high-value assets of the Companyor even environment pollution to the exent of environment disasters

Risk mitigation solutions: PTSC has constantly innovated and advanced 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.

PRODUCTION SAFETY

MANAGEMENT RISK


Possible Impacts:

Obsolete technologies: Non-control technology, lack of information about new technology lead to the risk of purchasing obsolete technologies which degrade competiveness, impact to the success of projects ie. Behind schedule, not meet quality requirements, increase operation, maintainance cost… Employees have no training, research in new technologies that limits the implication of new 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, updates in standards, technical requirements. It is a cost-consuming process to follow the advanced technologies, it also impact on competiveness and leads to the risk unsynchronized system lowering project quality.

No investment or unsynchronized investment in facilities, insfrustructures, softwares… to serve business operation, no implementation of advanced technologies, inadequate of qualified spare parts, high fuel and material consumption norms, outdated standards and norms, obsolete machines with many broken-down hours… are reasons for high cost of goods sold.

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 or upgrade recently implemented systems; has many training courses to equip knowledge for employees as well as help them develop their interests in researching, upgrading and implementing technologies in business operation; improve management skills, technical levels to enhance PTSC’s competitiveness, maintain the domestic market leader position as well as expand business to region and all over the world.

TECHNOLOGY RISK

Possible Impacts:Credit risk occurs when a client or partner fails to perform the 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 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 operation of the Company.

Risk mitigation solutions:

For credit risk: PTSC has implemented an appropriate credit policy for each client groups based on their business fields and locations, evaluate Feasibility study of the projects as well as control closely contract terms. On the other hand, PTSC regularly monitors credit risks to evaluate the impact and level of the impact of credit risks on the financial viability of PTSC.

For interest rate risk: PTSC surveys, approaches and arranges loan facilities from international monetory market with low cost of interest. On the other hand, PTSC participates in derivatives contracts to fix interest rate, balance the level between fixed facilities and non-fixed facilities.

CREDIT, EXCCHANGE

RATE AND INTEREST RATE

RISK

Possible Impacts:

Besides the the tendencies of reducing protection for state-owned enterprises, creating favourable conditions for other enterprises, international commitments (WTO, TPP…) gradually in force increase the market competition, PTSC has to face not only the harsh competition from international suppliers with outstanding 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 services as well as development of special niche services.

Risk mitigation solution:

PTSC has intensely improved system of internal regulations and rules, business procedures, updated the content to ensure legal compliance, creating a solid legal basis in the management and administration, especially form up comphensive and flexible project management processes to improve project efficiency.At the same time, PTSC has also involved in the construction of law, actively contributed ideas to the relevant legislation expected to have an impact on PTSC’s activities from the draft stage. As for the strains and shortcomings in applying policies and laws, PTSC has actively proposed to PVN and other relevant authorities such as recommendations on specific mechanism of oil and 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 on priority policy for services development in domestic as well as in oversea, proposals on setting up standards, technical barriers, proper protection for domestic service providers.

For Foreign exchange rate risk: This risk has been managed by PTSC’s obtaining licenses of directly receipt foreign currency payment from the State Bank of Vietnam and the balance of foreign currency inflows-outflows in order to minimize exchange rate risk by signing back-to-back contract with clients according to the amount of reciprocal foreign currency payable to suppliers and flexibly adjusting the price of goods and services if there were significant fluctuations in exchange rates.

Possible Impacts:With the possession and management of a large-scale vessel along with a number of modern facilities, diverse equipment and on-going machinery projects, the amount of fuel and material consumption serving for the 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 business activities.

Risk mitigation solutions: PTSC has managed these risks by contracting with clients with a term allowing for flexible contract price adjustments when there is a substantial fluctuation in the price of materials

RISK OF MATERIAL

LEGAL AND POLICY RISK

RISK MANAGEMENT (Continued)


Shareholders

Investor Relations

PVS Stock

PVS SECURITIES


SHAREHOLDER STRUCTURE

MAJOR SHAREHOLDERS

No. NAME NUMBER OF SHARES OWNERSHIP RATIO

1 Vietnam Oil& Gas Group 229,500,000 51.38%

2 Dragon Capital Group Funds 35,270,450 7.89%

3 VinaCapital Corporate Finance Vietnam-Representing for related Investment Funds 23,617,422 5.29%

4 VietinBank Capital 12,013,400 2.69%

(Data collected as at March 21st 2017)

27.1%

0.40%

14.3%

58.2%

Vietnam organizations

Vietnam individuals

Foreign individuals

Foreign organizations

SHAREHOLDER

INTERNAL STOCKHOLDERS LIST AND STOCK CHANGES IN PERIOD

No. NAME POSITION CURRENT HOLDING

TRANSACTION IN THE PERIOD NOTE

SELL BUY

1 Thai Quoc Hiep Chairman of the Board of Directors 357,233 - -

2 Phan Thanh TungMember of the Board of Directors/ President

45,375 - -

3 Nguyen Van Dan Member of the Board of Directors 6,956 - - Resigned from

November 8th, 2016

4 Pham Van Dung Member of the Board of Directors 1,295 - -

5 Nguyen Van MauMember of the Board of Directors/ Vice President

40,000 - -

6 Nguyen Thanh Huong Member of the Board of Directors - - - Resigned from

December 1st, 2016

7 Do Quoc Hoan Member of the Board of Directors 10,680 Appointed from

November 8th, 2016

8 Ho Thi Oanh Head of Board of Supervisors 87 - -

9 Bui Thu Ha Member of Board of Supervisors - - -

10 Trieu Van Nghi Member of Board of Supervisors 172 - -

11 Nguyen Tan Hoa Vice President 219 - - Resigned from March 1st, 2016

12 Nguyen Tran Toan Vice President 3,546 - -

13 Le Manh Cuong Vice President 51,799 - -

14 Nguyen Huu Hai Vice President 51,069 - -

15 Ta Duc Tien Vice President 13,830 - - Appointed from March 15th, 2016

16 Nguyen Xuan Cuong Vice President 18 - -

17 Nguyen Duc Thuy Announcer - - -

(Data collected as at March 21st, 2017)


TRANSACTION CONTRACT WITH THE CORPORATION’S INTERNAL STOCKHOLDERS

Based on the regulations of the corporation, the integrity responsibility and the prevention of interest conflicts are defined as below:

The member of the Board of Director, Board of Supervisors, CEO and other members of Board of Management are not permitted to use good business chances for the Corporation due to personal interest; as well as are not allowed to use confidential information, gained from their job position, for their own interest or for other organizations and individuals’ interest.

The member of the Board of Director, Board of Supervisors, CEO and other members of Board of Management take the responsibility of informing about all of their own interest conflicting with The corporation’s

interest, which they may receive through the legal entities, the transactions or other individuals.

The Corporation does not issue loan facilities or guarantees for The member of the Board of Director, Board of Supervisors, CEO, other members of Board of Management and individuals related to those mentioned above members or legal entity which those members have financial interest with; except that Shareholders’ Meeting reach to an agreement on those loan facilities or guarantees.

In 2016, there was no transaction between the Corporation and the member of the Board of Director, Board of Supervisors and Board of Management.

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%)

Enhancement of communication: In 2016, in addition to the usual meetings with Investors in order to provide information and updates on the business operation of PTSC every quarter, PTSC is honoured to receive a great number of Investors from top tier securities companies, fund management companies of Vietnam and foreign fund management at the Headquarter of PTSC. Besides, PTSC regularly responds to matters related to the rights and benefits of the shareholders, provides sufficient information in accordance with the current regulations on the business operations of PTSC via email, telephones etc.

Transparency of information: In order to ensure the information declared to the shareholders is transparent and timely communicated, PTSC has applied a variety of information technology solutions such as: using the information declaration system via CIMS of the Ho Chi Minh City Stock Exchange, uploading and updating the information publicized on the official website of PTSC, and using the information declaration service on the stock market – Ezsearch. At the same time, the Corporation cooperates with securities companies, media in order to update and provide sufficient information transparently about the current regulations on the business operations of PTSC.

Protection of the shareholders’ rights and benefits: To achieve the aim of the Corporation that “Ensuring the highest protection of shareholders’ rights and benefits, equal treatment between major and minor shareholders, between foreign and Vietnam shareholders, between internal and external shareholders”, the department in charge of shareholder relationship at PTSC is always working with the highest responsibility, meeting highest requirements, flexibly and quickly dealing with all of the requests from stockholders about the execution of shareholders’ rights such as: the registration of stock ownership, share transfer, procuring additional shares issued, accessing the information related to the operation of the Corporation, the rights of attending and voting at the shareholders’ meetings, granting authority to obtain the shareholder’s rights, receiving the profits from the Corporation… Currently, the shareholder relationship department of PTSC is carrying out research on electronic vote (e-voting) to bring advantages to shareholders on executing the voting rights about the issues belonging to the jurisdiction of the shareholders’ meeting in the future.

“ENHANCEMENT OF COMMUNICATION, ASSURANCE OF INFORMATION TRANSPARENCY, PROTECTION OF THE SHAREHOLDERS’ RIGHTS AND BENEFITS”

EVENTS RELATING TO SHAREHOLDERS’ INTERESTS

INVESTOR RELATIONS

THE ENHANCEMENT OF COMMUNICATION, ASSURANCE OF THE TRANSPARENCY OF INFORMATION AND HIGHEST PROTECTION OF SHAREHOLDERS’ RIGHTS AND BENEFITS, EQUAL TREATMENT TO ALL OF SHAREHOLDERS CREATING BILATERAL RELATIONSHIP BETWEEN THE CORPORATION AND THE RELATED PARTY CONTRIBUTE TO BUILDING THE TRUST AND SUPPORT OF SHAREHOLDERS, INVESTORS WHEN IMPLEMENTING LONG-TERM STRATEGY AND EFFECTIVELY FUNDRAISING ON THE STOCKMARKET; KEEPING THE COMPANY PRESTIGE AND INCREASING ENTERPRISE VALUE THAT PTSC HAS ALWAYS AIMED TO ACHIEVE OVER THE PAST YEARS.

SHAREHOLDER (Continued)


(Data collected as at 17 March 2017)

PVS - PRINCIPAL INFORMATION

Outstanding shares 446,700,421

Listed shares 446,700,421

Treasury shares 0

Market capitalization (billion VND) 7,817,26

Foreign room (%) 20.91%

Basic EPS (thousand VND) 2.21

P/E 8.19

Book value per share (thousand VND) 22.99

Highest price in 2016 (thousand VND) 22.10

Lowest price in 2016 (thousand VND) 12.50

PVS STOCK

HISTORY OF DIVIDEND PAYMENT

YEAR PAYMENT RATIO CUT-OFF DATE

2007 14% Mar 14th, 2008

2008 (1st payment) 10% Nov 20th, 2008

2008 (2nd payment) 5% Jun 25th, 2009

2009 20% May 12th, 2010

2010 15% Dec 13th, 2010

2011 20% May 25th, 2012

2012 (1st payment) 10% Jan 17th, 2013

2012 (2nd payment) 5% Sep 5th, 2013

2013 12% Jul 28th, 2014

2014 12% Jul 31st, 2015

2015 12% Jul 22nd, 2016

2016 (1st interim payment) 5% Dec 7th, 2016

HISTORY OF SHARE OFFER FOR INCREASING PTSC CHARTERED CAPITALYEAR DESCRIPTION QUANTITY

(share)CHARTERED CAPITAL

(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




PVS’S RECOVERY

In the year 2016, despite the strong growth vibe from basic materials, FMCG, Pharmaceutical and the not-market-leader positions like previous years, the PTSC’s stock and Oil&Gas stocks in general put their impacts on investors. The 26-USD-bottom of oil price pulled the PVS stock price to the lowest level from 2012 (at 12,500 VND per share). After that, the growth up trend of stock price was supported by the strong recovery of international oil price and achieved the pace of 76% and won the year-record of 22,100VND per share in 18 August 2016. PVS also overcomed the most challenging event of the year – Brexit (VN-index closed the trade session panically with the downturn of 34 points equivalent to -5.47%). At the closing session, PVS fixed at 16,500 VND per share. In general, despite the macroeconomic events and unsupported information from business operation, the oil price played as the key maker to the PVS stock price. However, in the point of view of investors, PVS is considered as a “safe house” for them to avoid market significant changes.

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)

The stock market starts the year of 2017 with both hopes and fears. On global perspective, the populism trend and domestic protection are getting more popular and challenge the globlisation trend which has been supported for decades. The changes in policy systems of world powers, especially trade policies and monetary systems may impact negatively on emerging markets. In Viet Nam, the business structure at significant state-owned enterprises as well as IPOs from big corporations create many choices for investors. It will lead to the bigger differentiation among stock groups.

The trend of oil price is still unpredictable when the affecting factors of oil&gas industry have no significant changes (supply variation, national reserves of top consumers, availability of alternative energies…). Therefore, the oil & gas stocks will share the rhythm of oil price. For PVS stock, optismistic signals from oil&gas services from the beginning of the year bring hopes to Shareholders and investors for a “bright” 2017.

Stock price chart

Oil price chart

PVS STOCK (Continued)

108 109www.ptsc.com.vnANNUAL REPORT 2016

FINANCIAL REPORT


STATEMENT OF THE BOARD OF MANAGEMENT

The Board of Management of PetroVietnam Technical Services Corporation (the “Parent Company”) and its 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 BOARDS OF DIRECTORS AND MANAGEMENT

Board of Directors

Board of Management

The members of the Boards of Directors and Management of the Corporation who held office during the year and to the date of this report are as follows:

Mr. Thai Quoc Hiep Chairman

Mr. Phan Thanh Tung Member

Mr. Nguyen Van Mau Member

Mr. Pham Van Dung Member

Ms. Nguyen Thanh Huong Member

Mr. Doan Minh Man Member

Mr. Do Quoc Hoan Member (appointed on 8 November 2016)

Mr. Nguyen Van Dan Member (resigned on 8 November 2016)

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)

Mr. Nguyen Xuan Cuong Vice President (appointed on 12 January 2017)

Mr. Do Quoc Hoan Vice President (resigned on 8 November 2016)

Mr. Nguyen Tan Hoa Vice President (resigned on 1 March 2016)

BOARD OF MANAGEMENT’S STATEMENT OF RESPONSIBILITYThe 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, 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 reporting. In preparing these consolidated financial statements, the Board of Management is required to:

• Select suitable accounting policies and then apply them consistently;

• Make judgments and estimates that are reasonable and prudent;

• State whether applicable accounting principles have been followed, subject to any material departures disclosed and explained in the consolidated financial statements;

• Prepare the consolidated financial statements on the going concern basis unless it is inappropriate to presume that the Corporation will continue in business; and

• 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.

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 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 of the Corporation and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.

The Board of Management confirms that the Corporation has complied with the above requirements in preparing these consolidated financial statements.

For and on behalf of the Board of Management,

Phan Thanh TungPresident and CEO17 March 2017Ho Chi Minh City, S.R. Vietnam

STATEMENT OF THE BOARD OF MANAGEMENT (Continued)


INDEPENDENT AUDITORS’ REPORT

To: The Shareholders The Board of Directors and Board of Management of PetroVietnam Technical Services Corporation

No.: 607/VN1A-HN-BC

We have audited the accompanying consolidated financial statements of PetroVietnam Technical Services Corporation (the “Parent Company”) and its subsidiaries (the Parent Company and its subsidiaries are referred to 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.

Auditors’ Responsibility

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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

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.

Opinion

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 cash flows for the year then ended in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting.

