golden harvest - dpm.vn · 2 message from leaders 4 golden foundation 6 establishment and...

PETROVIETNAM FERTILIZER AND CHEMICALS CORPORATION

Golden HarvestGolden Harvest

2 Message from Leaders

4 GOLDEN FOUNDATION6 Establishment and Development8 Key Development Milestones

10 2011 Achievements and Accomplishments12 2011 Awards and Accolades14 Established Position

16 GOLDEN TREASURE18 Organization Structure20 Board of Directors21 Biographies - Board of Directors24 Board of Management26 Biographies - Board of Management30 Supervisory Board31 Biographies - Supervisory Board32 Human Resources34 PVFCCo Corporate Culture36 Market Outlook:

Urea Market Overview 2011 - 201238 2011 Operations: Consolidated Results39 Report of Board of Directors44 Report of Board of Management48 Report of Supervisory Board50 Strategic Direction52 2012 Production and Business Plan

54 GOLDEN GOVERNANCE56 Shareholders’ Information and

Corporate Governance60 Risk Management62 Health, Safety and Environment64 Sustainability Report66 Investor Relations68 Interview: Investor ‘s Perspective about DPM

70 GOLDEN REACH72 Associated Companies74 Distribution Network

76 GOLDEN HEART78 Social Responsibility and

Community-related Activities80 Feature Story: Tet for the Poor

82 GOLDEN HARVEST82 Consolidated Financial Statements 2011

120 Financial Statements 2011

Vision MissionConstantly develop to become a top-ranking enterprise in Vietnam and in South East Asia, specializing in the fertilizer and chemical production for agriculture and oil & gas industry.

Undertake responsibility to provide a su� cient and reliable source of urea and chemical materials supply with competitive prices and best quality for customers, thereby assuring the business performance and contributing to the stabilization of the country’s agriculture and economy development.

Table of Content

G

OLDEN HEART

Dear Shareholders and Investors,

Continuing our journey from “Building Foundations” in 2009 to “Nurturing Success” in 2010 that focused on driving growth, we would like to invite you to join us in understanding and celebrating the exceptionally successful year of PVFCCo through this 2011 Annual Report that carries the theme “Golden Harvest”.

Indeed “Golden Harvest” illuminates our exemplary accomplishments in 2011. At the same time, it embodies our team spirit and endeavors, as well as the strong commitment epitomized across the entire company in the face of new uncertainties and challenges, to continue delivering bountiful harvests in the coming years.

Golden Harvest

GOLDEN REACH

GOLDEN HARVEST

GOLDEN GOVERNANCE

GOLDEN FOUNDATION

GOLDEN TREASURE

3Golden Harvest2 PVFCCo Annual Report 2011

meticulous execution of market entry preparations for new products; taking advantage of opportunities and promoting export operations; developing international markets by officially opening the Cambodia branch, raising Urea Phu My exports into regional countries to 25,000 tonnes; concentrating resources to carry out investment projects which are typically chemical development projects like NH3, H202; and the opening of the headquarters building, PVFCCo Tower - the new home for our extended family.

2011 was also a record year as PVFCCo strove to create and build the PVFCCo Corporate Culture based on the core values of “Professional & Effective, Dynamic & Innovative, Aspiring & Visionary and Responsible & Sharing”. With the beauty of that culture, we continue to contribute effectively to social welfare, realizing the business philosophy and commitment to “Develop the business hand-in-hand with environmental protection and social responsibility”.

In particular, we cannot underestimate PVFCCo’s professionalization of investor relations (IR) through accelerated implementation of the IR enhancement project and establishing a dedicated unit responsible for IR execution. We are very pleased to have received positive feedback from shareholders and potential investors about the company’s recent IR activities.


2012 will be a year full of changes and challenges when the Ca Mau and Ninh Binh Fertilizer Plants are officially inaugurated, and will transform the domestic fertilizer market from production deficit to surplus. Raw materials input costs continue to rise, the price of gas in particular rises 40%. Global and domestic fertilizer prices will continue to fluctuate unpredictably. The PVFCCo Management has set out innovative solutions and settled on the efforts and determination required from the beginning to meet the difficulties and challenges to achieve our business targets. Crucial tasks on the 2012 agenda include:

- Phase 2 of the corporate restructuring, to concentrate on core business areas; improving investment efficiency; rigorously execute the savings plan to combat waste and reduce costs; increase training and bolster human resource development; and grow the PVFCCo Corporate Culture.

- Continue safe and stable operations at the Phu My Fertilizer Plant; innovatively improve managerial practices; enhance operating efficiency and capacity, and

Bui Minh TienChairman of the BOD

Cao Hoai DuongPresident & CEO

maintain the plants; and implement the product quality improvement project targeted at attaining the highest capacity and quality at the lowest cost.

- Bolster domestic fertilizer trading through flexible policies which reflect the market to efficiently and judiciously consume Urea Phu My, NPK Phu My and Urea Ca Mau while continuing to promote development of regional markets (Cambodia, the Philippines, Myanmar, etc.)

- Complete preparatory work to transition to an investment execution phase and break ground on new plant projects aimed at product diversification, especially chemical production.

- Maintain and overhaul the depth of marketing execution, communication, and social welfare activities to effectively supporting trading activities, contribute to asserting market position and promoting the company’s brand name.

- Greater professionalization of IR activities with the goal of having an information conduit for accurate, comprehensive and timely two-way communication between PVFCCo and shareholders.

The Management are confident that the support of shareholders, especially Vietnam Oil & Gas Group, and PVFCCo’s achievements in past years, particularly 2011, will be the catalyst for all our efforts to transform the challenges and difficulties into new opportunities, completely fulfill the 2012 plan and continue to deliver strong business growth, striving to fulfill the Vision and Mission as set out.

Sincerely,

Message from Leaders Message From Leaders


As with the “Golden Harvest” theme of this Annual Report, 2011 has concluded with record outperformance successes for PVFCCo. While the global and domestic economies have endured major difficulties, with no small effect on PVFCCo’s production and business operations, with a unified spirit, the collective efforts of the employees, and the sharing and contributions of shareholders, PVFCCo has completely outperformed expectations at all levels planned for the year and approved by the Annual General Shareholders Meeting. These results have special significance for PVFCCo as 2011 was the final year to complete preparations for the market transition and also the critical first year for the planned acceleration of development over the period 2011-2015.

In production, Phu My Fertilizer Plant has completed its scheduled shut-down maintenance project and safe, stable production has resumed. Thus, the plant achieved the historic landmark of producing its 5 millionth tonne of Urea Phu My on 06 August 2011. Full year output reached 802 thousand

tonnes, exceeding plans by 4% and marking five years of safe and stable production exceeding designed operating capacity and achieving planned output ahead of schedule.

In trading, PVFCCo sold over one million tonnes of Urea Phu My and imported fertilizer while strengthening operational processes, chemical trading, and services. Revenues reached VND 9,763 billion or 139% of the plan and profit before tax totaled VND 3,510 billion corresponding to 223% of the plan. These are record numbers in the company’s eight years of operations.

Aside from the outstanding production and trading results, in 2011, PVFCCo also made a concerted effort to reinforce our market position and proactively prepare for a period of entirely new challenges and difficulties. These challenges being completion of Stage 1 restructuring in parallel with honing the 2011-2015 development strategy and orientation out to 2025 for PVFCCo and subsidiaries; completion and inauguration of six warehouse terminals, with total storage capacity of 215,000 tonnes across the country which add to the ongoing improvements in the domestic infrastructure and distribution network;

“2011 has concluded with record outperformance successes”


Golden foundation

An enduring success must be built on a sound foundation and persevered through a sustained effort. Taking the analogy of a golden harvest, the crops must be germinated and caringly nurtured by our precious motherland soil. Continuing our glorious journey where we achieved major successes over the past eight years, PVFCCo is strengthening its position and continuing to scale new heights.


1. KEY MILESTONES

ESTABlISHMENT

Petrovietnam Fertilizer and Chemicals Company (now Petrovietnam Fertilizer and Chemicals Corporation) is a member of the Vietnam Oil and Gas Group. The Corporation was established by Ministerial Decision 02/2003/QD-VPCP dated 28 March 2003 and was officially inaugurated on 19 January 2004.

Petrovietnam Fertilizer and Chemicals Corporation took possession of the Phu My Fertilizer Plant from the Technip Samsung consortium on 21 September 2004, formally taking over operational management and launching the Urea Phu My brand.

TRANSFORMATION OF CORPORATE STRUCTURE

From 100% State-owned enterprise to Joint Stock Company

The Ministry of Industry issued Decision 793/QD-BCN on 15 March 2007 approving the transformation of Petrovietnam Fertilizer and Chemicals Company from a 100% State-owned enterprise into the Petrovietnam Fertilizer and Chemicals Joint Stock Company.

The company successfully issued 40% of its shares in an initial public offering on the HCMC Securities Trading Center on 21 April 2007.

On 30 June 2007, the company held its inaugural Annual General Meeting of shareholders which approved the establishment of the joint stock company, approved the company charter, appointed the Board of Directors and Board of Supervisors, and approved the business plans.

The HCMC Department of Planning and Investment granted the Corporate Business Registration Certificate 4103007696 on 31 August 2007, officially inaugurating the Petrovietnam Fertilizer and Chemicals Joint Stock Company.

Shares officially listed on the HCMC Stock Exchange (HOSE)

The company completed procedures to list on the HCMC Stock Exchange (HOSE) on 29 October 2007. 380 million shares were formally listed on 05 November 2007.

3. KEY PERFORMANCE INDICATORS 2005-2011

UREA PHU MY OUTPUT

Year 2005 2006 2007 2008 2009 2010 2011

Production (thousand tonnes) 646 617 765 749 756 807 802

Sales (thousand tonnes) 616 716 747 741 721 806 753

FINANCIAl INDICATORS

Year 2005 2006 2007 2008 2009 2010 2011

Turnover (VND billion) 2,713 3,542 3,928 6,625 6,834 6,999 9,763

Profit before tax (VND billion) 791 1,161 1,330 1,501 1,520 1,922 3,510

Profit after tax (VND billion) 791 1,161 1,329 1,383 1,348 1,703 3,104

Tax payment to the national budget (VND billion)

85 107 151 283 253 405 537

Share type Ordinary sharesStock Code DPMPar value VND 10,000/shareNumber of shares issued 380,000000 shares

From Joint stock company to Corporation

The Annual General Meeting of shareholders on 05 April 2008 approved a resolution to transform the Joint Stock Company into a Corporation (Parent - Subsidiary model).

The HCMC Department of Planning and Investment granted Petrovietnam Fertilizer and Chemicals Corporation the amended Business Registration Certificate 4103007696 on 15 May 2008.

2. BUSINESS SECTORS

According to the corporate establishment Decision and the 8th business registration amendment, dated 24 January 2011, the Corporation is authorized by the HCMC Department of Planning and Investment to conduct business, under the national economic activity code, in the following fields:

1. Production of fertilizer and liquid ammonia;2. Trading fertilizers, liquid ammonia, industrial gases

and other chemical products;3. Technical services in the production and trading of

fertilizers and related chemical products;4. Electricity production and trading; 5. Real estate trading;6. Trading agro-forestry products;7. Overland and inland waterways transportation;8. Processing petroleum products;9. Mineral processing;10. Vocational training;11. Manufacture of other chemical products;12. Industrial gas production.

Establishment and Development Establishment and Development

Vẽ lại

KINH DOANH

20050

100

200300

400

500

600

700800

900

2006 2007 2008 2009 2010 2011

Urê kinh doanh

Thou

sand

Ton

nes

Year PRODUCTION SALES

2005 2006 2007 2008 2009 2010 20110

(VND billion)

Turnover

Profit before tax

Profit after tax

Tax payment to the national budget

12,000

10,000

8,000

6,000

4,000

2,000


Key Development Milestones

Key Development Milestones

Hand-over of Phu My Fertilizer Plant from Technip-Samsung consortium

09/2004

Inauguration of Petrovietnam Fertilizer and Chemicals Company

01/2004

Ground-breaking for the Phu My Fertilizer Plant

03/2001

Transformed into Petrovietnam Fertilizer and Chemicals Corporation (Parent - Subsidiary model)

05/2008

Inauguration of PVFCCo Tower

07/2011

Phu My Fertilizer Plant manufactured its 5 millionth tonne of urea

Completed transformation of four subsidiaries into joint stock companies

01/2011

Completed the CO2 recovery system at Phu My Fertilizer Plant; increased urea production capacity to 800,000 tonnes/year

09/2010

Commemoration of five years of safe, stable, uninterrupted operations at Phu My Fertilizer Plant

09/2009

Official launch of Urea Phu My on the Vietnamese market

12/2004 Transformed into Petrovietnam Fertilizer and Chemicals Joint Stock Company

08/2007DPM shares officially listed on the HCMC Stock Exchange

11/2007

08/2011


2011 Achievements and Accomplishments

2011 Achievements and Accomplishments

PVFCCo TowerPVFCCo Tower has a total precinct area of 1,756m2, and total usable area of 15,734m2

consisting of: 3 basement levels, 12 floors, a mezzanine level and a machinery floor. The building required a total investment capital of VND 912 billion and was completed in 17.5 months. PVFCCo Tower is an office building with beautiful, state-of-the-art architecture in the heart of Ho Chi Minh City. PVFCCo Tower was opened to satisfy demand for a headquarters for PVFCCo and at the same time provide rental office space of approximately 4,500m2. PVFCCo moved into the new office in August 2011.

1. January 2011: Close period and Go live ERP.

2. From April 2011: Implement market-sensitive sales policy for Urea Phu My products.

3. From 15 May to 14 June, 2011: Successfully completed Periodical Overall Maintenance for Phu My Fertilizer Plant.

4. 6 June, 2011: launch new product: NPK Phu My.

5. 16 July, 2011: Inauguration of PVFCCo tower in 43 Mac Dinh Chi.

6. 28 July, 2011: Inauguration of new branch in Combodia.

7. At 6 pm 6 August, 2011, Phu My Fertilizer Plant reached the 5th million tonnes of output.

8. 24 August, 2011: Myanmar Minister for Aggriculture and Irrigation visited PVFCCo, opened new export market for the company.

9. November - December: Contribute a diverse range of social welfare programs: support program for flood victims in the Central and Southwestern regions; the PVFCCo scholarship program valued VND 3.7 billion, a lunar New Year program for the poor, etc.

10. December 2011: Issue and implement “PVFCCo Cultural Book”.

1010 PVFCCo Annual Report 2011


2011 Awards and Accolades 2011 Awards and Accolades

1. Merit Award from Prime Minister.

2. Top 10 Brand in Vietnam Gold Star Award.

3. Top 10 Corporate social responsibility brand - Vietnam Gold Star Award.

4. Top 3 Brand in Agribusiness sector - organized by VCCI.

5. ASEAN Enterprise Award.

6. The Annual Report 2010: Excellent Award of HOSE, Silver Award of league of American Communications Professionals - lACP.

7. Phu My Urea received the “Vietnam High - Quality Product Brand” Award for the 8th

consecutive year (2004 - 2011).

DO NGÖÔØI TIEÂU DUØNGBÌNH CHOÏN


Established Position

HUMAN RESOURCES

We have a team of managers, engineers, technicians, investment, finance, marketing & media experts, etc. with advanced professional qualifications and training. Professional knowledge and skills are constantly updated.

TECHNOLOGY

The Phu My Fertilizer Plant produces ammonia using advanced, world-leading technology from Haldor Topsoe (Denmark). The production capacity, product quality and stability delivered by our Snamprogetti (Italy) urea production technology has defined our market position. The technology was upgraded in 2011 resulting in noticeable improvements in urea quality. PVFCCo’s other fertilizer and chemical plants are also equipped with advanced, environment-friendly technologies.

GOVERNANCE

We apply preeminent governance methods and models. Foremost is the advanced governance model based on ISO quality management systems. This is being transitioned to a higher, state-of-the-art governance model based on Enterprise Resource Planning (ERP). January 2011 marked the end of Stage 1 ERP implementation and employee user-training. The system is now in use.

FINANCIAL CAPABILITY

PVFCCo’s revenues and profits have continually been high in recent years. Major plant equipment has undergone depreciation, returning on investment after six years of operations and creating an accumulation of resources for investment into production development. We are one of a select group of domestic companies with substantial cash reserves.

DOMINANT MARKET POSITION

Urea demand in Vietnam is approximately 1.8 - 2.0 million tonnes/year. PVFCCo currently meets over 40% of domestic demand and is the fertilizer market leader. From 2012, with the consumption of the entire production form the Ca Mau Fertilizer Plant, PVFCCo will strongly increase its market share, not only domestically, but also into neighboring regional markets.

DISTRIBUTION NETwORK

PVFCCo has an extensive distribution network covering every region and agricultural sector in Vietnam. The four regional subsidiaries, more than 100 branches and Tier-1 agents, approximately 3,000 Tier-2 agents besides the 215,000 tonnes transit, terminal warehouse network in key geographic hubs. Given the specifics of the fertilizer industry, this is a key factor in improving our competitiveness.

BRANDING

Dam Phu My is a leading brand in the Vietnamese fertilizer market and within the investor community. This is driven by a combination of factors: product quality, distribution network, sales policy, marketing and communications, etc. The Dam Phu My name has widespread brand awareness and for over 8 years has been the farmer’s brand of choice.

SUPPORT FROM PARENT COMPANY - VIETNAM NATIONAL OIL AND GAS GROUP, CENTRAL AND LOCAL MINISTRIES & AGENCIES AND SHAREHOLDERS

With an important role and mission in the agriculture sector, our customers (farmers) account for 70% of the Vietnamese population. We have always received strong support from Vietnam National Oil and Gas Group, central ministries and local agencies. We have a priority to ensure stable supplies of natural gas, a precious national resource which is the raw material for manufacturing nitrogen fertilizer together with promulgating many policies and mechanisms to benefit our core business and manufacturing development, etc. Moreover, our shareholders and investors have always been supportive, monitoring and contributing positive feedback to contribute to the increased efficiency of our business.

We have comparative advantages as a business based on the following factors: Strong human resources; State-of-the-art technology; Advanced Management; Abundant financial resources; Dominant position; Extensive distribution network; Prestigious brand name; Strong support from the parent - Vietnam Oil and Gas Group, Central and Local Ministries & agencies and shareholders.

The relentless efforts, innovative spirit and strong vision of the management team and employees have created a competitive edge, shaping our core values and laying the foundations for accelerating progress into the future.

Established Position


The PVFCCo Management and Staff create a workforce characterized by ourformally trained, passionate, and highly responsible team, consistently demonstrating solidarity in delivering our common objectives. We shape our PVFCCo corporate culture around our core values of “professional & effective, dynamic & innovative, aspiring & visionary, responsible & sharing”. These are our intrinsic resources, which has crystallized into the treasure that has been driving our sublime growth over the years.

Golden treasure


Organization Structure Organization Structure

FINANCE-ACCOUNTING DIVISION

FUNCTIONAL DIVISION

PLANNING DIVISION

HUMAN RESOURCES & TRAINING DIVISION

TECHNICAL DIVISION FERTILIZER DIVISION

ADMINISTRATION

MARKETING & COMMUNICATIONS DIVISION

INVESTMENT & CONSTRUCTION DIVISION

HSE DIVISION

CHEMICAL DIVISION

COMMERCE & BIDDING DIVISION

RESEARCH & DEVELOPMENT DIVISION

LEGAL DIVISION

INFORMATION TECHNOLOGY DIVISION

BOARD OF DIRECTORS SUPERVISORY BOARDINTERNAL AUDIT DIVISION

BOARD OF MANAGEMENT

SUBSIDIARIESDEPENDENT UNITS

PHU MY FERTILIZER PLANTNORTH PETROVIETNAM FERTILIZER & CHEMICALS JOINT STOCK COMPANY

CENTRAL PETROVIETNAM FERTILIZER & CHEMICALS JOINT STOCK COMPANY

SOUTH EAST PETROVIETNAM FERTILIZER & CHEMICALS JOINT STOCK COMPANY

SOUTH WEST PETROVIETNAM FERTILIZER & CHEMICALS JOINT STOCK COMPANY

DAM PHU MY PACKAGING JOINT STOCK COMPANY

PVFCCo - BRANCH IN HO CHI MINH CITY

PETROVIETNAM SOUTHERNBUILDING AND DEVELOPMENT

JOINT STOCK COMPANY

SHAREHOLDERS’ MEETING

PVFCCo - BRANCH IN CAMBODIA


Board of Directors Biographies - Board of Directors

20 21

1. Mr. BUI MINH TIEN

Chairman

Year of birth : 1969

Qualifications: Bachelor of Physics, Master of Business Administration

Mr. Tien holds a BA in Physics from Hanoi University of Science (1990) and completed the MBA program at Maastricht School of Management (Netherlands) in 2002.He began his career at Oil and Gas Complex Construction Joint Venture (now Petrovietnam Construction Joint Stock Corporation - PVC) in 1991 where he worked as a specialist in the Economics and Technology Office, Secretary to the CEO, and Deputy Manager of Administration at Design and Consultancy Enterprise. From 1996-1998 Mr. Tien served as Secretary to the Deputy CEO of Petrovietnam Corporation (now Vietnam Oil and Gas Group-Petrovietnam). Between 1998 and 2007, he was Head of the Planning and Commerce Department of the Petrovienam Construction Consultancy Company, and Head of the Commerce Department of Petrovietnam Gas Corporation (PV Gas). He rose through the ranks at Petrovietnam and its subsidiaries as his professional abilities and capacity to successfully complete assigned tasks with excellent results was highly valued. In 2007, the Management of Petrovietnam Group had the confidence to appoint him as Deputy CEO PV Gas, a key member of Petrovietnam. In this leadership position, Mr. Tien continued to make great contributions to PV Gas’ development, particularly in the fields of trading and commerce. In 2011 Petrovietnam entrusted him to represent the Group’s capital in Petrovietnam Fertilizer and Chemicals Corporation and proposed his election as Chairman from 05 January 2011.

12 345

Mr. BUI MINH TIEN Chairman

Mr. NGUYEN DUC HOA Member

Mr. CAO HOAI DUONG Member

Mr. BUI QUANG HUNG Member

Ms. NGUYEN THI HIEN Vice Chairwoman


2. Ms. NGUYEN THI HIEN

Vice Chairwoman


Qualifications: Bachelor of Foreign Trade Economics

Professional history:

- 1996-2001: Economic analysis specialist, Head of Economic Analysis - Electricity Construction and Investment Advisory Company 2.

- 2002-2003: Head of Power Station and Infrastructure Construction Management Group, Ca Mau Gas - Power - Fertilizer Project Management Board, Petrovietnam.

- 2003-2005: Deputy Manager of Planning - Ca Mau Gas - Power - Fertilizer Project Management Board, Petrovietnam.

- Sep 2005-Jul 2007: Specialist, Deputy Department Head, PVFCCo Economic Planning Department.

- Jul 2007-Mar 2009: Head of the PVFCCo Supervisory Board.

- Mar 2009-Present: Member, PVFCCo Board of Directors, Vice Chairwoman.

5. Mr. Bui Quang Hung

Member


Qualifications: Civil Engineer


- Feb 1979 - Oct 1980: Worked at Vietnam Oil and Gas General Department, responsible for Rig Assembly Team I, Phung Hiep - Mekong Delta Oil and Gas Corporation.

- Oct 1980 - Jul 1984: Technical Officer, Head of Price Forecasting and Monitoring Unit - responsible for Planning Department, Vung Tau Oil and Gas Projects Management Board.

- Jul 1984 - Oct 1995: Site manager, Team leader, Deputy Section Manager, Section manager of Offshore Projects Enterprise, Vietsovpetro Joint Venture.

- Oct 1995 - Aug 2004: Director, Petrovietnam Metal Structure and Assembly Enterprise (PVECC).

- Aug 2004 - Jun 2006: Deputy Director, Acting Director, Petrovietnam Engineering Construction company (PVECC).

- Jun 2006 - Jun 2007: CEO, Chairman of the BOD, Petrovietnam Construction Joint Stock Corporation (PVC).

- Jun 2007 - Aug 2009: Chairman of the BOD, Petrovietnam Premier Recreation Joint Stock Company (PVR).

- Aug 2009 - Present: Member, PVFCCo Board of Directors.

4. Mr. NGUYEN DUC HOA

Member


Qualifications: Civil Engineer


- Nov 1978 - Feb 1983: Worked at Vietnam Oil and Gas General Department and Vietnam Oil and Gas Industrial Zone Construction Board.

- Mar 1983 - Dec 1987: Specialist, Deputy Head Technology Department - Oil and Gas Project Management Board.

- Jan 1990 - Dec 1992: Head of Technology, Construction Captain, Construction Team 5 - Gas Company.

- Jan 1993 - Oct 2001: Specialist, Planning Department, Deputy Head of Planning Department, Deputy Director Gas Works Development Center, Deputy Head of Haiphong Projects, Deputy Chairman of Ports and Warehouse Management Committee - Gas Trading and Processing Company, now Petrovietnam Gas Corporation (PV Gas).

- Nov 2001 - Mar 2006: Deputy Head of Phu My Fertilizer Plant Project Management Board.

- Apr 2006 - Jul 2006: Head of PVFCCo Construction Investment Management Committee.

- Aug 2006 - Mar 2009: Vice President PVFCCo.

- Mar 2009 - Present: Member, PVFCCo Board of Directors.

3. Mr. CAO HOAI DUONG

Member (since 08 Feb 2011)


Qualifications: Master of Petrochemical Technology

(information as per BOM section)

Biographies - Board of Directors (continued)Biographies - Board of Directors (continued)


4. Ms. CHU THI HIEN Vice President of Procurement and Chemical Business

7. Mr. HOANG VIET DUNG Vice President of Technology, Investment and Construction

2. Mr. TU CUONGVice President and Managing Director of Phu My Fertilizer Plant

1. Mr. CAO HOAI DUONG President & CEOMember of the BOD

Board of Management Board of Management

24

12 3

4

3. Mr. LE VAN QUOC VIET Vice President of Internal Affairs

8. Mr. HUYNH KIM NHAN Chief Accounting Officer

6. Mr. NGUYEN HONG VINHVice President of Sales and Distribution Network

5. Mr. NGUYEN VAN TONGVice President of Finance, Accounting and Auditing

25

5

6

7

8


Biographies - Board of Management Biographies - Board of Management

1. Mr. CAO HOAI DUONG

President & CEO, Member of the BOD


Qualifications: Master of Petrochemical Technology


Mr. Duong graduated with a degree in Petrochemical Engineering from the Hanoi Polytechnic University in 1993. He joined Petrovietnam as a specialist in the Science, Technology and Environment Department. From 1995 to 1997, he undertook post-graduate studies at the University of New South Wales in Sydney, Australia.After receiving his Master’s in Petrochemical Technology, Mr. Duong returned to work at Processing Division - Petrovietnam. With his qualifications and professional competence noted and recognized by the Petrovietnam management, from 2001 to 2008 he was appointed Deputy Head of the Technology Department, then Deputy Head of the Nghi Son Refinery Project Management Board - Petrovietnam’s second refinery project. Mr. Duong actively participated in preparing the Nghi Son Refinery project feasibility report, playing a tireless role in promoting foreign investment in the project. In the position of Head of the Project Management Board, he participated directly in negotiations, advising the Petrovietnam management on negotiations with Japanese and Kuwaiti partners. From there he played an important role in the birth of Nghi Son Refinery Co. ltd, a joint venture between Petrovietnam and partners: Kuwait Oil Co. ltd, Idemitsu Kosan Co and Mitsubishi Chemical (Japan). He continued to enjoy the confidence of Petrovietnam, being assigned to represent Petrovietnam in the position of Deputy CEO in the Nghi Son Refinery Joint Venture. In the process of working at the joint venture, Mr. Duong continued to display his abilities, successfully completing the task with the appreciation of Petrovietnam and the joint venture partners. In 2010 the Petrovietnam management appointed him CEO of Petrovietnam Fertilizer and Chemicals Corporation from 15 November 2010. He became one of the youngest CEOs at any Petrovietnam subsidiary. Aside from his professional career, in 2011 he was elected Chairman of the Petrovietnam Young Entrepreneur’s Association and was honored to represent the Petrovietnam Young Entrepreneur community in the Vietnam Young Entrepreneur’s Association, being elected Deputy Chairman of the Association.