Vo Thai HoaAudit PartnerAudit Practising Registration Certificate No. 0138-2013-001-1For and on behalf ofDELOITTE VIETNAM COMPANY LIMITED17 March 2017Ho Chi Minh City, S.R. Vietnam

Dao Thai ThinhAuditorAudit Practising Registration Certificate No. 1867-2013-001-1

INDEPENDENT AUDITORS’ REPORT (Continued) No.: 607/VN1A-HN-BC


CONSOLIDATED BALANCE SHEETAs at 31 December 2016

FORM B 01-DN/HNIssued under Circular No.202/2014/TT-BTC

dated 22 December 2014 of the Ministry of Finance

CONSOLIDATED BALANCE SHEET (Continued)As at 31 December 2016



ASSETS Codes Notes 31/12/2016 31/12/2015

A. CURRENT ASSETS 100 15,151,148,411,971 16,000,729,197,810

I. Cash and cash equivalents 110 5 5,883,669,671,740 7,991,387,356,724

1. Cash 111 2,646,758,096,799 3,982,903,553,183

2. Cash equivalents 112 3,236,911,574,941 4,008,483,803,541

II. Short-term financial investments 120 911,017,446,191 570,070,000,000

1. Held-to-maturity investments 123 6 911,017,446,191 570,070,000,000

III. Short-term receivables 130 6,125,027,352,428 5,725,328,822,123

1. Short-term trade receivables 131 7 4,766,279,842,961 4,229,681,576,031

2. Short-term advances to suppliers 132 346,760,133,285 475,565,519,498

3. Receivables from construction contracts under percentage of completion method

134 8 438,107,372,763 4,765,479,848

4. Short-term loan receivables 135 - 28,757,555,368

5. Other short-term receivables 136 9 667,479,061,085 1,142,556,125,176

6. Provision for short-term doubtful debts 137 (93,599,057,666) (155,997,433,798)

IV. Inventories 140 10 1,650,744,923,057 1,190,080,622,597

1. Inventories 141 1,655,953,765,876 1,195,777,537,746

2. Provision for devaluation of inventories 149 (5,208,842,819) (5,696,915,149)

V. Other short-term assets 150 580,689,018,555 523,862,396,366

1. Short-term prepayments 151 11 24,369,143,651 23,353,448,130

2. Value added tax deductibles 152 505,596,222,039 460,395,529,830

3. Taxes and other receivables from the State Budget 153 20 50,723,652,865 40,113,418,406

B. NON-CURRENT ASSETS 200 10,389,961,414,802 10,436,323,789,084

I. Long-term receivables 210 67,193,882,648 81,922,105,081

Unit: VND

The accompanying notes are an integral part of these consolidated financial statements

ASSETS Codes Notes 31/12/2016 31/12/2015

1. Long-term advances to suppliers 212 45,043,576,977 56,227,502,258

2. Other long-term receivables 216 9 22,150,305,671 25,694,602,823

II. Fixed assets 220 4,150,439,107,437 4,727,816,332,623

1. Tangible fixed assets 221 12 4,133,766,907,309 4,701,785,351,363

- Cost 222 11,927,166,182,310

11,653,416,894,534

- Accumulated depreciation 223 (7,793,399,275,001) (6,951,631,543,171)

2. Intangible assets 227 13 16,672,200,128 26,030,981,260

- Cost 228 76,843,823,475 71,167,554,725

- Accumulated amortisation 229 (60,171,623,347) (45,136,573,465)

III. Investment properties 230 14 197,541,863,907 202,277,135,763

- Cost 231 229,280,786,454 229,280,786,454

- Accumulated amortisation 232 (31,738,922,547) (27,003,650,691)

IV. Long-term assets in progress 240 15 498,672,582,913 424,420,945,500

1. Long-term work in progress 241 370,485,940,489 369,678,895,035

2. Construction in progress 242 128,186,642,424 54,742,050,465

V. Long-term financial investments 250 4,733,712,583,228 4,203,786,295,223

1. Investments in joint ventures, associates 252 16 4,707,276,291,641 4,166,493,636,903

2. Equity investments in other entities 253 17 51,030,000,000 61,030,000,000

3. Provision for impairment of long-term financial investments 254 17 (24,593,708,413) (23,737,341,680)

VI. Other long-term assets 260 742,401,394,669 796,100,974,894

1. Long-term prepayments 261 11 697,468,980,357 746,045,339,983

2. Long-term reserved spare parts 263 44,932,414,312 50,055,634,911

TOTAL ASSETS (270=100+200) 270 25,541,109,826,773 26,437,052,986,894

Unit: VND



Unit: VND

RESOURCES Codes Notes 31/12/2016 31/12/2015

C. LIABILITIES 300 13,788,657,616,607 14,562,178,949,277

I. Current liabilities 310 9,743,162,837,038 9,872,435,220,921

1. Short-term trade payables 311 18 4,051,838,898,443 4,355,312,301,426

2. Short-term advances from customers 312 19 1,431,502,690,033 987,427,659,341

3. Taxes and amounts payable to the State budget 313 20 128,092,850,261 175,425,464,475

4. Payables to employees 314 385,076,069,091 443,398,334,923

5. Short-term accrued expenses 315 21 2,063,212,809,649 1,779,598,558,385

6. Payables relating to construction contracts under percentage of completion method

317 8 238,298,386,212 20,520,328,878

7. Short-term unearned revenue 318 20,721,879,131 11,613,862,192

8. Other current payables 319 22 625,935,472,506 1,038,096,538,745

9. Short-term loans 320 23 432,147,165,556 684,347,404,258

10. Short-term provisions 321 62,820,128,025 83,201,867,977

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

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

6. Deferred tax liabilities 341 25 471,285,000,292 282,883,021,027

RESOURCES Codes Notes 31/12/2016 31/12/2015

7. Long-term provisions 342 26 1,355,709,901,710 1,280,954,820,004

8. Scientific and technological development fund 343 61,883,884,794 48,011,377,818

D. EQUITY 400 11,752,452,210,166 11,874,874,037,617

I. Owners’ equity 410 27 11,752,452,210,166 11,874,874,037,617

1. Owners’ contributed capital 411 4,467,004,210,000 4,467,004,210,000

- Ordinary shares carrying voting rights 411a 4,467,004,210,000 4,467,004,210,000

2. Share premium 412 39,617,060,000 39,545,660,000

3. Investment and development fund 418 2,626,119,682,700 2,418,539,906,053

4. Retained earnings 421 3,188,956,067,975 3,326,188,546,305

- Retained earnings accumulated to the prior year end 421a 2,390,099,035,058 1,831,264,703,174

- Retained earnings of the current year 421b 798,857,032,917 1,494,923,843,131

5. Non-controlling interests 429 29 1,430,755,189,491 1,623,595,715,259

TOTAL RESOURCES (440=300+400) 440 25,541,109,826,773 26,437,052,986,894

Duong Thi Ngoc QuyPreparer

Nguyen Quang ChanhHead of Accounting Department


Unit: VND







The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements


For the year ended 31 December 2016




Unit: VND

ITEMS Codes Notes 2016 2015

1. Gross revenue from goods sold and services rendered 01 31 18,682,080,522,528 23,356,897,865,989

2. Net revenue from goods sold and services rendered (10=01) 10 18,682,080,522,528 23,356,897,865,989

3. Cost of goods sold and services rendered 11 32 17,899,327,840,481 21,181,966,606,269

4. Gross profit from goods sold and services rendered (20=10-11) 20 782,752,682,047 2,174,931,259,720

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

- In which: Interest expense 23 55,841,878,387 70,937,160,828

7. Income from associates, joint ventures 24 36 667,105,854,738 753,186,652,840

8. Selling expenses 25 37 91,959,953,182 98,571,639,097

9. General and administration expenses 26 37 540,231,230,547 896,467,983,169 10. Operating profit (30=20+(21-22)+24-(25+26)) 30 964,394,219,023 1,932,940,886,202

11. Other income 31 38 304,151,849,725 144,558,270,036

12. Other expenses 32 39 12,410,057,984 62,419,150,229

13. Profit from other activities (40=31-32) 40 291,741,791,741 82,139,119,807

14. Profit before tax (50=30+40) 50 1,256,136,010,764 2,015,080,006,009

15. Current corporate income tax expense 51 40 157,989,589,078 350,424,712,724

16. Deferred corporate income tax expense 52 25 188,401,979,265 171,116,435,819

17. Profit after tax (60=50-51-52) 60 909,744,442,421 1,493,538,857,466

18. Profit after tax of the Parent Company 61 1,038,743,379,556 1,517,394,760,704

19. Loss after tax of non-controlling interests 62 29 (128,998,937,135) (23,855,903,238)

20. Basic earnings per share 70 41 2,122 2,915

ITEMS Codes 2016 2015

I. CASH FLOWS FROM OPERATING ACTIVITIES

1. Profit before tax 01 1,256,136,010,764 2,015,080,006,009

2. Adjustments for:

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

Foreign exchange loss arising from translating foreign currency items 04 39,733,506,386 45,086,595,470

Gain from investing activities 05 (897,868,661,163) (947,048,021,972)

Interest expense 06 55,841,878,387 70,937,160,828

Other adjustments 07 13,872,506,976 18,208,231,720

3. Operating profit before movements in working capital 08 1,330,823,395,342 2,442,809,113,790

Changes in receivables 09 (609,823,896,516) 2,423,557,330,327

Changes in inventories 10 (455,860,052,985) (677,968,559,417)

Changes in payables 11 56,367,184,831 (1,999,111,919,808)

Changes in prepaid expenses 12 47,560,664,105 (67,638,283,727)

Interest paid 14 (62,003,800,061) (76,563,627,232)

Corporate income tax paid 15 (206,556,951,661) (442,942,805,801)

Other cash inflows 16 403,068,550 5,546,411,696

Other cash outflows 17 (177,196,561,038) (185,478,789,954)

Net cash (used in)/generated by operating activities 20 (76,286,949,433) 1,422,208,869,874

II. CASH FLOWS FROM INVESTING ACTIVITIES

1. Acquisition and construction of fixed assets 21 (447,570,715,035) (772,995,240,381)

2. Proceeds from sale, disposal of fixed assets 22 1,037,212,560 5,598,152,126

3. Cash outflow for lending, buying debt instruments of other entities 23 (1,245,394,000,000) (867,070,000,000)

4. Cash recovered from lending, selling debt instruments of other entities 24 918,029,044,621 793,484,145,852

5. Investments in other entities and other long-term investments 25 - (38,412,998,000)

6. Cash recovered from investments in other entities 26 5,000,000,000 47,524,303,246

7. Interest earned, dividends and profits received 27 217,921,395,605 158,688,237,098

Net cash used in investing activities 30 (550,977,062,249) (673,183,400,059)

Unit: VND


dated 22 December 2014 of the Ministry of FinanceFor the year ended 31 December 2016CONSOLIDATED CASH FLOW STATEMENT FORM B 03-DN/HN

Issued under Circular No.202/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance

CONSOLIDATED INCOME STATEMENT

The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements


ITEMS Codes 2016 2015

III. CASH FLOWS FROM FINANCING ACTIVITIES

1. Proceeds from borrowings 33 59,165,312,670 358,910,191,041

2. Repayment of borrowings 34 (735,067,925,898) (786,478,291,675)

3. Dividends paid 36 (808,800,203,900) (578,772,068,210)

Net cash used in financing activities 40 (1,484,702,817,128) (1,006,340,168,844)

Net decrease in cash (50=20+30+40) 50 (2,111,966,828,810) (257,314,699,029)

Cash and cash equivalents at the beginning of the year 60 7,991,387,356,724 8,194,248,685,277

Effects of changes in foreign exchange rates 61 4,249,143,826 54,453,370,476

Cash and cash equivalents at the end of the year (70=50+60+61) 70 5,883,669,671,740 7,991,387,356,724




These notes are an integral part of and should be read in conjunction with the accompanying consolidated financial statements

Structure of ownership

PetroVietnam Technical Services Corporation (the “Parent Company”) and its subsidiaries (the Parent Company and the subsidiaries are referred to as the “Corporation”) was established under Business Registration Certificate No. 0103015198 dated 29 December 2006 issued by the Department of Planning and Investment of Hanoi City and other amended Certificates issued by the Department of Planning and Investment of Ho Chi Minh City. The stocks of the Parent company have been listed in the Hanoi Stock Exchange on 20 September 2007 with the stock code of PVS. Vietnam Oil and Gas Group is the main shareholder and the holding company.

The number of the Corporation’s employees as at 31 December 2016 was 8,976 (as at 31 December 2015: 9,655).

Principal activities

Supplying oil and gas services; Management, business and operation of the technology service vessels; Supplying port based services; Supplying ship services, tallying services and freight forwarding; Management, business and operation of the floating storage and offloading (FSO), floating production storage and offloading (FPSO); Management and implementation of marine engineering activities; Machining, assembly, fabrication of components, oil and gas equipment; Fabrication and installation of all types of petroleum storage tanks, liquefied gas pipelines and other types of oil and gas; Repair shipping vessels and the offshore oil and gas projects; Seismic survey services, geophysical and geological survey services, diving, and subsea services by using Remote operated vehicle (ROV) for oil and gas exploration, exploitation, production and industrial buildings, civil; Maintenance, repair, building and conversion of floating facilities; Export and import of equipment for oil and gas supplies; Production and supply of petroleum materials and equipment; Supply of petroleum specialized labour; Operation and maintenance of oil and gas exploitation projects; Supply hotels, housing, office services ; Sales

of petroleum products; Shipping agency services and maritime brokerage; Chartering, shipping brokerage, towage and salvage services; Manufacturing, trading of petroleum products, fertilizer and chemicals for agriculture (except chemicals banned by the State).

Normal production and business cycle

The Corporation’s normal production and business cycle is carried out for a time period of 12 months or less.

The Company’s structure

Details of the Corporation’s branches, subsidiaries, associates and joint ventures as at 31 December 2016 are as follows:

Branches:

• Branch of PetroVietnam Technical Services Corporation - PTSC Marine;

• Branch of PetroVietnam Technical Services Corporation - PTSC Supply Base;

• Branch of PetroVietnam Technical Services Corporation - PTSC Da Nang;

• Branch of PetroVietnam Technical Services Corporation - PTSC Hanoi;

• Branch of PetroVietnam Technical Services Corporation - Engineering and Construction Division;

• Branch of PetroVietnam Technical Services Corporation - Long Phu Power Project Management Board;

• Branch of PetroVietnam Technical Services Corporation - Quang Binh General Petroleum Services Port.

1.GENERAL INFORMATION

For the year ended 31 December 2016CONSOLIDATED CASH FLOW STATEMENT (Continued) FORM B 03-DN/HN


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORM B 09-DN/HN


Unit: VND



FORM B 09-DN/HN FORM B 09-DN/HN

Name Place of incorporation and operation

Proportion of

ownership interest %

Proportion of voting

power held %


Subsidiaries

PTSC Geos and Subsea Services Company Limited Vietnam 100.00 100.00

Seismic survey, Geo survey and Subsea services

PTSC Mechanical & Construction Company Limited Vietnam 100.00 100.00 Construction in oil and

gas field

PTSC CGGV Geophysical Survey Company Limited Vietnam 51.00 51.00 2D and 3D seismic

data acquisition service

Petro Hotel Company Limited Vietnam 100.00 100.00 Hotel services

PTSC Offshore Services Joint Stock Company Vietnam 84.95 84.95

Operation and maintainance of oil and gas projects

PTSC Quang Ngai Joint Stock Company Vietnam 95.19 95.19 Oil and gas services

PTSC Thanh Hoa Port Joint Stock Company Vietnam 54.69 54.69 Supply base services

Dinh Vu Petroleum Services Port Joint Stock Company Vietnam 51.00 51.00 Supply base services

PTSC Production Services Joint Stock Company Vietnam 51.00 51.00 FPSO/FSO services

PTSC Phu My Port Joint Stock Company Vietnam 59.61 59.61 Supply base services

PetroVietnam Security Joint Stock Company Vietnam 51.00 51.00 Security services

Name Place of incorporation and operation

Proportion of

ownership interest %

Proportion of voting

power held %


Sao Mai - Ben Dinh Petroleum Investment Joint Stock Company Vietnam 51.00 51.00 Supply base service

PTSC Labuan Company Limited (*) Malaysia 100.00 100.00 Marine services

Associates, Joint Ventures

Rong Doi MV12 Private Limited Singapore 33.00 33.00 FSO services

Malaysia Vietnam Offshore Terminal (Labuan) Limited Malaysia 49.00 49.00 FPSO/FSO services

Vietnam Offshore Floating Terminal (Ruby) Limited Malaysia 60.00 60.00 FPSO/FSO services

PTSC South East Asia Private Limited Singapore 51.00 51.00 FPSO/FSO services

PTSC Asia Pacific Private Limited Singapore 51.00 51.00 FPSO/FSO services

PetroVietnam Marine Shipyard Joint Stock Company Vietnam 28.75 28.75 Building, installation of

oil construction

Thi Vai General Port Joint Stock Company Vietnam 21.46 21.46 Supply base services

(*) PTSC Labuan Company Limited was established according to Resolution No. 498/NQ-DVKT-HDQT dated 24 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 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

Comparative figures are the figures of the audited consolidated financial statements for the year ended 31 December 2015.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



Accounting convention

The accompanying consolidated financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention and in accordance with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting.

The accompanying consolidated financial statements

are not intended to present the consolidated financial position, consolidated results of operations and consoli-dated cash flows in accordance with accounting princi-ples and practices generally accepted in countries and jurisdictions other than Vietnam.

Financial year

The Corporation’s financial year begins on 1 January and ends on 31 December.

On 21 March 2016, the Ministry of Finance issued Circular No. 53/2016/TT-BTC (“Circular 53”) amending and supplementing certain articles of Cir-cular No. 200/2014/TT-BTC dated 22 December 2014 of the Ministry of Finance guiding the accounting regime for enterprises. Circular 53 is effective for the

financial years beginning on or after 1 January 2016. The Board of Management has adopted Circular 53 in the preparation and presentation of the Corporation’s consolidated financial statements for the year ended 31 December 2016.

2. ACCOUNTING CONVENTION AND FINANCIAL YEAR

3. ADOPTION OF NEW ACCOUNTING GUIDANCE

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of consolidated financial statements in conformity with Vietnamese Accounting Standards, accounting regime for enterprises and legal regulations relating to financial reporting requires the Board of Management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the financial year. Although these accounting estimates are based on the Board of Management’s best knowledge, actual results may differ from those estimates.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Parent Company and

enterprises controlled by the Parent Company (its subsidiaries) up to 31 December each year. Control is achieved where the Parent Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Parent Company.

Intragroup transactions and balances are eliminated in full on consolidation.

The significant accounting policies, which have been adopted by the Corporation in the preparation of these consolidated financial statements, are as follows:

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the parent’s ownership interests in them. Non-controlling interests consist of the amount of those non-controlling interests at the date of the original business combination (see below) and the non-controlling interests’ share of changes in equity since the date of the combination. Losses in subsidiaries are respectively attributed to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Business combinations

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired is credited to profit and loss in the period of acquisition.

The non-controlling interests are initially measured at the non-controlling shareholders’ proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Investments in associates

An associate is an entity over which the Corporation has significant influence and that is neither a subsidiary nor an interest in joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Interests in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Corporation’s share of the net assets of the associate. Losses of an associate in excess of the Corporation’s interest in that associate (which includes any long-term interests that, in substance, form part of the Corporation’s net investment in the associate) are not recognised.

Where a group entity transacts with an associate of the Corporation, unrealised profits and losses are

eliminated to the extent of the Corporation’s interest in the relevant associate.

Interests in joint ventures

A joint venture is a contractual arrangement whereby the Parent Company and other parties undertake an economic activity that is subject to joint control, i.e., the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The Parent Company reports its interests in jointly controlled entities using the equity method of accounting. Accordingly, the joint venture is presented in consolidated balance sheet at cost and adjusted for changes in share capital of the Parent Company in the net assets of the joint venture after the date of capital contribution in the joint venture company.

Financial instruments

Initial recognition

Financial assets: At the date of initial recognition, financial assets are recognized at cost plus transaction costs that are directly attributable to the acquisition of the financial assets. Financial assets of the Corporation comprise cash and cash equivalents, trade and other receivables, loan receivables, deposits and financial investments.

Financial liabilities: At the date of initial recognition financial liabilities are recognized at cost plus transaction costs that are directly attributable to the issue of the financial liabilities. Financial liabilities of the Corporation comprise trade and other payables, accrued expenses, provisions and borrowings.

Subsequent measurement after initial recognition

Currently there are no requirements for the subsequent measurement of the financial instruments after initial recognition.

FORM B 09-DN/HN

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FORM B 09-DN/HN



Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in bank and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial investments

Held-to-maturity investments

Held-to-maturity investments comprise investments that the Corporation has the positive intent or ability to hold to maturity, including term deposits, loans held to maturity to earn periodic interest and other held-to-maturity investments.

Held-to-maturity investments are recognised on a trade date basis and are initially measured at acquisition price plus directly attributable transaction costs. Post-acquisition interest income from held-to-maturity investments is recognised in the income statement on accrual basis. Pre-acquisition interest is deducted from the cost of such investments at the acquisition date.

Held-to-maturity investments are measured at cost less provision for doubtful debts.

Provision for doubtful debts relating to held-to-maturity investments is made in accordance with prevailing accounting regulations.

Loan receivables

Loan receivables are measured at cost less provision for doubtful debts. Provision for doubtful debts relating to loan receivables is made in accordance with prevailing accounting regulations.

Equity investments in other entities

Equity investments in other entities represent the Corporation’s investments in ordinary shares of the entities over which the Corporation has no control, joint control, or significant influence.

Equity investments in other entities are carried at cost less provision for impairment.

Receivables

Receivables represent the amounts recoverable from customers or other debtors and are stated at book value less provision for doubtful debts.

Provision for doubtful debts is made for receivables that are overdue for six months or more or when the debtor is in dissolution, in bankruptcy, or is experiencing similar difficulties and so may be unable to repay the debt.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

The evaluation of necessary provision for inventory obsolescence follows current prevailing accounting regulations which allow provisions to be made for obsolete, damaged, or sub-standard inventories and for those which have costs higher than net realisable values as at the balance sheet date.

Tangible fixed assets and depreciation

The costs of purchased tangible fixed assets comprise their purchase prices and any directly attributable costs of bringing the assets to their working conditions and locations for their intended use. The costs of tangible fixed assets formed from construction investment by contractual mode or self-construction or self-generating process are the settled costs of the invested construction projects in accordance with the prevailing State’s regulations on investment and construction management, directly-related expenses and registration fee (if any). In the event the construction project has been completed and put into use but the settled costs thereof have not been approved, the cost of tangible fixed assets is recognised at the estimated cost based on the actual cost incurred. The estimated cost will be adjusted according to the settled costs approved

by competent authorities. Tangible fixed assets are depreciated using the straight-line method over the estimated useful lives as follow:

Years

Buildings and structures 03 - 45

Machinery and equipment 03 - 20

Motor vehicles 06 - 10

Office equipment 03 - 10

Others 04 - 14

Intangible assets and amortisation

Intangible assets represent land use rights and computer software that are stated at cost less accumulated amortisation. Land use rights with indefinite duration are not amortised according to current regulations. Computer software is amortised within 3 years.

Investment property

Investment properties, which are composed of infrastructures held by the Corporation to earn rentals or for capital appreciation, are stated at cost less accumulated depreciation. The cost of purchased investment properties comprises its purchase price and any directly attributable expenditures, such as professional fees for legal services, property transfer taxes and other related transaction costs. The costs of self-constructed investment properties are the finally accounted construction or development costs of the properties.

Investment properties are depreciated using the straight-line method over the lease term.

Construction in progress

Properties in the course of construction for production, rental and administrative purposes or for other purposes are carried at cost. The cost includes any costs that are necessary to form the asset including construction cost, equipment cost, other directly attributable costs in accordance with the Corporation’s accounting policy. Such costs will be included in the estimated costs of the fixed assets (if settled costs have not been approved)

when they are put into use.

According to the State’s regulations on investment and construction management, the settled costs of completed construction projects are subject to approval by appropriate levels of competent authorities. The final costs of these completed construction projects may vary depending on the final approval by competent authorities.

Prepayments

Prepayments are expenses which have already been paid but relate to results of operations of multiple accounting periods. Long-term prepayments consist of land use rights, prepaid land rentals, office rentals, costs for equipment mainternance and other long-term prepayments. Land rentals are allocated over their useful lives.

The office rental at PetroVietnam Tower No. 1-5 Le Duan Street, District 1, Ho Chi Minh City is from October 2010, over 50 years. The Corporation allocates this rental to the consolidated income statement pursuant to the lease term and annual using areas.

The cost of site clearance at Son Tra Port is transferred to Branch of PetroVietnam Technical Services Corporation - PTSC Da Nang from 20 December 2015 with the duration of 42 years. The Corporation allocates this site clearance cost to the consolidated income statement over the annual lease term.

Other long-term prepayments comprise tools and supplies which are expected to provide future economic benefits to the Corporation for one year or more. Other long-term prepayments are charged to the consolidated income statement using straight-line method over 3 years..

Payable provisions

Payable provisions are recognised when the Corporation has a present obligation as a result of a past event, and it is probable that the Corporation will be required to settle that obligation. Provisions are measured at the Board of Management’s best estimate of the expenditure required to settle the obligation as at the balance sheet date.

FORM B 09-DN/HN




Leasing

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases.

The Corporation as lessor

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are recognized to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Corporation as lessee

Rentals payable under operating leases are charged to the consolidated income statement on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also recognized on a straight-line basis over the lease term.

Revenue recognition

Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:

(a) the Corporation has transferred to the buyer the significant risks and rewards of ownership of the goods;

(b) the Corporation retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably;

(d) it is probable that the economic benefits associated with the transaction will flow to the Corporation;

(e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue of a transaction involving the rendering of services is recognised when the outcome of such transactions can be measured reliably. Where a

transaction involving the rendering of services is attributable to several years, revenue is recognised in each year by reference to the percentage of completion of the transaction at the balance sheet date of that year. The outcome of a transaction can be measured reliably when all four (4) following conditions are satisfied:

(a) the amount of revenue can be measured reliably;

(b) it is probable that the economic benefits associated with the transaction will flow to the Corporation;

(c) the percentage of completion of the transaction at the balance sheet date can be measured reliably; and

(d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable interest rate. Dividend income from investments is recognised when the Corporation’s right to receive payment has been established (excluding investments in subsidiaries, associates, joint ventures).

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date as measured by the proportion that contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable of recovery.

Foreign currencies

Transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. The

balances of monetary items denominated in foreign currencies as at the balance sheet date are retranslated at the exchange rates on the same date. Exchange differences arising from the translation of these accounts are recognised in the consolidated income statement.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other borrowing costs are recognised in the consolidated income statement when incurred.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable income for the year. Taxable income differs from profit before tax as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years (including loss carried forward, if any) and it further excludes items that are never taxable or deductible.

Deferred tax is recognised on significant differences between carrying amounts of assets and liabilities

in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using balance sheet liability method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Corporation intends to settle its current tax assets and liabilities on a net basis.

The determination of the tax currently payable is based on the current interpretation of tax regulations. However, these regulations are subject to periodic variation and their ultimate determination depends on the results of the tax authorities’ examinations.

Other taxes are paid in accordance with the prevailing tax laws in Vietnam.

FORM B 09-DN/HN




5. CASH AND CASH EQUIVALENTS

31/12/2016 31/12/2015

VND VND

Cash on hand 7,238,713,722 10,845,491,662

Cash in bank 2,639,386,081,536 3,965,301,277,854

Cash in transit 133,301,541 6,756,783,667

Cash equivalents 3,236,911,574,941 4,008,483,803,541

5,883,669,671,740 7,991,387,356,724

Cash equivalents as at 31 December 2016 represent time deposits in local commercial banks with the term less 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).

Held-to-maturity investments represent deposits with the terms more than 3 months and less than 1 year in commercial 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).

6. HELD-TO-MATURITY INVESTMENTS

7. SHORT-TERM TRADE RECEIVABLES31/12/2016 31/12/2015

VND VNDCuu 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 Company Limited 183,869,463,677 198,158,212,048

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.

8. RECEIVABLES/PAYABLES FROM CONSTRUCTION CONTRACTS UNDER PERCENTAGE OF COMPLETION METHOD

31/12/2016 31/12/2015

VND VND

Contracts in progress as at the balance sheet date:

Receivables from construction contracts under percentage of completion method 438,107,372,763 4,765,479,848

Payables relating to construction contracts under percentage of completion method (238,298,386,212) (20,520,328,878)

199,808,986,551 (15,754,849,030)

Contract costs incurred plus recognised profits less recognised losses 1,526,279,421,270 51,121,985,399

Less: progress billings (1,326,470,434,719) (66,876,834,429)

199,808,986,551 (15,754,849,030)

As at 31 December 2016, the Corporation has recorded revenue, expenses according to Vietnamese Accounting Estándar - No. 15 - Construction Contract for projects: NPK Plant Project, NH3 Revamped PlantProject and Ca Mau Gas Processing Project.

FORM B 09-DN/HN




9. OTHER RECEIVABLES 31/12/2016 31/12/2015

VND VNDa) Short-term

Long Phu 1 Power Plant Project Management Board (i) 206,879,316,776 12,575,464,419

JGCS Consortium (ii) 86,542,209,070 160,751,821,743

Vietnam Oil and Gas Group (iii) 59,514,542,073 40,811,003,545

Malaysia Vietnam Offshore Terminal (Labuan) Limited (iv) 44,531,200,000 77,003,500,000

Undeductible VAT 40,926,117,807 67,529,647,074 PetroVietnam Insurance Corporation (v) 30,970,354,115 -

Lilama Corporation (vi) 26,746,568,852 9,299,083,063

Interest of time-deposits 25,931,332,538 14,265,945,718 Petroleum Domestic Exploration Production Operating Company (vii) 22,579,091,739 5,925,839,415

Nghi Son Refinery and Petrochemicals Company Limited (viii) 21,529,260,315 90,847,767,158

Bien Dong Petroleum Operating Company 16,690,612,452 12,624,211,512

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 Toisa Company Limited 4,869,745,252 - Lam Son Joint Operating Company 2,943,698,601 5,618,032,041 Talisman Malaysia Company Limited 1,983,372,593 20,293,373,860 Nhon Trach Shipyard Joint Stock Company (ix) - 230,819,875,570 Dung Quat Shipbuilding Industry Company (ix) - 124,740,417,492

Representative office in Ho Chi Minh City - Idemtisu Kosan Company Limited (Block 39&40/02) - 179,567,269,713

Japan Vietnam Petroleum Corporation - 14,151,516,545

Representative office in Ho Chi Minh City - Eni Vietnam B.V - 13,900,487,576

Saipem Asia Sdn Bhd - 7,033,848,822 Others receivables 46,647,551,713 31,239,716,087

667,479,061,085 1,142,556,125,176

b) Long-termElectronics Communciations Technology Investment Development Corporation 11,516,550,273 11,516,550,273

Deposits and mortages 9,720,826,709 3,131,717,694 Others receivables 912,928,689 11,046,334,856

22,150,305,671 25,694,602,823

(I) Receivable from Long Phu 1 Power Plant Project Management Board includes the accrued revenue based on the percentage of completion relating to Long Phu 1 Power Plant.

(II) Receivable from JGCS Consortium represents the accrued revenue related to the services rendered to Nghi Son Refinery and Petrochemical Complex Project.

(III) Receivables from Vietnam Oil and Gas Group represent the accrued revenue relating to the 2D/3D seismic survey services rendered that belong to PVN12, PVN15 projects and other receivables.