2. Mr. TU CUONG

Vice President and Managing Director of Phu My Fertilizer Plant


Qualifications: Organic Chemistry and Technology Engineer


- 1984 - 1989: Translator, labor Management Department, Czechoslovakia, MolISA.

- 1990 - 1995: Technician, Poisons Department, A9 Bach Mai Hospital, Hanoi.

- 1995 - 1999: Technician, Technology Department, Head of Gas Distribution, Gas Production and Trading Company (PV Gas).

- 1999 - 2004: Head of Trading, Head of Moderation PV Gas.

- 2004 - 2008: Director, Gas Processing Enterprise, PV Gas.

- 2008 - Present: Managing Director, Phu My Fertilizer Plant and concurrently Vice President PVFCCo.

3. Mr. LE VAN QUOC VIET

Vice President of Internal Affairs


Qualifications: Bachelors Degree in Economic Planning


- Dec 1980 - Mar 1984: Military service on front 779 in Cambodia where he held the position of Platoon Commander.

- 1984 - 1991: Union official responsible for Vung Tau - Con Dao Special Zone. Member of Union Special Zone Standing Committee - Deputy Chairman, Head of Youth and Workers Union Vung Tao - Con Dao Special Zone. University studies (1985-1990).

- Nov 1991 - Nov 2002: Union and Party work at Vietsovpetro Joint Venture.

- Dec 2002 - May 2005: Chief Engineer, Housing and living Office Vietsovpetro Joint Venture.

- May 2005 - Apr 2007: Party Member, Deputy Head Vietsovpetro Joint Venture Party Committee.

- May 2007 - Feb 2009: Head of PVFCCo Training and Personnel Organization.

- Feb 2009 - Present: Vice President PVFCCo.


Biographies - Board of Management (continued)Biographies - Board of Management (continued)

6. Mr. NGUYEN HONG VINH

Vice President of Sales and Distribution Network


Qualifications: Agricultural Engineer

Professional history :

- Jul 1984 - Apr 1994: Official - Cultivation and Plant Protection Department - Ministry of Agriculture and Rural Development.

- Apr 1994 - Nov 1999: Technician, NICHIMEN - Japan, Representative Office.

- Nov 1999 - Oct 2009: Deputy CEO ARYSTA-lIFESCIENCE Company Vietnam (100% Japanese invested).

- Dec 2009 - Present: Vice President PVFCCo.

5. Mr. NGUYEN VAN TONG

Vice President of Finance, Accounting and Auditing


Qualifications: Bachelor of Finance and Accounting, Banking sector reform


- Jul 1980 - Dec 1990: Specialist, Office 2 in HCMC, Tax Department (now the General Department of Taxation).

- Dec 1990 - Mar 1993: Specialist, Vietnam Oil and Gas Company II (Petrovietnam II) Finance and Accounting Department.

- Mar 1993 - Nov 1993: Responsible for Finance - Accounting, Petrovietnam Exploration and Drilling Company.

- Nov 1993 - Sep 2005: Deputy Head General Accounting Department - Oil and Gas Environment and Safety Center.

- Sep 2005 - Sep 2006: Head of Supervisory Board - Petrovietnam Drilling and Well Services JSC (PVD).

- Sep 2006 - Apr 2009: Deputy CEO and concurrently HCMC Branch Director - Petrovietnam Securities Joint Stock Company (PSI).

- Apr 2009 - Present: Vice President PVFCCo.

4. Ms. CHU THI HIEN

Vice President of Procurement and Chemical Business


Qualifications: Oil and Gas Transportation and Conservation Engineer


- Oct 1981 - 1984: Vung Tau Oil and Gas Training Institute, International Cooperation Department Office 2 Vietnam General Oil and Gas Department.

- May 1984 - Sep 1985: Principle Secretary to the Deputy CEO, Translator, Vietsovpetro Office, Translator, Vietnam General Oil and Gas Department Training Office in Baku, Soviet Union.

- Oct 1985 - Apr 2006: Engineer, Chief Engineer and Deputy Head of Commerce - Vietsovpetro.

- May 2006 - Apr 2009: Deputy CEO Petrovietnam Oil and Gas Trading Company (now Petrovietnam Oil Corporation - PV Oil).

- May 2009 - Present: Vice President PVFCCo.

7. Mr. HOANG VIET DUNG

Vice President of Technology, Investment and Construction


Qualifications: Petrochemical Technology Engineer


- Jan 1996 - Oct 2002: Vietnam Oil and Gas Corporation (Petrovietnam) Specialist and studies at UOP - U.S.A.

- Nov 2002 - Jan 2007: Specialist, Dung Quat Oil Refinery Project Management Board.

- Feb 2007 - Feb 2011: Deputy Head, Dung Quat Oil Refinery Project Management Board.

- Mar 2011 - Present: Vice President PVFCCo.

8. Mr. HUYNH KIM NHAN

Chief Accounting Officer


Qualifications: Bachelor Degree in Economics - Finance and Accounting


- Sep 1998 - Apr 2004: Accounting Specialist, Petrovietnam Construction and Investment Consultancy Company.

- May 2004 - Jun 2005: Specialist, PVFCCo Finance and Accounting Department.

- Jun 2005 - Jun 2007: Deputy Head, PVFCCo Finance and Accounting.

- Jun 2007 - Present: Chief Accountant, PVFCCo.


Supervisory Board

1. Ms. TRAN THI PHUONG THAO

Chief Supervisor


Qualifications: Bachelor of Foreign Trade Economics


- Nov 1992 - Jun 1996: Business and Trading Department, PETEC, Ministry of Trade.

- Jul 1996 - Mar 2001: Specialist, Contract Management Department, Deputy Head, Finance, Accounting and Auditing Department, Petrovietnam Contract Supervision Company PSC.

- Mar 2001 - Mar 2004: Deputy Head of Finance and Accounting, Phu My Fertilizer Plant Project Management Board - Petrovietnam.

- Mar 2004 - Aug 2007: Deputy Head, Commerce Department, Petrovietnam Fertilizer and Petrochemicals Company (PVFCCo).

- Sep 2007 - Feb 2009: Deputy Head - Sales and Marketing Department, PVFCCo.

- Mar 2009 - Present: Chief Supervisor of PVFCCo.

2. Mr. NGUYEN VAN HOA

Member of Supervisory Board


Qualifications: Bachelor of Economics majoring in Banking


- 1995 - 1996: Accountant, Asia Commercial Bank.

- 1996 - 1997: Chief Accountant, Asia Commercial Bank Danang branch.

- 1997 - 2002: Deputy Chief Accountant, Asia Commercial Bank Head Office.

- 2002 - Present: Chief Accountant, Asia Commercial Bank Head Office.

3. Mr. LE VINH VAN

Member of Supervisory Board


Qualifications: Bachelor of Economics, majoring in Finance

and Accounting


- Sep 1995 - 2001: Bachelor of Economics, Accounting Specialist Petroleum Services Joint Venture Company OSC - SOS International.

- Apr 2001 - 2004: Chief Accountant, Classic Services and Trading Company limited.

- 2005 - 2007: Trading Specialist, PVFCCo.

- 2008 - Nov 2008: PVFCCo Supervisory Board Specialist.

- Nov 2008 - Present: PVFCCo Member of Supervisory Board.

Biographies - Supervisory Board

2

2. Mr. NGUYEN VAN HOA Member

1

1. Ms. TRAN THI PHUONG THAO Chief Supervisor

3

3. Mr. LE VINH VAN Member


Human Resources

PERSONNEL STRUCTURE

Educational Qualification:

Level Number (employees)

Ratio (%)

University; College or higher 973 53.4

Professional school 175 9.6

Technical and other education

673 37

Total 1,821 100

Functional Breakdown:

Divison of Labor Number (employees)

Ratio (%)

Management and leadership 231 12.7

Technicians and Professionals 516 28.3

Service Personnel 267 14.7

Trades workers 807 44.3

Total 1,821 100

HUMAN RESOURCES POLICY

Since 2008, we have created, instituted and applied new compensation tiers appropriate for a joint stock company, in accordance with the law on labor - Invalids and Social Affairs and Government Decree 141/2007/ND-CP dated 10 September 2007 regulating salary schemes for State Owned parent companies and subsidiaries of State owned economic conglomerates, which is to pay proper remuneration to reduce brain drain and attract qualified talent. The company has Social Security, Health and Accident Insurance policies in place for all employees.

Our staff policy has been in place since 01 January 2009. This includes a welfare policy for all employees and a number of policies on employee benefits and managerial skills consisting of: Salary and bonus packages, training and study privileges, leisure, retention and other welfare schemes.

These policies and schemes are directed at ensuring employee’s maintain and update their technical and professional skills. PVFCCo has put regulations in place to recognize expertise and applies a tiered remuneration scheme for specialists and workers. In this regard, highly specialized experts are remunerated at levels comparable with office/section managers. In 2011, PVFCCo had 13 staff ranked at the expert level.

As of 31 January 2012, PVFCCo (including parent company and subsidiaries) employed a total of 1,821 people.

Human Resources

TRAINING POLICY

Recognizing that continual improvement in the professional expertise of our employees plays a vital role in the management and business operations of the organization, we have paid particular attention to creating a training policy and regulatory system which motivates employees to improve their professional and educational skills, knowledge and expertise.

Improved and enhanced specialist training and education quality promotes and strengthens the focus on training management skills, professional knowledge and technical expertise. There is a good balance between internal, domestic and overseas training; and short-term and long-term training. There is a focus on training younger personnel who have the potential to develop into managers and experts. There is a reward policy to motivate and encourage employees to improve their own levels of expertise and professional knowledge.

Internal training was the focus of the company’s training objectives in 2011 and this was undertaken effectively. A notable event was the successful practical training seminar which attracted representatives from universities, colleges, and internal and external project management board.

Overseas training or training courses with international standard formula have been reviewed to ensure suitability and effectiveness (foreign language skills, training objectives,

etc.). The Management is always ready to invest in staff. Skilled technical workers participate in intensive overseas training courses with specific objectives to acquire up-to-date experience and knowledge to serve the production operations of PVFCCo and the Group’s new projects.

Increased in-house training to ensured savings and efficiency, and is consistent with the specific characteristics of the company’s needs (inviting lecturers for individual tutoring according to programs and content tailored for PVFCCo).

Flexibility in conducting planned, timely training to meet demand for updated, supplementary and improved employee knowledge to serve the production operations of units.

Following the training, human resources have satisfied the operating demands in all aspects of production and business. In addition, there is the capacity to pass on to colleagues and guide knowledge which has been acquired. A particular training success in 2011 was the company’s team of experts in specialized fields whose technical skills came to the fore during the planned maintenance and repair of the Phu My Fertilizer Plant and are actively supporting important projects like the Dung Quat Oil Refinery and Ca Mau Fertilizer Plant.

1,821PEOPLE


PVFCCo Corporate Culture

Recognizing the importance of corporate culture for the development of the organization, we have fostered and promoted our resources to create strength, differentiation and our own unique traditions from the very beginning.

PVFCCo Corporate Culture

y Deliver high degrees of transparency and responsibility for shareholders, customers and employees.

y Promote internal vigor in mobilizing all resources to exploit maximum advantages and opportunities.

y Control risks: calculate and forecast risk factors, proactively manage those risks and transform them into opportunities for growth.

y Grow the business together with environmental protection and social responsibility.

Emanating from that: all of our successes will be built upon the foundation of the PVFCCo Corporate Culture. Therefore the management and employees will collectively strive to continue maintaining and developing our corporate culture to create real value for the company. This will assist us to develop sustainably and deliver benefits to shareholders and customers, and for the national economy.

To strengthen the shaping of our unique corporate culture, in 2011 we implemented a corporate culture-building and development project for PVFCCo. The Steering Committee and PVFCCo Corporate Culture Project Committee will engage a consultant to build and implement our corporate culture across the entire organization. In 2011 we promulgated the PVFCCo Corporate Culture Handbook outlining our: Vision, Mission, Core Values, Business Philosophy and regulations for general standards of conduct. After the handbook was promulgated we promoted the organization and implementation of the PVFCCo Corporate Culture through a number of different avenues, appealing to employees to voluntarily implement it. Together, the Management and employees are collectively upbeat about implementing the Core Values of our Corporate Culture: “Professional & Effective, Dynamic & Innovative, Aspiring & Visionary and Responsible & Sharing” which aim to:

y Create customer value through superior products, stable and appropriate pricing, superior services and creative solutions.


Market Outlook: Urea Market Overview 2011 - 2012

Market Outlook: Urea Market Overview 2011 - 2012

GLOBAL NITROGEN FERTILIzER MARKET

Early in 2011, the global Nitrogen Fertilizer (urea) price continued its rise from 2010 on the back of strong global agricultural produce price rises and China limiting annual urea exports by raising tariffs (110%) from 01/11/2010. In Q1 2011, global urea prices stabilized and fell slightly due to high supply volumes held by the major global producers during a period when demand was low because few regions were in the main season. Price rises continued through Quarters 2 and 3, peaking at over USD 510/tonne (FOB) in September, the highest since 2009. The downward trend began in October. Despite a slight increase in November, due to import demand from South Asia and latin America, the December global urea price returned to the downward trend which has continued through to Quarter 1 2012 as consumer demand remains low.

The IFA forecasts global fertilizer consumption will increase 2.3% in 2012/2013, but says the outlook will depend on the economic situation in developed countries. Therefore the supply and demand trend for the global fertilizer market in 2012 appears to be quite stable, with supply able to meet demand. In 2012, analysts predict the global urea price could fall slightly, with a number of seasonal price increases. According to Fertecon Urea Futures, the FOB urea price average in 2012 could reach USD 384/tonne in the Yuzhnyy region and USD 410/tonne in the Middle East.

As for the Chinese urea market, which has the greatest impact on Vietnam, 2011 also saw continual price fluctuations primarily due to supply-side shortages brought about by higher domestic fertilizer production costs. 2011 export volumes fell sharply to 3.6 million tonnes compared to 7 million tonnes for 2010. Chinese urea export volumes for 2012 are forecast to continue falling, to approximately 3 million tonnes, with the objective of stabilizing domestic market consumption.

VIETNAMESE UREA MARKET

The Vietnamese domestic urea market continued to be affected by the global market in 2011 as domestic production only satisfies approximately 50% of total domestic urea demand, the remainder being met by imports. According to data from the Ministry of Agriculture and Rural Development, Ministry of Commerce and Industry and the General Department of Customs, total national urea import (including re-export) and production volumes in 2011 reached an estimated 2 million tonnes, an increase of approximately 10% compared to 2010. Urea boarder-trading and re-export volumes increased sharply due to high global urea prices.

From the beginning of 2011, the domestic urea market price lay within global price increase trends, especially for the months April - June, as demand increased for the Summer - Autumn crop in the South and the influence of global prices on the cost of imports. In addition, domestic urea prices rose due to: (i) increased input costs as the prices of essential commodities such as electricity, gas, etc; (ii) rising currency exchange rate; and (iii) high interest rates increasing the cost of capital and warehousing costs limiting the volume of reserved supplies, causing a price surge when demand increased suddenly. In the context of those price increases, 2011 was also a year when Urea Phu My continued to play an active market stabilization role. Specifically, beginning from May 2011, the price of urea imports fluctuated strongly, following global prices, yet domestic urea price increases remained low due to prior imports and the maintenance of stable prices for Urea Phu My.

12,000

8,000

10,000

6,000

11,000

7,000

9,000

5,000

11,500

7,500

9,500

5,500

10,500

6,500

8,500

7 11 126 105 94 8321

Chinese Urea (South East market)

Ha Bac Fertilizer Urea Phu My (average prices)

Domestic Urea Market Price Movements in 2011(unit: VND/kg)

Forecast of Vietnam urea market in 2012 will see changes to the nature of the urea market in Vietnam. Specifically, the market will begin to transition from a supply deficit to surplus due to increased output from the Ca Mau and Ninh Binh Fertilizer Plants. Total supply from domestic production is estimated to reach 1.8-1.9 million tonnes, double that of 2011, and will almost meet the expected demand of 2 million tonnes. 2012 urea prices on the Vietnamese market are forecast to be relatively stable following world market prices and the supply - demand balance.


No. Items Unit 2011 Planned

2011 Realized

Ratio % Realized/Planned

1 Production Output:

Urea Phu My Thousand tonnes 770 802 104%

Packaging Million bags 28.3 32.5 116%

2 Fertilizer imports Thousand tonnes 250 135 54%

3 Trading Output:

Urea Phu My Thousand tonnes 800 753 94%

Packaging Million bags 28.3 34 120%Fertilizer and Chemicals Import/Export and Other Trading

Thousand tonnes 320 310 97%

4 Full Financial Targets (Consolidated):Total revenues VND billion 7,000 9,763 139%Profit before tax VND billion 1,570 3,510 223%Profit after tax VND billion 1,430 3,104 217%Tax payments VND billion 304 537 177%

5 Parent Corporation Financials:Shareholder equity VND billion 6,467 8,238 127.4%Where: Charter Capital VND billion 3,800 3,800 100%Total revenues VND billion 4,637 8,224 177.4%Profit before tax VND billion 1,515 3,441 227%Profit after tax VND billion 1,407 3,120 221.7%Profit after tax/Charter capital % 37 82Tax payments VND billion 184 422 229%

6. Investments:a. Total Investments: VND billion 1,584 1,086 69%

Infrastructure Investment VND billion 942 780 82%Plant and Equipment VND billion 134 77 57%Capital Investments VND billion 507 229 45%

b. Capital Investment Sources: VND billion 1,584 1,086 69%Shareholder equity VND billion 1,219 1,086 89%loans and Other Capital VND billion 365

2011 Operations:Consolidated Results

Report of Board of Directors

1. 2011 OVERVIEw

Performance in 2011 fluctuated along with the domestic and global economies. This presented both opportunities and challenges for PVFCCo’s business and production operations. Alongside favorable food and fertilizer prices, compared to previous years, stood increased prices across a range of production inputs: Electricity, fuel, interest, the USD exchange rate and in particular the cost of raw materials for the Phu My Fertilizer Plant increased 34.7%, transportation costs rose 25%, directly impacting production and product distribution. In that context, PVFCCo exceeded all planned targets with the direct attention of the Petrovietnam Group, together with the outstanding collective efforts of the Management and employees, sharing and companionship of Shareholders. This outperformance is detailed in the above consolidated table. Analysis of this performance is set out in the 2011 business and production income statements below.

2. 2011 BOARD OF DIRECTORS (BOD) ACTIVITIES

As the supreme management unit, representing the rights of the shareholders, in 2011, the five incumbent members of the BOD actively carried out their roles and duties of guiding the company’s standards of governance. The BOD organized its responsibilities, issued collective decisions, and assigned tasks to the members of the Board according to their expertise.

2011 was an outstandingly successful year with all production and trading criteria achieving record highs, particularly the impressive production output, revenues and profits. Besides that, the efforts and initiative in actively preparing for a completely new period with many difficulties and challenges were highlighted as major features during the year.


In 2011, the BOD held 16 monthly and extraordinary meetings, deciding on the specific important agenda items as follows:

- Strategy: Submitted the updated Corporate development strategy to 2015 and the vision to 2025 to the Annual General Shareholders Meeting (AGSM ) for approval and promulgation; approved development strategies of subsidiaries.

- Planning: Approved and supervised execution of the 2011 production plan; Appraised and passed the 2012 plan for submission to the AGSM for approval at the 2012 meeting.

- Restructuring: Directed the successful Stage 1 Corporate restructuring with the transformation of four subsidiaries from Single-member limited liability companies into Joint Stock Companies; Dissolved the Petrovietnam Fertilizer and Chemicals Services and Trading Single-member Co ltd; Established a Corporate branch in HCMC; Upgraded the Cambodian Representative Office to Branch status; Established a BOD Internal Auditing Committee.

- Governance, risk management and internal control systems: Approved guidelines and plans to select a consultancy firm to assist the establishment of internal auditing mechanisms; Directed implementation of the Stage 1 ERP application; Continued directing the application, monitoring and adjustment of the company’s specific economic, technical, production and trading targets to realize savings through

effective management of expenses and production costs.

- Project investment and execution: Decided to pause the DAP production project in Morocco; Adjusted the NPK procurement project plan; Resolution on researching the Nam Dinh NPK project; Approved guidelines on researching investment into the forecast 30,000 tonnes/year Hydrogen Peroxide production project; Approved the work items required to complete the CO2 recovery project and adjusted Stage 2 of the project; Approved adjustments to total investment in the 43 Mac Dinh Chi office building project; Approved consultancy selection bid results for the FS Glyphosate project; Approved the PVFCCo warehousing system plan.

- Promulgated or amended 11 regulations: Regulation on managing fertilizer production operations (amendment); Regulation on the company’s representatives (amendment); Regulation on salary increases (amendment); Regulation on management of cash and bank deposits; Regulation on management of salaries and bonuses, and policy for parent company representatives at subsidiary companies; Regulation on the company’s Awards Council; Regulation on payments, compensation and welfare fund disbursement; Regulation on management and use of science and technology development funds; Regulation on Governance; Regulation on management of construction investment and procurement; Regulation on the use and provision of services.

- Shareholders and Dividends: Successfully organized the 2011 AGM; Bolstered the BOD investor relations organization; Paid an interim dividend 1 for 2011 at 10% of share par value.

- Appointments and resignations Appointed the BOD Vice Chairman, one BOD Member, and one Vice President; Dismissed one BOD Member, one Vice President; Appointed capital representatives to subsidiaries.

- Other matters: Relocated the Head Office to PVFCCo Tower; Resolution on conducting research with PVI into a number of agricultural insurance projects; Established the company’s Science and Technology Council; Approved the company’s payroll system; Decided to increase the stake in PV TEX Co (buying back the capital from PVFC), raising the capital contribution to 25%, or VND 499 billion; Guided implementation of the PVFCCo Corporate Culture.

Aside from the regular and extraordinary meetings, the BOD also held regular weekly and monthly work briefings to check and review the Board of Executive’s work, and supervise implementation of resolutions and decisions on the company’s production and trading activities.

The BOD Members executed their direction and supervision responsibilities and urged timeliness from the Board of Management through:

- Attending important Board of Management meetings on implementing the BOD’s resolutions and decisions, or on the preparation of projects to be presented to the BOD.

- Attending and providing guidance to regular Board of Management working meetings.

- Attending and providing guidance to meetings of the Councils for product pricing, sales and personnel policy, workforce organization, and meetings on construction and production planning for subsidiaries, reporting and reviewing important tasks, etc.

- Monitoring and capturing of production management processes through reports and papers sent to the BOD by the Board of Management.

- Directly guiding and contributing to the Board of Management on a number of key issues arising from the production management process.

3. 2011 REVIEw OF OPERATIONS

RESUlTS FROM EXECUTING THE 2011 PlANS

2011 was an outstandingly successful year with all production and trading criteria achieving record highs, particularly the impressive production output, revenues and profits. Besides that, the efforts and initiative in actively preparing for a completely new period with many difficulties and challenges were highlighted as major features during the year. Specifically:

- Completing Stage 1 of the business restructuring in parallel with perfecting the development strategy for 2011-2015 and vision to 2025 for PVFCCo and subsidiaries. Subsidiaries had very encouraging initial production and trading results courtesy of operating as joint stock companies.

Report of Board of Directors (continued)Report of Board of Directors (continued)


- Investments in base materials and infrastructure, especially regional warehouse depots, was accelerated. 6 warehouses were completed and opened in 2011. These raised PVFCCo’s warehousing system capacity to 215,000 tonnes, creating a competitive advantage for the company.

- Preparing the market for new products and opening new markets in a positive way aimed at taking advantage of opportunities and accelerating exports and international market development. The Cambodia branch was officially opened in July 2011. The branch will sell fertilizer directly in Cambodia. Aside from the Cambodian market, fertilizer exports to other regional countries saw outstanding progress, bringing regional exports of Urea Phu My to 25,000 tonnes.

RESUlTS CONTRIBUTING TO THE 2011 - 2015 5 YEAR PlAN, THE DEVElOPMENT STRATEGY TO 2015 AND THE VISION TO 2025

With these pleasing results, the company has basically completed its historic 2011 mission. It was an especially important and meaningful year, being the final year for the company to prepare for the changes to the fertilizer market and also the first year, the linchpin year, for the plan to accelerate development over 2011-2015, and execute the company’s strategic development vision to 2025. Specifically:

- Fertilizer Production: Successfully completed a major repair and maintenance work of Phu My Plant, ensuring safe and stable production until the next overall maintenance period scheduled for 2013.

- Project investment and implementation: Completion of the headquarters building on time, accelerating completion of construction preparations for coming

- Production: Continue safe and stable operations at the Phu My Fertilizer Plant; innovatively improve managerial practices; enhance operating efficiency and capacity, and maintain the plant; implement the product quality improvement project targeted at attaining the highest capacity and quality at the lowest cost.

- Fertilizer Trading: Bolster domestic fertilizer trading methods through flexible policies which reflect the market to efficiently and judiciously consume Urea Phu My, NPK Phu My and Urea Ca Mau while continuing to promote development of regional markets (Cambodia, the Philippines, Myanmar, etc.).

- Investment and Development: This continues to be a priority task aimed at creating a new and powerful PVFCCo into the future. Therefore preparatory investment work to transition to an investment execution stage and break ground on new plant projects aimed at product diversification, especially chemical production, needs to be completed. Of particular attention are the NPK, H2O2 and NH3 plant construction projects with the determination to have these plants operating from the 2013-2015 period with NPK production starting in 2013.

BOD 2012 PlANS

To accomplish the objectives set out above, the Board of Directors have determined the important management and executive tasks to enhance governance efficiency with the following specific programs:

- Direct completion of business and production plans approved by the 2012 AGSM;

- Continue to direct completion of the established plans and restructuring direction;

- Enhance governance, constructing and applying a production management model, repair and maintenance, world-best governance (ISO, OHSAS, ERP, etc.) aiming to minimize risks, and exploit and efficiently use the company’s resources;

- Enhance supervision, inspection, internal controls and risk management. Continue improving the internal auditing apparatus, strengthening professionalism on the basis of recommendations from the consultancy firm and actual requirements at the company;

- Direct completion of work plans, strategic constructions for important functions such as: the distribution network, new products, marketing and branding, etc.;

- Direct organization of fertilizer trading to ensure efficiency; closely co-ordinate with PVCFC/PVTEX

years to begin construction on projects aimed at improving fertilizer and chemical production capacity for the NPK, NH3, Hydrogen Peroxide, etc. projects.