(IV) Receivable from Malaysia Vietnam Offshore Terminal (Labuan) Limited is related to the profit shared for the year ended 31 December 2016 based on the declaration of Malaysia Vietnam Offshore Terminal (Labuan) Limited.

(V) Receivable from PetroVietnam Insurance Corporation represents the compensation receivable relating to CGG Amadues vessel.

(VI) Receivable from Lilama Corporation represents the accrued revenue relating to Song Hau 1 Power Plant Project.

(VII) Receivable from Petroluem Domestic Exploration Production Operating Company represents receivable relating to fuel fee on service vessels and the payment on behalf for shipping agency services.

(VIII) Receivable from Nghi Son Refinery and Petrochemical Complex Project Management Board represents the accrued revenue for completed progress of Nghi Son Port dredging services.

(IX) In 2016, the Corporation offset the receivable from Nhon Trach Shipyard Joint Stock Company and Dung Quat Shipbuilding Industry Company with the payable to Vietnam Oil and Gas Group relating to Nhon Trach Shipbuilding Factory Project according to the Official Dispatch No. 917/DVKT-TCKT dated 27 June 2016 sent to Vietnam Oil and Gas Group.

10. INVENTORIES

31/12/2016 31/12/2015

Cost Provision Cost Provision

VND VND VND VND

Goods in transit 1,445,317,815 - 25,661,984,631 -

Raw materials 87,207,081,315 (5,208,842,819) 75,506,120,923 (5,696,915,149)

Tools and supplies 25,911,872,334 - 43,569,400,889 -

Work in progress (*) 1,539,522,556,112 - 1,046,524,633,778 -

Merchandise 1,253,234,720 - 4,515,397,525 -

Goods on consignment 613,703,580 - - -

1,655,953,765,876 (5,208,842,819) 1,195,777,537,746 (5,696,915,149)

FORM B 09-DN/HN




(*) Details of work in progress are as follows:

31/12/2016 31/12/2015

Cost Recoverableamount Cost Recoverable

amount

VND VND VND VNDSu Tu Trang Full Field project 1,309,513,731,020 1,309,513,731,020 535,463,865,959 535,463,865,959

Nghi Son Refinery and Petrochemical Complex project - SMP9 package

77,498,206,903 77,498,206,903 37,493,934,879 37,493,934,879

Nghi Son Refinery and Petrochemical Complex project - SMP8 package

6,483,349,859 6,483,349,859 1,162,312,348 1,162,312,348

Nghi Son Refinery and Petrochemical Complex project - Tank package

3,414,150,812 3,414,150,812 9,698,679,483 9,698,679,483

Nghi Son Refinery and Petrochemical Complex project - Port package

- - 43,686,567,588 43,686,567,588

Nghi Son Refinery and Petrochemical Complex project - SSF2 package

- - 22,828,786,197 22,828,786,197

Low Pressure Gas Distribution project 42,930,280,702 42,930,280,702 64,164,153,447 64,164,153,447

HUC Su Tu Trang project 11,308,249,902 11,308,249,902 - -

Long Phu 1 Thermal Power Plant project 10,623,728,307 10,623,728,307 518,115,454 518,115,454

Badamyar - Huyndai project 9,789,163,621 9,789,163,621 - -

Ca Mau GPP project 7,225,688,903 7,225,688,903 - -

Maharaja Lela South project (MLS) - - 143,146,645,256 143,146,645,256

PVN Tie-lines project - - 86,967,265,455 86,967,265,455

On fabrication for Sapura project - - 21,761,976,344 21,761,976,344

Thai Binh Ham Rong Pipeline project - - 1,193,226,209 1,193,226,209

Others 60,736,006,083 60,736,006,083 78,439,105,159 78,439,105,159

1,539,522,556,112 1,539,522,556,112 1,046,524,633,778 1,046,524,633,778

11. PREPAYMENTS 31/12/2016 31/12/2015

VND VNDa. Short-termSpare parts expense of CGG Amadeus vessel, Binh Minh 02 vessel 4,557,043,774 4,789,313,798

Insurance cost for FPSO Ruby II 3,054,650,795 4,568,862,973 Tools and supplies cost 6,240,421,794 6,424,673,304 Insurance cost 3,595,824,301 2,105,904,819 Other short-term prepayments 6,921,202,987 5,464,693,236

24,369,143,651 23,353,448,130

b. Long-termOffice rental at No. 1-5 Le Duan Street (i) 304,399,782,199 308,895,368,087 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 Equipment and spare parts expense of CGG Amadeus vessel, Binh Minh 02 vessel (iv) 71,565,751,496 112,252,844,716

Maintenance cost awaiting allocation 32,330,917,843 40,327,860,499 Repair expense for the restaurant at 1st Floor, PetroVietnam Hotel 13,916,757,594 -

Repair expense for Binh Minh 02 and CGG Amadues vessel 9,758,152,279 -

Tools awaiting allocation 8,561,332,439 6,471,403,674 Pre-operation expense of FPSO Lam Son 7,327,715,605 24,914,233,081 Son Tra harbour rental fee 3,491,936,308 3,576,530,076 Repair cost of PTSC Researcher 106 vessel - 9,916,260,348 Other long-term prepayments 26,653,770,180 13,885,739,480

697,468,980,357 746,045,339,983

(I) Prepayment for office rental at No. 1-5 Le Duan Street started since October 2010 with the lease term of 50 years. The Corporation allocates this prepayment into the consolidated income statement based on the lease term and annual using area.

(II) Dinh Vu Petroleum Services Port Joint Stock Company has rent an area of 138,269 m2 in Dinh Vu Economic Zone – Hai Phong City from Dinh Vu Development Limited Company (now known as Dinh Vu Industrial Zone Joint Stock Company) to build up the Base of PetroVietnam Technical Services and Supply Base for the Industry Zone. The lease term is from October 2007 to April 2047. The value of land use rights is amortised using straight line method from July 2008 to the end of the contract term.

(III) The site clearance cost regarding Son Tra Harbour transferred to Branch of PetroVietnam Technical Services Cor–oration - PTSC Da Nang since 20 December 2015 with the duration of 42 years. The Corporation allocates this site clearance cost to the consolidated income statement over the annual lease term.

(IV) Equipment and spare part expense of CGG Amadeus vessel, Binh Minh 02 vessel represents the cost of repair, mainternance for equipment on CGG Amadeus vessel, Binh Minh 02 vessel. These prepayments are allocated using straight line method from 2 years to 6 years.

FORM B 09-DN/HN




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13. INCREASE, DECREASE IN INTANGIBLE ASSETS

Land use rights Computersoftware Others Total

VND VND VND VND

COST

As at 31/12/2015 1,310,220,000 68,908,471,925 948,862,800 71,167,554,725

Purchase in the year - 1,119,968,750 36,000,000 1,155,968,750

Transfer from construction in progress - 4,974,860,000 - 4,974,860,000

Other decreases - (454,560,000) - (454,560,000)

As at 31/12/2016 1,310,220,000 74,548,740,675 984,862,800 76,843,823,475

ACCUMULATED AMORTISATION

As at 31/12/2015 - 44,522,573,537 613,999,928 45,136,573,465

Charge for the year - 14,593,950,595 69,000,000 14,662,950,595

Other increases - 372,099,287 - 372,099,287

As at 31/12/2016 - 59,488,623,419 682,999,928 60,171,623,347

NET BOOK VALUE

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

FORM B 09-DN/HN




14. INVESTMENT PROPERTIES

Infrastructure

VND

COST

As at 31/12/2015 and 31/12/2016 229,280,786,454

ACCUMULATED AMORTISATION

As at 31/12/2015 27,003,650,691

Charge for the year 4,735,271,856

As at 31/12/2015 31,738,922,547

NET BOOK VALUE

As at 31/12/2015 202,277,135,763

As at 31/12/2015 197,541,863,907

Details of investment property cost are as follows:

31/12/2016

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 and infrastructure at Sao Mai - Ben Dinh marine service base of Sao Mai Ben Dinh project which was completed in 2009 and then has been rented by PetroVietnam Marine Shipyard Joint Stock Company since 2010. This investment property is depreciated using the straight-line method over the lease term of 48 years.

(II) Investment property represents 23 hectare land and infrastructure at Sao Mai - Ben Dinh marine service base of Sao Mai Ben Dinh project rented

by Petroleum Equipment Assembly & Metal Structure Joint Stock Company in 2010. This investment property is depreciated using the straight-line method over 49 years.

The Corporation’s income for the year ended 31 December 2016 from the investment properties is VND 5,203,799,784. Direct operating expense arising on the investment properties for the year ended 31 December 2016 is VND 4,735,271,856.

15. L

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Petro

Hot

el -

17,

995,

830,

691

Electr

onic

gene

rato

r 100

KVA

- 4

,740

,000

,000

Re

nova

tion

and

upgr

adin

g do

cum

ent s

tora

ge -

2,1

73,8

67,9

43

Reno

vatio

n of

was

tew

ater

trea

tmen

t of V

ung

Tau

Petro

Hot

el -

1,4

13,4

80,7

90

Vide

o co

nfer

ence

syste

m -

1,7

33,2

00,0

00

Othe

rs 1

0,57

1,71

8,85

9 4

,169

,324

,942

12

8,18

6,64

2,42

454

,742

,050

,465

FORM B 09-DN/HN




16. INVESTMENTS IN JOINT VENTURES, ASSOCIATES

31/12/2016 31/12/2015

VND VND

Cost of investments in joint ventures, associates 2,479,809,740,787 2,479,809,740,787

Net income from associates, joint ventures:

Accumulated in the prior years 1,686,683,896,116 1,063,518,743,276

Income from associates, joint ventures during the year 667,105,854,738 753,186,652,840

Less: Dividend received (126,323,200,000) (130,021,500,000)

4,707,276,291,641 4,166,493,636,903

Details of these associates, joint ventures as at 31 December 2016 are as follows:

Name of entity Location

Proportion of ownership interest %

Principal activityPer Investment Certificate

Per actual contribution

Rong doi MV12 Pte. Ltd. Singapore 33.00 33.00 FSO services

Malaysia Vietnam Offshore Terminal (Labuan) Limited (i) Malaysia 49.00 49.00 FSO/FPSO services

Vietnam Offshore Floating Terminal (Ruby) Limited (ii)) Malaysia 60.00 60.00 FSO/FPSO services

PetroVietnam Marine Shipyard Joint Stock Company Việt Nam 28.75 28.75 Building, installation

of oil construction

PTSC South East Asia Private Limited (iii) Singapore 51.00 51.00 FSO/FPSO services

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

(I) Malaysia Vietnam Offshore Terminal (Labuan) Limited is a jointly controlled venture company established between the Corporation and its partner, Malaysia International Shipping Corporation Berhard in 2009 to invest in FSO “Orkid” with the capacity of 650,000 barrels of oil for Talisman Malaysia Limited to rent within 10 years for offshore oil exploitation at PM-3 bounded trade area between Vietnam and Malaysia. FSO “Orkid” has operated since 2009.

(II) Vietnam Offshore Floating Terminal (Ruby) Limited is a jointly controlled venture company established between the Corporation and its partner, Malaysia International Shipping Corporation Berhard in 2009, in which, the Corporation owns 60% of the charter capital to own, manage and operate FPSO “Ruby II” for oil exploration and production of Petronas. FPSO “Ruby II” has started its operation and exploitation since June 2010.

(III) PTSC South East Asia Private Limited is a jointly controlled venture company, established in September 2011 by the Corporation and its partner, Yinson Holdings Berhad (Malaysia), under Foreign Investment Certificate No. 474/BKHDT-DTRNN issued by the Ministry of Planning and Investment dated 31 October 2011 to invest and provide FSO service for Bien Dong 1 Project. Total investment capital of the project is USD 149,318,329, equivalent to VND 3,071,478 million, in which, the capital contributions of joint venture parties are USD 37,329,582, taking up 25% of its investment capital, the remaining is the borrowing capital. In which, the capital contribution of the Parent Company is USD 19,038,087, equivalent to VND 391,613 million, taking up 51% of its charter capital. The principal activities of the jointly controlled venture are to invest and own FSO “PTSC Bien Dong 01”. PTSC South East Asia Private Limited started its operating in 2011. As at 31 December 2016, the Corporation has contributed to PTSC South East Asia Private Limited with an amount of USD 16,320,000, equivalent to VND 340,800,232,500.

(IV) Joint venture PTSC Asia Pacific Private Limited is a jointly controlled venture company established in 2012 by the Corporation and its partner, Yinson Holding Berhad, under the Foreign Investment Certificate No. 561/BKHDT-DTRNN dated 19 October 2012 issued by the Ministry of Planning and Investment to contribute to investment capital in floating storage, production and processing of oil (FPSO) for Lam Son Joint Operating Company (“Lam Son JOC”) to rent to develop Blocks 01/97 and 02/97 of the low-lying delta in Vietnam’s water. The project has a total investment capital of USD 429,977,481, equivalent to VND 9,113,372,709,795, in which, the capital contribution of each party is USD 119,996,426 taking up 27.9% of the investment capital, the remaining is the borrowing capital. In which, the Corporation contributed USD 61,198,177, equivalent to VND 1,272,922,081,600, taking up 51% of the charter capital. As at 31 December 2016, the Corporation made capital contributions to joint venture PTSC Asia Pacific Private Limited with an amount of USD 51,000,000 equivalent to VND 1,069,026,300,000.

(V) Thi Vai General Port Joint Stock Company is a joint stock company which was established in accordance with Business Registration Certificate No. 3502259121 dated 21 July 2014 issued by Department of Planning and Investment of Ba Ria - Vung Tau Province with the registered charter capital of VND 60,000,000,000. PTSC Phu My Port Joint Stock Company holds 36% of charter capital of Thi Vai General Port Joint Stock Company in accordance with Business Registration Certificate. As a result, the Parent Company has an indirect ownership of 21.46% of charter capital of Thi Vai General Port Joint Stock Company. Based on Circular No. 202/2014/TT–BTC, as at 31 December 2016, Thi Vai General Port Joint Stock Company became an associate of the Corporation in accordance with the prevailing regulations.

FORM B 09-DN/HN




17. E

QU

ITY

INV

ESTM

ENTS

IN O

THER

EN

TITI

ES 3

1/12

/201

6 3

1/12

/201

5

Cos

t P

rovis

ion

Fai

r val

ue C

ost

Pro

visio

n F

air v

alue

VND

VND

VND

VND

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VND

Indoc

hina

Pet

roleu

m

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spor

tatio

n Jo

int S

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C

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ny (i

) -

- -

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000,

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00

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00

Nho

n Tr

ach

Ship

yard

Join

t Sto

ck

Com

pany

3,0

00,0

00,0

00

613

,321

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2

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3

,000

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4

68,7

57,6

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2,5

31,2

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81

Duye

n Ha

i Pet

roVi

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m

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tmen

t and

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struc

tion

Join

t St

ock

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pany

37,

500,

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13

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2

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0,00

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31

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High

tech

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cret

e Inv

estm

ent

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t Sto

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ompa

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0,53

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- 1

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51,

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24,

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26,

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587

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23,

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(i) Ac

cord

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to R

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No.

136

/NQ

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ted

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ry 2

015

of th

e Bo

ard

of D

irecto

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m T

echn

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n on

ap

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ithdr

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t Sto

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s at

31

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g-te

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the y

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nd th

e pr

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us y

ears

wer

e as

follo

ws:

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ntVN

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at 0

1/01

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5 3

8,57

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9,72

2 Pr

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on m

ade

for t

he y

ear

11,

038,

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464

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ase

from

inve

sting

and

tran

sform

ing

form

of o

wne

rship

10,

530,

000,

000

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rsal f

or th

e ye

ar (6

61,9

57,5

89)

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pens

atin

g fo

r dive

sted

inve

stmen

ts (3

5,74

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7)As

at 3

1/12

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5 2

3,73

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0 Pr

ovisi

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ade

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he y

ear

7,2

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or th

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ompe

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vestm

ents

(5,0

00,0

00,0

00)

As a

t 31/

12/2

016

24,

593,

708,

413

18. TRADE PAYABLES

31/12/2016 31/12/2015

Amount Amount ableto be paid off Amount Amount able

to be paid off

VND VND VND VND

a) Short-term trade payables

PTSC Asia Pacific Private Limited 423,650,464,009 423,650,464,009 416,809,680,000 416,809,680,000

Waterway Construction Consultants Joint Stock Company

337,619,339,653 337,619,339,653 - -

PTSC South East Asia Private Limited 287,344,889,040 287,344,889,040 218,518,898,640 218,518,898,640

SapuraKencana TL Offshore Sdn. Bhd 242,109,710,855 242,109,710,855 263,724,256,796 263,724,256,796

CGG Services (Singapore) Private Limited

134,469,045,326 134,469,045,326 66,068,595,467 66,068,595,467

PetroVietnam Exploration Production Corporation

132,535,870,219 132,535,870,219 145,554,690,702 145,554,690,702

CGG Services SA Corporation 112,836,799,432 112,836,799,432 49,156,712,427 49,156,712,427

Joint Venture Vietsovpetro 94,429,555,668 94,429,555,668 158,846,890,173 158,846,890,173

Lilama Corporation 93,800,866,366 93,800,866,366 24,765,202,868 24,765,202,868

Saipem Asia Sdn. Bhd 39,545,075,691 39,545,075,691 107,980,161,683 107,980,161,683

Others 2,153,497,282,184 2,153,497,282,184 2,903,887,212,670 2,903,887,212,670

4,051,838,898,443 4,051,838,898,443 4,355,312,301,426 4,355,312,301,426

b) Long-term trade payablesPetroVietnam Exploration Production Corporation

- - 66,267,935,109 66,267,935,109

The significant balances of trade payables to the related parties are presented in Note 44.

FORM B 09-DN/HN




19. ADVANCES FROM CUSTOMERS

20. TAXES AND OTHER RECEIVABLES FROM/PAYABLES TO THE STATE BUDGET

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 December 2015: VND 238,691,230,949) and other advances.

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 December 2015: VND 1,051,381,785,330) and other advances.

31/12/2016 31/12/2015

VND VND

Value added tax 7,860,062,497 10,126,900,479

Corporate income tax 61,558,178,834 99,109,437,000

Personal income tax 20,378,121,072 22,078,518,431

Others 38,296,487,858 44,110,608,565

128,092,850,261 175,425,464,475

Details of the implementation of the State obligations according to each type of tax are as follows:

31/12/2015 Payable/adjustment during the year

Paidduring the year 31/12/2016

VND VND VND VND

VAT on domestic goods 10,126,900,479 181,587,829,667 183,937,189,466 7,777,540,680

VAT on imported goods - 44,465,885,579 44,465,885,579 -

Import-export duties - 9,518,904,373 9,518,904,373 -

Corporate income tax 59,132,803,497 157,989,589,078 206,556,951,661 10,565,440,914

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 -

Land tax 4,213,486,783 (903,902,463) 3,309,584,320 -

Exercise tax - 54,000,000 54,000,000 -

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 -

135,312,046,069 841,287,551,100 899,230,399,773 77,369,197,396

In which

Tax and other receivables from the State Budget

40,113,418,406 50,723,652,865

Taxes and amounts payable to the State budget

175,425,464,475 128,092,850,261

FORM B 09-DN/HN




21. SHORT-TERM ACCRUED EXPENSES

31/12/2016 31/12/2015

VND VND

Cost for Bien Dong Project 374,778,638,924 299,504,178,883

Cost for provision of Long Phu 1 Thermal Power Plant Project 231,128,430,307 231,128,430,307

Cost for Ca Mau GPP Project 217,880,698,572 1,889,144,760

Cost for Su Tu Nau Project 176,519,134,415 176,519,134,415

Cost for Long Phu 1 Thermal Power Plant Project 139,304,121,277 52,438,032,663

Cost for packages of Nghi Son Refinery and Petrochemical Complex Project 92,138,952,951 106,806,214,999

Cost for operating of CGG Amadues vessel, Binh Minh 02 vessel 85,944,577,772 97,166,073,548

Cost for NH3 Project 82,515,821,353 28,134,735,905

Cost for Maharaja Lela South Project (MLS) 69,191,265,079 15,736,205,478

Cost for Hai Su Trang Den Project 64,593,419,068 64,593,419,068

Cost for Daman Project 61,414,140,978 -

Cost for NPK Project 61,222,182,630 15,476,352,091

Cost for Su Tu Vang 6X Project 49,161,840,000 49,161,840,000

Cost for Thai Binh Ham Rong Project 44,429,260,212 202,090,860,645

Cost for Heera Ceter Technology Project (HRD) 37,188,998,400 51,597,502,775

Cost for Ghana Yinson Project 33,517,500,000 50,763,803,907

Cost for Bio Ethanol Project 29,150,440,587 28,542,446,554

Cost for H5 Topside Project 23,062,094,580 -

Cost for Ghana Kanfa Project 18,323,004,878 49,566,360,713

Cost for land rental at Nghi Son shipbuilding industry zone 15,000,000,000 10,000,000,000

31/12/2016 31/12/2015

Cost for Thai Binh T&I Project 14,771,393,352 14,771,393,352

Cost for seismic and geological servey services 9,926,180,478 17,475,490,781

Cost for dredging for water-front area of PTSC Supply Base 8,159,637,483 -

Cost for project of dredging Nghi Son port 8,117,122,541 10,740,479,804

Cost for marine services rendered to Bien Dong POC 6,920,255,989 15,513,795,645

Interest payables to PVEP due to receiving transfer of Binh Minh 02 vessel 6,626,793,514 9,940,190,266

Cost for land rental at Son Tra Harbour 6,335,686,568 -

Cost for operating of FPSO Lam Son, FSO Bien Dong 01, FPSO Ruby II 6,987,608,986 -

Cost for SOFEL Project 4,594,190,885 -

Interest expense payable to the credit institutions 3,369,463,919 9,550,821,209

Cost for Song Hau Power Plant construction 2,796,540,000 -

Cost of processing components for TSA rig 2,188,702,724 -

Cost for supplying materials to Dung Quat Oil Refinery 1,852,167,074 -

Cost for Su Tu Trang Full Field Project 24,287,000 48,547,509,167

Cost of service rendered to Talisman Vietnam Company Limited - 24,991,255,825

Cost for Dai Hung, Tam Dao 05, and Chim Sao Projects - 10,615,867,760

Maintenance cost of drilling rigs - 10,592,449,760

Cost for repair of PTSC 01 and POS 01 barges - 9,077,803,890

Other accruals 74,078,257,153 66,666,764,215

2,063,212,809,649 1,779,598,558,385

FORM B 09-DN/HN




22. OTHER PAYABLES

31/12/2016 31/12/2015

VND VND

a. Current payables

Vietnam Shipbuilding Industry Corporation (i) 411,828,898,922 402,177,441,565

Salary and bonus payables 52,392,565,726 35,020,333,214

Bien Dong Petroleum Operating Company 19,939,346,487 -

Dividend payable (ii) 15,145,283,073 12,285,493,723

Lam Son Joint Operating Company 13,980,607,544 -

Vietnam Waterway Construction Corporation (iii) 9,057,781,235 58,209,744,759

Withhold PIT of employees 8,347,896,267 8,814,464,483

PetroVietnam Construction Corporation (iii) 7,826,660,837 49,873,999,702

OffShore Limited Company 7,552,986,709 7,552,986,709

Trade union fee 7,324,055,689 2,687,070,993

Nordic Maritime Private Limited 6,837,000,000 6,762,000,000

Petroleum Domestic Exploration Production Operating Company - Block 05.1a 4,143,598,682 3,043,358,432

PISICO Quang Nam Joint Stock Company 4,000,000,000 -

Global Petroleum and Maritime Service Joint Stock Company 3,250,953,390 -

Social, health, unemployment insurance 2,604,992,170 105,550,648

Yen Son Diversified Company Limited 2,327,854,549 9,891,423,655

Petroleum Maritime Service Vietnam Joint Stock Company 2,033,551,487 -

(I) Payable to Vietnam Shipbuilding Industry Corporation is the last payment for the project of building FSO5 vessel; in which, the Corporation is the investor and Vietnam Shipbuilding Industry Corporation is the constructor.

(II) Dividend payable to shareholders represent dividend of the years which custody shareholders have not received.

(III) Payable to PetroVietnam Construction Corporation, Vietnam Waterway Construction Corporation is the payable amount related to the

project of dredging of Nghi Son port which are kept in accordance with the signed partnership agreement.

(IV) In 2016, the Corporation offset the receivable from Nhon Trach Shipyard Joint Stock Company and Dung Quat Shipbuilding Industry Company with the payable to Vietnam Oil and Gas Group relating to Nhon Trach Shipbuilding Factory Project according to the Official Dispatch No. 917/DVKT-TCKT dated 27 June 2016 sent to Vietnam Oil and Gas Group (as presented in Point ix, Note 9).

31/12/2016 31/12/2015

Malaysia Vietnam Offshore Terminal (Labuan) Limited 1,169,382,840 6,655,616,068

Short-term deposits received 839,713,197 508,838,739

PC Vietnam Limited 67,527,210 14,219,767,472

Vietnam Oil and Gas Group (iv) - 349,068,201,763

Cuu Long Joint Operating Company - 3,759,479,209

Asia Investment and Asset Management Join Stock Company - 1,880,480,066

Thang Long Securities Joint Stock Company - 3,078,500,783

Dung Quat Port Customs Department - 828,428,160

Others 45,264,816,492 61,673,358,602

625,935,472,506 1,038,096,538,745

b. Long-term payables

Long-term deposits received 204,067,385 203,242,385

204,067,385 203,242,385

FORM B 09-DN/HN




23. S

HO

RT-T

ERM

LO

AN

S

24. L

ON

G-T

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ount

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rent

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on o

f lo

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rm lo

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e 24

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4,34

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432,

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556

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g 2

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4.1

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g-te

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epre

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whi

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bran

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m. T

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lo

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tes r

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.7%

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per

ann

um. T

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f the

long

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o in

vest

in fi

xed

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ts in

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ng p

ort,

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as v

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the

capi

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int v

entur

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f FSO

/FPS

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reig

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ed b

y Vi

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m O

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as G

roup

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re se

cure

d by

fixe

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sets

and

cons

tructi

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pro

gres

s for

med

from

the

loan

s as n

oted

in N

ote

12 o

r un

secu

red.

Long

-term

loan

s are

repa

yabl

e as

follo

ws:

31/

12/2

016

31/

12/2

015

VND

VND

With

in o

ne y

ear

432,

147,

165,

556

684,

347,

404,

258

In the

seco

nd y

ear

781,

851,

494,

483

1,08

9,89

0,97

2,98

6

In the

third

to fi

fth y

ear i

nclus

ive28

2,33

8,45

2,84

636

0,59

0,57

7,50

3

Afte

r five

yea

rs79

,318

,663

,921

112,

931,

314,

711

1,5

75,6

55,7

76,8

06

2,24

7,76

0,26

9,45

8

Less

: Am

ount

due

for s

ettle

men

t with

in 1

2 m

onths

(pre

sente

d in

Not

e 23

) (4

32,1

47,1

65,5

56)

(684

,347

,404

,258

)

Amou

nt d

ue fo

r set

tlem

ent a

fter 1

2 m

onth

s 1

,143

,508

,611

,250

1

,563

,412

,865

,200

FORM B 09-DN/HN




25. D

EFER

RED

TAX

LIA

BILI

TIES

The

follo

win

g ar

e the

def

erre

d ta

x as

sets

and

liabi

lities

reco

gnize

d by

the

Cor

pora

tion,

and

the

mov

emen

ts the

reon

, dur

ing

the c

urre

nt an

d pr

ior y

ears.

Accr

uals

and

othe

r pr

ovisi

ons

Unre

alise

dfo

reig

n ex

chan

gedi

ffere

nce

Unre

alise

dpr

ofit

Unea

rned

reve

nue

Accr

ued

cost

of sa

lesDe

prec

iatio

n of

fixed

ass

ets

Prof

it fro

mjo

int v

entu

rean

d as

socia

tes

Tota

l

VND

VND

VND

VND

VND

VND

VND

VND

As a

t 01

Janu

ary

2015

47,

407,

108,

444

(6,8

44,2

34,0

17)

3,7

13,3

89,2

59

- -

49,

281,

556,

595

(200

,715

,182

,175

) (1

07,1

57,3

61,8

94)

Cha

rged

to th

e co

nsol

idat

ed

inco

me

state

men

t(5

7,96

0,86

2,96

2) (3

,067

,396

,132

)(3

,447

,929

,304

) -

- (1

8,16

3,70

6,64

9) (8

8,47

6,54

0,77

2) (1

71,1

16,4

35,8

19)

Incre

ase

from

in

vesti

ng a

nd

trans

form

ing

form

of

ow

nersh

ip

- -

- -

- (4

,609

,223

,314

) -

(4,6

09,2

23,3

14)

As a

t 31

Dece

mbe

r 201

5 (1

0,55

3,75

4,51

8) (9

,911

,630

,149

) 2

65,4

59,9

55

- -

26,

508,

626,

632

(289

,191

,722

,947

) (2

82,8

83,0

21,0

27)

Cha

rged

to th

e co

nsol

idat

ed

inco

me

state

men

t(6

0,02

3,26

8,16

0)11

,643

,927

,890

(2

65,4

59,9

55)

9,00

4,43

1,14

0 (8

,586

,056

,140

) (1

5,58

2,33

2,05

4) (1

24,5

93,2

21,9

86)

(188

,401

,979

,265

)

As a

t 31

Dece

mbe

r 201

6 (7

0,57

7,02

2,67

8) 1

,732

,297

,741

-

9,0

04,4

31,1

40

(8,5

86,0

56,1

40)

10,

926,

294,

578

(413

,784

,944

,933

) (4

71,2

85,0

00,2

92)

Defe

rred

tax

asse

ts an

d lia

biliti

es h

ave

been

offs

et in

acc

orda

nce

with

the

prev

ailin

g ac

coun

ting

polic

ies f

or fi

nanc

ial r

epor

ting

purp

oses

as f

ollo

ws:

31/1

2/20

1631

/12/

2015

VND

VND

Defe

rred

tax

liabi

lities

-(49

2,94

8,02

3,75

1) -(

299,

103,

353,

096)

Defe

rred

tax

asse

ts 2

1,66

3,02

3,45

9 1

6,22

0,33

2,06

9

-(47

1,28

5,00

0,29

2) -(

282,

883,

021,

027)

As a

t 31

Dece

mbe

r 201

6, th

e su

bsid

iarie

s of t

he C

orpo

ratio

n ha

ve u

nsue

d ta

x lo

sses

ava

ilabl

e fo

r offs

et a

gain

st to

futur

e pr

ofits

as b

elow

s:- P

TSC

Qua

ng N

gai J

oint

Stoc

k C

ompa

ny o

f VN

D 31

1,12

2,58

4,33

1 (a

s at 3

1 De

cem

ber 2

015:

VN

D 37

8,07

6,92

2,65

3)- P

TSC

CG

GV

Geo

phys

ical S

urve

y C

ompa

ny Li

mite

d of

VN

D 87

6,16

8,71

9,55

1 (a

s at 3

1 De

cem

ber 2

015:

VN

D 45

9,08

0,08

1,87

5)

PTSC

Qua

ng N

gai J

oint

Stoc

k C

ompa

ny a

nd P

TSC

CG

GV

Geo

phys

ical S

urve

y C

ompa

ny Li

mite

d ha

ve n

ot re

cogn

ised

defe

rred

tax

asse

ts of

thes

e ta

x lo

sses

due

to th

e un

certa

inty

of fu

ture

prof

its to

utili

se th

ese

tax

loss

es.