- Warehousing System: Completed the planned warehouses and increased development of the regional warehouse system, achieving a total capacity of 215,000 tonnes (more than 70% on target to reach 350,000 tonnes by 2015).

- Sales, Distribution Network Development, Market Share: Continued implementing business efficiencies; prepared the market for new products; consolidated and developed the domestic and overseas distribution network; and increased domestic and international market share.

Completely exceeding the plans and almost all important tasks in 2011 has given impetus to the 5 year plan and fits with the company’s Vision and Mission.

WEAKNESSES TO BE ADDRESSED

Despite achieving more than satisfactory results in 2011, there remain some shortcomings and weaknesses to be overcome. Most notable of these is the relatively slow implementation of construction projects which have fallen behind their planned schedules; production efficiency at a number of associated companies remains low; and planned divestments have proven difficult to execute.

4. 2012 BUSINESS PLANS AND OBJECTIVES

2012 OBJECTIVES

The period from 2012 onwards will be a time full of changes and challenges when the Ca Mau and Ninh Binh Fertilizer Plants are officially inaugurated and transform the domestic fertilizer market from production deficit to surplus. In particular, the cost of raw input materials continues to rise, gas prices rose over 40%, global and domestic fertilizer prices continued to fluctuate unpredictably. Therefore, every effort and determination should be made to introduce effective measures to overcome the difficulties and challenges to succeed and achieve the important objectives for the 2102 plan and the 2011-2015 period, specifically :

- Governance: Execute phase 2 of the corporate restructure, to concentrate on core business areas; improve investment efficiency; rigorously execute the savings plan to combat waste and reduce costs; increase training and bolster human resource development; grow the PVFCCo Corporate Culture; and improve the governance skills and professionalism.

to organize consumption of Ca Mau/Fiber fertilizer; marketing and market preparations for the new NPK Phu My product; reinforce and improve the domestic fertilizer distribution network, and construct an overseas distribution network, beginning with Cambodia;

- Guide implementation of investment projects, ensure purchasing quality and efficiency, comply with schedules and conform to Group/company regulations and current legal provisions;

- Promote research and development, improve innovation and rationalization of production aimed at product diversification, improving product and service quality;

- Promote development investment, focused on important projects in the fields of fertilizer and chemical production or projects along the value chain and support the large production business areas of PVFCCo;

- Enhance building and training human resources to achieve high quality in the field of enterprise management and human resources with high professionalism to ensure the organization’s development requirements and demands from partners and customers;

- Continue to promote and maximize internal resources capabilities in the company’s units, while enlisting maximum support from the Petrovietnam Group and other sector units;

- Continue to strictly implement Government Resolution 11/NQ-CP dated 24 February 2011, and action programs at all levels to curb inflation, stabilize the macro-economy and ensure social security; Construct, disseminate, supervise implementation and review program outcomes to practice thrift and combat waste in 2012.

Aimed at enhancing efficiency through corporate governance activities, the Board of Directors determined to continue efforts to improve the management and executive regulatory processes, regulations and systems; Promulgate and apply advanced corporate governance standards and norms, monitoring, and internal control regulations, health, safety and environmental quality management systems, apply effective and continuous improvements to enterprise resource planning (ERP) systems; Improve working style and increase awareness of responsibilities among employees; Actively build a PVFCCo culture coupled with constant care to improve the material and spiritual lives of employees. Implement measures to encourage employees to be dedicated, promote intellect and wholeheartedness for the development of PVFCCo; Ensure professional, responsible and effective management, administration and supervision to deliver on our commitments to investors, shareholders and the community.

Report of Board of Directors (continued)Report of Board of Directors (continued)


2011 OPERATIONS OVERVIEw

Regarding the production difficulties, the Phu My Fertilizer Plant has been operating for eight years and has reached a stage where machinery and equipment failures may appear. In fact the company is focused on enhancing maintenance and the good news is that in 2011 we have passed this test, aside from a one month period of major repair and maintenance, the plant is running smoothly and without breakdowns. Regarding raw material costs, gas prices increased from USD 3.55/million BTU to USD 4.59/million BTU, with the increasing of exchange rate from the beginning of the year made 2011 gas prices have increased by approximately 34.7% compared to the plan. This is the primary reason for the significant increase in production costs. Plant maintenance and servicing costs increased by approximately 12% compared to the plan as parts are primarily imported from overseas in foreign currency. Petroleum prices have increased transportation costs, an additional 20% to 25% loading, and other distribution costs have increased from 10% to 15%. Complex weather conditions are also affecting crops and consumption of fertilizer products.

Besides the challenges, PVFCCo has the advantage of some favorable factors in overcoming difficulties. The advantages are gained from the development process like quality and product brand name, experience and skills of the employees, unified will and unity within the Management, accumulated financial capabilities, and the timely support from state agencies, especially the Petrovietnam Group. In addition, the 2012 fertilizer market will be favorable for sales growth increased production.

ANALYSIS OF KEY INDICATORS

1. PROFITABIlITY

Items 2009 2010 2011

Return/Shareholder Equity (ROE)

25% 28% 37.4%

Return/Total Assets (ROA)

27% 23% 33.12%

Total assets in 2011 increased 26.3% compared to 2010, with ROA and ROE ratios both reaching very high levels of growth outperformance compared to 2010. This shows the company’s business situation is very sound with the use of shareholder equity and asset efficiency being high.

2. SOlVENCY

Items 2009 2010 2011

Current Ratio = Current Assets/Current liabilities

6.37 5.22 6.97

Quick Ratio = (Current Assets Inventories)/Current liabilities

5.43 4.50 5.63

The company’s Current and Quick Ratio’s in 2011 were both high. This reflects good liquidity able to service liabilities, with no financial difficulties in paying liabilities as they fall due.

The Board of Management has strengthened improvements, updated procedures, work instructions and implementation modes, enhanced responsibilities and effectiveness in coordinating and handling production and business among management levels.

The Board of Management evaluated the exceptional business and productions results for the year as follows:

PRODUCTION

Safe plant operations maintained very good urea production performance and achieved more than 100% of planned output (802,000/800,000 tonne). Packaging production grew significantly, increasing 19% compared to 2010 and with diverse products for external customers.

CONSUMPTION

With the unfavorable weather in Quarter 4/2011, fertilizer consumption did not reach the plan (753,000/800,000 tonnes). However, consumption was sent to market at the right time for the Corporation to optimize revenue.

REVENUES AND PROFIT

Total revenues: VND 9,763 billion, an increase of 39% compared to 2010 and profit before tax: VND 3,510 billion, an increase of 82.6% compared to 2010. Sound cost management has assisted the strong profit growth compared to the level of increased revenue.

At the 2011 Annual General Shareholders Meeting, the Board of Directors and Board of Management analyzed and reported to the shareholders the difficulties foreseen in executing the 2012 business and production plans. Indeed in the past year the Board of Management has evaluated the execution of business and production tasks conducted in the face of the difficulties anticipated, in parallel with advantageous factors for PVFCCo to completely exceed planned targets.

Report of Board of Management Report of Board of Management


3. 2011 OPERATING RATIOS

- The company’s receivables in 2011 averaged 18.2 days, showing receivables maintaining good recovery levels.

- Inventory turnover for the year was 7.9 times.

- Shareholder equity accounted for 88.6% of total capital, reflecting a very strong financial position, especially given the recent financial crisis, and it has delivered a considerable profit. Capital efficiency (Net Revenue/Shareholder Equity) was 1.11 times. PVFCCo’s funding from loans is very low, so there is no risk from high interest rate, at the same time the focus is on core trading and production activities.

Overall, the company’s 2011 indicators were good, maintaining stability and growth in difficult domestic and global economic conditions.

KEY ACHIEVEMENTS

1. PRODUCTION OPERATIONS

The engineers and staff operating the plant have matured significantly and are now able to completely replace the foreign experts. Periodical maintenance of the Plant has been executed with carefully detailed plans and successfully completed ahead of schedule, which has contributed to the plant continuing to exceed design output.

2. TRADING OPERATIONS

The Urea Phu My brand name maintained its position in the market, and market share gradually expanded with steps to develop international markets; Completion of the company’s nationwide trading and product distribution system is founded on 4 subsidiaries, more than 100 branches and level 1 outlets, 3,000 level 2 outlets. In addition, PVFCCo imported 135,000 tonnes of fertilizer to ensure supply of more than 50% of domestic urea demand. We also launched the NPK Phu My product on the market in June 2011, and actively implemented market preparations for the NPK Phu My and Urea Ca Mau products.

3. CHEMICAlS

Completed construction of the company’s chemicals development strategy to 2015 and vision to 2025, with the goal of chemical production being on par with fertilizer production, of which potential chemicals projects are clearly defined together with a suitable investment roadmap.

4. CHANGES IN SHAREHOlDER EQUITY

There were no significant changes to shareholder equity in 2011. The company’s charter capital of VND 3,800 billion is divided into 380,000,000 common shares, with the State holding a 61.37% stake.

In 2011, the company bought 28,540 treasury bonds. This increased treasury bond holdings to 2,380,800 at an average price of VND 29,000/bond. Therefore, outstanding shares at 31 December 2011 stood at 377,619,200 shares.

5. DIVIDENDS

In 2011, PVFCCo paid a total VND 755,291,940,000 in cash dividends. Where:

- 2010 dividend 2 payment was VND 377,647,740,000.

- 2011 interim dividend 1 was VND 377,644,200,000.

Total dividends shareholders receive for fiscal year 2011 depends upon the profit distribution plan which will be determined at the 2012 Annual General Shareholders Meeting.

Report of Board of Management (continued)

Currently, the company is accelerating chemicals project implementation such as the Ammonia production plant and the hydrogen peroxide plant integrated into the Phu My Fertilizer Plant. These are the projects specified in the company’s Chemicals Strategy. Besides that, PVFCCo is also gradually building databases on the chemicals market segment to learn and grasp the investment opportunities, at the same time expanding cooperation with partners in the chemicals sector both domestically and overseas.

4. FINANCE AND CAPITAl MANAGEMENT

Implemented an effective cash management plan, improved the efficiency of investment operations and capital management, and enhanced the effectiveness of financial risk management.

5. HUMAN RESOURCES ORGANIZATION

We have established a management regime to delegate responsibilities, improve regulations and corporate governance standards in compliance with the parent and subsidiary model. Training has been conducted well to improve the expertise and experience level of the company’s human resources.

6. FUNDAMENTAl INVESTMENT AND CONSTRUCTION

Asset purchasing investment projects, basic materials, equipment, machinery for production operations, expansion of the production and distribution system were implemented with increased rates of progress. In particular, PVFCCo completed and opened the office building at 43 Mac Dinh Chi in August 2011.

Report of Board of Management (continued)


Report of Supervisory Board Report of Supervisory Board

REVIEw ON 2011 OPERATIONS

In 2011, PVFCCo successfully converted four limited liability companies to joint stock companies as part of its organizational restructuring. With that, we instituted an organizational architecture in the form of parent company and subsidiaries.

The company has basically implemented stage I of the ERP project and decided to progress to stage II of the project. We strengthened our focus on risk management and expanded the scope and scale of risk control activities. With the support of KPMG, we identified the key strategic risks and rolled outrisk management initiatives in line with international best practice.

PVFCCo launched a program to strengthen Investor Relations (IR). At the same time, we established a dedicated IR Unit to provide IR services professionally, and ensureaccurate, timely and transparent information to investors.

The Phu My plant operations ended the year meeting safety and productivity objectives, free from accidents or major loss time. Phu My urea production output in 2011 came in at 801,852 tons, which was 104% of Plan.

PVFCCo promulgated a program to encourage saving and reduce waste. This program was implemented across the entireorganization. We also reviewed the salary policy and salary distribution, and implemented performance-driven incentives.

In 2011, we revised our sales policy and adjusted the pricing structure to allow us to respond quickly to market factors. We strengthened our domestic distribution system, and gained market share through business development and expanding distribution footprint to regional markets such as Cambodia, laos, Myanmar and Thailand.

PVFCCo executed the purchase of 28,540 shares at a cost of VND 684,365,010 funded from 2010 retained earnings by the order matching method on the stock exchange

PVFCCo paid out the second partial dividend for 2010 at VND 1,000/share following the profit distribution plan approved by the 2011 Annual General Shareholders Meeting. At the same time, we also made an Interim 2011 dividend of VND 1,000/share.

PVFCCo ended 2011 with a strong performance by exceeding the planned targets, with key indicators as follows:

y Total revenue: VND 9,763 billion 139% of the annual plan

y Pre-tax profit: VND 3,510 billion 223% of the annual plan

y Profit after tax: VND 3,104 billion 219% of the annual plan

REVIEw ON 2011 FINANCIAL STATEMENTS

The company’s Financial statements reflect a full, clear and fair view of the business and financial activities of the company as at 31/12/2011, and conform to the accounting standards issued by the Ministry of Finance.

Deloitte VN Co. ltd. was appointed to audit the PVFCCo 2011 Financial Statements and the Supervisory Board concurs with the opinions of the auditor.

The 2011 production and business results have exceeded the targets passed by the Annual General Shareholders Meeting.

COMMENT ON THE GOVERNANCE OF THE BOARD OF DIRECTORS AND BOARD OF MANAGEMENT

PVFCCo’s Board of Directors comprises four full-time members and one part-time member who have executed their duties responsibly, discussed and judiciously provided direction for the key issues of the company.

The Board of Management has led and managed the business and production activities of PVFCCo in compliance with the Company charter and legal regulations, and in accordance with the Resolutions of the Annual General Shareholders Meeting, and per the direction of the Board of Directors,

in the interest of shareholders. In the company’s business activities, the Board of Management has maintained an integrated management system consisting of ISO 9001:2008, OHSAS 18001:2007 and ISO 14001:2004

COORDINATION BETwEEN THE SUPERVISORY BOARD, BOARD OF DIRECTORS, THE BOARD OF MANAGEMENT AND MANAGEMENT TEAM

In the process of supervising and overseeing the company, the Supervisory Board received full support from the Board of Management, the Board of Management and the functional teams in accordance with the company charter, including regular, full and timely provision of documents, data and other evidence of economic activities.

2012 PLAN OF THE SUPERVISORY BOARD

y Ensure discipline in the implementation of the Resolutions of the Annual General Shareholders Meeting; compliance with the law, the company Charter and internal Rules/Regulations

y Oversee the governance activities of the Board of Directors and Board of Management.

y Oversee the protection and expansion of capital.

y Evaluate the financial statements and management reports, and make assessment reports on management.

y Monitor and supervise implementation of cost-saving measures.

y Conduct investigations (when necessary).

y Participate in training courses to enhance capabilities.

During 2011, the Supervisory Board monitored and reviewed the execution of the resolutions of Annual General Shareholders Meeting and ensured compliance with corporate rules and regulations on a regular and periodic basis. It also provided oversight on the governance activities of the Board of Directors and Board of Management. At the same time, the Supervisory Board reviewed the suitability and integrity of the finance and accounting activities, and provided oversight on the discipline and effectiveness in capital protection and capital expansion in the interest of shareholders.


Strategic Direction Strategic Direction

The strategic objectives for phase 2011 - 2015 were developed, updated and passed during 2011 Annual General Meeting of Shareholders as follows:

A. PRODUCTION

y Stable and efficient production of Urea Phu My (800,000 tonnes/year), NPK Phu My (400,000 tonnes/year), Ammonia (450,000 tonnes/year), the H2O2 production project (30,000 tonnes/year).

y Packaging production to increase gradually over the years with the aim of meeting demand for fertilizer and chemicals packaging, and the company’s business requirement to produce 53.2 million bags/year by 2015.

B. TRADING

y To ensure that the company produces or imports sufficient urea to meet 50 - 60% of domestic market demand; after 2013 the business aims to meet domestic and export demand for urea and stabilize prices when required.

y To consume all 1.6 million tonnes/year of urea output from the Phu My and Ca Mau plants. NPK Phu My productions satisfy 10 - 15% of domestic market demand after 2013.

y By 2015 the distribution network to expand to 120 subsidiaries and 100 Tier-1 agents throughout Vietnam, with 20 subsidiaries and 10 Tier-1 agents in Cambodia and the region.

y By 2015 PVFCCo’s chemicals business aims to achieve the following targets:

- 20-30% market share for upstream and downstream petrochemicals used in the oil and gas industry.

- 7-10% market share for agricultural chemicals, (foliant fertilizers, pesticides, etc.).

- Chemical revenues to exceed VND 1 trillion by 2015.

C. INVESTMENTS

y 2011: To relocate all HCMC operations to new headquarters building (completed in August 2011).

y 2011 - 2015: To complete investment construction of the Ammonia plant and produce 200,000 tonnes/year (Phase 1). To raise production capacity to 450,000 tonnes/year in Phase 2.

y 2012: To upgrade the capacity of the Phu My Packaging plant and to raise capital in the Bac lieu province packaging plant to meet the needs of PVFCCo’s fertilizer and chemicals projects.

y 2010 - 2014: To complete investment construction the 400,000 tonnes/year NPK plant at Phu My in Ba Ria - Vung Tau province.

y 2011 - 2013: To complete construction of the 200,000 tonnes/year Ammonium Nitrate plant in Ba Ria - Vung Tau.

y By 2015: To complete the 350,000 tonne-equivalent fertilizer handling terminal (the capacity of 215,000 tonnes at end of the year 2011).

Over the long term, we will continue implementing the strategic initiatives outlined in our 2011-2015 development strategy and 2011-2025 strategic direction, approved by the 2008 Annual General Meeting and updated in 2011.


The 2012 production and trading plan is built on the basis of fertilizer market forecasts and premises on raw materials prices at the beginning of 2012, of which gas prices are based on a roadmap for the period 2011-2015 passed by the Prime Minister in Document 2732/VPCP-KTN dated 29 April 2011 applied to the production of nitrogen fertilizer.

PLAN OBJECTIVES

1. OUTPUT INDICATORS

No Items Unit 2012 Planned

1 Production Output:

1.1 Urea Phu My Thousand tonnes 800

1.2 Packaging Million bags 38

2 Fertilizer Imports: Thousand tonnes 100

3 Trading Output:

3.1 Urea Phu My Thousand tonnes 850

3.2 Urea Ca Mau Thousand tonnes 560

3.3 NPK Phu My Thousand tonnes 70

3.4 Packaging Million bags 38

3.5 Fertilizer and Chemicals Import/Export and Other Trading

Thousand tonnes 200

2. FUll FINANCIAl TARGETS (CONSOlIDATED)


1 Total revenues VND billion 15,8102 Profit before tax VND billion 2,0003 Profit after tax VND billion 1,7874 Tax payments VND billion 235

3. PARENT COMPANY TARGETS

a/ Financial Plan


1 Charter Capital VND billion 3,8002 Total revenues VND billion 13,3043 Profit before tax VND billion 1,9454 Profit after tax VND billion 1,764

2012 Production and Business Plan 2012 Production and Business Plan

5 Profit after tax/ Charter capital % 46

6 Dividend/Charter Capital Ratio % 257 Tax payments VND billion 181

b/ Investment Plan


1 Total Investments VND billion 3,636a Infrastructure Investment VND billion 706b Plant and Equipment Purchases VND billion 262c Capital Investments VND billion 2,6682 Capital Investment Sources VND billion 3,636a Shareholder equity VND billion 3,340

of which - Charter Capital increased VND billion 0

- Other funds VND billion 3,340b Loans and Other Capital VND billion 296

2012 PRODUCT REVENUE RATIO CHART (PLANNED)

SOLUTION IMPLEMENTATION PLANS

1. PRODUCTION, ENGINEERING AND TECHNOlOGY

- Full compliance with statutes, regulations and procedures to ensure stable and safe operations at the Phu My Fertilizer Plant to produce the highest quality product.

- Apply and closely monitor the consumption of raw materials and chemicals; practice maximum thrift in production.

- Research product diversification. Encourage improvements in production technology and innovation.

- Apply information technology: Complete the production and management software systems: Enterprise Resource Planning software; licensed software, payment technology, construction of an electronic library, safety knowledge, etc.

2. TRADING

- Develop the warehouse system, improve the distribution network and means of transport to proactively ensure trading autonomy and flexibility.

- Actively participate in the fertilizer import-export market, create close relationships with experienced importers to grow market share, contribute to stabilizing and regulating the domestic fertilizer market.

3. INVESTMENT DEVElOPMENT

- Prioritize important projects to improve the efficient use of capital. Select high-level and experienced investment project consultants to negotiate with contractors.

4. FINANCE

- Tightly manage finances and cash-flow controls and increase capital turnover capacity to deliver optimal economic efficiency.

5. ORGANIZATION AND EMPlOYEES

- Stable organizational mechanisms on the parent - subsidiary model.

- Continually improve the material and spiritual lives of employees aimed at encouraging them to be fully engaged in their work.

- Build and institutionalize a distinctive culture for PVFCCo consistent with the Petroleum culture.

- Enhance training aimed at comprehensive improvements in human resources quality to meet the work requirements.

6. HEAlTH, SAFETY AND ENVIRONMENT

- Strive for safety and health for employees, the community and society.

- Absolute compliance with legal regulations governing the environment.

- Regularly inspect and monitor production operations, ensuring waste disposal according to regulations and registration criteria.

- Construct employee protection plans and programs for occupational safety, working conditions, prevention of industrial accidents and diseases for all our employees.

- Institute, monitor and oversee periodical internal audits to maintain management quality, health, safety and the environment.

7. MEDIA MARKETING AND COMMUNITY RElATIONS

- Actively participate in community and social welfare activities to build and promote a positive Corporate image and enhance communication.

- Strengthen the construction of the distribution network and consumer sales, combined with reinforcing the customer care system, effectively guide the use of fertilizers to increase crop productivity and protect the environment.

8. PRACTICE THRIFT AND COMBAT WASTE

- Draw up concrete action plans and regularly inspect efforts to practice thrift and combat waste across the company according to the outlined program.

Other Trading 10%

Other Trading

Urea Phu My 44%

Urea Phu My

Textile Fibre 9%

Textile Fibre

Revenue from financial or other activities 2%

Revenue from financial or other activities

Urea Ca Mau 29%

Urea Ca Mau

NPK Phu My 5%

NPK Phu My

Packaging 1%

Packaging


Golden Governance

Focusing on transparency and enhancing governance capabilities, as well as embedding robust processes in assessing risk, identifying risk exposure and taking pre-emptive actions, we convert risks into opportunities for sustainable development. At the same time, we ensure clarity in investor relations, helping to reinforce the trust from shareholders, customers and the community.


Shareholders’ Information and Corporate Governance

Shareholders’ Information and Corporate Governance

BOARD OF DIRECTORS CHAIRMANSHIP CHANGES

Prime Ministerial Decision 2402/QD-TTg of 29 December 2010 appointed Mr. Nguyen Xuan Thang, Chairman of the PVFCCo Board of Directors, as a member of the Vietnam National Oil and Gas Group Board of Members. Pursuant to this Prime Ministerial Decision, and as recommended by the Vietnam National Oil and Gas Group, the PVFCCo Board of Directors appointed Mr. Bui Minh Tien, Deputy General Director of Vietnam Gas Group, as Chairman of the Board of Directors, replacing Mr. Nguyen Xuan Thang on 05 January 2011.

CHANGE OF PRESIDENT & CEO

There was no change of President & CEO in 2011.

CHANGES TO THE BOARD OF DIRECTORS, BOARD OF MANAGEMENT, SUPERVISORY BOARD AND CHIEF ACCOUNTING OFFICER

On 08 February 2011, the Board of Directors appointed Mr. Cao Hoai Duong, Chief Executive Officer and Member of the Board of Directors, to replace Mr. Pham Dang Nam. At the same time, Mrs. Nguyen Thi Hien, Member of the Board of Directors, was appointed Vice Chairwoman of the Board of Directors effective from 08 February 2011.

Membership appointments to the Board of Directors were approved by the Annual General Shareholders Meeting on 08 April 2011.

On 15 March 2011, the Board of Directors issued a decision to dismiss Mr. Nguyen Duc Thanh, Vice President, and welcomed the appointment of Mr. Hoang Viet Dung, Vice President of Binh Son Refinery Single-member Co ltd as Vice President of PVFCCo.

EXECUTIVE BENEFITS

We apply an executive remuneration scheme in accordance with the law and in harmony with our annual wage and salary packages, commensurate with the competence, performance and work results of each member. Bonus, welfare and other employee policies and Collective labor Agreements are included. Executive bonuses are deducted from profit after tax as decided by the Annual General Shareholders Meeting on Executive Management Remuneration and Administration.

REMUNERATION AND BONUSES FOR MEMBERS OF THE SUPERVISORY BOARD AND THE BOARD OF DIRECTORS

We apply an executive remuneration regime in accordance with the law and in harmony with our annual wage and salary packages, commensurate with the competence and work results of each member. Bonus, welfare and other employee policies and Collective labor Agreements are included.

Non-members of the Board of Directors or Supervisory Board are offered salaries according to their role.

Executive bonuses are deducted from profit after tax as decided by the Annual General Shareholders Meeting on Executive Management Remuneration and Administration.

CHANGES TO SHAREHOLDINGS OF THE BOARD OF DIRECTORS, BOARD OF MANAGEMENT, SUPERVISORY BOARD AND CHIEF ACCOUNTANT

NO Full Name Position Proxy Ownership Personal Ownership

Board of Directors

1. Bui Minh Tien Chairman of the BOD 77,404,253 5,000

2. Nguyen Thi Hien Vice Chairwoman of the BOD 55,100,000 5,500

3. Cao Hoai Duong Member of the BOD 55,100,000 2,000

4. Nguyen Duc Hoa Member of the BOD 45,600,000 7,700

5. Bui Quang Hung Member of the BOD 3,256,680 4,000

Board of Management

1. Cao Hoai Duong President & CEO 55,100,000 2,000

2. le Van Quoc Viet Vice President - -

3. Tu Cuong Vice President - -

4. Chu Thi Hien Vice President - -

5. Nguyen Van Tong Vice President - -

6. Nguyen Hong Vinh Vice President - -

7. Hoang Viet Dung Vice President - -

Supervisory Board

1. Tran Thi Phuong Thao Chief Supervisor - -

2. Nguyen Van Hoa Supervisory Board Member - -

3. le Vinh Van Supervisory Board Member - -

Chief Accountant

1. Huynh Kim Nhan Chief Accountant - -

(*) Notes- The numbers of State-owned DPM shares which the Members of the Board of Directors represent as proxies are based on the Decisions of the Vietnam National Oil and Gas Group.- The number of DPM shares which Mr. Bui Quang Hung - Board of Directors Member represents on behalf of Petrovietnam Finance Corporation (PVFC) are based on transaction reports from PVFC throughout the year and calculated as at 31 December 2011.