26. LONG-TERM PROVISIONS

31/12/2016 31/12/2015

VND VND

Warranty provision for the construction works

- Bien Dong project 525,047,170,282 525,047,170,282

- Su Tu Nau project 305,716,586,414 305,716,586,414

- Hai Su Trang - Den project - 155,860,354,444

- Chim Sao project - 100,390,150,982

- Su Tu Vang 6X project 84,525,593,656 84,525,593,656

- HRD project 54,028,471,982 54,028,471,982

- Su Tu Trang project 46,462,217,152 30,492,733,169

- Thai Binh Ham Rong project - 9,844,800,000

- Maharaja Lela South project 132,446,433,030 -

- H05 Topside project 96,130,757,059 -

- Ghana Yinson project 55,087,141,058 -

- Ghana Kanfa project 19,702,996,906 -

- Quata project 6,464,616,021 -

Provisions for overhaul expenses of FPSO Lam Son vesse 30,097,918,150 15,048,959,075

1,355,709,901,710 1,280,954,820,004

FORM B 09-DN/HN




27. OWNERS’ EQUITY

Share 31/12/2016 31/12/2015

- Number of shares registered 446,700,421 446,700,421

- Number of shares issued to public 446,700,421 446,700,421

- Number of shares in circulation 446,700,421 446,700,421

The Corporation has only one type of ordinary share which carries no right to fixed income with par value of VND 10,000/share. The shareholders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the Corporation’s shareholders’ meetings. All shares rank equally with regard to the Corporation’s net assets.

Details of the contributed capital as at 31 December 2016 and as at 31 December 2015 were as follows:

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, the capital was fully contributed by the shareholders as follows:

Contributed capital

31/12/2016 31/12/2015

% VND % VND

Vietnam Oil and Gas Group 51.38 2,295,000,000,000 51.38 2,295,000,000,000

Vina Capital Corporate Financial Vietnam Company Limited 5.29 236,174,220,000 6.12 273,403,700,000

FTIF-Templeton Frontier Markets Fund group 0.50 22,462,000,000 5.79 258,800,740,000

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

Mov

emen

t in

owne

rs’ e

quity

Ow

ners

’co

ntrib

uted

cap

ital

Sha

re p

rem

ium

Inve

stmen

t and

de

velo

pmen

t fun

dN

on-c

ontro

lling

inte

rests

Ret

aine

d ea

rnin

gsTo

tal

VND

VND

VND

VND

VND

VND

As a

t 01

Janu

ary

2015

4,46

7,00

4,21

0,00

039

,545

,660

,000

1,8

47,2

10,1

52,2

85

1,4

41,8

30,7

62,9

55

3,15

9,34

3,75

5,21

0 1

0,95

4,93

4,54

0,45

0

Cap

ital c

ontri

butio

n -

- -

3,2

80,0

00,0

00

- 3

,280

,000

,000

Adjus

tmen

t for

pu

rcha

sing

Sao

Mai

- Be

n Di

nh -

- 2

2,47

0,91

7,57

3 2

75,1

74,8

70,9

88

(22,

470,

917,

573)

275

,174

,870

,988

Prof

it fo

r the

yea

r -

- -

(23,

855,

903,

238)

1,51

7,39

4,76

0,70

4 1

,493

,538

,857

,466

Fund

app

ropr

iatio

n -

- 5

49,2

65,6

29,8

02

(22,

307,

884,

709)

(791

,595

,857

,165

) (2

64,6

38,1

12,0

72)

Divid

ends

pai

d -

- -

(50,

529,

500,

000)

(536

,040

,505

,200

) (5

86,5

70,0

05,2

00)

Othe

rs -

- (4

06,7

93,6

07)

3,3

69,2

63

(442

,689

,671

) (8

46,1

14,0

15)

As a

t 31

Dece

meb

er

2015

4,4

67,0

04,2

10,0

00

39,

545,

660,

000

2,4

18,5

39,9

06,0

53

1,6

23,5

95,7

15,2

59

3,32

6,18

8,54

6,30

5 1

1,87

4,87

4,03

7,61

7

Cap

ital c

ontri

butio

n -

- -

3,6

20,5

20,0

00

- 3

,620

,520

,000

Prof

it fo

r the

yea

r -

- -

(128

,998

,937

,135

)1,

038,

743,

379,

556

909

,744

,442

,421

Fund

app

ropr

iatio

n -

- 2

07,5

79,7

76,6

47

(12,

142,

920,

870)

(416

,017

,679

,948

) (2

20,5

80,8

24,1

71)

Divid

ends

pai

d -

- -

(55,

896,

450,

000)

(759

,390

,715

,700

) (8

15,2

87,1

65,7

00)

Othe

rs -

71,

400,

000

- 5

77,2

62,2

37

(567

,462

,238

) 8

1,19

9,99

9 As

at 3

1 De

cem

ber

2016

4,46

7,00

4,21

0,00

039

,617

,060

,000

2,62

6,11

9,68

2,70

01,

430,

755,

189,

491

3,18

8,95

6,06

7,97

511

,752

,452

,210

,166

Acco

rdin

g to

the

Reso

lutio

n No.

277

/NQ

-DVK

T-DHD

CD

date

d 28

Apr

il 201

6 of

the

Gen

eral

Mee

ting

of S

hare

hold

ers o

f Pet

roVi

etna

m Te

chni

cal S

ervic

es C

orpo

ratio

n,

the R

esol

ution

s of G

ener

al M

eetin

g of

Sha

reho

lder

s of s

ubsid

iarie

s, the

shar

ehol

ders

of th

e C

orpo

ratio

n ap

prov

ed th

e di

viden

d di

strib

ution

, app

ropr

iatio

n of

the

welf

are

and

bonu

s fun

ds a

nd in

vestm

ent a

nd d

evelo

pmen

t fun

d fro

m p

rofit

of 2

015.

Acco

rdin

g to

the

Reso

lutio

n N

o. 6

70/N

Q-D

VKT-H

DQT

date

d 21

Nov

embe

r 201

6, th

e Bo

ard

of D

irecto

rs of

Pet

roVi

etna

m T

echn

ical S

ervic

es C

orpo

ratio

n ap

prov

ed

the te

mpo

rary

adv

ance

of d

ivide

nd o

f 201

6 to

the

shar

ehol

ders

at th

e ra

te o

f 5%

of p

er p

ar v

alue

with

tota

l am

ount

of V

ND

223,

350,

210,

500.

As a

t 31

Dece

mbe

r 201

6, th

e C

orpo

ratio

n an

d the

sub

sidia

ries

appr

opria

ted

funds

, pa

id d

ivide

nd o

f 201

5 an

d te

mpo

rary

adv

ance

of d

ivide

nd o

f 201

6 to

sh

areh

olde

rs in

acc

orda

nce

with

pre

vailin

g re

gula

tions

.

FORM B 09-DN/HN




28. OFF BALANCE SHEET ITEMSForeign currencies:

31/12/2016 31/12/2015United States Dollar (USD) 82,501,397 120,476,279

Euro (EUR) 1,020,958 3,930

British Pound (GBP) 248,230 319,468

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s pr

ofit/

(loss

)48

,332

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27,5

31,0

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22,0

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0016

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7 (2

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8,42

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2 (4

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Non

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g in

tere

sts’ p

rofit/

(loss

)8,

561,

608,

306

26,4

51,3

99,7

842,

349,

938,

988

14,9

13,9

91,4

3213

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2,20

5,14

6,79

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10,9

95,6

03)

6,98

3,79

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6 (1

28,9

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29. N

ON

-CO

NTR

OLL

ING

INTE

REST

SN

on-co

ntrol

ling

inte

rests

repr

esen

ts ot

her s

hare

hold

ers’

shar

e to

the

subs

idia

ries’

net a

sset

s and

the

resu

lt fro

m o

pera

tion

of su

bsid

iarie

s. Th

e no

n-con

trollin

g in

tere

sts a

re

as fo

llow

s:

Non

-contr

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g in

tere

sts in

subs

idia

ries’

prof

it an

d lo

ss d

urin

g the

yea

r are

as f

ollo

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Unit:

VN

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Unit:

VN

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l

Cha

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l of

subs

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400,

000,

000,

000

200,

000,

000,

000

300,

000,

000,

000

350,

000,

000,

000

400,

000,

000,

000

400,

000,

000,

000

1,17

1,49

8,64

1,42

028

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,000

500,

000,

000,

000

3,75

0,28

4,96

1,42

0

In w

hich

:

Attri

buta

ble

to th

e C

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ratio

n33

9,80

7,00

0,00

010

2,00

0,00

0,00

028

5,58

1,00

0,00

020

8,64

5,00

0,00

021

8,77

3,00

0,00

020

4,00

0,00

0,00

059

7,81

7,10

4,00

015

,300

,000

,000

255,

000,

000,

000

2,22

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0

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buta

ble

to

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-contr

ollin

g in

tere

sts60

,193

,000

,000

98,0

00,0

00,0

0014

,419

,000

,000

141,

355,

000,

000

181,

227,

000,

000

196,

000,

000,

000

573,

681,

537,

420

13,4

86,3

20,0

0024

5,00

0,00

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01,

523,

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Perc

enta

ge o

f no

n-co

ntro

lling

inte

rests

15.0

5%49

.00%

4.81

%40

.39%

45.3

1%49

.00%

48.9

7%46

.85%

49.0

0%

FORM B 09-DN/HN




Non

-contr

ollin

g in

tere

sts in

subs

idia

ries’

net a

sset

s as a

t 31

Dece

mbe

r 201

6 ar

e as

follo

ws:

Unit:

VN

D

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int S

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ng N

gai

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t Sto

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nyPT

SC P

hu M

y Po

rt Jo

int S

tock

Com

pany

PTSC

Tha

nh H

oa P

ort

Join

t Sto

ck C

ompa

ny

Dinh

Vu

Petro

leum

Se

rvice

s Por

t Joi

nt

Stoc

k Co

mpa

ny

PTSC

CG

GV

Geo

phys

ical S

urve

y Co

mpa

ny Li

mite

d

Petro

Viet

nam

Se

curit

y Jo

int S

tock

Co

mpa

ny

Sao

Mai

- Be

n Di

nh

Petro

leum

Inve

stmen

t Jo

int S

tock

Com

pany

Tota

l

Tota

l ass

ets

1,7

28,3

68,9

84,8

19

521

,881

,452

,022

8

86,1

05,5

86,7

69

524

,261

,639

,828

6

77,6

66,5

12,7

72

618

,234

,375

,419

1

,790

,391

,765

,850

13

7,99

9,02

5,93

5 8

19,1

19,4

61,4

66

7,7

04,0

28,8

04,8

80

Tota

l liab

ilitie

s 8

85,8

40,7

82,5

36

262

,905

,989

,889

8

85,6

51,5

71,1

30

114

,000

,506

,772

1

89,0

22,9

47,5

19

191

,273

,677

,306

1

,206

,349

,360

,643

8

8,34

9,08

5,92

9 2

59,3

36,0

69,3

80

4,0

82,7

29,9

91,1

04

Net

ass

ets

842

,528

,202

,283

2

58,9

75,4

62,1

33

454

,015

,639

4

10,2

61,1

33,0

56

488

,643

,565

,253

4

26,9

60,6

98,1

13

584

,042

,405

,207

4

9,64

9,94

0,00

6 5

59,7

83,3

92,0

86

3,6

21,2

98,8

13,7

76

Deta

il as

follo

ws:

Inves

tmen

t cap

ital

400

,000

,000

,000

20

0,00

0,00

0,00

0 3

00,0

00,0

00,0

00

350

,000

,000

,000

4

00,0

00,0

00,0

00

400

,000

,000

,000

1

,171

,498

,641

,420

2

8,78

6,32

0,00

0 5

00,0

00,0

00,0

00

3,7

50,2

84,9

61,4

20

Inves

tmen

t and

de

velo

pmen

t fun

d 3

08,7

42,9

64,2

35

6,2

11,9

78,4

09

4,7

07,2

50,5

51

23,

333,

560,

624

24,

762,

484,

050

10,

155,

240,

391

- 7

,766

,748

,200

4

4,06

0,62

2,69

2 4

29,7

40,8

49,1

52

Reta

ined

ea

rnin

gs/

(Acc

umula

ted

loss

) 1

33,7

85,2

38,0

48

52,

763,

483,

724

(304

,253

,234

,912

) 3

6,92

7,57

2,43

2 6

3,88

1,08

1,20

3 1

6,80

5,45

7,72

2 (5

87,4

56,2

36,2

13)

13,

096,

871,

806

15,

722,

769,

394

(558

,726

,996

,796

)

Non

-con

trollin

g in

tere

sts

Deta

il as

follo

ws:

Inves

tmen

t cap

ital

60,

193,

000,

000

98,

000,

000,

000

14,

419,

000,

000

141

,355

,000

,000

1

81,2

27,0

00,0

00

196

,000

,000

,000

5

73,6

81,5

37,4

20

13,

486,

320,

000

245

,000

,000

,000

1

,523

,361

,857

,420

Inves

tmen

t and

de

velo

pmen

t fun

d 4

6,46

0,41

3,11

5 3

,043

,869

,420

2

26,2

46,1

52

9,4

23,7

58,4

63

11,

219,

076,

742

4,9

76,0

67,7

92

- 2

,638

,026

,396

2

1,58

9,70

5,11

9 9

9,57

7,16

3,19

8

Reta

ined

ea

rnin

gs/

(Acc

umula

ted

loss

) 2

0,13

2,33

7,08

5 2

5,85

4,10

7,02

5 (1

4,62

3,42

4,64

7) 1

4,91

3,99

1,43

2 2

8,94

2,44

1,75

8 8

,234

,674

,284

(2

87,6

76,6

43,2

69)

4,3

34,5

28,2

03

7,7

04,1

57,0

03

(192

,183

,831

,127

)

126

,785

,750

,200

1

26,8

97,9

76,4

45

21,

821,

505

165

,692

,749

,895

2

21,3

88,5

18,5

00

209

,210

,742

,076

2

86,0

04,8

94,1

51

20,

458,

874,

598

274

,293

,862

,122

1

,430

,755

,189

,491

30. B

USI

NES

S A

ND

GEO

GRA

PHIC

AL

SEG

MEN

TSFo

r man

agem

ent p

urpo

ses,

the C

orpo

ratio

n is

curre

ntly

orga

nise

d in

to se

ven

oper

atin

g di

visio

ns a

s fol

low

s:

Busin

ess s

egm

ent

Ope

ratio

n

Mar

ine

servi

ces

Man

agem

ent,

busin

ess a

nd o

pera

tion

the te

chno

logy

servi

ce v

esse

lsFlo

atin

g sto

rage

and

offlo

adin

g (FS

O) a

nd Fl

oatin

g pr

oduc

tion

stora

ge a

nd

offlo

adin

g (FP

SO) s

ervic

esSu

pply

of F

loat

ing

stora

ge a

nd o

ffload

ing

(FSO

) an

d Flo

atin

g pr

oduc

tion

stora

ge a

nd

offlo

adin

g (FP

SO)

Seism

ic su

rvey,

geo

phys

ical a

nd g

eolo

gica

l sur

vey

and

subs

ea se

rvice

sSu

pply,

ope

ratio

n, m

anag

emen

t of s

eism

ic su

rvey v

esse

ls 2D

, 3D;

Geo

phys

ical a

nd g

eolo

gica

l su

rvey

servi

ces,

divin

g, a

nd su

bsea

servi

ces b

y us

ing R

emot

e op

erat

ed v

ehicl

e (RO

V)

Supp

ly ba

se se

rvice

sSu

pply

base

servi

ces,

offic

es re

ntal,

logi

stic

and

supp

ly ch

ain

man

agem

ent

Mec

hani

cal &

con

struc

tion

Fabr

icatio

n,

engi

neer

ing,

co

nstru

ction

, tra

nspo

rtatio

n an

d in

stalla

tion,

ho

ok-up

an

d co

mm

issio

ning

Repa

ir, m

ainte

nanc

e an

d in

stallm

ent o

il an

d ga

s pro

ject

Repa

ir, m

ainte

nanc

e, in

stall o

il an

d ga

s pro

jects

Othe

r ser

vices

Prov

idin

g ot

her s

ervic

es fo

r oil

and

gas i

ndus

try

The

Cor

pora

tion

has p

repa

red

the se

gmen

t rep

ort f

or se

ven

segm

ents

as fo

llow

:As

at 3

1 De

cem

ber 2

016:

Unit:

VN

D

FORM B 09-DN/HN


Item

sM

arin

e se

rvice

sFP

SO/F

SO se

rvice

sSe

ismic

surv

ey, G

eo

surv

ey a

nd S

ubse

a se

rvice

s

Supp

ly ba

sese

rvice

sM

echa

nica

l &

cons

tructi

on

Repa

ir, m

aint

enan

ce

and

insta

llmen

t oil

and

gas p

roje

ctO

ther

serv

ices

Elim

inat

ion

Tota

l

Asse

ts

Segm

ent a

sset

s 1

,805

,543

,455

,066

3,

852,

932,

368,

373

2,1

10,7

56,8

12,3

60

3,15

7,66

3,70

3,88

8 8

,358

,550

,376

,537

2

,276

,470

,855

,063

39

8,36

7,92

9,88

0 (2

,173

,675

,665

,819

)19

,786

,609

,835

,348

Inter

est i

n as

socia

tes

2,2

27,4

66,5

50,8

54

Unal

loca

ted

asse

ts 3

,527

,033

,440

,571

Con

solid

ated

as

sets

25,5

41,1

09,8

26,7

73

Liabi

litie

sSe

gmen

t lia

biliti

es 1

,007

,451

,943

,092

1,

539,

242,

668,

965

1,4

83,5

18,2

34,9

13

1,41

8,96

7,30

5,10

6 6

,838

,877

,716

,705

1

,752

,157

,269

,980

40

0,54

4,16

3,84

1 (2

,173

,675

,665

,819

)12

,267

,083

,636

,783

Unal

loca

ted

liabi

lities

1,5

21,5

73,9

79,8

24

Cons

olid

ated

lia

bilit

ies

13,7

88,6

57,6

16,6

07


As a

t 31

Dece

mbe

r 201

5:Un

it: V

ND

Item

sM

arin

e se

rvice

sFP

SO/F

SO se

rvice

sSe

ismic

surv

ey, G

eo

surv

ey a

nd S

ubse

a se

rvice

s

Supp

ly ba

sese

rvice

sM

echa

nica

l &

cons

tructi

on

Repa

ir, m

aint

enan

ce

and

insta

llmen

t oil

and

gas p

roje

ctO

ther

serv

ices

Elim

inat

ion

Tota

l

Asse

ts

Segm

ent a

sset

s 1

,903

,208

,082

,362

3,

275,

134,

639,

378

2,56

1,20

9,97

4,52

7 3,

488,

666,

350,

843

8,7

95,0

33,1

18,1

90

2,75

6,83

1,97

7,63

2 4

43,6

32,1

13,7

30

(3,6

71,1

37,3

38,2

02)

19,5

52,5

78,9

18,4

60

Inter

est i

n as

socia

tes

1,6

86,6

83,8

96,1

16

Unal

loca

ted

asse

ts 5

,197

,790

,172

,318

Cons

olid

ated

as

sets

26,

437,

052,

986,

894

Liabi

litie

s

Segm

ent li

abilit

ies

1,1

66,4

76,6

27,5

29

1,44

1,51

5,45

6,08

8 1,

523,

995,

892,

922

1,81

5,00

2,50

2,37

5 7

,843

,459

,031

,566

1,

780,

713,

156,

457

259

,157

,543

,388

(3

,671

,137

,338

,202

) 2

,159

,182

,872

,123

Unal

loca

ted

liabi

lities

2,4

02,9

96,0

77,1

54

Cons

olid

ated

lia

bilit

ies

14,

562,

178,

949,

277

FORM B 09-DN/HN


Item

sM

arin

e se

rvice

sFP

SO/F

SO se

rvice

sSe

ismic

surv

ey, G

eo

surv

ey a

nd S

ubse

a se

rvice

s

Supp

ly ba

sese

rvice

sM

echa

nica

l &

cons

tructi

on

Repa

ir, m

aint

enan

ce

and

insta

llmen

t oil

and

gas p

roje

ctO

ther

serv

ices

Elim

inat

ion

Tota

l

Reve

nue

Exte

rnal

sales

2,10

4,37

6,81

0,11

4 3

,272

,368

,226

,710

1,2

94,0

90,5

51,3

97

1,45

3,23

2,28

0,80

8 9

,362

,057

,242

,016

7

42,2

78,1

83,0

20

453,

677,

228,

462

18,6

82,0

80,5

22,5

28

Inter

-segm

ent

sales

60,

794,

995,

550

352

,625

,674

,219

3

54,1

86,4

92,4

56

183

,516

,140

,160

1,

088,

213,

907,

472

1,0

75,5

65,8

74,1

66

159,

748,

887,

040

(3,2

74,6

51,9

71,0

62)

-

Tota

l rev

enue

2,1

65,1

71,8

05,6

64

3,6

24,9

93,9

00,9

29

1,6

48,2

77,0

43,8

53

1,6

36,7

48,4

20,9

68

10,

450,

271,

149,

488

1,8

17,8

44,0

57,1

86

613

,426

,115

,502

(3

,274

,651

,971

,062

) 1

8,68

2,08

0,52

2,52

8

Cost

of g

oods

so

ld

Exte

rnal

cos

t of

good

s sol

d1,

845,

740,

443,

944

3,1

33,6

16,9

29,0

99 1

,543

,248

,340

,464

1,

177,

889,

877,

569

9,1

46,0

94,3

11,4

45

605

,765

,273

,499

44

6,97

2,66

4,46

1 -

17

,899

,327

,840

,481

Inter

-segm

ent

cost

of g

oods

so

ld 6

0,50

5,91

1,41

5 3

52,6

25,6

74,2

19

354

,186

,492

,456

1

83,5

11,1

89,6

45

1,08

7,43

2,64

0,89

9 1

,075

,565

,874

,166

7

8,80

7,36

3,29

4 (3

,192

,635

,146

,094

) -

Tota

l cos

t of

good

s sol

d 1

,906

,246

,355

,359

3

,486

,242

,603

,318

1

,897

,434

,832

,920

1

,361

,401

,067

,214

1

0,23

3,52

6,95

2,34

4 1

,681

,331

,147

,665

5

25,7

80,0

27,7

55

(3,1

92,6

35,1

46,0

94)

17,

899,

327,

840,

481

Gro

ss p

rofit

Segm

ent p

rofit

258

,636

,366

,170

1

38,7

51,2

97,6

11

(249

,157

,789

,067

) 2

75,3

42,4

03,2

39

215

,962

,930

,571

1

36,5

12,9

09,5

21

6,7

04,5

64,0

01

- 7

82,7

52,6

82,0

47

Sellin

g an

d ad

min

istra

tive

expe

nses

- -

- -

- -

- -

632

,191

,183

,729

Net

pro

fit fro

m fi

nanc

ing

activ

ities

- -

- -

- -

- -

146

,726

,865

,967

Ope

ratin

g pr

ofit

- -

- -

- -

- -

297

,288

,364

,285

Prof

it fro

m o

ther

activ

ities

- -

- -

- -

- -

291

,741

,791

,741

Shar

e of

pro

fit of

as

socia

tes

- -

- -

- -

- -

667

,105

,854

,738

Prof

it be

fore

tax

- -

- -

- -

- -

1,2

56,1

36,0

10,7

64

Cor

pora

te

inco

me

tax

expe

nse

- -

- -

- -

- -

157

,989

,589

,078

Defe

rred

tax

expe

nse

- -

- -

- -

- -

188

,401

,979

,265

Prof

it fo

r the

ye

ar 9

09,7

44,4

42,4

21

For t

he y

ear e

nded

31

Dece

mbe

r 201

6 as

follo

ws:

Unit:

VN

D

FORM B 09-DN/HN



Item

sM

arin

e se

rvice

sFP

SO/F

SO se

rvice

sSe

ismic

surv

ey, G

eo

surv

ey a

nd S

ubse

a se

rvice

s

Supp

ly ba

sese

rvice

sM

echa

nica

l &

cons

tructi

on

Repa

ir, m

aint

enan

ce

and

insta

llmen

t oil

and

gas p

roje

ctO

ther

serv

ices

Elim

inat

ion

Tota

l

Reve

nue

Exte

rnal

sales

4,5

14,8

95,3

75,2

06

3,2

80,3

72,4

74,9

95

2,1

73,9

21,0

20,3

33

2,

190,

069,

141,

904

8,5

23,3

27,6

78,6

24

1,5

25,6

69,3

51,4

73

1,1

48,6

42,8

23,4

54

- 2

3,35

6,89

7,86

5,98

9

Inter

-segm

ent s

ales

271

,806

,781

,068

4

70,4

24,7

91,5

98

234

,844

,630

,188

3

81,9

02,0

48,4

95

1,7

87,8

28,4

76,9

29

2,7

92,7

77,3

04,8

64

174

,391

,181

,408

(6

,113

,975

,214

,550

) -

Tota

l rev

enue

4,78

6,70

2,15

6,27

4 3

,750

,797

,266

,593

2

,408

,765

,650

,521

2,

571,

971,

190,

399

10,3

11,1

56,1

55,5

53

4,3

18,4

46,6

56,3

37

1,3

23,0

34,0

04,8

62

(6,1

13,9

75,2

14,5

50)

23,3

56,8

97,8

65,9

89

Cost

of g

oods

sold

Exte

rnal

cos

t of

good

s sol

d 3

,954

,805

,225

,599

3

,121

,195

,633

,236

2

,232

,027

,304

,915

1,

696,

822,

422,

028

7,7

84,0

82,0

65,7

86

1,2

66,0

85,5

14,5

93

1,1

26,9

48,4

40,1

12

- 2

1,18

1,96

6,60

6,26

9

Inter

-segm

ent c

ost

of g

oods

sold

271

,806

,781

,068

4

70,4

24,7

91,5

98

234

,844

,630

,188

3

81,9

02,0

48,4

95

1,7

87,8

28,4

76,9

29

2,7

92,7

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VN

DFORM B 09-DN/HN


31. REVENUE FROM GOODS SOLD AND SERVICES RENDERED

32. COST OF GOODS SOLD AND SERVICES RENDERED

33. PRODUCTION COST BY NATURE

34. FINANCIAL INCOME

Năm 2016 Năm 2015

VND VND

Sales of merchandise sold 1,624,986,787,184 2,565,739,077,774

Sales of services rendered 14,890,662,513,164 16,390,114,472,699

Sales of construction contracts 2,166,431,222,180 4,401,044,315,516

18,682,080,522,528 23,356,897,865,989

Năm 2016 Năm 2015

VND VND

Cost of merchandise sold 1,541,611,821,735 2,315,141,454,218

Cost of services rendered 14,256,260,104,589 14,879,189,270,119

Cost of construction contracts 2,101,455,914,157 3,987,635,881,932

17,899,327,840,481 21,181,966,606,269

Năm 2016 Năm 2015

VND VND

Raw materials and consumables 2,444,636,657,326 3,391,403,563,228

Labour 2,633,609,040,237 2,792,820,102,335

Depreciation and amortisation 870,764,893,967 904,020,669,964

Outsource services 11,783,501,132,741 14,333,198,900,369

Other expenses 581,774,435,998 817,982,142,865

18,314,286,160,269 22,239,425,378,761

Năm 2016 Năm 2015VND VND

Deposit interest and interest income from lending 224,475,761,923 162,246,149,733

Dividends and profits received 4,829,760,000 4,487,280,000 Foreign exchange gain 76,171,535,177 168,998,748,103 Others 844,756,962 42,215,758,002

306,321,814,062 377,947,935,838

FORM B 09-DN/HN



35. FINANCIAL EXPENSES

36. INCOME/(LOSS) FROM JOINT VENTURES, ASSOCIATES

2016 2015

VND VND

Interest expenses 55,841,878,387 70,937,160,828

Foreign exchange loss 91,244,218,513 210,494,663,049

Margin of investment in Petroleum Technical Services and Son Tra port Joint Stock Company - 41,557,748,054

Provision for impairment of long-term investments 5,856,366,733 10,376,710,875

Others 6,652,484,462 44,719,057,124

159,594,948,095 378,085,339,930

2016 2015

VND VND

PetroVietnam Marine Shipyard Joint Stock Company (115,317,926,850) 11,121,620,923

Rong Doi MV12 Private Limited (4,150,928,603) 14,883,742,658

Malaysia VietNam Offshore Terminal (Labuan) Limited 176,509,631,110 162,331,298,360

Vietnam Offshore Floating Terminal (Ruby) Limited 3,209,281,838 4,388,467,001

PTSC South East Asia Private Limited 300,134,789,896 288,171,011,414

PTSC Asia Pacific Private Limited 306,721,007,347 272,290,512,484

667,105,854,738 753,186,652,840

FORM B 09-DN/HN


37. SELLING EXPENSES AND GENERAL AND ADMINISTRATION EXPENSES

2016 2015

VND VND

Selling expenses

Salary expenses 10,932,830,812 16,573,821,516

Advertising expenses 59,492,551,315 50,543,295,333

Others 21,534,571,055 31,454,522,248

91,959,953,182 98,571,639,097

2016 2015

VND VND

Admin expenses

Salary expenses 204,100,533,152 225,810,519,386

Out source service expenses 196,442,368,919 275,762,544,926

Social insurance, health insurance, union expenses 32,948,381,796 33,190,906,486

Depreciation expenses 37,291,526,969 43,589,942,951

(Reversal)/made provision (56,471,138,800) 103,406,731,337

Others 125,919,558,511 214,707,338,083

540,231,230,547 896,467,983,169

FORM B 09-DN/HN



38. OTHER INCOME

39. OTHER EXPENSES

2016 2015

VND VND

Revesal of payables related to Berth No, 1, 2 of Nghi Son Port - 39,338,750,137

Disposal of fixed assets 1,683,167,117 8,931,389,015

Penalty, compensation 37,601,960,689 13,942,533,529

Margin of investment to Sao Mai - Ben Dinh Petroleum Investment Joint Stock Company - 62,856,534,599

Income from supply of chemicals, oil lube to Lam Son Joint Operating Company - 4,478,813,641

Reversal of guarantee provision for projects 256,250,505,426 -

Others 8,616,216,493 15,010,249,115

304,151,849,725 144,558,270,036

2016 2015

VND VND

Additional tax and late payment 2,822,266,185 23,279,639,237

Penalty, compensation cost 1,441,926,682 2,311,431,381

Disposal of fixed assets 225,882,615 3,102,236,161

Welfare expense - 2,721,464,294

Construction expense of 266 Le Loi project - 11,792,020,639

Reversal insurance fee for FPSO Ruby II vessel from 09/6/2010 to 31/3/2011 - 4,626,828,036

Others 7,919,982,502 14,585,530,481

12,410,057,984 62,419,150,229

FORM B 09-DN/HN


40. CURRENT CORPORATE INCOME TAX EXPENSE

2016 2015

VND VND

Profit before tax 1,256,136,010,764 2,015,080,006,009

Addition adjustments (916,429,441,856) 481,337,695,346

Deduction adjustments 453,948,876,143 (845,701,159,952)

Assessable income 793,655,445,051 1,650,716,541,403

Tax loss carried forward (66,954,338,322) (29,262,502,487)

Taxable income 726,701,106,729 1,621,454,038,916

Corporate income tax 145,340,221,346 356,719,888,562

Tax deductions (i) (4,965,726,656) (12,556,224,430)

Additional corporate income tax 17,933,091,784 6,261,048,592

Tax adjustments (317,997,396) -

Net current corporate income tax expense 157,989,589,078 350,424,712,724

The Parent Company and its subsidiaries are obliged to pay corporate income tax at the rate of 20% of its taxable income since 1 January 2016.