SHARE TRADING BY MEMBERS OF THE BOARD OF DIRECTORS/BOARD OF MANAGEMENT/ SUPERVISORY BOARD/CHIEF ACCOUNTING OFFICER, MAJOR SHAREHOLDERS AND RELATED PERSONS

- On 21 February 2011, Mr. Cao Hoai Duong, Member of the Board of Directors and President & CEO, registered his intention to purchase 2,000 shares and on 04 March 2011 reported the purchase of 2,000 shares;

- On 04 April 2011, Mr. Bui Quang Hung, Chairman of the Board of Directors, registered his intention to purchase 5,000 shares and on 17 May 2011 reported the purchase of 5,000 shares;

- On 30 May 2011, PVFCCo registered its intention to purchase 500,000 treasury bonds and on 06 September 2011, announced the purchase of 3,540 treasury bonds, bringing the number of treasury bonds held to 2,355,800;

- Petrovietnam Finance Corporation, represented on the Board of Directors by Mr. Bui Quang Hung, announced the following DPM share transactions in 2011:

+ 21 December 2010: Announced holdings of 6.189.460 shares and registered its intention to sell 2,000,000 shares

+ 20 January 2011: Announced the sale of 2,000,000 shares

+ 29 January 2011: Registered its intention to purchase 4,000,000 shares and sell 1,678,160 shares .

+ 09 April 2011: Announced it had purchased 0 shares and had sold 269,230 shares.

+ 26 May 2011: Registered its intention to purchase 500,000 shares and sell 1,000,000 shares.

+ 29 July 2011: Announced it had purchased 0 shares and had sold 1,000 shares.

+ 09 September 2011: Registered its intention to sell 1,000,000 shares.

+ 11 November 2011: Announced the sale of 230,280 shares.

+ 11 November 2011: Registered its intention to purchase 1,000,000 shares and sell 1,000,000 shares.

+ 10 January 2012: Announced the purchase of 0 shares and the sale of 432,270 shares, with remaining holdings being 3,256,680 shares.

Shareholders’ Information and Corporate Governance (continued)

Shareholders’ Information and Corporate Governance (continued)

- 2011 shareholder announcements from Deutsche Bank AG london:

+ 09 February 2011: Announced its holdings of 18,812,430 shares and the purchase of 147,060 shares, increasing the holding to 18,959,490 shares or 5.02% of total outstanding shares, thereby becoming a major shareholder.

+ 09 February 2011: Registered its intention to sell 6,000,000 shares and purchase 6,000,000 shares.

+ 09 March 2011: Announced a change of ownership with 18,910,270 shares still being held.

+ 17 March 2011: Announced a change of ownership with 18,769,790 shares held being 4.97% of total outstanding shares, thereby no longer being a major shareholder.

+ 18 April 2011: Announced the results of the transactions registered on 09 February 2011, being a purchase of 454,240 shares and sale of 1,218,070 shares, with 18,195,660 shares being held.

+ 20 June 2011: Announced a change of ownership with 18,911,350 shares held, being 5.01% of total outstanding shares, thereby becoming a major shareholder.

+ 20 June 2011: Registered its intention to purchase 5,000,000 shares and sell 5,000,000 shares.

+ 19 August 2011: Announced the purchase of 369,540 shares and the sale of 882,220 shares, with 18,398,670 shares held being 4.87% of total outstanding shares, thereby no longer being a major shareholder.

+ 27 September 2011: Announced the change of ownership with 18,920,080 shares, or 5.00% of total outstanding shares, thereby becoming a major shareholder. Subsequently selling 3,675,100 shares and purchasing 1,977,390 shares, for a total shareholding of 17,222,370 shares or 4.56% of total shares outstanding and thereby no longer being a major shareholder.

SHAREHOLDER STATISTICS

According to the share register, held by the Vietnam Securities Depository Center, as of 21 March 2012, a total of 377,554,320 shares are outstanding, owned by 8,635 shareholders.

DOMESTIC SHAREHOLDERS

DOMESTIC SHAREHOlDING STRUCTURE

Shareholder Number Number of shares Percentage of total outstanding shares

Institutional 115 262,671,502 69.57

Individual 7,862 19,477,424 5.16

Total 7,977 282,148,926 74.73

MAJOR DOMESTIC SHAREHOlDER INFORMATION

Shareholder name and address Main scope of business Number of shares held

Percentage of total outstanding shares

PETROVIETNAM GROUP

Address: 18 lang Ha, Ba Dinh District, Hanoi.

Government-based business conglomerate owned by Vietnam government

Website: www.pvn.vn

- Exploring, surveying, exploiting, processing, storing and transporting oil. Services related to oil industry locally & oversea. Trading commodities & equipment in oil industry, distributing products from oil & petrochemical.

- Investing in production & trading of electricity, biochemical energy, recycle energy.

- Supplementary businesses related to oil & energy industry.

233,204,253 61.77

FOREIGN SHAREHOLDERS

FOREIGN SHAREHOlDING STRUCTURE

Shareholder Number Number of shares Percentage of total outstanding shares

Institutional 134 94,101,886 24.92

Individual 524 1,303,508 0.35

Total 658 95,405,394 25.27

MAJOR FOREIGN SHAREHOlDER INFORMATION: Nil


Risk Management Risk Management

For management risks, PVFCCo has restructured the management and administration systems. The key aspects of this were the construction of operating mechanisms, and enhanced inspection, oversight and internal control capabilities targeted at establishing and maintaining an effective and efficient internal control system. In particular, we successfully implemented and deployed an effective, international-standard, enterprise resource planning (ERP) system with a solution from Oracle (a global solution applicable for large-scale enterprises).

RISK MANAGEMENT TO INTERNATIONAL STANDARDS - A STRATEGIC DIRECTION

For our development strategy to 2015 and orientation to 2025, PVFCCo recognizes that we will face new internal and external challenges in hitting our production and business targets. Therefore, in parallel with maintaining stable and effective production and business operations, PVFCCo constructed a risk mitigation structure alongside an internal control capability based on international practices and applicable to the company’s operations.

All of the above were executed in a professional manner, according to a specific plan and in cooperation with a prestigious global consultancy partner and world leader in corporate governance, internal control, auditing, information systems, etc.

In 2011, the Board of Directors determined to establish an Internal Audit Committee - a functional unit of the Board of Directors and independent of the company’s management structure.

In August 2011, PVFCCo partnered with KPMG - a leading global consultancy firm to support the establishment of internal audit functions and systems in line with international best practices. Hence, the company has established an internal audit function, with a direct line of reporting to the Board of Directors. The “internal risk-based auditing” method is used.

RISK MANAGEMENT - CORE ISSUES

Besides continuing to maintain risk management structures to identify, analyze, evaluate and mitigate risks, in 2011 KPMG and PVFCCo co-hosted a risk assessment workshop to define the 10 to 15 greatest major risk to the company. The Members of the company’s Boards of Directors and Management identified and evaluated risks with the intention of achieving a “general overview of major risks”.

Through this workshop, the Boards agreed the 12 major risks to the company are:

R1 Project management risks

R2 Restructuring risks

R3 Plant operating risks (technical or safety)

R4 labor safety and welfare management risks

R5 Price fluctuations due to boarder trading with China

R6 Third party/supplier risks

R7 Strategic business plan failure

R8 Forecasting failures

R9 Risks relating to key personnel

R10 Technology and innovation

R11 New product launch failures

R12 Customer service quality

Based on the 12 major risks, PVFCCo drew up a standard control plan to be executed by the internal control function with the aim of re-assessing the company’s risk management and internal control system. With a world-leading internal audit methodology, we will identify and take preventative measures which minimize risks in a timely manner to achieve our business targets and add value for shareholders.

The professionalization of governance, strengthening of risk management and internal control capabilities, and other tasks while at the same time maintaining stable and efficient production operations are priorities for the Board of Directors and the Board of Management in the face of the future domestic and global economic situation.

PVFCCo has been progressively improving risk management capabilities in line with business production and international practices. We are keenly aware we will inevitably face future risks in achieving our business goals. This is unavoidable, whether the influence is positive (better) or negative (worse), at different levels: strategic risks and operational risks, comprising: compliance, execution, human resources, finance, technology, etc.

RISK MANAGEMENT - INTEGRATED wITH STRATEGY DEVELOPMENT AND PERFORMANCE MANAGEMENT

Since establishment and assuming management of the Phu My Fertilizer Plant, PVFCCo has been constantly strengthening the risk management structure. We have progressively enhanced our risk management capabilities across all business processes in addition to taking preemptive measures and mitigating risks to corporate goals. Such measures include: successful ISO 9001:2000 quality management standard certification; certification to OHSAS 18001 health and safety management standard; and ISO:14001 environmental management standard. In addition, the four subsidiaries also received ISO:2008 certification in 2011. Aside from management systems which meet international standards, PVFCCo has progressively constructed and completed a system of operating procedures for the production operations.

For the financial risks, the company has focused on risk-sharing solutions through cooperation with insurers in a number of areas: fire insurance, building, plant and equipment insurance, goods and warehousing insurance, personal liability insurance, etc.


Health, safety and environment are extremely important factors for PVFCCo in the production process. The most relevant dangers in operating the Phu My Fertilizer Plant are fire, chemical leaks or spills, poisonous gases, etc. The plant is located in the Phu My Industrial Zone in the Thi Vai river basin. This area has a high concentration of industrial zones, across many manufacturing industries, which must comply with stringent construction and operating regulations concerning health, safety and the environment. Together with our state-of-the-art production equipment and technology, policies, processes, standards, and health, safety and environment equipment, PVFCCo has paid particular attention to these factors for many years.

Health, Safety and Environment Health, Safety and Environment

1. MANAGEMENT AND PERSONNEL ORGANIzATION

Given their particular nature and importance, the Health - Safety - Environment (HSE) management system for the company, the Phu My Fertilizer Plant has been consolidated and synchronized; from PVFCCo to each member unit, and from the highest levels of management to the responsible experts and specialists. The company has a labor Protection Council and an Emergency Rescue Steering Committee with a network of 170 health and safety officers.

2. CONSTRUCTION AND MAINTENANCE OF QUALITY MANAGEMENT SYSTEMS - HEALTH, SAFETY AND ENVIRONMENT

The business production operations of the company and the Phu My Fertilizer Plant apply integrated quality management systems for health, safety and environment to the ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 standards. These systems were certified by the evaluation and certification organization DNV in June 2010. The company and the Phu My Fertilizer Plant continued to improve the system, with the health, safety and environment objectives being achieved in 2011.

3. HSE POLICY AND CORPORATE COMPLIANCE

- 100% of the company’s workforce at the Phu My Fertilizer Plant, warehouses, ports and construction sites are outfitted with appropriate personal protection. PVFCCo conducted safety training for 4,147 employees, visitors and contractors in 2011. Training objectives were to raise employee awareness of workplace safety and risks, thereby preventing safety incidents and accidents.

- Investigate and undertake corrective actions using the experiences drawn from 27 incidents, 15 minor mishaps and 01 workplace accident on a public holiday (2011) etc.

- Exercise emergency rescue procedures at least once per year/unit with the participation of many organizations (Fire Brigades, Medical agencies, local authorities, etc.).

- Continue to maintain and improve the effectiveness of the Safety Training Observation Program (STOP) aimed at maximizing the program to prevent accidents at the Phu My Fertilizer Plant. PVFCCo is also assessing the expansion of the STOP program to include subsidiaries.

4. EMPLOYEE wELFARE

Establish and maintain a medical room at the Phu My Fertilizer Plant, equipped with first-aid supplies, and organize a Disease Prevention Office at PVFCCo and subsidiaries. Arrange annual health check-ups for 100% of employees.

5. ENVIRONMENT MANAGEMENT wORKPLACE HYGIENE

- Ensure production, business operations and investment development conform to stringent environmental regulations: waste water, emissions and ambient air quality indicators for 2011 achieved the standards required by law.

- The management and disposal of waste is regularly and rigorously checked and monitored, with a removal and treatment contract in place.

- Ensure the work environment is clean, green and beautiful, with abundant trees in the open spaces.

- Continue to maintain the 5S pilot program at the Phu My Fertilizer Plant, the Dam Phu My Packaging Company and the Tra Noc - Can Tho warehouse. Concurrently evaluate and review the implementation of 5S with periodic HSE inspections at trialing units to serve as the basis for expanding the 5S program throughout the Phu My Fertilizer Plant.

6. BUILDING A HEALTH, SAFETY AND ENVIRONMENT CULTURE

Regularly organize and conduct activities in support of National Fire Prevention, Safety and labor Hygiene Week, World Environment Day, Clean Up the World Campaign, Earth Hour, Corporate hygiene and safety contest and a Design Contest for a Clean and Green PVFCCo aimed at reinforcing production safety combined with environmental preservation at factories, warehouses and ports.

Health, safety and environment work was one of PVFCCo’s stand-out highlights and proud achievement in the past year. This work has contributed significantly to the Phu My Fertilizer Plant running safely and continuously at full design capacity for over 8 years.


Sustainability Report

Springing from that, we will continue taking action to achieve sustainable development goals and contribute to the success of sustainable development strategies for Vietnam. The following are some specific actions PVFCCo has taken in recent years:

1. Develop, promulgate and adhere to regulations, procedures and protocols in production and business activities. Apply and maintain effective ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 Health, Safety and Environment quality management standards,

2. We use only the most advanced production technology to use raw materials most efficiently, especially natural gas, at the same time minimizing CO2 emissions.

Sustainability report

3. The manufacturing plant is well-ventilated to ensure adequate natural light and air. This minimizes energy consumption for lighting and air-conditioning while ensuring good working conditions for employees.

4. Since 2010, a 60,000 tonnes/year CO2 recovery system has been in place. The system not only reduces CO2 emissions but has also increased production capacity from 740 to 800 thousand tonnes/year.

5. With the aim of assisting farmers to conserve fertilizer while increasing yields, PVFCCo, local authorities and scientists hold regular seminars, provide technical guidance on cultivation, and organize experimental and test plots.

6. To manage, allocate and use savings effectively, we implemented information technology applications, software support and advanced management programs for operations and business management. These include electronic document handling, construction and implementation of enterprise resource planning software - ERP, STOP, 5S, APC, System 1, RBI, etc.

7. Besides our effective development and environmental protection, we are always conscious of fulfilling our responsibilities to our employees and society. PVFCCo invested approximately VND 140 billion in social welfare activities in 2011.

As a company engaged in the production and trading of fertilizer and chemicals, we are closely connected to farmers and agriculture. We view the concept of “sustainable development” as a responsibility of business, and the entire society, to achieve the targets of: (1) Effective economic development; (2) Developing social harmony and raising living standards; (3) Improving the environment to guarantee long-term development for today’s generation and generations to come. From the very beginning, the company’s business philosophy to “Develop the business hand-in-hand with environmental protection and social responsibility” has seen generations of staff develop into an asset, a beauty of our corporate culture.


Investor Relations Investor Relations

KEY IR ACTIVITIES OF 2011

- Establishing IR working group directly under Board of Directors.

- Investor interviews and a survey to assess IR activities. Through this survey PVFCCo received feedback from investors and adjusted IR activities to reflect and satisfy their wishes.

- Publication of a quarterly Investor Newsletter (in Vietnamese and English) which provides updated information on production and trading activities for the quarter, information on projects, analysis from securities companies, etc. The Investor Newsletter is deeply appreciated, especially by foreign investors, as an official English language information channel about the company’s operations.

- Short training courses on Investor Relations to provide knowledge on professional IR activities. Training course participants included representatives from the Executive and management levels of associated units and representatives from subsidiaries.

- Improving the Investor Relations section of our website at: www.dpm.vn.

- Enhancing cooperation with finance and investment information providers to regularly update information on the company’s activities and receive feedback from investors.

- Organizing over 50 meetings with approximately 80 investors and securities companies to introduce our operations and the Vietnamese fertilizer market. These investors included names such as Dragon Capital, VinaCapital, Goldman Sachs, HSBC, Daiwa, SSI Securities Corporation, Bao Viet, HSC, Ban Viet and many other international funds. In addition, representatives of the Corporation’s management also participated in workshops held by investment funds to directly answer questions from foreign investors. Examples include the JP Morgan conference in May 2011; the investment conferences convened by Dragon Capital and ClSA (Credit lyonnais Securities Asia) in September 2011; organizing two investor meetings in March and October 2011; and especially the successful 2011 Annual General Shareholders Meeting held on 08 April 2011.

- Arranging field trips to the Phu My Fertilizer Plant in Ba Ria-Vung Tau province for over 20 representatives from investment funds and securities companies to study the plant’s technology and operations. We also organized other activities such as business trips for investors to visit and attend the inauguration of the new headquarters at 43 Mac Dinh Chi in District 1, HCMC and the commemoration of the 5 millionth tonne of urea produced, etc.

- The PVFCCo’s 2010 Annual Report (AR) was awarded the Excellent AR Award by HOSE and a Silver Award

in the Agricultural Sector AR category in a competition organized by the league of American Communications Professionals (lACP), marking the progress we have made on information disclosure.

2012 IR Plans

In 2012, PVFCCo will further enhance professional IR activities by executing an IR plan comprised of activities such as:

y Meeting investors and major shareholders; regularly publishing business results and responding to related questions.

y Continuing publication of the Investor Newsletter and improving article quality to provide timely, high quality information.

y Participating in investment conferences in international financial centers such as Hong Kong, Singapore, etc.

y Continuing to conduct training courses to improve professionalism for the Management and IR Group.Conducting roadshows to reach out to investors and introduce the company’s investment projects.

y Continuing to consolidate the IR unit and its role as a link ensuring seamless, accurate, timely, two-way communication between PVFCCo and investors.

Since PVFCCo became a public company and listed on the stock exchange (Code: DPM), the Management has recognized the need to prioritize and spend adequate resources on Investor Relations (IR). We have constructed a scheme to enhance investor relations together with specific plans for each year. IR activities overall made quality progress in 2011, receiving positive feedback and support from investors.


Interview: Investor’s Perspective about DPM

1. As a seasoned investor, how do you rate the potential for DPM’s shares in the future?

Mr. Vu Huu Dien:

DPM is one of those stocks on the market with a large market capitalization, and stable and efficient operations. It is rated highly because of its sound fundamentals like a strong brand name, high quality products, an extensive distribution system and a large and stable market share. In terms of company value, DPM is an attractive stock because the P/E and P/B ratios are attractive, dividends are generous and stable, the ROE is appealing and cash flows are always hefty. As a pioneer with a strong and stable brand name in the fertilizer sector, added to its intrinsic advantages, we believe DPM will continue to be an industry leader in the fertilizer and petrochemicals sector. This and the generous dividends will attract investor attention, especially large investment institutions.

DPM’s potential and attractiveness in coming years will depend on future investment and development strategies to reconcile relationships with the parent PVN and associated companies (like PV Gas, which determines gas prices) as well as harmonious benefits for minor shareholders. Product diversification through investments into highly profitable fertilizer and chemicals fields such as NPK or Ammonia can help DPM maintain a good and effective growth rate into the future. However, if DPM uses its substantial cash reserves to buy back Dam Ca Mau (DCM) and this is not as effective as desired or they cannot control gas prices, this will cause concern for investors and be a hurdle for DPM shares.

Interview: Investor’s Perspective about DPM

2. The Vietnamese fertilizer market is undergoing significant change with the transition from imports to exports. Competition will become much fiercer and many investors have commented that DPM’s “honeymoon” is over. How do you view this and how will it affect DC’s strategic investment in DPM in the future?

Mr. Vu Huu Dien:

In market economies, oversupply also has certain positive advantages. Companies in the fertilizer sector will have to compete more aggressively on price and product quality. This will be better for the agriculture sector in general, and especially for farmers. With its sound fundamentals and competitive advantages (low production costs from sound management, full plant depreciation, strong financial potential, etc.) we believe DPM is still capable of being the most competitive player in the sector and will continue its dominant position.

With approximately 40% fertilizer market share, a large domestic market (with capacity to expand into laos, Cambodia and neighboring regional countries) and with no significant competitors, DPM will likely continue to grow with an expanding market share and the best is yet to come. However, as I mentioned, there are still some risk factors relating to associated companies (PVN, DCM, PV Gas) which may reduce the attractiveness of DPM shares. We will continue to monitor this and make investment decisions according to the circumstances.

3. What DPM information or issues are investors especially concerned about? Why?

Mr. Vu Huu Dien:

We pay particular attention to corporate governance, investor relations, dividend policy and especially transactions with associated companies, such as the DCM buy back proposal; DCM’s distribution and increased gas prices from PV Gas. If the information and major decisions relating to these issues are not economically effective and beneficial for shareholders, that would fundamentally change the attractiveness of DPM shares.

As an investment organization, we are very interested in investment, production and trading plans which the DPM Management sets out for next year. In recent years, PVFCCo has far exceeded planned revenues and profits set down at the beginning of the year. This shows the

plans PVFCCo puts forth are extremely prudent and not reflective of the true situation, either that or the established business plan is severely limited. To reinforce investor confidence, PVFCCo should prepare market analysis in a more scientific way to set out realistic plans and clearly state the assumptions and projections behind the plans

4. How is DPM’s current disclosure regime viewed by investors?

Mr. Vu Huu Dien:

In recent years, DPM has very actively updated their business and production results. We also appreciate them organizing quarterly meetings with investors to provide information and address investor concerns. DPM is one of the enterprises implementing good investor relations. We expect PVFCCo to continue to do better with information transparency, especially information relating to remuneration for the Board of Directors, Board of Management, contracts and transactions with associated companies. To enhance investor understanding, we also want them to provide more information on supply and demand and international fertilizer pricing. DPM could regularly update us on international fertilizer market fluctuations and forecasts, for example fertilizer import-export policies of major global suppliers such as China, etc.

5. As a DPM shareholder, what are the tasks you hope DPM will prioritize for 2012?

Mr. Vu Huu Dien:

In 2012, we hope the DPM Board of Management will categorically resolve the existing hindrances to their investment development orientation from the past, including internal fertilizer and chemicals investment projects like NPK, Ammonia, etc. or DCM buy back. We also expect DPM to boost growth investments and rapidly bring the NPK plant into operation to deliver efficiencies for PVFCCo. Besides that, to ensure stable future operations for DPM, as a major gas consumer, we expect the Management to negotiate with PV Gas/ PVN to put in place a long-term purchasing contract with stable and appropriate pricing to ensure good profitability levels and sustainable development for DPM.

Thank you!

Dragon Capital (DC) is a large investment organization with years of experience in the Vietnamese Stock Market. Dragon Capital is also one of the key shareholders of DPM with a substantial number of shares held since 2007. Mr. Vu Huu Dien, Director of Portfolio Management at Dragon Capital, shares an investor’s perspective about DPM.

“The best is yet to come”


Golden reacH

One of the key competitive advantages of PVFCCo is the strength of our production and distribution systems, encompassing our stable operations and high productivity at the manufacturing plants, as well as our wide network of subsidiaries, branches, and agents across all regions. This extensive system not only helps our products and services reach the end-users, but is constantly expanding our outreach and development footprint to new horizons.


Associated Companies

72

IN 2011, PVFCCo OwNS 6 SUBSIDIARIES AND 6 ASSOCIATED COMPANIES

COMPANIES WITH MORE THAN 50% SHARE HOlDINGS

No Company Scope of business Charter Capital

(VND million)

Percentage of shares

held

1 North Petrovietnam Fertilizer and Chemicals Joint Stock Company (PVFCCo - North)

Distributing fertilizer, chemicals

120,000 75

2 Central Petrovietnam Fertilizer and Chemicals Joint-Stock Company (PVFCCo - Central)


100,000 75

3 South East Petrovietnam Fertilizer and Chemicals Joint Stock Company (PVFCCo - SE)


125,000 75

4 South West Petrovietnam Fertilizer and Chemicals Joint Stock Company (PVFCCo - SW)


170,000 75

5 Dam Phu My Packaging Joint Stock Company(PVFCCo - Packaging)

Producing & Trading packaging

42,000 50.976

6 Petrovietnam Southern Building and Development Joint Stock Company (PVFCCo - SBD)

Management, housing development and construction services

72,248 81.38

COMPANIES WITH lESS THAN 50% SHARE HOlDINGS

No Company Type Charter Capital

(VND million)

Percentage of shares

held

1 Drilling Mud Corporation Joint Stock Company (DMC) JSC 350,000 8.062 Petrovietnam Petrochemicals and Textile Fiber Joint Stock Company (PV TEX) JSC 1,996,000 253 Petrovietnam Information Technology, Telecom and Automation JSC (PAIC) JSC 42,353 8.54 Petrovietnam Sport and Culture Joint Stock Company (PSCC) JSC 10,000 105 Petrovietnam Urban Development JSC (PVC Mekong) JSC 100,000 206. Petrovietnam Packaging Joint Stock Company (PSP) JSC 32,650 14.5

FINANCIAl STATUS OF RElATED COMPANIES IN 2011

No Company Charter Capital (VND billion)

Revenue (VND billion)

Profit before tax (VND billion)

Return on Capital (%)

Return on Equity(%)

I. Subsidiaries 1 PVFCCo - North 120 1,520.112 30.272 21 192 PVFCCo - Central 100 2,203.850 41.961 42 363 PVFCCo - SE 125 2,455.895 44.371 35 324 PVFCCo - SW 170 2,666.126 55.422 33 296 PVFCCo - Packaging 42 116.450 8.877 19 157 PVFCCo - SBD 72.248 133.180 14.236 20 17

TOTAL 629.248 9,095.613 195.139

Associated Companies

73

No Company Charter Capital (VND billion)

Revenue (VND billion)

Profit before tax (VND billion)

Return on Capital (%)

Return on Equity(%)

II. Associated companies1 DMC 350 2,748.749 160.008 32 542 PV TEX (*) 1,996 50.123 33.202 1.7 1.93 PAIC 42.353 106.525 4.37 11.2 34 PSCC 10 32.425 0.345 3.5 (3.5)5 PVC - Mekong 100 723.486 33.057 33 276 PSP 32.65 2.989 (4.726) - -

TOTAL 2,524.65 3,664.297 226.623

(*) The PV TEX plant is currently under commissioning to prepare for project hand-over

FINANCIAl INDICATORS

1. Subsidiaries

No Company ROA ROE 1 PVFCCo - North 12.9% 14.5%2 PVFCCo - Cetral 14.3% 26.8%3 PVFCCo - SE 16.8% 23.6%4 PVFCCo - SW 15.2% 21.4%5 PVFCCo - Packaging 10.6% 15.3%6 PVFCCo - SBD 7.8% 12.5%

Average 12.9% 19%

2. Associated companies

No Company ROA ROE

1 Drilling Mud Corporation Joint Stock Company (DMC) 4.4% 11.9%2 Petrovietnam Information Technology, Telecom and Automation JSC (PAIC) 3.8% 8.0%3 Petrovietnam Urban Development JSC (PVC - Mekong) 3.5% 20.3%4 Petrovietnam Sport and Culture Joint Stock Company (PSCC) 1.4% 2.5%5 Petrovietnam Petrochemicals and Textile Fiber Joint Stock Company (PV TEX) 0.4% 1.4%6 Petrovietnam Packaging Joint Stock Company (PSP) - -

Average 2.3% 7.4%

SUBSIDIARY RESTRUCTURING PLANAs of January 2011, PVFCCo converted four of its subsidiaries into joint stock companies and increased their charter capital. PVFCCo retains a 75% stake in each of these companies with the remaining shareholding going to employees, agents and strategic partners in fertilizer and chemicals trading and distribution. PVFCCo also established branches in Hochiminh City and Cambodia.