(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 and PTSC Thanh Hoa Port Joint Stock Company.

FORM B 09-DN/HN



41. BASIC EARNINGS PER SHARE

42. OPERATING LEASE COMMITMENTS

The calculation of the basic earnings per share attributable to the ordinary equity holders of the Parent Company is based on the following data:

2016 2015

VND VND

Profit for the year attributable to ordinary shareholders of the Corporation 1,038,743,379,556 1,517,394,760,704

Less: Appropriation of bonus and welfare fund as budget 90,775,446,381 215,077,583,166

Profit for calculating basis earnings per share 947,967,933,175 1,302,317,177,538

Weighted average number of ordinary shares 446,700,421 446,700,421

Basic earnings per share 2,122 2,915

2016 2015

VND VND

Minimum lease payments under operating leases recognised in the consolidated income statement for the year

1,028,808,421,285 1,173,897,588,278

At the balance sheet date, the Corporation had outstanding commitments under non-cancellable operating leas-es, which fall due as follows:

31/12/2016 31/12/2015

VND VND

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

2,505,877,851,439 2,357,507,356,330

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 Company Limited.

The ship leases are signed for a period from 1 year to 5 years since 2013. The land lease in Vung Tau City was signed for 50 years since 2002.

FORM B 09-DN/HN


43. FINANCIAL INSTRUMENTS

Capital risk management

The Corporation manages its capital to ensure that the Corporation will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

The capital structure of the Corporation consists of net debt (borrowings disclosed in Note 23 and Note 24, offset 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).

Gearing ratio

The gearing ratio of the Corporation as at the balance sheet date was as follows:

Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in Note 4.

Closing balance Opening balance

VND VND

Borrowingst 1,575,655,776,806 2,247,760,269,458

Less: Cash and cash equivalents 5,883,669,671,740 7,991,387,356,724

Net debt - -

Equity 11,752,452,210,166 11,874,874,037,617

Net debt to equity ratio - -

FORM B 09-DN/HN



Categories of financial instruments

The Corporation has not determined fair value of its financial assets and liabilities as at the balance sheet date since there is no comprehensive guidance under Circular No. 210/2009/TT-BTC issued by the Ministry of Finance on 6 November 2009 (“Circular 210”) and other relevant prevailing regulations to determine fair value of these financial assets and liabilities. While Circular 210 refers to the application of International Financial Reporting Standards (“IFRS”) 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.

Financial risk management objectives

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.

Financial risks include market risk (including foreign currency risk, interest rate risk, share price risk and commodity price risk), credit risk and liquidity risk.

Market risk

The Corporation’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and prices.

Carrying amountClosing balance Opening balance

VND VNDFinancial assets

Cash and cash equivalents 5,883,669,671,740 7,991,387,356,724

Trade and other receivables 5,336,116,236,209 5,140,224,852,743

Loan receivables - 28,757,555,368

Financial investments 937,453,737,778 607,352,658,320

Deposits 10,647,044,637 31,971,408,873

12,167,886,690,364 13,799,693,832,028

Financial liabilities

Borrowings 1,575,655,776,806 2,247,760,269,458

Trade and other payables 4,606,699,068,194 5,427,466,442,539

Accrued expenses 2,063,212,809,649 1,779,598,558,385

Provisions 1,418,530,029,735 1,364,156,687,981

9,664,097,684,384 10,818,981,958,363

FORM B 09-DN/HN


Foreign currency risk management

The Corporation undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Corporation has managed these risks by signing contract with customers with the respective currency with suppliers and adjust the selling price when there is significant fluctuation of exchange rate.

The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities at the end of the year were as follows:

Foreign currency sensitivity analysis

The Corporation is mainly exposed to United States Dollar.

The following table details the Corporation’s sensitivity to a 2% increase and decrease in Vietnam Dong against 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 rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 2% change in foreign currency rates. For a 2% increase/decrease in USD against Vietnam Dong, the Corporation profit before tax in the year would have increased/decreased by the same amount as follows:

Based on the similar analysis for other currencies, there is no significant impact on the results of operations of the Corporation.

Interest rate risk management

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 floating interest rates. The risk is managed by the Corporation by maintaining an appropriate mix between fixed and floating rate borrowings..

Assets Liabilites

31/12/2016 31/12/2016 31/12/2016 31/12/2016

VND VND VND VND

United States Dollar (“USD”) 5,589,794,767,537 6,209,965,379,842 3,458,489,081,707 4,325,123,704,974

Bristish Pound (“GBP”) 6,916,415,798 30,156,577,071 35,371,625 4,290,141,023

Euro (EUR) 24,234,864,366 87,159,122 938,980,803 27,432,488,908

Singapore Dollar (“SGD”) - - 2,419,883,743 13,332,847,863

Current year Prior year

VND VND

United States Dollar (“USD”) 42,626,113,717 18,848,416,749

FORM B 09-DN/HN



Interest rate sensitivity

The loan’s sensitivity to interest rate changes which may arise at an appropriate level is presented as below. Assuming all other variables were held constant, if interest rates applicable to floating interest bearing loans had been 200 basis points higher/lower, the Corporation’s profit before tax for year ended 31 December 2016 would have decreased/ increased by VND 18,319,472,310 (for the year ended 31 December 2015: VND 44,955,205,389).

Share price risk management

The Corporation is exposed to equity price risks arising from investments in subsidiaries and associates. The 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 investments rather than trading purposes. The Corporation does not have intention to trade these investments in the foreseeable future.

Commodity price risk management

The Corporation purchases materials, commodities from local and foreign suppliers for business purpose. Therefore, the Corporation is exposed to the risk of changes in selling prices of materials, commodities.

Credit risk

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 ongoing basis. The Corporation does not have any significant credit risk exposure to any counterparty because receivables consist of a large number of customers, spread across diverse industries and geographical areas.

Liquidity risk management

The purpose of liquidity risk management is to ensure the availability of funds to meet present and future financial obligations. Liquidity is also managed by ensuring that the excess of maturing liabilities over maturing assets in 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 that the Corporation maintains sufficient reserves of cash, borrowings and adequate committed funding from its shareholders to meet its liquidity requirements in the short and longer term.

The following table details the Company’s remaining contractual maturity for its non-derivative financial assets and financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial assets and undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

FORM B 09-DN/HN


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.

Less than 1 year From 1- 5 years After 5 years TotalVND VND VND VND

31/12/2016Cash and cash equivalents 5,883,669,671,740 - - 5,883,669,671,740

Trade and other receivables 5,313,965,930,538 22,150,305,671 - 5,336,116,236,209

Loan receivables - - - - 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

12,133,897,038,611 33,989,651,753 - 12,167,886,690,364

31/12/2016Borrowings 432,147,165,556 1,064,189,947,329 79,318,663,921 1,575,655,776,806 Trade and other payables 4,606,495,000,809 204,067,385 - 4,606,699,068,194

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

7,194,773,022,189 2,390,005,998,274 79,318,663,921 9,664,097,684,384

Net liquidity gap 4,939,124,016,422 (2,356,016,346,521) (79,318,663,921) 2,503,789,005,980

Less than 1 year From 1- 5 years After 5 years TotalVND VND VND VND

31/12/2015Cash and cash equivalents 7,991,387,356,724 - - 7,991,387,356,724

Trade and other receivables 5,120,569,735,057 19,655,117,686 - 5,140,224,852,743

Loan receivables 28,757,555,368 - 28,757,555,368 Financial investments 570,070,000,000 37,282,658,320 - 607,352,658,320 Deposits 29,281,984,607 2,689,424,266 - 31,971,408,873

13,740,066,631,756 59,627,200,272 - 13,799,693,832,028

31/12/2015Borrowings 684,347,404,258 1,450,481,550,489 112,931,314,711 2,247,760,269,458 Trade and other payables 5,294,871,024,465 132,595,418,074 - 5,427,466,442,539

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

FORM B 09-DN/HN



44. RELATED PARTY TRANSACTIONS AND BALANCES

List of related parties Relationship

Vietnam Oil and Gas group Holding Company

Nghi Son Refinery and Petrochemical Complex Project Management Board Company in Group

Vung Ang - Quang Trach Power Plant Project Management Board Company in Group

Thai Binh II Power Plant Project Management Board Company in Group

Long Phu 1 Power Plant Project Management Board Company in Group

Dung Quat Oil Refinery Factory – Project Management Unit Company in Group

PetroVietnam Insurance Corporation Company in Group

Dung Quat Shipbuilding Industry Company Limited Company in Group

Binh Son Refining and Petrochemical Company Limited Company in Group

Vietnam Public Joint Stock Commercial Bank Company in Group

PetroVietnam General Service Joint Stock Corporation Company in Group

PetroVietnam Drilling and Well Services Corporation Company in Group

PetroVietnam Transportation Corporation Company in Group

PetroVietnam Construction Joint Stock Company Company in Group

PetroVietnam Energy Technology Corporation Company in Group

Drilling Mud Joint Stock Corporation Company in Group

PetroVietnam Gas Joint Stock Corporation Company in Group

PetroVietnam Fertilizer and Chemicals Joint Stock Corporation Company in Group

PetroVietnam Exploration Production Corporation Company in Group

PetroVietnam Manpower Training College Company in Group

PetroVietnam Engineering Corporation Company in Group

PetroVietnam Oil Corporation Company in Group

PetroVietnam General Service Joint Stock Corporation Company in Group

Petrovietnam Petrochemical and Textile Fiber Joint Stock Company Company in Group

PetroVietnam Ca Mau Fertilizer Joint stock Company Company in Group

PetroVietnam Power Corporation Company in Group

Bien Dong Petroleum Operating Company Company in Group

FORM B 09-DN/HN


During the year, the Corporation entered into the following significant transactions with related parties:

2016 2015 VND VND

SalesPetroVietnam 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 Vietnam Oil and Gas group 497,629,715,205 27,691,665,219 PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 443,693,451,925 309,816,168,482 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

PetroVietnam Exploration Production Corporation 77,078,223,539 348,149,983,303 Drilling Mud Joint Stock Corporation 29,592,627,645 35,568,152,639 Dung Quat Shipbuilding Industry Company Limited 19,364,328,237 10,203,240,533 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 PetroVietnam Construction Joint Stock Company 12,229,344,280 58,978,595,640 PetroVietnam Manpower Training College 11,202,397,416 11,932,786,009 PetroVietnam Power Corporation 10,069,076,036 11,569,997,407 PetroVietnam Transportation Corporation 5,560,300,421 7,962,386,666 PetroVietnam Oil Corporation 1,944,948,213 1,269,717,999 Thai Binh II Power Plant Project Management Board 758,088,000 758,088,000 Vietnam Public Joint Stock Commercial Bank 725,614,949 283,613,637 PetroVietnam Insurance Corporation 589,378,845 81,614,545 Vung Ang - Quang Trach Power Plant Project Management Board

582,272,731 1,055,604,108

PetroVietnam Engineering Corporation 4,158,000 327,170,008

Nghi Son Refinery and Petrochemical Complex Project Management Board - 172,328,109,940

2016 2015 VND VND

Loan interestVietnam Public Joint Stock Commercial Bank 18,452,382,046 27,682,463,399

Remuneration of the Board of Directors, Board of Management and Board of Supervisors during the year as follows:

2016 2015 VND VND

Salary and benefits in kinds 14,523,115,000 14,379,173,230

FORM B 09-DN/HN



Significant related party balances as at the balance sheet date were as follows:

31/12/2016 31/12/2015 VND VND

Trade receivablesBien Dong Petroleum Operating Company 477,128,220,848 610,194,370,810 PetroVietnam Gas Joint Stock Corporation 291,425,001,609 161,969,108,539 PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 172,978,117,164 73,573,917,895 PetroVietnam Exploration Production Corporation 121,244,498,956 188,288,143,102 Nghi Son Refinery and Petrochemical Complex Project Management Board 73,350,037,636 5,566,760,597

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 Drilling and Well Services Corporation 30,377,251,450 21,649,783,631 Drilling Mud Joint Stock Corporation 7,538,840,510 694,189,510 Dung Quat Shipbuilding Industry Company Limited 3,524,400,695 4,572,629,721 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 General Service Joint Stock Corporation 1,820,941,473 1,816,549,869 PetroVietnam Manpower Training College 1,601,398,204 10,462,387,004 Vietnam Oil and Gas Group 1,159,136,846 774,874,440 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 to suppliersPetroVietnam General Service Joint Stock Corporation - 1,003,405,822 PetroVietnam Energy Technology Corporation - 1,171,233,209 PetroVietnam Gas Joint Stock Corporation - 4,678,763,094 PetroVietnam Fertilizer and Chemicals Joint Stock Corporation 165,000,000 - Drilling Mud Joint Stock Corporation 163,112,452 -

Other receivablesLong Phu 1 Power Plant Project Management Board 206,879,316,776 12,575,464,419 Vietnam Oil and Gas Group 59,514,542,073 40,811,003,545 Nghi Son Refinery and Petrochemical Complex Project Management Board 21,529,260,315 90,847,767,158

Bien Dong Petroleum Operating Company 16,690,612,452 12,624,211,512 PetroVietnam Exploration Production Corporation 329,077,036 - PetroVietnam Gas Joint Stock Corporation 155,200,000 - Dung Quat Shipbuilding Industry Company Limited - 355,560,293,062

FORM B 09-DN/HN


31/12/2016 31/12/2015

VND VND

Trade payables

PetroVietnam Exploration Production Corporation 132,535,870,219 211,822,625,811

PetroVietnam Construction Joint Stock Company 93,800,866,366 24,765,202,868

PetroVietnam Drilling and Well Services Corporation 39,992,050,431 27,089,929,607

PetroVietnam General Service Joint Stock Corporation 26,290,563,147 91,491,347,204

PetroVietnam Gas Joint Stock Corporation 14,002,376,774 498,013,200

PetroVietnam Engineering Corporation 9,957,874,090 21,450,017,085

PetroVietnam Manpower Training College 6,787,941,876 2,201,815,875

PetroVietnam Oil Corporation 5,689,117,078 17,769,324,088

PetroVietnam Transportation Corporation 715,043,213 208,266,420

PetroVietnam Energy Technology Corporation 375,777,841 2,358,470,558

Dung Quat Shipbuilding Industry Company Limited 329,566,952 627,599,808

PetroVietnam Insurance Corporation 309,314,549 1,266,003,566

PetroVietnam Fertilizer and Chemicals Corporation 125,717,790 287,940,125

Advances from customers

Long Phu 1 Power Plant Project Management Board 791,695,089,681 1,051,381,785,330

PetroVietnam Fertilizer and Chemicals Corporation 216,400,185,333 312,666,955,829

PetroVietnam Gas Joint Stock Corporation 135,440,143,319 244,585,600,839

PetroVietnam Central Biofuels Joint Stock Company 50,466,725,642 50,466,725,642

Bien Dong Petroleum Operating Company - 76,022,200,000

Other payables

Vietnam Oil and Gas Group - 349,068,201,763

Bien Dong Petroleum Operating Company 19,939,346,487 -

PetroVietnam Construction Joint Stock Company 7,826,660,837 49,873,999,702

Long-term loans

Vietnam Public Joint Stock Commercial Bank 182,852,571,127 492,543,919,502

FORM B 09-DN/HN



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.

45. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

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:




Codes Previouslyreported amount Reclassification Amount after

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

FORM B 09-DN/HN


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