The aforesaid subsidiaries developed their equitization plan in 2011. However, the planned public listings were held in abeyance due to the stock market downturn. As a result, these subsidiary companies shifted their focus on consolidating management systems and corporate governance, constructed development strategies and focused on their core businesses.

Similarly, the other subsidiary companies in information technology, telecommunications and petrochemical automation also deferred their planned public listing, hence PVFCCo has yet to divest its capital from these companies.

In line with the strategy to expand product range in the petrochemical sector, PVFCCo increased its stake in PV TEX from 15% to 25% in 2011, bringing total investment to VND 490 billion.

likewise, PVFCCo will contribute an additional VND 80 billion corresponding to its 20% ownership of PVC Mekong to respond to their expected increase in charter capital from VND 100 billion to VND 500 billion.


Distribution Network

Subsidiaries Branches Tier -1 Agents

Tier - 2 Agents

PVFCCo - North 2 45 545

PVFCCo - Central 2 16 813

PVFCCo - SE 6 25 760

PVFCCo - SW 2 24 804

Total 12 110 2,922

DISTRIBUTION - VITAL FOR FERTILIzER TRADING

In the past the domestic Vietnamese fertilizer trading market had commonalities. With imports being the primary source of fertilizer supply, the goods arrived at ports or border gates across the country and were traded through multiple hands before finally reaching the hands of the farmers and contributing to agricultural production. This resulted in price volatility for imported fertilizer and overlapping, multi-tiered distribution networks. These negatively impacted agricultural production as Vietnam could not actively regulate and stabilize the market and farmers were severely disadvantaged.

At conferences called by the Ministry of Agriculture and Rural Development and Vietnam National Oil and Gas Group, in Nam Dinh on 18 February and HCMC on 23 April 2011, attendees discussed fertilizer market stabilization and distribution efficiency improvements for Urea Phu My. The conferences recommended the Government address market stabilization issues of:

- Regulating the balance between supply and demand.

- Accessibility and availability of appropriate fertilizers wherever and whenever needed.

- Fertilizer costs pushed higher by continuing overlaps and poor control of the supply network.

- Sufficient fertilizer reserves being immediately available to counter price fluctuations in key consumption areas.

Therefore, aside from supply-side stimulation, organizing a distribution system compatible with consumption is of utmost importance to regulating the supply and demand of fertilizer on the domestic market.

DISTRIBUTION NETwORK STRUCTURE AND OPERATIONS

One of the important achievements in PVFCCo’s production and trading activities in past years has been the construction of a nationwide distribution network. The company’s domestic distribution network was founded on four core subsidiaries in the key market regions. These subsidiaries have continued to organize, construct and develop the breadth and depth of the nationwide distribution network, achieving the following structure and size:

Distribution Network

To support stable supply through the distribution network, the company has been organizing and constructing a nationwide transhipment system to serve the key markets. The transhipment warehouses are located in or near major seaports for convenient transportation of the large volumes associated with direct delivery to terminal depots and agents nationwide. The company’s existing warehouse storage capacity is over 215,000 tonnes, ensuring stable and timely distribution to each market, limiting speculation and price gouging, assisting State efforts to regulate and stabilize the market.

With the opening of a Cambodian branch in 2011, PVFCCo made its first official direct sales in Cambodia. This branch not only opens a new export avenue but also serves as the foundation for establishing a distribution network for overseas markets.

The greatest success in the construction and development of the company’s distribution network has been the active, flexible guaranteeing of stable, timely fertilizer supply for domestic agricultural production. This has gradually reduced the dependence on imports and limited speculative price increases, contributing to market stability through the company’s “Dam Phu My” brand - trusted as a high quality product.

In the recent past PVFCCo’s production and trading operations have achieved some important results due to the dynamic, creative and flexible construction, development and management of the distribution network. However, in future years, especially after 2012, many significant challenges will appear on the market. PVFCCo must prepare for these now to be able to tackle the changes at the next level of competition and satisfy the needs of increasingly demanding consumers. Furthermore, our general objective is to become the leading domestic and regional producer and distributor of fertilizer and chemicals through the core values of “Acceleration - Optimization - Sustainability - Humanitarianism”. Therefore the construction of effective distribution channels ensure the following: flexibility to operate according to market forces; Reduced brokering and costs to achieve higher efficiencies - a very important long-term strategic objective for company.

PVFCCO DISTRIBUTION NETwORK

: Kho trung chuyển

: Chi nhánh và Đại lý cấp 1

: Nhà máy Đạm Phú Mỹ

: Nhà máy Đạm Cà Mau

: Transit Warehouse

: Branches and Tier-1 Agents

: Phu My Fertilizer Plant

: Ca Mau Fertilizer Plant


Golden Heart

Throughout our development process, PVFCCo has consistently focused on CSR activities, particularly on community support for farmers. That brings to life the compassionate brand image of PVFCCo and underlines our ethos of being “responsible & sharing”.


Social Responsibility and Community-related Activities

Not only successful in production and business in 2011, PVFCCo marked a year of close connection with the community, especially farmers and the poor. PVFCCo’s social responsibility activities not only provided humanitarian relief but were also aimed to long-term investment activities closely linked to, and conducted in line with, general Party policy, especially the Rural Triumvirate policy. PVFCCo’s social welfare activities have received decent recognition from the community. In 2011, PVFCCo was chosen in the Top 10 socially responsible enterprises - Vietnam Gold Star Award.

PVFCCo does not act alone in our social welfare activities, but always in close coordination with our subsidiaries, agents and outlets in the distribution network, organizations and localities. In this, PVFCCo’s role is to mobilize individuals and social organizations to get involved. We mobilize material and the greater emotional resources of society to join with us in community welfare programs. PVFCCo’s emergency relief packages include not only vital needs, but also essential livelihood subsistence items (boats, nets, agricultural tools, etc.) to assist the people living in difficulties.

In 2011, PVFCCo undertook a diverse range of social welfare programs across the country at a total value of approximately VND 140 billion. The primary recipients were farmers - the customers who use our products. A number of typical examples are: construction of charity houses, community healthcare and education works; support program for flood victims in the Central and Southwestern regions; a lunar New Year program for the poor, the PVFCCo scholarship program, and agricultural technical support programs, weather information, luong Dinh Cua Prize for rural youth, etc. Along with PVFCCo’s socially responsible activities in the community, we also focused internally by ensuring employees have the best working conditions, nutritious meals, a support program to deal with serious illnesses and difficult family circumstances, etc.

Conducting community and social welfare activities is aligned with our core value of “Responsible & Sharing”. The PVFCCo social welfare programs are a humane brand image and form a close and emotional bond between PVFCCo and the farming community - the customers who directly use our products.

Social Responsibility and Community-related Activities

THE NUMBERS SPEAK FOR THEMSELVES

1. Top 10 socially responsible enterprise - Vietnam Gold Star Award

2. Almost 3,500 charity houses constructed in 17 provinces nationwide

3. 24 community welfare projects (schools, clinics, community programs, etc.) worth a total VND 100 billion

4. 635 scholarships, worth almost VND 3.7 billion, for students to 20 universities and colleges nationwide

5. 10,000 dike maintenance kits for An Giang and Dong Thap provinces during the Mekong Delta flood season

6. 16,000 relief packages for the poor severely affected by natural disasters, and gifts for the poor to celebrate Lunar New Year

7. VND 200 million donated to 2 Phu My Fertilizer Plant workers encountering extreme difficulties and serious illness


Feature Story:TET for the Poor

Feature Story:TET for the Poor

For all Vietnamese people, TET or the lunar New Year is a sincere and sacred occasion. A time to remember one’s ancestors; to be re-united with family; and a time of joyful and happy moments. Wishing to make that joy more warm and complete, since 2008 PVFCCo has organized lunar New Year programs for the Poor. Our aim is to support our needy compatriots, government family policy, awardees, agent orange victims, and their families, to overcome hardships and celebrate the lunar New Year more happily and heartily. Over the past four years, in coordination with local authorities and the Red Cross, PVFCCo has donated over 5,000 gifts worth almost VND 3 billion to disadvantaged people across the country.

In this Year of the Dragon, as the country faces tough economic times, many families have not been able to prepare for the New Year. Responding to calls from the Party and the Government, and as one of our social responsibilities to the loyal farmers who trust our Urea Phu My and NPK Phu My, the company implemented the largest “lunar New Year with the Poor” program yet. We delivered almost 7,700 donations worth more than VND 3.7 billion.

Our 2012 Year of the Dragon activities commenced in lao Chai, Mu Cang Chai District, Yen Bai province - one of the poorest in the nation - and concluded on 16 January 2012 (the day of the Kitchen Gods) in Hoa Binh hamlet, Vu Thu District in Thai Binh province - famed for its revolutionary traditions. The program visited over 66 hamlets in 33 provinces across the country. Touching stories were heard wherever we visited.

The support of local authorities and organizations was warm-hearted; from choosing gift recipients to coordinating the best locations, times and personnel. In many locations, late the night before and despite the inclement weather, the management themselves were still on duty. They personally supervised the gifts, re-checking the lists and the program. United in offering meaningful opportunities to the disadvantaged, next day they rose early to visit the hamlets and villages, arrange the seating and ensure the program’s success.

The employees, especially the marketing staff, the youth union members of the units working directly with the company to organize the program, greeted the people.

It must noted that all of the programs were directly and completely organized by the company’s employees themselves. They carefully prepared the specific gifts suitable for each locale; wrapped them; transported them to the designated places; procured new bank notes for gifts; liaised directly with localities to organize programs while still ensuring completion of everyday tasks. Each member of the group played many roles, perhaps driving the vehicles, then immediately working to hand out the gifts, then next day being the MC controlling the program or dispensing gifts to the people, the young and the elderly, or pushing a wheelchair, etc. On completion of the program at the main sites, the people gathered to visit families who could not attend, due to the special surroundings, and present gifts to them. During the program, the employees slept for only a few hours but were always smiling and positive. They were occasionally moved to tears when faced with especially difficult situations. Everybody voluntarily gave some lucky money to the children or wishes for the aged.

The humanitarian channel of Vietnam Television must be mentioned as it has been especially close to the company’s New Year for the Poor program over the years. Almost all of

those present at the company’s gift giving, not only have memories and visions, but also connections with the Red Cross and local authorities in order to organize the program. It seems there is no gap between the two units jointly undertaking the program; feeling sufficiently close as to be one and joining each other on the road again when the next New Year comes around.

In lieu of concluding this report, we offer the very real emotions of the team who carried out the New Year for the Poor program, those are the tender loving words such as “every drop of oil for industry, every grain of fertilizer for the furrow, our comrades must drill the oceans, mine the jungles, spilling their sweat, yet our comrades still heartily give of themselves for our poor” or the movingly simple like “on getting home, I will place this gift on my ancestral altar and make an extra offering tray for my mother’s hundred days, etc”. Yes, when conducting this program, the Union, and the entire company expected nothing in return, yet received a priceless gift: the affection of the people. A cozier, warmer New Year in the countryside villages gave cause for very many New Year days of joy for PVFCCo’s wider family.

83Golden Harvest

Golden harvest

Financial Statements

2011(Consolidated)

The Board of General Directors of Petrovietnam Fertilizer and Chemicals Corporation - JSC and its subsidiaries (“the Corporation”) presents this report together with the Corporation’s consolidated financial statements for the year ended 31 December 2011.

THE BOARDS OF MANAGEMENT AND GENERAL DIRECTORS

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

Board of Management Mr. Bui Minh Tien Chairman (appointed on 5 January 2011)Mr. Nguyen Xuan Thang Chairman (resigned on 5 January 2011)Ms. Nguyen Thi Hien Vice Chairwoman (appointed on 8 February 2011) Mr. Cao Hoai Duong Member (appointed on 8 February 2011)Mr. Pham Dang Nam Member (resigned on 8 February 2011)Mr. Bui Quang Hung MemberMr. Nguyen Duc Hoa Member

Board of General Directors Mr. Cao Hoai Duong General Director Mr. Tu Cuong Deputy General DirectorMr. Hoang Viet Dung Deputy General Director (appointed on 15 March 2011)Mr. Nguyen Duc Thanh Deputy General Director (resigned on 15 March 2011)Mr. Le Van Quoc Viet Deputy General DirectorMr. Nguyen Van Tong Deputy General DirectorMs. Chu Thi Hien Deputy General DirectorMr. Nguyen Hong Vinh Deputy General Director

BOARD OF GENERAL DIRECTORS’ STATEMENT OF RESPONSIBILITY

The Board of General Directors of the Corporation is responsible for preparing the consolidated financial statements of the year, which give a true and fair view of the financial position of the Corporation and of its results and cash flows for the year. In preparing these consolidated financial statements, the Board of General Directors 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 the consolidated

financial statements so as to minimize errors and frauds.

The Board of General Directors is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Corporation and to ensure that the consolidated financial statements comply with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam. The Board of General Directors is also responsible for safeguarding the assets of the Corporation and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

For and on behalf of the Board of General Directors,

Nguyen Van TongDeputy General Director5 March 2012Hochiminh City, S. R. Vietnam

Statement of The Board of General Directors

85Golden Harvest84 PVFCCo Annual Report 2011 The accompanying notes set out on page 90 to 119 are an integral part of these consolidated financial statements

No.: 974/2012/Deloitte-AUDHCM-RE

DELOITTE VIETNAM COMPANY LIMITEDFloor 11, R.1101, Saigon Trade Center37 Ton Duc Thang, Dictrict 1HCMC, VietnamTel: +84 8 3910 0751Fax: +84 8 3910 0750www.deloitte.com/vn

To: The Shareholders The Boards of Management and General Directors Petrovietnam Fertilizer and Chemicals Corporation - JSC

We have audited the accompanying consolidated balance sheet of Petrovietnam Fertilizer and Chemicals Corporation - JSC and its subsidiaries (“the Corporation”) as at 31 December 2011, the related consolidated statements of income and cash flows for the year then ended, and the notes thereto (collectively referred to as “the consolidated financial statements”), as set out from page 85 to page 119(*). The accompanying consolidated financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam.

Respective Responsibilities of the Board of General Directors and Auditors

As stated in the Statement of the Board of General Directors on page 84(**), these consolidated financial statements are the responsibility of the Corporation’s Board of General Directors. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

Basis of Opinion

We have conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, the accompanying consolidated financial statements give a true and fair view, in all material respects, of the financial position of the Corporation as at 31 December 2011 and the results of its operations and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam.

Tran Dinh Nghi Ha Pham Van TanPartner AuditorCPA Certificate No. 0288/KTV CPA Certificate No. 0401/KTVFor and on behalf of DELOITTE VIETNAM COMPANY LIMITED5 March 2012Ho Chi Minh City, S. R. Vietnam

Auditors’ Report Consolidated Balance SheetAs at 31 December 2011FORM B 01- DN/HN

Unit: VND

ASSETS Codes Notes 31/12/2011 31/12/2010

A. CURRENT ASSETS 100 6,041,065,689,804 4,825,585,314,646I. Cash and cash equivalents 110 5 4,070,456,552,343 3,748,457,003,885

1. Cash 111 295,456,552,343 241,082,663,0032. Cash equivalents 112 3,775,000,000,000 3,507,374,340,882

II. Short-term financial investments 120 202,000,000,000 58,500,000,0001. Short-term investments 121 6 202,000,000,000 58,500,000,000

III. Short-term receivables 130 464,355,369,431 249,941,896,1151. Trade accounts receivable 131 155,810,424,409 81,200,353,4152. Advances to suppliers 132 151,559,520,332 105,082,543,3503. Receivables from construction contracts under

percentage of completion method134 - 1,097,519,533

4. Other receivables 135 7 166,322,266,639 71,898,321,7665. Provision of doubtful receivables 139 (9,336,841,949) (9,336,841,949)

IV. Inventories 140 8 1,160,376,913,208 671,348,990,5971. Inventories 141 1,170,599,773,156 674,774,862,0302. Provision for devaluation in inventories 149 (10,222,859,948) (3,425,871,433)

V. Other short-term assets 150 143,876,854,822 97,337,424,0491. Short-term prepayments 151 13,029,055,831 11,434,197,4702. Value added tax deductibles 152 119,527,971,996 69,575,598,7163. Taxes and other receivables from State budget 154 304,805,911 -4. Other short-term assets 158 11,015,021,084 16,327,627,863

B. NON-CURRENT ASSETS 200 3,254,096,938,186 2,592,991,072,194I. Fixed assets 220 2,236,412,726,375 1,719,011,531,824

1. Tangible fixed assets 221 9 1,217,649,752,564 899,119,226,532- Cost 222 6,791,323,544,439 6,304,085,138,466- Accumulated depreciation 223 (5,573,673,791,875) (5,404,965,911,934)

2. Intangible assets 227 10 714,774,274,574 96,067,612,181- Cost 228 896,988,754,023 267,944,208,238- Accumulated amortization 229 (182,214,479,449) (171,876,596,057)

3. Construction in progress 230 11 303,988,699,237 723,824,693,111II. Investment properties 240 12 221,618,684,934 174,124,237,914

- Cost 241 233,281,835,168 174,808,376,037- Accumulated depreciation 242 (11,663,150,234) (684,138,123)

III. Long-term financial investments 250 502,220,263,326 370,702,872,9391. Investments in associates 252 14 458,628,905,405 27,111,515,0182. Other long-term investments 258 15 43,591,357,921 343,591,357,921

IV Other long-term assets 260 293,845,263,551 329,152,429,5171. Long-term prepayments 261 16 279,019,910,904 312,947,856,7472. Deferred tax assets 262 14,662,058,447 15,310,889,8443. Other long-term assets 268 163,294,200 893,682,926

TOTAL ASSETS 270 9,295,162,627,990 7,418,576,386,840

87Golden Harvest86 PVFCCo Annual Report 2011 The accompanying notes set out on page 90 to 119 are an integral part of these consolidated financial statements The accompanying notes set out on page 90 to 119 are an integral part of these consolidated financial statements

FORM B 01-DN/HN

Consolidated Balance SheetAs at 31 December 2011

Unit: VND

RESOURCES Code Notes 31/12/2011 31/12/2010

A. LIABILITIES 300 883,206,119,407 1,188,354,989,107I. Current liabilities 310 864,476,078,937 924,057,613,623

1. Short-term loans and liabilities 311 17 9,205,641,372 85,620,583,9982. Trade accounts payable 312 323,540,578,949 416,918,064,8703. Advances from customers 313 12,012,772,578 50,107,014,6814. Taxes and amounts payable to State budget 314 18 106,975,226,211 82,058,550,2555. Payables to employees 315 89,278,373,094 52,998,893,6426. Accrued expenses 316 19 199,235,356,613 187,269,781,9847. Short-term inter-company payables 317 6,897,966,1168. Other current payables 319 33,865,995,534 15,465,930,5189. Short-term provisions 320 56,022,00010. Bonus and welfare funds 323 90,306,112,586 26,720,827,559

II. Long-term liabilities 330 18,730,040,470 264,297,375,4841. Other long-term payables 333 4,653,070,992 1,754,838,1952. Long-term loans and liabilities 334 20 - 246,087,577,1053. Provision for severance allowance 336 9,123,440,123 10,289,578,4334. Unearned revenue 338 4,868,527,582 6,045,381,7515. Scientific and technological development fund 339 85,001,773 120,000,000

B. EQUITY 400 8,227,079,406,507 6,193,758,946,548

I. Shareholders’ equity 410 21 8,227,079,406,507 6,193,758,946,5481. Charter capital 411 3,800,000,000,000 3,800,000,000,0002. Other owner’s capital 413 977,787,044 257,121,9983. Treasury shares 414 (83,961,341,647) (83,277,130,627)4. Foreign exchange reserve 416 (74,411,767,146) (3,530,148,052)5. Investment and development fund 417 1,420,380,501,371 849,893,623,4846. Financial reserve fund 418 494,715,910,705 341,712,214,4457. Other owner’s funds 419 554,153,469 342,595,7038. Retained earnings 420 2,668,824,162,711 1,288,360,669,597

C. MINORITY INTERESTS 439 22 184,877,102,076 36,462,451,185

TOTAL RESOURCES 440 9,295,162,627,990 7,418,576,386,840

Nguyen Van Tong Huynh Kim NhanDeputy General Director Chief Accountant5 March 2012

Consolidated Income StatementFor the year ended 31 December 2011

Unit: VNDITEMS Codes Notes 2011 2010

1. Gross sales 01 9,278,861,379,142 6,648,640,613,8342. Less deductions 02 52,327,770,303 29,856,615,4163. Net sales 10 24 9,226,533,608,839 6,618,783,998,4184. Cost of goods sold 11 24 5,191,254,632,483 4,236,094,827,9035. Gross profit from sales 20 4,035,278,976,356 2,382,689,170,5156. Financial income 21 26 526,679,442,074 343,091,652,5357. Financial expenses 22 27 74,038,067,805 81,034,462,821

In which: Interest expense 23 27,900,441,399 8,349,710,4498. Selling expenses 24 492,836,265,735 331,845,387,4699. General and administration expenses 25 502,603,306,568 409,858,160,58410. Operating profit 30 3,492,480,778,322 1,903,042,812,17611. Other income 31 9,447,874,142 36,976,544,57612. Other expenses 32 2,192,187,845 23,189,419,75113. Profit from other activities 40 7,255,686,297 13,787,124,82514. Profit from associates 45 10,503,381,175 4,811,771,81615. Accounting profit before tax 50 3,510,239,845,794 1,921,641,708,81716. Current corporate income tax expense 51 28 369,042,805,384 227,514,762,21017. Deferred tax income/ (expense) 52 584,880,162 (12,742,158,051)18. Net profit after corporate income tax 60 3,140,612,160,248 1,706,869,104,65819. Attributable to minority interests 61 36,318,726,268 3,693,114,24020. Attributable to owners of the parent company 62 3,104,293,433,980 1,703,175,990,41821. Basic earnings per share 70 29 8,288 4,499


FORM B 02-DN/HN


FORM B 03-DN/HN

Consolidated Cashflow StatementFor the year ended 31 December 2011

Unit: VND

ITEMS Codes 2011 2010

I. CASH FLOWS FROM OPERATING ACTIVITIES

1 Profit before tax 01 3,510,239,845,794 1,921,641,708,817

2 Adjustments for:Depreciation and amortisation 02 190,196,427,163 687,289,914,263 Provisions 03 6,796,988,515 12,640,667,018 Foreign exchange loss 04 10,065,177,076 Gain from investing activities 05 (529,728,699,362) (336,133,158,164)Interest expense 06 27,900,441,399 8,349,710,449

3 Operating profit before movements in working capital 08 3,205,405,003,509 2,303,854,019,459 (Increase)/ decrease in receivables 09 (134,819,285,194) 682,311,075,305 Increase in inventories 10 (495,824,911,126) (103,524,001,292)(Decrease)/ increase in accounts payable 11 (27,994,337,978) 422,034,550,219 Decrease/ (increase) in prepaid expenses 12 32,333,087,482 (11,134,545,308)Interest paid 13 (27,900,441,399) (741,113,951)Corporate income tax paid 14 (359,489,042,056) (263,335,917,897)Other cash inflows 15 128,451,200,000 - Other cash outflows 16 (195,495,058,471) (88,261,697,835)Net cash from operating activities 20 2,124,666,214,767 2,941,202,368,700

II CASH FLOWS FROM INVESTING ACTIVITIES

1. Acquisition and construction of fixed assets and other long-term assets

21 (781,684,768,892) (992,475,769,486)

2. Proceeds from sale, disposal of fixed assets and other long-term assets

22 205,570,669 12,295,946,922

3. Cash outflow for lending, buying debt instruments of other entities

23 (143,500,000,000) -

4. Cash recovered from lending, selling debt instruments of other entities

24 30,000,000,000 -

5. Investments in other entities 25 (309,000,000,000) (616,059,797,280)

6. Interest earned, dividends and profits received 27 492,205,217,530 330,800,873,221 Net cash used in investing activities 30 (711,773,980,693) (1,265,438,746,623)

Consolidated cashflow statement (Continued)For the year ended 31 December 2011

FORM B 03-DN/HN

Unit: VND

ITEMS Codes 2011 2010

III CASH FLOWS FROM FINANCING ACTIVITIES1 Capital withdrawals, buying treasury shares 32 (14,180,236,055) (39,981,041,328)2 Proceeds from borrowings 33 166,650,500,511 126,129,516,996 3 Repayment of borrowings 34 (489,153,020,242) (49,507,553,519)4 Dividends and profits paid 36 (753,064,360,000) (870,072,707,300)

Net cash used in financing activities 40 (1,089,747,115,786) (833,431,785,151)Net increase in cash 50 323,145,118,288 842,331,836,926Cash and cash equivalents at the beginning of the year 60 3,748,457,003,885 2,906,125,166,959Effect of changes in foreign exchange rates 61 (1,145,569,830) -

Cash and cash equivalents at the end of the year 70 4,070,456,552,343 3,748,457,003,885

Supplemental non-cash disclosures

Cash outflows for purchases of fixed assets during the year exclude an amount of VND 72,927,159,793, representing an addition in fixed assets during the year that has not yet been paid, and include an amount of VND 44,141,948,337, representing fixed assets purchased in last period but settled in this period, and an amount of VND 63,156,046,391, representing an advance to suppliers in this period for purchase of fixed assets in the next year. Consequently, changes in account payables and account receivables have been adjusted by the same amount

Cash outflows for investments in other entities include an amount of VND 80,000,000,000, representing charter capital advance to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong) in order to construct the Bac Lieu Tower in accordance with the Announcement No. 8606/TB-DKVN dated 22 September 2011 of Vietnam Oil & Gas Group. This capital advance is presented in “Other receivable” item in the consolidated balance sheet. Accordingly, changes in account receivables have been adjusted by the same amount.

Cash outflows for buying issued shares include an amount of VND 13,496,025,035, representing the advance to Petrovietnam Securities Incorporated Ho Chi Minh City Branch for buying the Corporation’s treasury shares. This advance is presented in “Advance to suppliers” item in the consolidated balance sheet. Accordingly, changes in account receivables have been adjusted by the same amount.


The accompanying notes set out on page 90 to 119 are an integral part of these consolidated financial statements The accompanying notes set out on page 90 to 119 are an integral part of these consolidated financial statements

91Golden Harvest

Notes To The Consolidated Financial Statements (continued)For the year ended 31 December 2011

These notes are an integral part of and should be read in conjunction with the consolidated financial statements90 PVFCCo Annual Report 2011

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

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

1. GENERAL INFORMATION

Structure of ownership

Petrovietnam Fertilizer and Chemicals Corporation - JSC (“the Corporation”), formerly Petrovietnam Fertilizer and Chemicals Joint Stock Company, was established under the Business Registration Certificate No.4103007696 dated 31 August 2007 and as amended on 15 May 2008, issued by Ho Chi Minh City Department of Planning and Investment. On 1 September 2008, the Corporation transformed its operation into parent-subsidiary model in pursuant to Resolution No.01/ND-DHDCD of Shareholders’ General Meeting. Accordingly, Holding Company - Petrovietnam Fertilizer and Chemicals Corporation JSC was established from functional departments of Petrovietnam Fertilizer and Chemicals Joint Stock Company, Projects’ Management Committee and Phu My Fertilizer Plant. The Corporation’s shares are listed on Ho Chi Minh Stock Exchange from 5 November 2007 with stock symbol “DPM”.

The parent company of the Corporation is Vietnam Oil and Gas Group which holds 61.37 % of its charter capital.

The total number of employees of the Corporation and its subsidiaries are 1,826 as at 31 December 2011 (2010: 1,744).

Principal activities

The principal activities of the Corporation and its subsidiaries are to produce and do business in fertilizer, liquid ammonia, industrial gas, other chemicals; technical services relating to production and trading of fertilizer and other related chemicals (excluding heavily toxic chemicals); producing and trading of electricity; real estate, trading of agriculture and forestry products, goods transport services by inbound waterway and car, processing of oil and gas-related products and minerals and service of vocational training.

2. ACCOUNTING CONVENTION AND FISCAL YEAR

Accounting convention

The accompanying consolidated financial statements, expressed in Vietnamese Dong (VND), are prepared under the historical cost convention and in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam.

Fiscal year

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

3. ADOPTION OF NEW ACCOUNTING GUIDANCE

On 06 November 2009, the Ministry of Finance issued Circular No.210/2009/TT-BTC (“Circular 210”) guiding the application of International Financial Reporting Standards (“IFRS”) on presentation of financial statements and disclosures of financial instruments. The adoption of Circular 210 requires disclosures of certain financial instruments as well as the effect thereof on the financial statements. This Circular is effective for the financial year ending on or after 31 December 2011. The Corporation has adopted Circular 210 and additional notes on this application to the financial statements for the year ended 31 December 2011 are set out in Note 31.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Accounting Estimates

The preparation of consolidated financial statements in conformity with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam requires 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 reporting period. Actual results could differ from those estimates.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Corporation and enterprises controlled by the Corporation (its subsidiaries). This control is achieved where the Corporation 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 Corporation.

All significant inter-company transactions and balances between group enterprises are eliminated on consolidation.

Minority interests in the net assets of consolidated subsidiaries are identified separately from the Corporation’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the Corporation except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

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 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 recognized.

Where a member company 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.

Notes To The Consolidated Financial StatementsFor the year ended 31 December 2011



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



4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)

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, short-term deposits, trade and other receivables, and listed and unlisted financial instruments.

Financial liabilities

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

Re-measurement after initial recognition

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

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits 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.

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 maybe unable to repay the debt.

Inventories

Inventories are stated at the lower of cost and net realizable value. Cost comprises direct materials and where applicable, direct labor 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 less the cost of materials which is measured using the first-in first-out method. Net realizable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

The provision for inventory obsolescence is made for obsolete, damaged, or sub-standard inventories and for those which have book value higher than net realizable value as at the balance sheet date.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated depreciation.

The cost of purchased tangible fixed assets comprises its purchase price and any directly attributable costs of bringing the assets to its working condition and location for its 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 recognized 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 following estimated useful lives in conformity with the Circular No. 203/2009/TT-BTC dated 20 October 2009 (replaced the Decision No. 206/2003/QĐ-BTC dated 12 December 2003) issued by the Ministry of Finance with effect from 1 January 2010 as follows:

Years

Building and structures 5 - 25

Machinery, equipment 3 - 6

Motor vehicles 6

Office equipment 3 - 5

With respect to repairing expenses of fixed assets at Phu My Fertilizer Plant which is on a cyclical basis, the Company shall be permitted to accrue such expenses to operating expenses in advance based on annual budget. If actual expenses of repairs are higher than the accrued expenses, then the difference shall be directly charged to operating expenses. If the actual expenses of repairs are lower than the accrued expenses, then the difference shall be accounted for as a reduction of operating expenses of the year.

Intangible assets and amortization

Intangible assets represent patent rights, land use right, computer software and other intangible assets which are stated at cost less accumulated amortization. The patent rights and other intangible assets are amortized using the straight-line method over 6 years; the computer software is amortized using the straight-line method over 3 years. The Corporation amortizes its land use right that has definite term using the straight-line method over the duration of the right to use the land and does not amortize its land use right that has indefinite term.

Leasing

Operating lease includes office and land rentals. Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.

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 costs and related borrowing 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.






4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued) Construction in progress (continued)

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

Investment property

Investment properties, which are composed of land use rights and building and structure of Cuu Long Supermarket-Office Building in Ca Mau Province; and Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province held by the Corporation to earn rentals, 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. Investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Years

Land use right 50Building and structure 25

The Corporation does depreciate investment properties which are land use rights of Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province because they have indefinite term

Other long-term investments

Other long term investments are the investments into other entities which the Corporation holds below 20% of the owners’ equity (below 20% voting rights) with no significant influence and over 1 year of capital withdrawing period. Other long term investment are carried at cost. Provision for devaluation of other long term investments is losses for devaluation of long-term investment or losses in contributed capital from the Corporation.

Long-term prepayments

Long-term prepayments include land rental, business privilege fee, spare parts, training fee for Fertilizer Plant, and other long-term prepayments.

Land rental includes payables for the rental of 634,595.35 m2 in Phu My 1 Industrial Zone, which was prepaid to Infrastructure Exploitation and Investment Company in Dong Xuyen and Phu My 1 Industrial Zones for 17 years from 3 September 2004. Prepaid land rentals are charged to income statement on the straight-line basis over the lease term.

Business privilege fee incurred in the valuation of the enterprise for equitization purpose amounting to VND 531,700,794,477 and has been allocated to income for 6 years from 1 January 2007. According to the Board of General Directors’ judgments, allocating business privilege fee within 6 years is in accordance with financial regulations applicable to privatized State-owned enterprises and estimated useful lives of production line.

Spare parts which are put in use at Phu My Fertilizer Plant are charged to income statement on the straight-line basis over 6 years in accordance with the depreciation duration of production lines.

Training fee for Ca Mau Fertilizer Plant incurred in the year are recorded as actually incurred but has not been charged to income statement, and will be charged to income statement when the Company finalizes the pre-operating expenses of Ca Mau Fertilizer Plant.

Other types of long-term prepayments comprise of tools and equipments which are charged to income statement on the straight-line basis from 1.5 to 2 years, and other prepaid rentals which are amortized over the validity duration of the lease contracts.

Provisions

Provisions are recognized 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 management’s best estimate of the expenditure required to setter the obligation at the balance sheet date.

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 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; and(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 periods, revenue is recognised in each period by reference to the percentage of completion of the transaction at the balance sheet date of that period. 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.

Revenue of investment property rental is recognized in income statement on the straight-line basis over the lease term.

Financial income includes interest from current and saving bank accounts, short-term and long-term investments. 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.

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.






4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)

Foreign currencies

The Corporation applies the method of recording foreign exchange differences in accordance with Circular No. 201/2009/TT-BTC dated 15 October 2009 issued by the Ministry of Finance. Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. Foreign exchange differences arising from these transactions are recognised in the income statement.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the rates of exchange prevailing on the balance sheet date as follows:

- Foreign exchange differences arising from revaluation of monetary items, short-term receivables and payables denominated in foreign currencies at the balance sheet date are recorded in the balance sheet under the account “foreign exchange reserve” in the Owner’s equity section.

- Foreign exchange differences arising from revaluation of long-term receivables and payables are recorded in the income statement for the reporting period.

The recognition of foreign exchange differences in accordance with Circular No.201/2009/TT-BTC differs from that as regulated in Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates”. According to VAS 10, all foreign exchange differences arising from revaluation of balances denominated in foreign currencies at the balance sheet date are recognized in the income statement. The Board of General Directors has decided to recognise foreign exchange differences as guided in Circular No.201/2009/TT-BTC and believes that such application and disclosure of differences at the same time, in the case where the Corporation would apply VAS 10, may provide more information to users of the financial statements.

Accordingly, the adoption of Circular No.201/2009/TT-BTC in recording foreign exchange differences makes the Corporation’s profit before tax for the year ended 31 December 2011 decrease by VND 2,694,803,722, and retained earning as at 31 December 2011 increase by VND 835,361,854 (31/12/2010: increase by VND 3,530,148,052) and the “Foreign exchange reserve” item under Owner’s equity section in the balance sheet as at 31 December 2011 changes by the same amount in comparison with the VAS 10 adoption.

Loss on foreign exchange differences arising from the transactions which are in the pre-operating stage of Petrovietnam Petrochemical and Textile Fiber Joint Stock Company (PVTEX) the Corporation’s associates, is recognized in “foreign exchange differences” item pursuant to ownership ratio of the Corpation in the associate amounting to VND 73,576,422,816, and allocated to income statement in maximum of 5 years from official operating commencement of PVTEX.

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. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the cost of those assets.

All 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 profit for the year. Taxable profit differs from net profit 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 taxation authority and the Corporation intends to settle its current tax assets and liabilities on a net basis.

The determination of corporate income tax due and deferred tax is based on the current interpretation of tax regulations. However, these regulations are subject to periodic variation and its ultimate determination depends on the results of tax authorities’ examination.

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

5 CASH AND CASH EQUIVALENTS31/12/2011 31/12/2010

VND VND

Cash on hand 2,501,956,305 1,806,005,513 Cash in bank 292,954,596,038 239,276,657,490 Cash equivalents 3,775,000,000,000 3,507,374,340,882

4,070,456,552,343 3,748,457,003,885

Cash equivalents represent the time deposits with terms of 1 week to 3 months at commercial banks at the interest rate of 6% to 14% per annum.






6 SHORT-TERM INVESTMENTS31/12/2011 31/12/2010

VND VND

Time deposits at commercial banks 25,000,000,000 58,500,000,000 Time deposits at Petrovietnam Trade Union Finance Investment Corporation (PVFI)

177,000,000,000 -

202,000,000,000 58,500,000,000

Short-term investments as at 31 December 2011 represent time deposits at commercial banks with terms from 6 to 12 months at the interest rate of 14% per annum, and time deposits at PVFI which has the maturity date at 31 December 2012 with interest rate of 2.4% per annum.

7 OTHER RECEIVABLES31/12/2011 31/12/2010

VND VND

Charter capital advance to Petrovietnam Urban Development Joint Stock Company (PVC - Mekong)

80,000,000,000 -

Accrued interest income from term deposits 57,249,279,741 25,664,322,224 Others 29,072,986,898 46,233,999,542

166,322,266,639 71,898,321,766

According to the Announcement No. 8606/TB-DKVN dated 22 September 2011 of Vietnam Oil & Gas Group, the Corporation advanced charter capital to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong) in order to construct the Bac Lieu Tower. As at 31 December 2011, PVC-Mekong has not yet completed register of increase in charter capital, therefore, this charter capital advance is presented in “Other receivables” item in the consoliated balance sheet.

8 INVENTORIES31/12/2011 31/12/2010

VND VND

Goods in transit 69,823,891,556 78,505,265,382 Raw materials 323,011,367,715 242,068,830,163 Tools and supplies 4,937,805,436 2,189,351,418 Work in process 54,089,522,986 14,199,580,754 Finished goods 132,282,869,306 91,042,176,910 Merchandise 586,454,316,157 246,769,657,403

1,170,599,773,156 674,774,862,030 Provision for devaluation of inventories (10,222,859,948) (3,425,871,433)Net realizable value 1,160,376,913,208 671,348,990,597

9 TANGIBLE FIXED ASSETS

Buildings and structures

Machinery and equipment

Motor vehicles Office equipment

Total

VND VND VND VND VND

COST

As at 1/1/2011 889,532,145,286 5,294,786,454,225 75,637,513,160 44,129,025,795 6,304,085,138,466 Purchases 15,058,913,718 19,045,109,224 9,312,364,514 27,579,969,770 70,996,357,226 Transfer from con-struction in progress

407,829,548,965 688,698,142 47,130,242 8,085,525,643 416,650,902,992

Other increase - - 30,000,000 - 30,000,000 Disposals (187,971,034) - - (150,140,000) (338,111,034)Other decrease - (41,167,500) - (59,575,711) (100,743,211)

As at 31/12/2011 1,312,232,636,935 5,314,479,094,091 85,027,007,916 79,584,805,497 6,791,323,544,439

ACCUMULATED DEPRECIATION

As at 1/1/2011 552,473,150,962 4,783,028,045,289 53,144,504,999 16,320,210,684 5,404,965,911,934 Charge for the year 51,720,422,723 95,732,934,535 5,555,361,481 17,131,358,793 170,140,077,532 Other increase - - 3,501,822 3,501,822 Disposals (15,664,254) - - (129,435,906) (145,100,160)Other decrease (1,289,879,872) - (719,381) - (1,290,599,253)

As at 31/12/2011 602,888,029,559 4,878,760,979,824 58,699,147,099 33,325,635,393 5,573,673,791,875

NET BOOK VALUE

As at 31/12/2011 709,344,607,376 435,718,114,267 26,327,860,817 46,259,170,104 1,217,649,752,564

As at 31/12/2010 337,058,994,324 511,758,408,936 22,493,008,161 27,808,815,111 899,119,226,532

The cost of the Corporation’s tangible fixed assets at 31 December 2011 includes an amount of VND 5,335,434,384,183 (31/12/2010: VND 5,455,516,599,005) in respect of fully depreciated items which are still in use.

Pursuant to the short term contract with the Vietcombank- Vung Tau Branch, all of the buildings and structures, machinery and equipment of Phu My Fertilizer packaging JSC amounting to VND 43.076.880.833 are pledged to the Vietcombank- Vung Tau Branch to secure for the short-term loans.






10 INTANGIBLE ASSETSLand use rights Patent Software Others Total

VND VND VND VND VNDCOSTAs at 1/1/2011 80,885,746,363 159,117,493,074 18,402,650,769 9,538,318,032 267,944,208,238 Purchases 10,962,577,000 - 4,864,972,118 396,878,364 16,224,427,482 Transfer from construction in progress

579,236,316,984 12,323,643,983 21,295,167,336 - 612,855,128,303

Disposals - - (11,250,000) - (11,250,000)Other decrease - - (23,760,000) - (23,760,000)

As at 31/12/2011 671,084,640,347 171,441,137,057 44,527,780,223 9,935,196,396 896,988,754,023

ACCUMULATED AMORTIZATION As at 1/1/2011 - 159,117,493,074 3,220,784,951 9,538,318,032 171,876,596,057 Charge for the year 202,192,133 2,464,728,796 7,686,794,888 13,501,575 10,367,217,392

Disposals - - (11,250,000) - (11,250,000)Other decrease - - (18,084,000) - (18,084,000)As at 31/12/2011 202,192,133 161,582,221,870 10,878,245,839 9,551,819,607 182,214,479,449 NET BOOK VALUE As at 31/12/2011 670,882,448,214 9,858,915,187 33,649,534,384 383,376,789 714,774,274,574 As at 31/12/2010 80,885,746,363 - 15,181,865,818 - 96,067,612,181

The cost of the Corporation’s intangible assets at 31 December 2011 includes an amount of VND 168,842,111,106 (31/12/2010: VND 168,710,811,106) in respect of fully depreciated items which are still in use.

11 CONSTRUCTION IN PROGRESS31/12/2011 31/12/2010

VND VND

Cai Cui - Can Tho warehouse 122,575,593,205 96,023,047,507 An Giang warehouse 39,233,289,888 -Nam Phat - Tien Giang warehouse 34,854,969,899 -Gia Lai warehouse 25,242,660,028 12,677,660,028 Amoniac project 24,397,090,908 -Tay Ninh warehouse 15,126,000,000 4,510,000,000 Office building at 43 Mac Dinh Chi 5,732,174,223 432,199,782,107 Enterprise resource planning system - 26,286,284,628 Vung Ang warehouse - 25,011,558,283 Nghi Son warehouse - 23,224,572,032 Others 36,826,921,086 103,891,788,526

303,988,699,237 723,824,693,111

According to the Decision No. 751/QD-PBHC dated 27 July 2009, the Corporation’s Board of Management approved on an investment project of Cai Cui port Can Tho (the general dock warehouse 20,000 DWT) at Cai Rang District, Can Tho City (phase 1) with the total investment of VND 347,112,911,828. As of 31 December 2011, the total invested amount for the Project is VND 173,613,663,132. During the year, the Corporation put in use Cawaco warehouse with estimated amount of VND 51,038,069,927 in value.

12 INVESTMENT PROPERTIESLand use rights Buildings and structures Total

VND VND VND

COSTAs at 1/1/2011 50,284,152,000 124,524,224,037 174,808,376,037 Purchases 24,500,000,000 33,973,459,131 58,473,459,131

As at 31/12/2011 74,784,152,000 158,497,683,168 233,281,835,168

ACCUMULATED DEPRECIATIONAs at 1/1/2011 684,138,123 - 684,138,123 Charge for the year 962,302,573 8,726,829,666 9,689,132,239 Other increase - 1,289,879,872 1,289,879,872

As at 31/12/2011 1,646,440,696 10,016,709,538 11,663,150,234

NET BOOK VALUE

As at 31/12/2011 73,137,711,304 148,480,973,630 221,618,684,934

As at 31/12/2010 49,600,013,877 124,524,224,037 174,124,237,914

Investment properties represent land use rights and buildings and structures of Cuu Long Supermarket-Office Builing in Ca Mau Province; and Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province. As of 31 December 2011, the Corporation has not determined fair value of investment properties because the Corporation does not intend to sell or transfer in the foreseeable future.

13 INVESTMENTS IN SUBSIDIARIES

Name of subsidiary Place of incorporation and operation

Proportion of ownership interest and voting power (%)

Principal activity

2010 2011Central Petrovietnam Fertilizer and Chemicals JSC

Binh Dinh Province 100 75 Trading of fertilizer and chemicals

SouthWest Petrovietnam Fertilizer and Chemicals JSC

Can Tho City 100 75 Trading of fertilizer and chemicals

SouthEast Petrovietnam Fertilizer and Chemicals JSC

Ho Chi Minh City 100 75 Trading of fertilizer and chemicals

North Petrovietnam Fertilizer and Chemicals JSC

Ha Noi City 100 75 Trading of fertilizer and chemicals

Phu My Fertilizer packaging joint stock Company

Ba Ria - Vung Tau Province

51 51 Production of packaging

Petrovietnam Southern Building and Development JSC

Ho Chi Minh City 75 81 Investing and trading of real estates

Fertilizer and Chemicals Trading-Service Company Limited

Ho Chi Minh City 100 - Trading of fertilizer and chemicals

According to Resolution No. 1929/NQ-DKVN dated 11 August 2010 from Vietnam Oil & Gas Group about comprehensive restructuring plan of PVFCCo - JSC, the Corporation transformed its subsidiaries into joint stock companies. Accordingly, as at 30 June 2011, the Corporation still owned by 75% (31 December 2010: 100%) at Central Petrovietnam Fertilizer and Chemicals Limited JSC, SouthWest Petrovietnam Fertilizer and Chemicals JSC, SouthEast JSC, SouthEast Petrovietnam Fertilizer and Chemicals Company JSC and Northern Petrovietnam Fertilizer and Chemicals Company JSC.






13 INVESTMENTS IN SUBSIDIARIES (Continued)

In accordance with Decision No. 335/NQ-PBHC, dated 5 October 2011 of the Board of Management, the Corporation contributed some motor vehicles with value of VND 17,248,000,000 into Petrovietnam Southern Building and Development JSC; and purchased, in addition, some share in cash with amount of VND 298,000,000. Accordingly, the Corporation owned 5,879,680 shares, equivalent to 81% in Petrovietnam Southern Building and Development JSC since 5 October 2011 (31 December 2010: 75%).

In pursuant to Decision No. 16/NQ-PBHC, dated 12 January 2011, the Corporation disposed Fertilizer and Chemicals Trading-Service Company Limited, a subsidiary owned 100% by the Corporation. Then, Fertilizer and Chemicals Trading-Service Company Limited was officially transformed into a branch of Petrovietnam Fertilizer and Chemicals Corporation JSC according to the business registration certificate No. 0303165480-010, dated on 28 January 2011. The transfers of assets the Corporation and Fertilizer and Chemicals Trading-Service Company Limited was implemented under the Decision 265/QD-PBHC dated on 1 April 2011 with the handover being their book value as at 1 April.

14 INVESTMENTS IN ASSOCIATES31/12/2011 31/12/2010

VND VND

Investment in associates 519,000,000,000 20,000,000,000 Profit from paid dividends after the date of investment 8,582,677,298 7,111,515,018 Difference between acquisition price and the Corporation’s share of associates’ net assets at date of investment (*)

4,622,650,923 -

Changes in net assets which are not presented in the income statement (**)

(73,576,422,816) -

458,628,905,405 27,111,515,018

(*) The Corporation determined difference between acquisition price and interest of the Corpation in the net assets of associate, the Petrovietnam Petrochemical and Textile Fiber Joint Stock Company (PV TEX) at date of investment with amount of VND 23,113,254,617. The Board of Management decided to allocate the difference to the consolidated income statement of the Corporation in 5 years with VND 4.6 billions per annum.

(**) According to the unaudited accounting books of Petrovietnam Petrochemical and Textile Fiber Joint Stock Company (PV TEX), the Corporation’s associate, foreign exchange differences arising from the date of investment (15 June 2011) to the date of 31 December 2011 is about VND 288 billions, as PVTEX is in the progess of construction, then the above foreign exchange differences is not recognized to the income statement of the year, but to the “foreign exchange differences” item in the consolidated balance sheet. In addion, the interest of the Corporation in the net assets of PV TEX is 25.48% at the balance sheet date, then the value of investment at PV TEX has been decreased and an amount of VND 73 billions is recognized to “foreign exchange difference” item in the Consolidated Balance Sheet as at 31 December 2011.

Details of the Corporation’s associates at 31 December 2011 are as follows:

Name of associate Place of incor-poration and operation

Proportion of ownership in-

teest and voting power

31/12/2011 Principal activity

(%) VND

Petrovietnam Urban Development JSC (PVC-Mekong)

Ca Mau City 20 26,412,636,214 Construction and installation of works

Petrovietnam Petrochemical and Textile Fiber JSC (PVTEX)

Hai Phong City 25 432,216,269,191 Manufacturing and trading polyester

fiber458,628,905,405

Summarised financial information in respect of the Corporation ‘s associates is set out below:

31/12/2011 31/12/2010VND VND

Total assets 7,117,435,446,917 585,565,810,606 Total liabilities 5,216,180,694,037 457,056,075,375 Net assets 1,901,254,752,880 128,509,735,231 The Corporation’s share of associates’ net assets 458,628,905,405 27,111,515,018

2011 2010VND VND

Net revenue 721,917,003,581 491,122,542,486 Net profit 30,545,641,810 24,184,898,586 The Corporation’s share of associates’ net profit 6,424,087,304 4,836,979,717

15 OTHER LONG-TERM INVESTMENTS31/12/2011 31/12/2010

VND VND

Contributed capital in Petrovietnam Petrochemical and Textile Fiber JSC (PVTEX)

- 270,000,000,000

Others 43,591,357,921 73,591,357,921 43,591,357,921 343,591,357,921

As at 31 December 2011, the Board of General Directors has evaluated other long-term investments and believes that there are no diminution in value thereof, thus no provision was made.






19 ACCRUED EXPENSES31/12/2011 31/12/2010

VND VND

Repair and maintenance expenses 2011 - 147,231,991,964 Repair and maintenance expenses 2013 72,380,000,004 - Social donation expenses 38,283,665,997 11,092,663,603 Accrued contruction expenses 20,150,988,108 - Others 68,420,702,504 28,945,126,417

199,235,356,613 187,269,781,984

During 2011, the Corporation accrued repair and maintenance expense of VND 72,380,000,000 in pursuant to the Plant of repair and maintenance in Phu My Fertilizer Plant in 2013.

In accordance with Decision No. 1762/QD-DKVN dated 24 June 2011 of Vietnam Oil and Gas Group, the Corporation accrued social donation expenses with amount of VND 150 billion in order to perform the social donation program of the Group. As at 31 December 2011, social donation expenses which have not been paid to donation parties are VND 38,283,665,997.

20 LONG-TERM LOANS AND LIABILITIES31/12/2011 31/12/2010

VND VND

Asia Commercial Bank and Petrovietnam Finance Corporation - Vung Tau Branch

- 246,087,577,105

- 246,087,577,105

The long-term loan pursue to Credit Agreement No. 60095579 dated 29 May 2009 from Petrovietnam Finance Corporation - Vung Tau Branch (PVFC - Vung Tau Branch) and Asia Commercial Bank (ACB) for a credit facility of USD 23,905,925, of which USD 7,200,000 is from ACB and USD 16,705,925 from PVFC - Vung Tau Branch. The loan purpose is for the payment of investment cost in the Primary Reformer CO2 recovery system to upgrade capacity of Phu My Fertilizer Plant from 740,000 tons to 800,000 tons of Ure per year. The term of the loan (include the grace period of 24 months) is 120 months from the first withdrawal date.

As at 31 December 2010, the loan balance of this agreement is USD 17,331,332 which is equivalent to VND 328,116,769,473. In which, USD 5,199,302 which is equivalent to VND 98,433,190,955 is from ACB and USD 12,132,029 which is equivalent to VND 229,683,578,518 is from PVFC - Vung Tau Branch. This loan was refunded before due date in 2011.

16 LONG-TERM PREPAYMENTS31/12/2011 31/12/2010

VND VND

Land rentals in Phu My 1 Industrial Zone 5,618,251,495 6,180,076,651 Business privileges 88,616,799,064 177,233,598,148 Spare parts 61,700,077,851 77,125,097,319 Training fee for Ca Mau Fertilizer Plant 69,469,257,424 32,107,384,773 Others 53,615,525,070 20,301,699,856

279,019,910,904 312,947,856,747

17 SHORT-TERM LOANS AND LIABILITIES31/12/2011 31/12/2010

VND VND

Vietcombank - Vung Tau Branch 9,205,641,372 3,591,391,630 Current portion of long-term loans - 82,029,192,368

9,205,641,372 85,620,583,998

According to the Appendix Credit Agreement No. 2009/DPM/PL02 dated 28 April 2010, loan from the Vietcombank Vung Tau Branch is a short term loan of VND 20,000,000,000. The pupose of this loan is to provide more capital for purchasing of packaging material in kinds. This loan is secured by buildings and structures, machinery and equipment of Phu My Fertilizer packaging JSC.

18 TAX AND AMOUNTS PAYABLE TO THE STATE BUDGET31/12/2011 31/12/2010

VND VND

Value added tax 12,780,283,409 2,529,249,447 Corporate income tax 87,299,170,055 77,564,627,561 Personal income tax 6,885,813,006 1,964,673,247 Other tax 9,959,741 -

106,975,226,211 82,058,550,255

107Golden Harvest


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

FORM B 09-DN/HN


FORM

B 0

9-DN

/HN

Note

s To

The

Cons

olid

ated

Fin

ancia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011


21

OWNE

RS’ E

QUIT

Y

M

ovem

ent i

n ow

ner’s

equ

ity

Char

ter c

apita

lOt

her o

wne

r’s

capi

tal

Trea

sury

sha

res

Fore

ign

exch

ange

re

serv

eIn

vest

men

t and

de

velo

pmen

t fun

dFi

nanc

ial r

eser

ve

fund

Othe

r ow

ner’s

fu

nds

Reta

ined

ear

ning

s T

otal

VND

VND

VND

VND

VND

VND

VND

VND

VND

Bala

nce

as a

t 01

/01/

2010

3,80

0,00

0,00

0,00

0 20

9,23

3,30

9 (4

3,29

6,08

9,29

9)(1

,915

,614

,125

)30

2,75

7,04

4,49

4 20

1,74

5,54

8,83

3 22

9,92

3,50

6 1,

228,

173,

483,

976

5,48

7,90

3,53

0,69

4

Prof

it fo

r the

yea

r

- -

- -

- -

1,70

3,17

5,99

0,41

8 1,

703,

175,

990,

418

Acqu

isitio

n of

trea

sury

sh

are

for t

he y

ear

- -

(39,

981,

041,

328)

- -

- -

- (3

9,98

1,04

1,32

8)

Prof

it di

strib

utio

n -

- -

- 54

7,41

3,56

6,67

9 13

9,96

6,66

5,61

2 11

2,67

2,19

7 (7

72,9

25,9

68,5

55)

(85,

433,

064,

067)

Divi

dend

s pa

id -

- -

- -

- (8

71,6

45,4

20,0

00)

(871

,645

,420

,000

)Ot

hers

- 47

,888

,689

-

(1,6

14,5

33,9

27)

(276

,987

,689

)-

1,58

2,58

3,75

8 (2

61,0

49,1

69)

Bala

nce

as a

t 01

/01/

2011

3,80

0,00

0,00

0,00

0 25

7,12

1,99

8 (8

3,27

7,13

0,62

7)(3

,530

,148

,052

)84

9,89

3,62

3,48

4 34

1,71

2,21

4,44

5 34

2,59

5,70

3 1,

288,

360,

669,

597

6,19

3,75

8,94

6,54

8

Prof

it fo

r the

yea

r-

- -

- -

- -

3,10

4,29

3,43

3,98

0 3,

104,

293,

433,

980

Acqu

isitio

n of

trea

sury

sh

are

for t

he y

ear (

1)-

- (6

84,2

11,0

20)

- -

- -

- (6

84,2

11,0

20)

Prof

it di

strib

utio

n (2

) -

- -

- 58

3,70

2,78

9,59

6 1

61,3

20,1

38,1

35

211,

557,

766

(745

,234

,485

,497

)-

Prov

ision

for b

onus

an

d w

elfa

re fu

nds

(2)

- -

- -

- -

- (2

42,8

96,5

87,7

36)

(242

,896

,587

,736

)

Recla

ssifi

ed-

720,

665,

046

-

-

(13,

356,

597,

669)

(8,3

56,6

20,5

85)

- 20

,992

,553

,208

-

Di

vide

nds

paid

(2)

- -

- -

- -

- (7

55,2

91,9

40,0

00)

(755

,291

,940

,000

)Fo

reig

n ex

chan

ge

rese

rve

in n

et a

sset

s of

ass

ocia

tes

- -

- (7

3,57

6,42

2,81

6) -

-

- -

(73,

576,

422,

816)

Othe

rs-

- 2,

694,

803,

722

140,

685,

960

40,1

78,7

10

- (1

,399

,480

,841

)1,

476,

187,

551

Bala

nce

at

31/1

2/20

113,

800,

000,

000,

000

977,

787,

044

(83,

961,

341,

647)

(74,

411,

767,

146)

1,42

0,38

0,50

1,37

1 49

4,71

5,91

0,70

5 55

4,15

3,46

9 2,

668,

824,

162,

711

8,22

7,07

9,40

6,50

7

21 OWNERS’ EQUITY (Continued)

(1) During the year, the Corporation has acquired 28,540 treasury shares with average buying price per share of VND 23,974 per share.

(2) Profit distribution to funds includes additional distributed to Investment and Development funds and Financial Reserve funds of the Corporation and its subsidiaries with respective amount of VND 583,707,480,341 and VND 161,339,815,467 out of the profit after tax for the year ended 31 December 2010 according to the Resolution of the annual shareholders’ meeting of the Corporation and its subsidiaries. Provision for bonus and welfare funds in year includes VND 135,315,413,818 from the profit after tax for the year ended 31 December 2010, and VND 107,581,173,918 which was temporarily distributed from the profit after tax for the year ended 31 December 2011.

According to the Resolution of the annual shareholders’ meeting on 9 April 2011, the Corporation declared and paid dividends of VND 755,295,480,000 (VND 2,000 per share) for the fiscal year ended 31 December 2010. In which, the first dividend advance amounting to VND 377,647,740,000 (VND 1,000 per share) was paid in third quarter 2010. On 21 April 2011, the Corporation declared the second dividend payment for the year ended in 31 December 2010 after distributing to funds amounting to VND 377,647,740,000. On 25 August 2011, the Corporation declared the first dividend advance for the year ended in 31 December 2011 with amount of VND 1,000/share (10% face value). As a result, the Corporation temporarily paid VND 377,644,200,000.

(3) As presented in the Note 14, exchange diffence arising from the acquisition date of the associate, Petrovietnam Petrochemical and Textile Fiber Joint Stock Company (PV TEX), to the balance sheet date is about VND (288) billiions, as PV TEX is in the progess of construction, the above exchange diffence is not recognized to the income statement of the year, but to the “foreign exchange differences” item in the Balance Sheet statement of PV TEX. In addion, the interest of the Corporation in the net assets of PV TEX is 25.48% at the balance sheet date, then the value of investment at PV TEX has been decreased and an amount of VND 73 billions is recorded to “foreign exchange difference” item in the Consolidated Balance Sheet as at 31 December 2011.

Charter capital is in detail as below:

Shareholders Proportion 31/12/2011(%) VND

Vietnam Oil & Gas Group 61.37 2,332,042,530,000Others 38.63 1,467,957,470,000

100.00 3,800,000,000,000

The number of shares registered and issued to public by the Corporation as at 31 December 2011 was 380,000,000, in which, the Corporation is holding 2,380,800 treasury shares (equivalent to 2,380,800 shares). The Corporation has only ordinary shares with par value of VND 10,000 per share. The shareholders of ordinary shares are entitles 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 residual assets.

109Golden Harvest



FORM B 09-DN/HN


FORM

B 0

9-DN

/HN

Note

s To

The

Cons

olid

ated

Fin

ancia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011


22

MIN

ORIT

Y IN

TERE

STS

Min

ority

inte

rest

s pre

sent

inte

rest

s of o

ther

shar

ehol

ders

in n

et a

sset

s val

ue a

nd re

sults

of o

pera

tion

of su

bsid

iarie

s. Pe

rcen

tage

s of m

inor

ity in

tere

sts i

n su

bsid

iarie

s ar

e ca

lcula

ted

as fo

llow

s:

Cent

ral

Petr

ovie

tnam

Fe

rtili

zer a

nd

Chem

ical

s JS

C

Sout

hWes

t Pe

trov

ietn

am

Fert

ilize

r and

Ch

emic

als

JSC

Sout

hEas

t Pe

trov

ietn

am

Fert

ilize

r and

Ch

emic

als

JSC

Nort

h Pe

trov

ietn

am

Fert

ilize

r and

Ch

emic

als

JSC

Phu

My

Fert

ilize

r pa

ckag

ing

JSC

Petr

ovie

tnam

So

uthe

rn B

uild

ing

and

Deve

lopm

ent J

SC

VN

DVN

DVN

DVN

DVN

DVN

D

Ch

arte

r cap

ital o

f sub

sidia

ries

100,

000,

000,

000

170,

000,

000,

000

125,

000,

000,

000

120,

000,

000,

000

42,0

00,0

00,0

0072

,248

,000

,000

In w

hich

:

Co

ntrib

uted

capi

tal o

f the

Cor

pora

tion

75,0

00,0

00,0

0012

7,50

0,00

0,00

093

,750

,000

,000

90,0

00,0

00,0

0021

,410

,000

,000

58,7

96,8

00,0

00Co

ntrib

uted

capi

tal o

f min

ority

sha

reho

lder

s25

,000

,000

,000

42,5

00,0

00,0

0031

,250

,000

,000

30,0

00,0

00,0

0020

,590

,000

,000

13,4

51,2

00,0

00

Perc

enta

ges

of m

inor

ity in

tere

sts

25.0

0%25

.00%

25.0

0%25

.00%

49.0

2%18

.62%

22 MINORITY INTERESTS(Continued)

Minority interests in net assets as at 31 December 2011 are as follows:31/12/2011 31/12/2010

VND VND

Total assets 268,403,750,593 47,856,087,163 Total liabilities (83,526,648,517) (11,393,635,978)Net assets 184,877,102,076 36,462,451,185 In which:Charter capital 162,791,200,000 34,340,000,000 Other funds 8,051,285,497 2,026,387,779 Retained earnings 14,034,616,579 96,063,406

Minority interests in results of operations for the fiscal year ended 31 December 2011 are as follows:

2011 2010VND VND

Profit for the period 143,047,592,636 8,717,615,438

Non-controlling interest 36,318,726,268 3,693,114,240


FORM

B 0

9-DN

/HN

FORM

B 0

9-DN

/HN

Note

s To

The

Cons

olid

ated

Fin

ancia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011

Note

s To

The

Cons

olid

ated

Fin

ancia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011


22

MIN

ORIT

Y IN

TERE

STS(

Cont

inue

d)

Mov

emen

t in

min

ority

inte

rest

in y

ear i

s as

follo

ws:

Char

ter c

apita

lOt

her o

wne

r’s

capi

tal

Inve

stm

ent a

nd

deve

lopm

ent f

und

Fina

ncia

lre

serv

e fu

ndFo

reig

nex

chan

geOt

her o

wne

r’s

fund

s Re

tain

ed e

arni

ngs

Tota

l

VND

VND

VND

VND

VND

VND

VND

VND

As a

t 31/

12/2

010

34,3

40,0

00,0

0024

7,25

5,97

11,

292,

134,

225

157,

440,

087

107,

532

329,

449,

964

96,0

63,4

06

36,4

62,4

51,1

85Co

ntrib

uted

capi

tal

128

,451

,200

,000

-

- -

- -

- 12

8,45

1,20

0,00

0 Pr

ofit

for t

he y

ear

- -

- -

- -

36,

318,

726,

268

36,3

18,7

26,2

68

Prof

it di

strib

utio

n-

- 4,

202,

780,

722

2,00

1,66

8,45

5 -

- (1

1,66

4,34

3,62

8)(5

,459

,894

,451

)Di

vide

nds

paid

- -

- -

- -

(10,

688,

863,

084)

(10,

688,

863,

084)

Othe

rs-

692,

938,

633

(968

,260

,015

)(1

07,5

26,6

58)

(101

,690

)20

3,39

8,27

1 (2

6,96

6,38

3)(2

06,5

17,8

42)

As a

t 31/

12/2

011

162,

791,

200,

000

940,

194,

604

4,52

6,65

4,93

22,

051,

581,

884

5,84

253

2,84

8,23

514

,034

,616

,579

184,

877,

102,

076

23

BUSI

NESS

AND

GEO

GRAP

HICA

LSEG

MEN

TS

Prin

cipal

act

iviti

es o

f the

Cor

pora

tion

and

the

subs

idia

ries a

re to

pro

duce

and

do

busin

ess i

n fe

rtiliz

er, li

quid

am

mon

ia, in

dust

rial g

as, o

ther

chem

icals;

oth

er a

ctiv

ities

ar

e no

t of m

ater

ial im

pact

. The

n, th

e Co

rpor

atio

n do

es n

ot re

port

s its

prim

ary

segm

ent i

nfor

mat

ion.

The

Corp

orat

ion

is cu

rren

tly o

rgan

ised

into

the

Repr

esen

tativ

e Of

fice

of H

oldi

ng C

ompa

ny lo

cate

d in

Ho

Chi M

inh

City

, and

som

e un

its in

som

e pr

ovin

ces

inclu

ding

02

bra

nche

s, 01

pla

nt, 0

1 Bo

ard

of M

anag

emen

t of B

uild

ing

and

Cons

truc

tion

and

06 s

ubisd

iarie

s pr

esen

ted

in N

ote

13. P

rodu

cts

and

serv

ices

of th

e Co

rpor

atio

n ar

e di

strib

uted

thro

ung

the

abov

e ag

ent s

yste

ms,

bran

ches

and

6 s

ubsid

iarie

s.

23

BUSI

NESS

AND

GEO

GRAP

HICA

LSEG

MEN

TS(c

ontin

ued)

Segm

ent i

nfor

mat

ion

abou

t the

Cor

pora

tion’

s op

erat

ions

is p

rese

nted

bel

ow:

Co

nsol

idat

ed b

alan

ce s

heet

s

The

Corp

orat

ion

Cent

ral

Petr

ovie

tnam

Fe

rtiliz

er a

nd

Chem

icals

JSC

Sout

hWes

t Pe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Sout

hEas

t Pe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Nort

h Pe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Petr

ovie

tnam

So

uthe

rn B

uild

ing

and

Deve

lopm

ent

JSC

Phu

My

Fert

ilizer

pa

ckag

ing

JSC

Cons

olid

ated

adju

stm

ent

Tota

l

VND

VND

VND

VND

VND

VND

VND

VND

VND

Asse

ts

Segm

ent a

sset

s8,

536,

229,

008,

303

218,

938,

999,

066

273,

351,

688,

574

196,

117,

763,

095

143,

240,

592,

830

132,

027,

951,

625

74,7

16,8

31,4

69

(738

,089

,112

,377

)8,

836,

533,

722,

585

Inte

rest

in a

ssoc

iate

s51

9,00

0,00

0,00

0 -

- -

- -

- (6

0,37

1,09

4,59

5) 4

58,6

28,9

05,4

05

Unal

loca

ted

asse

ts-

- -

- -

- -

- -

Tota

l ass

ets

9,05

5,22

9,00

8,30

3 21

8,93

8,99

9,06

6 27

3,35

1,68

8,57

4 19

6,11

7,76

3,09

5 14

3,24

0,59

2,83

0 13

2,02

7,95

1,62

5 74

,716

,831

,469

(7

98,4

60,2

06,9

72)

9,29

5,16

2,62

7,99

0

Liab

ilitie

s

Segm

ent l

iabi

litie

s81

7,25

5,75

3,52

0 10

2,10

6,14

2,41

5 79

,323

,791

,696

56

,379

,837

,271

16

,029

,112

,654

49

,599

,095

,466

2

2,55

9,81

6,50

0 (2

60,0

47,4

30,1

15)

883,

206,

119,

407

Unal

loca

ted

liabi

litie

s-

- -

- -

- -

- -

Tota

l lia

bilit

ies

817,

255,

753,

520

102,

106,

142,

415

79,3

23,7

91,6

96

56,3

79,8

37,2

71

16,0

29,1

12,6

54

49,5

99,0

95,4

66

22,5

59,8

16,5

00

(260

,047

,430

,115

)88

3,20

6,11

9,40

7

113Golden Harvest



FORM B 09-DN/HN


FORM

B 0

9-DN

/HN

Note

s To

The

Cons

olid

ated

Fin

ancia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011


23

BUSI

NESS

AND

GEO

GRAP

HICA

LSEG

MEN

TS(c

ontin

ued)

Co

nsol

idat

ed in

com

e st

atem

ent

Th

e Co

rpor

atio

nCe

ntra

lPe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Sout

hWes

t Pe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Sout

hEas

t Pe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Nort

hPe

trov

ietn

am

Fert

ilizer

and

Ch

emica

ls JS

C

Petr

ovie

tnam

So

uthe

rn B

uild

ing

and

Deve

lopm

ent

JSC

Phu

My

Fert

ilizer

pa

ckag

ing

JSC

Fert

ilizer

and

Ch

emica

lsTr

adin

g-Se

rvice

Co

mpa

ny Li

mite

d

Cons

olid

ated

ad

just

men

tTo

tal

VND

VND

VND

VND

VND

VND

VND

VND

VND

VND

Gr

oss

sale

s7,

655,

679,

058,

679

2,21

1,98

7,45

5,71

0 2,

660,

856,

972,

664

2,46

2,18

8,16

8,10

0 1,

512,

518,

879,

804

135,

773,

145,

861

115,

411,

006,

310

89,6

23,9

16,1

29

(7,5

65,1

77,2

24,1

15)

9,27

8,86

1,37

9,14

2 Le

ss d

educ

tions

53,6

59,1

86,1

36

14,8

67,1

63,2

30

13,5

81,0

28,9

06

21,9

02,9

48,6

60

1,97

6,62

9,50

7 -

- -

(53,

659,

186,

136)

52,3

27,7

70,3

03

Net s

ales

7,60

2,01

9,87

2,54

3 2,

197,

120,

292,

480

2,64

7,27

5,94

3,75

8 2,

440,

285,

219,

440

1,51

0,54

2,25

0,29

7 13

5,77

3,14

5,86

1 11

5,41

1,00

6,31

0 89

,623

,916

,129

(7,

511,

518,

037,

979)

9,22

6,53

3,60

8,83

9 Sa

les

from

out

side

part

ies

397,

974,

177,

479

2,16

2,73

9,96

6,62

3 2,

628,

811,

422,

911

2,39

6,31

0,05

7,83

9 1,

495,

758,

971,

471

18,1

26,9

41,4

34

73,1

52,8

84,9

46

- -

9,17

2,87

4,42

2,70

3

Sale

s fr

om in

ter-g

roup

pa

rtie

s7,

204,

045,

695,

064

34,

380,

325,

857

18,4

64,5

20,8

47

43,9

75,1

61,6

01

14,7

83,2

78,8

26

117,

646,

204,

427

42,2

58,1

21,3

64

89,6

23,9

16,1

29

(7,5

11,5

18,0

37,9

79)

53,6

59,1

86,1

36

Net s

ales

7,60

2,01

9,87

2,54

3 2,

197,

120,

292,

480

2,64

7,27

5,94

3,75

8 2,

440,

285,

219,

440

1,51

0,54

2,25

0,29

7 13

5,77

3,14

5,86

1 11

5,41

1,00

6,31

0 89

,623

,916

,129

(7,

511,

518,

037,

979)

9,22

6,53

3,60

8,83

9 Co

st o

f goo

d so

lds

3,79

8,29

4,92

2,19

7 2,

126,

497,

796,

242

2,58

3,48

0,56

6,72

8 2,

370,

481,

116,

377

1,44

4,49

4,39

3,10

5 11

3,00

7,30

8,34

6 89

,179

,424

,676

82

,610

,881

,076

(7

,416

,791

,776

,264

)5,

191,

254,

632,

483

Gros

s pr

ofit

from

sal

es3,

803,

724,

950,

346

70,6

22,4

96,2

38

63,7

95,3

77,0

30

69,8

04,1

03,0

63

66,0

47,8

57,1

92

22,7

65,8

37,5

15

26,2

31,5

81,6

34

7,01

3,03

5,05

3 (9

4,72

6,26

1,71

5)4,

035,

278,

976,

356

Fina

ncia

l inco

me

598,

035,

818,

598

5,77

7,89

3,74

3 18

,837

,406

,161

15

,092

,817

,697

9,

554,

122,

867

3,46

0,24

8,01

7 98

1,71

9,07

9 11

,960

,488

,507

(1

37,0

21,0

72,5

95)

526,

679,

442,

074

Fina

ncia

l exp

ense

68,7

94,7

63,3

42

2,07

6,50

6,36

0 -

51,4

20,0

15

- 15

,428

,600

93

4,52

2,08

3 2,

454,

297,

099

(288

,869

,694

)74

,038

,067

,805

Se

lling

expe

nse

461,

540,

749,

528

14,3

05,2

62,0

06

10,1

68,0

44,7

02

18,5

65,9

51,9

84

30,0

88,5

87,6

98

456,

924,

891

3,80

8,54

1,82

3 2,

245,

724,

134

(48,

343,

521,

031)

492,

836,

265,

735

Gene

ral a

nd ad

mini

stra

tion

expe

nse

441,

512,

649,

319

18,

135,

314,

332

17,0

56,5

34,8

16

22,0

44,7

79,1

51

15,2

58,4

23,0

55

11,5

75,7

33,4

51

12,8

62,2

46,3

19

2,48

8,07

7,33

5 (3

8,33

0,45

1,21

0)50

2,60

3,30

6,56

8

Oper

atin

g pr

ofit

3,42

9,91

2,60

6,75

5 41

,883

,307

,283

55

,408

,203

,673

44

,234

,769

,610

30

,254

,969

,306

14

,177

,998

,590

9,

607,

990,

488

11,7

85,4

24,9

92

(144

,784

,492

,375

)3,

492,

480,

778,

322

Prof

it fr

om o

ther

ac

tiviti

es10

,964

,241

,818

77

,421

,580

13

,636

,364

13

6,34

7,24

0 16

,544

,353

57

,706

,210

(3

27,3

69,9

25)

897,

931,

231

(4,5

80,7

72,5

74)

7,25

5,68

6,29

7

Prof

it fr

om a

ssoc

iate

s

10

,503

,381

,175

10

,503

,381

,175

Ac

coun

ting

prof

it be

fore

tax

3,44

0,87

6,84

8,57

3 41

,960

,728

,863

55

,421

,840

,037

44

,371

,116

,850

30

,271

,513

,659

14

,235

,704

,800

9,

280,

620,

563

12,6

83,3

56,2

23

(138

,861

,883

,774

)3,

510,

239,

845,

794

Curr

ent c

orpo

rate

in

com

e ta

x ex

pens

e31

7,70

8,67

1,42

8 10

,631

,670

,570

13

,993

,698

,624

11

,331

,961

,026

7,

271,

296,

757

3,95

7,63

0,44

0 97

7,03

7,48

3 3,

170,

839,

056

- 36

9,04

2,80

5,38

4

Defe

rred

corp

orat

e ta

x (in

com

e)/e

xpen

se2,

989,

712,

564

- -

- 43

3,86

3,17

2 -

- -

(2,8

38,6

95,5

74)

584,

880,

162

Net p

rofit

aft

er

corp

orat

e in

com

e ta

x3,

120,

178,

464,

581

31,3

29,0

58,2

9341

,428

,141

,413

33,0

39,1

55,8

2422

,566

,353

,730

10,2

78,0

74,3

608,

303,

583,

080

9,51

2,51

7,16

7(1

36,0

23,1

88,2

00)

3,14

0,61

2,16

0,24

8

24. NET SALES AND COST OF GOODS SOLDLocally-produced

productsImported goods Total

VND VND VND

From 01/01/2011 to 31/12/2011Net sales 6,768,159,614,159 2,458,373,994,680 9,226,533,608,839Cost of goods sold (2,760,887,985,242) (2,430,366,647,241) (5,191,254,632,483)In which: Provision for inventorydevaluation

(6,796,988,515) (6,796,988,515)

Gross profit 4,007,271,628,917 28,007,347,439 4,035,278,976,356

From 01/01/2010 to 31/12/2010Net sales 5,091,424,261,250 1,527,359,737,168 6,618,783,998,418Cost of goods sold (2,712,101,346,028) (1,523,993,481,875) (4,236,094,827,903)In which: Provision for inventorydevaluation

- (3,425,871,433) (3,425,871,433)

Gross profit 2,379,322,915,222 3,366,255,293 2,382,689,170,515

Sales from locally-produced products is as follows:2011 2010

VND VND

Sales of Ure 6,453,341,863,786 4,790,081,223,736 Sales of Amoniac 36,273,170,013 186,892,922,107 Sales of electricity 7,693,247,916 10,201,609,113 Others 323,159,407,509 134,105,121,710

6,820,467,689,224 5,121,280,876,666 Sales discounts 52,308,075,065 26,999,472,560 Sales rebate - 2,857,142,856

6,768,159,614,159 5,091,424,261,250

25 PRODUCTION COST BY NATURE2011 2010

VND VND

Raw materials and consumables 2,179,431,068,686 1,587,377,650,031 Labour 391,133,521,243 277,170,401,681 Depreciation and amortization 190,196,427,163 687,289,914,263 Out-sourced services 384,713,811,134 440,883,132,702 Other expenses 601,504,421,761 394,941,456,571

3,746,979,249,988 3,387,662,555,248






26 FINANCIAL INCOME2011 2010

VND VND

Interest income 514,219,760,206 338,756,648,665 Dividend 4,992,998,186 288,000,000 Others 7,466,683,682 4,047,003,870

526.679.442.074 343,091,652,535

27 FINANCIAL EXPENSES2011 2010

VND VND

Loan interest 27,900,441,399 8,349,710,449 Loss from exchange difference 39,067,463,965 62,423,713,405 Others 7,070,162,441 10,261,038,967

74,038,067,805 81,034,462,821

28 CURRENT CORPORATE INCOME TAX EXPENSE2011 2010

VND VND

Current corporate income tax calculated on the current taxable incomes

369,042,805,384 226,887,699,805

Tax adjustments in previous years - 627,062,405

Current corporate income tax expense 369,042,805,384 227,514,762,210

For fertilizer production at Phu My Fertilizer Plant, the Corporation is obliged to pay corporate income tax at the rate of 15% its assessable income. The Corporation is entitled to corporate income tax exemption for four years from the first profit-making year (2004) and a 50% reduction in tax payable for the seven years thereafter (from 2008). The year 2011 is the fourth year the Corporation enjoys 50% corporate income tax reduction as it is the Corporation’s eighth profit-making year (since the Corporation’s commencement of operation).

For other business activities, the Corporation’s corporate income tax rate is applied at 25% of its taxable income.

29. BASIC EARNINGS PER SHARE2011 2010

VND VND

Earnings for the purpose of calculating basic earnings per share 3,104,293,433,980 1,703,175,990,418 Weighted average number of ordinary shares for the purpose of calculating basic earnings per share

374,542,632 378,560,156

Basic earnings per share 8,288 4,499

30. OPERATING LEASE COMMITMENTS

At the balance sheet date, the Corporation had outstanding commitments under non-cancelable operating leases, which fall due as follows:

31/12/2011 31/12/2010VND VND

Within one year 11,652,728,108 14,346,601,261In the second to fifth years inclusive 33,610,888,221 22,924,219,188After five years 31,795,489,104 28,702,378,545

77,059,105,432 65,973,198,994

On 03 September 2005, the Corporation was handed over with a land-subleasing contract No. 178/HD/TLD/UDEC.2001 dated 01 June 2001 signed between the PMU of Phu My Fertilizer Plant and Ba Ria-Vung Tau Urban Development and Construction Company for long-term rental of land and infrastructure in Phu My 1 Industrial Zone, Tan Thanh Commune, Ba Ria-Vung Tau Province. The contract is valid for 17 years from the date of 03 September 2004 with the rental fee and infrastructure use fee of USD 378,392 per annum.

On 01 November 2010, the Corporation signed the office rental contract in Cambodia with rental period of 03 years and rental fee of USD 1,500 per month.






31 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 equity attributable to equity holders of the parent (comprising capital, reserves and retained earnings), and equity attributable to minority shareholders of subsidiaries.

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.

Categories of financial instrumentsCarrying amounts

31/12/2011 31/12/2010VND VND

Financial assets Cash and cash equivalents 4,070,456,552,343 3,748,457,003,885 Trade & other receivables 232,795,849,099 142,184,416,577 Short-term investments 202,000,000,000 58,500,000,000 Long-term investments 43,591,357,921 343,591,357,921 Other financial assets 266,713,819 10,548,583,250

Total 4,549,110,473,182 4,303,281,361,633

Financial liabilities Borrowings 9,205,641,372 331,708,161,103 Trade & other payables 346,746,305,819 423,951,306,724 Accruals 199,235,356,613 187,269,781,984

Total 555,187,303,804 942,929,249,811

The Corporation has not assessed fair value of its financial assets and liabilities as at the balance date since there are no comprehensive guidance under 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 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

Financial risks include market risk (including foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Corporation does not hedge these risk exposures due to the lack of a market to purchase financial instruments.

31 FINANCIAL INSTRUMENTS

Market risk

The Corporation’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Corporation does not hedge these risk exposures due to the lack of any market to purchase financial instruments.

Foreign currency risk management

The Corporation undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Corporation does not hedge this risk due to the lack of any market to purchase such instruments.

The carrying amounts of the Corporation’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

Liabilities Assets

31/12/2011 31/12/2010 31/12/2011 31/12/2010 VND VND VND VND

United States Dollar (USD) 4,260,029,420 597,806,637,247 147,465,726,357 1,755,187,612 Euro (EUR) 150,052,595 - 39,588,091 40,793,413 Singapore Dollar (SGD) - - - 6,619,819

Price risk management

The Corporation is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Corporation does not actively trade these investments.

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. The Corporation does not hedge this risk due to the lack of any market to purchase such instruments.

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.

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 period is kept to manageable levels relative to the amount of funds that the Corporation believes can generate within that period. 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 owners to meet its liquidity requirements in the short and longer term.






31 FINANCIAL INSTRUMENTS(Continued) Liquidity risk management (continued)

The following table details the Corporation’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Corporation can be required to pay.

Less than 1 year Over 1 year Total VND VND VND

31/12/2011 Borrowings 9,205,641,372 - 9,205,641,372 Trade & other payables 346,746,305,819 - 346,746,305,819 Accruals 199,235,356,613 - 199,235,356,613

Total 555,187,303,804 - 555,187,303,804

31/12/2010 Borrowings 85,620,583,998 246,087,577,105 331,708,161,103 Trade & other payables 423,951,306,724 - 423,951,306,724 Accruals 187,269,781,984 - 187,269,781,984

Total 696,841,672,706 246,087,577,105 942,929,249,811

The management assessed the liquidity risk concentration at low level. The management believes that the Corporation will be able to generate sufficient funds to meet its financial obligations as and when they fall due.

The following table details the Corporation’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets, if any. The inclusion of information on non-derivative financial assets is necessary in order to understand the Corporation’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Less than 1 year Over 1 year Total VND VND VND

31/12/2011Cash and cash equivalents 4,070,456,552,343 - 4,070,456,552,343 Trade & other receivables 232,795,849,099 - 232,795,849,099 Short-term investments 202,000,000,000 - 202,000,000,000 Long-term investments - 43,591,357,921 43,591,357,921 Other financial assets 103,419,619 163,294,200 266,713,819

Total 4,505,355,821,061 43,754,652,121 4,549,110,473,182

31/12/2010Cash and cash equivalents 3,748,457,003,885 - 3,748,457,003,885 Trade & other receivables 142,184,416,577 - 142,184,416,577 Short-term investments 58,500,000,000 - 58,500,000,000 Long-term investments - 343,591,357,921 343,591,357,921 Other financial assets 9,654,900,324 893,682,926 10,548,583,250

Total 3,958,796,320,786 344,485,040,847 4,303,281,361,633

32 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

During the year, the Corporation entered into the following significant transactions with related parties:2011 2010

VND VND

Vietnam Oil & Gas Group 499,313,154,111 561,095,083,834Dividend paid 466,408,506,000 536,369,781,900Management fee payables 32,904,648,111 24,725,301,934Sale urea to Petrovietnam’s subsidiaries 373,924,660,745 271,585,801,409Receive Mac Đinh Chi Project from Petrovietnam Oil Corporation (PV Oil) 190,620,250,351 - Receive Mac Đinh Chi Project from PVFC Land 36,942,483,601 210,000,000,000Purchase construction service of Mac Dinh Chi Project from Petrolium Industrial and Civil Construction Joint Stock Company (PVC-IC)

161,917,824,793 59,931,721,934

Purchase gas from Petrovietnam Gas Corporation (PV Gas) 1,926,771,062,298 1,346,190,365,185

Remuneration of Boards of Management and General Directors 14,453,066,403 8,667,818,706

Related party balances at the balance sheet date were as follows:31/12/2011 31/12/2010

VND VND

Payable to Vietnam Oil & Gas Group 6,897,966,116Payable to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong)

7,033,309,000 -

Payable to PV Gas - 269,472,389,374Payable to South East Gas Transmission Company 195,468,590,693 - Payable to PV Oil 18,285,400,000 - Payable to PVC-IC 15,042,870,801 - Payable to PVFC Land 11,043,000,000 - Payable to Petrovietnam Trade Union Finance Investment Corporation (PVFI) 11,000,000,000 - Payable to Petrovietnam Ca Mau Fertilizer Company Limited 8,112,540,000 - Receive from Binh Son Refining and Petrochemical Company Limited 1,353,902,194 8,202,066,405Advance to PVC-IC 3,012,188,600 - Advance to PVC-Mekong 100,335,295,400 - Advance to Petrovietnam Securities Incorporated - Hochiminh Branch 13,496,025,035 - Receive from PVFI 19,012,777,778 - Time deposits at PVFI 177,000,000,000 250,000,000,000Time deposits at Petrovietnam Finance Joint Stock Corporation 595,000,000,000 1,171,200,000,000

Nguyen Van Tong Huynh Kim NhanDeputy General Director Chief Accountant

05 March 2012

121Golden Harvest

Statement of The Board of General Directors

Financial Statements

2011

The Board of General Directors of Petrovietnam Fertilizer and Chemicals Corporation - JSC (“the Company”) presents this report together with the Company’s financial statements for the year ended 31 December 2011.

THE BOARDS OF MANAGEMENT AND GENERAL DIRECTORS

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

Board of Management Mr. Bui Minh Tien Chairman (appointed on 05 January 2011)Ms. Nguyen Thi Hien Vice Chairwoman (appointed on 08 February 2011)Mr. Cao Hoai Duong Member (appointed on 08 February 2011)Mr. Pham Dang Nam Member (resigned on 08 February 2011)Mr. Bui Quang Hung MemberMr. Nguyen Duc Hoa Member

Board of General Directors Mr. Cao Hoai Duong General Director Mr. Tu Cuong Deputy General DirectorMr. Hoang Viet Dung Deputy General Director (appointed on 15 March 2011)Mr. Nguyen Duc Thanh Deputy General Director (resigned on 15 March 2011)Mr. Le Van Quoc Viet Deputy General DirectorMr. Nguyen Van Tong Deputy General DirectorMs. Chu Thi Hien Deputy General DirectorMr. Nguyen Hong Vinh Deputy General Director

BOARD OF GENERAL DIRECTORS’ STATEMENT OF RESPONSIBILITY

The Board of General Directors of the Company is responsible for preparing the financial statements which give a true and fair view of the financial position of the Company and of its results and cash flows for the year. In preparing these financial statements, the Board of General Directors 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 financial statements; - Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company

will continue in business; and - Design and implement an effective internal control system for the purpose of properly preparing and presenting

the financial statements so as to minimize errors and frauds.

The Board of General Directors is responsible for ensuring that proper accounting records are kept, which disclose, with reasonable accuracy at any time, the financial position of the Company and that the financial statements comply with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam. The Board of General Directors is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of frauds and other irregularities.

The Board of General Directors confirms that the Company has complied with the above requirements in preparing these financial statements.

For and on behalf of the Board of General Directors,

Nguyen Van TongDeputy General Director05 March 2012Ho Chi Minh City, S. R. Vietnam

Golden harvest


No.:973/2012/Deloitte-AUDHCM-RE

Auditors’ Report Balance SheetAs at 31 December 2011FORM B 01-DN

To: The Shareholders The Boards of Management and General Directors Petrovietnam Fertilizer and Chemicals Corporation - JSC

We have audited the accompanying balance sheet of Petrovietnam Fertilizer and Chemicals Corporation - JSC (“the Company”) as at 31 December 2011, the related statements of income and cash flows for the year then ended, and the notes thereto (collectively referred to as “the financial statements”), as set out from page 123 to page 148. The accompanying financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Vietnam.

Respective Responsibilities of the Board of General Directors and Auditors

As stated in the Statement of the Board of General Directors on page 121, these financial statements are the responsibility of the Company’s Board of General Directors. Our responsibility is to express an opinion on these financial statements based on our audit.

Basis of Opinion

We have conducted our audit in accordance with Vietnamese Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, the accompanying financial statements give a true and fair view of, in all material respects, the financial position of the Company as at 31 December 2011 and the results of its operations and its cash flows for the year then ended in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam.

As discussed further in Note 2 and 4 to the financial statements, the accompanying financial statements are prepared as solely to present separate financial position of the Company as at 31 December 2011, and the separate results of its operations and its separate cash flows for the year then ended as a single entity. This is the separate financial statements, therefore, the Company has accounted for its investment in subsidiaries and associates using cost method.

Tran Dinh Nghi Ha Pham Van TanPartner AuditorCPA Certificate No. 0288/KTV CPA Certificate No. 0401/KTVFor and on behalf of DELOITTE VIETNAM COMPANY LIMITED05 March 2012Ho Chi Minh City, S. R. Vietnam

Unit: VND

ASSETS Codes Notes 31/12/2011 31/12/2010

A. CURRENT ASSETS(100=110+120+130+140+150)

100 5,464,356,634,668 3,844,444,364,716

I. Cash and cash equivalents 110 5 3,633,780,353,239 2,876,483,097,0991. Cash 111 258,780,353,239 88,483,097,0992. Cash equivalents 112 3,375,000,000,000 2,788,000,000,000

II. Short-term financial investments 120 202,000,000,000 25,000,000,0001. Short-term investments 121 6 202,000,000,000 25,000,000,000

III. Short-term receivables 130 478,597,862,736 291,992,118,6251. Trade accounts receivable 131 209,522,866,280 14,684,146,4912. Advances to suppliers 132 119,856,679,429 105,466,633,2643. Short-term inter-company receivables 133 - 105,647,033,8384. Other receivables 135 7 158,555,158,976 66,377,346,9815. Provision of doubtful receivables 139 (9,336,841,949) (183,041,949)

IV. Inventories 140 8 1,021,525,646,645 568,339,288,5531. Inventories 141 1,028,619,849,295 568,339,288,5532. Provision for devaluation in inventories 149 (7,094,202,650) -

V. Other short-term assets 150 128,452,772,048 82,629,860,4391. Short-term prepayments 151 11,838,427,664 10,351,032,1432. Value added tax deductibles 152 113,211,738,860 61,542,163,1733. Other short-term assets 158 3,402,605,524 10,736,665,123

B. NON-CURRENT ASSETS(200=220+240+250+260)

200 3,590,872,373,635 3,297,663,668,488

I. Fixed assets 220 1,981,355,639,587 1,498,868,700,3241. Tangible fixed assets 221 9 1,059,679,571,214 761,321,147,926

- Cost 222 6,566,922,568,601 6,134,127,922,277- Accumulated depreciation 223 (5,507,242,997,387) (5,372,806,774,351)

2. Intangible assets 227 10 627,804,437,666 27,555,900,904- Cost 228 809,684,068,355 199,325,526,875- Accumulated amortization 229 (181,879,630,689) (171,769,625,971)

3. Construction in progress 230 11 293,871,630,707 709,991,651,494II. Investment properties 240 12 308,492,302,434 260,997,855,414

- Cost 241 322,137,485,168 263,664,026,037- Accumulated depreciation 242 (13,645,182,734) (2,666,170,623)

III. Long-term financial investments 250 1,029,048,157,921 1,226,251,357,9211. Investment in subsidiaries 251 13 466,456,800,000 892,660,000,0002. Investments in associates 252 14 519,000,000,000 20,000,000,0003. Other long-term investments 258 15 43,591,357,921 313,591,357,921

IV Other long-term assets 260 271,976,273,693 311,545,754,8291. Long-term prepayments 261 16 260,021,060,620 296,600,179,5922. Deferred tax assets 262 17 11,823,362,873 14,813,075,4373. Other long-term assets 268 131,850,200 132,499,800

TOTAL ASSETS (270=100+200) 270 9,055,229,008,303 7,142,108,033,204

DELOITTE VIETNAM COMPANY LIMITED11th Flr, Suite1101, Saigon Trade Center37 Ton Duc Thang St., Dictrict 1HCMC, VietnamTel: +84 8 3910 0751Fax: +84 8 3910 0750www.deloitte.com/vn

The accompanying notes set out on pages 128 to 148 are an integral part of these financial statements


FORM B 01-DN FORM B 02-DN

Income StatementFor the year ended 31 December 2011


Unit: VNDRESOURCES Codes Notes 31/12/2011 31/12/2010

A. LIABILITIES (300=310+330) 300 817,255,753,520 1,039,824,634,016I. Current liabilities 310 803,920,238,961 778,752,651,382

1. Short-term loans and liabilities 311 - 82,029,192,3682. Trade accounts payable 312 335,512,607,275 347,493,535,1453. Advances from customers 313 14,581,571,175 19,639,300,0004. Taxes and amounts payable to State budget 314 18 88,609,868,041 47,852,850,2475. Payables to employees 315 80,014,768,234 43,123,221,5546. Accrued expenses 316 19 157,644,838,303 182,976,389,0837. Short-term inter-company payables 317 - 20,719,981,2928. Other current payables 319 50,859,750,751 12,460,169,1869. Bonus and welfare funds 323 76,696,835,182 22,458,012,507

II. Long-term liabilities 330 13,335,514,559 261,071,982,6341. Long-term loans and liabilities 334 20 - 246,087,577,1052. Provision for severance allowance 336 8,466,986,977 9,444,356,9033. Unearned revenue 338 4,868,527,582 5,540,048,626

B. EQUITY (400=410) 400 8,237,973,254,783 6,102,283,399,188I. Shareholders’ equity 410 21 8,237,973,254,783 6,102,283,399,188

1. Charter capital 411 3,800,000,000,000 3,800,000,000,0002. Treasury shares 414 (83,961,341,647) (83,277,130,627)3. Foreign exchange reserve 416 (835,361,854) 310,231,3424. Investment and development fund 417 1,407,397,263,345 835,237,972,3495. Financial reserve fund 418 488,321,761,273 333,085,317,4426. Retained earnings 420 2,627,050,933,666 1,216,927,008,682

TOTAL RESOURCES 440 9,055,229,008,303 7,142,108,033,204


Unit: VNDITEMS Codes Notes 2011 2010

1. Gross sales 01 7,655,679,058,679 4,776,554,836,067 2. Less deductions 02 53,659,186,136 40,946,100,937 3. Net sales (10=01-02) 10 22 7,602,019,872,543 4,735,608,735,130 4. Cost of goods sold 11 22 3,798,294,922,197 2,596,760,833,227 5. Gross profit from sales (20=10-11) 20 3,803,724,950,346 2,138,847,901,903 6. Financial income 21 24 598,035,818,598 356,304,242,378 7. Financial expenses 22 25 68,794,763,342 79,986,692,661

In which: Interest expense 23 25,377,064,463 7,633,940,298 8. Selling expenses 24 461,540,749,528 298,770,119,631 9. General and administration expenses 25 441,512,649,319 329,949,510,920 10. Operating profit (30=(20+21)-22-24-25) 30 3,429,912,606,755 1,786,445,821,069 11. Other income 31 24,678,833,123 13,232,506,903 12. Other expenses 32 13,714,591,305 2,698,533,388 13. Profit from other activities (40=31-32) 40 10,964,241,818 10,533,973,515

14. Accounting profit before tax (50=30+40) 50 3,440,876,848,573 1,796,979,794,584 15. Current corporate income tax expense 51 26 317,708,671,428 176,936,737,983 16. Deferred tax expense/(income) 52 2,989,712,564 (12,779,656,650)17. Net profit after corporate income tax

(60=50-51-52)60 3,120,178,464,581 1,632,822,713,251


Balance Sheet (Continued)As at 31 December 2011



Cash Flow StatementFor the year ended 31 December 2011

Cash Flow Statement (Continued)For the year ended 31 December 2011

Unit: VNDITEMS Codes 2011 2010

I. CASH FLOWS FROM OPERATING ACTIVITIES

1. Profit before tax 01 3,440,876,848,573 1,796,979,794,584

2. Adjustments for:Depreciation and amortisation 02 172,114,953,111 673,180,983,042 Provisions 03 7,094,202,650 60,995,585 Unrealized foreign exchange loss 04 - 10,065,177,076 Gain from investing activities 05 (594,859,433,769) (262,610,144,144)Interest expense 06 25,377,064,463 7,633,940,298

3. Operating profit before movements in working capital 08 3,050,603,635,028 2,225,310,746,441 Increase in receivables 09 (57,354,403,986) (144,041,136,225)Increase in inventories 10 (460,280,560,742) (21,556,902,730)(Decrease)/ increase in accounts payable 11 (27,974,286,308) 349,694,799,167 Decrease/(increase) in prepaid expenses 12 35,091,723,451 (5,185,542,375)Interest paid 13 (25,377,064,463) -Corporate income tax paid 14 (280,618,701,902) (236,371,210,251)Other cash inflows 15 6,687,287,644 -Other cash outflows 16 (173,128,042,095) (101,020,146,709)Net cash from operating activities 20 2,067,649,586,627 2,066,830,607,318

II. CASH FLOWS FROM INVESTING ACTIVITIES

1. Acquisition and construction of fixed assets and long-term assets 21 (730,632,653,197) (757,597,161,880)

2. Proceeds from sale, disposal of fixed assets and other long- term assets

22 - 165,000,000

3. Cash outflow for buying debt instruments of other entities 23 (177,000,000,000) -

4. Investments in other entities 25 (361,798,800,000) (106,539,115,000)

5. Cash recovered from investments in other entities 26 502,908,424,557 -

6. Interest earned, dividends and profits received 27 552,677,656,877 286,313,394,634

Net cash used in investing activities 30 (213,845,371,763) (577,657,882,246)

Unit: VNDITEMS Codes 2011 2010

III. CASH FLOWS FROM FINANCING ACTIVITIES

1. Buying treasury shares 32 (14,180,236,055) (39,981,041,328)

2. Proceeds from borrowings 33 - 101,077,418,222

3. Repayment of borrowings 34 (328,116,769,473) -

4. Dividends paid 36 (753,064,360,000) (870,072,707,300)

Net cash used in financing activities 40 (1,095,361,365,528) (808,976,330,406)

Net increase in cash 50 758,442,849,336 680,196,394,666

Cash and cash equivalents at the beginning of the year 60 2,876,483,097,099 2,196,286,702,433 Effect of changes in foreign exchange rates 61 (1,145,593,196) -Cash and cash equivalents at the end of the year 70 3,633,780,353,239 2,876,483,097,099

Supplemental non-cash disclosures

Cash outflows for purchases of fixed assets during the year exclude an amount of VND 85,257,649,151, representing an addition in fixed assets during the year that has not yet been paid, and include an amount of VND 44,141,948,337, representing fixed assets purchased in last period but settled in this period, and an amount of VND 57,795,494,652, representing an advance to suppliers in this period for purchase of fixed assets in the next year. Consequently, changes in account payables and account receivables have been adjusted by the same amount.

Other information

Cash outflows for investments in other entities include an amount of VND 80,000,000,000, representing charter capital advance to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong) in order to construct the Bac Lieu Tower in accordance with the Announcement No. 8606/TB-DKVN dated 22 September 2011 of Vietnam Oil & Gas Group. This capital advance is presented in “Other receivable” item in the balance sheet. Accordingly, changes in account receivables have been adjusted by the same amount.

Cash outflows for buying issued shares include an amount of VND 13,496,025,035, representing the advance to Petrovietnam Securities Incorporated - Ho Chi Minh City Branch for buying the Company’s treasury shares. This advance is presented in “Advance to suppliers” item in the balance sheet. Accordingly, changes in account receivables have been adjusted by the same amount.


FORM B 03-DN FORM B 03-DN

The accompanying notes set out on pages 128 to 148 are an integral part of these financial statements The accompanying notes set out on pages 128 to 148 are an integral part of these financial statements

129Golden HarvestThese notes are an integral part of and should be read in conjunction with the accompanying financial statements

Notes To The Financial Statements (continued)For the year ended 31 December 2011

FORM B 09-DN


Notes To The Financial StatementsFor the year ended 31 December 2011

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

1. GENERAL INFORMATION

Structure of ownership

Petrovietnam Fertilizer and Chemicals Corporation - JSC (“the Company”), formerly Petrovietnam Fertilizer and Chemicals Joint Stock Company, was established under the Business Registration Certificate No.4103007696 dated 31 August 2007 and as amended on 15 May 2008, issued by Ho Chi Minh City Department of Planning and Investment. On 1 September 2008, the Company transformed its operation into parent-subsidiary model in pursuant to Resolution No.01/ND-DHDCD of Shareholders’ General Meeting. Accordingly, Holding Company - Petrovietnam Fertilizer and Chemicals Corporation - JSC was established from functional departments of Petrovietnam Fertilizer and Chemicals Joint Stock Company, Projects’ management committee and Phu My Fertilizer Plant. The Company’s shares are listed on Ho Chi Minh Stock Exchange from 5 November 2007 with stock symbol “DPM”.

The parent company of the Company is Vietnam Oil and Gas Group which holds 61.37 % of its charter capital.

The total number of employees of the Company is 1,144 as at 31 December 2011 (31/12/22010: 1,137).

Principal activities

The principal activities of the Company are to produce and do business in fertilizer, liquid ammonia, industrial gas, other chemicals; technical services relating to production and trading of fertilizer and other related chemicals (excluding heavily toxic chemicals); producing and trading of electricity; real estate, trading of agriculture and forestry products, goods transport services by inbound waterway and car, processing of oil and gas-related products and minerals and service of vocational training.

2. ACCOUNTING CONVENTION AND FISCAL YEAR

Accounting convention

The accompanying financial statements, expressed in Vietnam Dong (VND), are prepared under the historical cost convention and in accordance with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam.

Financial statement of the Company is prepared base on the aggregation financial statements of the head office and business units of the Company. The major transactions and balances incurring between the head office and business units of the Company is eliminated on the Company’s financial statement.

The accompanying financial statements are prepared solely to present the separate financial position of the Company as at 31 December 2011 and the separate results of its operations and its separate cash flows for the year then ended; hence the Company did not consolidate investments in subsidiaries and associates in this separate financial statements. Accounting policies for the Company’s investment are presented in Note 4.

Fiscal year

The Company’s fiscal year begins on 1 January and ends on 31 December.

3. ADOPTION OF NEW ACCOUNTING GUIDANCE

On 06 November 2009, the Ministry of Finance issued Circular No.210/2009/TT-BTC (“Circular 210”) guiding the application of International Financial Reporting Standards (“IFRS”) on presentation of financial statements and disclosures of financial instruments. The adoption of Circular 210 requires disclosures of certain financial instruments as well as the effect thereof on the financial statements. This Circular is effective for the financial year ending on or after 31 December 2011. The Company has adopted Circular 210 and additional notes on this application to the financial statements for the year ended 31 December 2011 are set out in Note 28.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Estimates

The preparation of financial statements in conformity with Vietnamese Accounting Standards, Vietnamese Accounting System and prevailing relevant regulations in Vietnam requires 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 financial statements and the reported amounts of revenues and expenses during the financial year (reporting period). Actual results could differ from those estimates.

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 Company comprise cash and cash equivalents, short-term deposits, trade and other receivables, and listed and unlisted financial instruments.

Financial liabilities

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

Re-measurement after initial recognition

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

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits 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.

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.

FORM B 09-DN

131Golden Harvest130 PVFCCo Annual Report 2011 These notes are an integral part of and should be read in conjunction with the accompanying financial statements These notes are an integral part of and should be read in conjunction with the accompanying financial statements



FORM B 09-DNFORM B 09-DN

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventories

Inventories are stated at the lower of cost and net realizable 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, except that cost of raw materials which is calculated using the first in first out method. Net realizable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

The provision for inventory obsolescence is made for obsolete, damaged, or sub-standard inventories and for those which have costs higher than net realizable values as at the balance sheet date.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost less accumulated 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 recognized 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 their estimated useful lives in accordance with Circular 203/2009/TT-BTC dated 20 October 2009 issued by Ministry of Finance, valid from 1 January 2010, as follows:

Years

Buildings and structures 5 - 25Machinery and equipment 3 - 6Motor vehicles 6Office equipment 3 - 5

With respect to repairing expenses of fixed assets at Phu My Fertilizer Plant which is on a cyclical basis, the Company shall be permitted to accrue such expenses to operating expenses in advance on the basis of annual budget. If actual expenses of repairs are higher than the accrued expenses, then the difference shall be directly charged to operating expenses. If the actual expenses of repairs are lower than the accrued expenses, then the difference shall be accounted for as a reduction of operating expenses of the year.

Intangible assets and amortization

Intangible assets represent patent rights, land use right, computer software and other intangible assets which are stated at cost less accumulated amortization. The patent rights and other intangible assets are amortized using the straight-line method over 6 years; the computer software is amortized using the straight-line method over 3 years. The Company amortizes its land use right that has definite term using the straight-line method over the duration of the right to use the land and does not amortize its land use right that has indefinite term.


Leasing

Operating lease includes office and land rentals. Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.

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 costs and related borrowing costs in accordance with the Company’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 level of competent authorities. The final costs of these completed construction projects may vary depending on the final approval by competent authorities.

Investment property

Investment properties, which are composed of land use rights and building and structure of Dong Tay Building at 27 Dinh Bo Linh, Ho Chi Minh City; Cuu Long Supermarket-Office Building in Ca Mau Province; and Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province held by the Company to earn rentals, 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. Investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Years

Land use right 50Building and structure 25

The Company does not depreciate investment properties which are land use rights of Dong Tay Building at 27 Dinh Bo Linh, Ho Chi Minh City, and Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province because they have indefinite term.

Investments in subsidiaries

Subsidiary is a company in which the Company have a dominant portion of ownership and respective control right. Investments in subsidiaries are initially measured at cost that directly relate to its investment. At the subsequent reporting dates, investments in subsidiaries are recognized at cost less devaluation of investment.

Investments in associates

An associate is an entity over which the Company 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. Investments in subsidiaries are initially measured at cost that directly relate to its investment. At the subsequent reporting dates, investments in associates are recognized at cost less devaluation of investment.






Other long-term investments

Other long term investments are the investments into other entities which the Company holds below 20% of the owners’ equity (below 20% voting rights) with no significant influence and over 1 year of capital withdrawing period. Other long-term investment are carried at cost. Provision for devaluation of other long-term investments is for devaluation of long-term investments or losses in investees.

Long-term prepayments

Long-term prepayments include land rental, business privilege fee, spare parts, training fee for Fertilizer Plant, and other long-term prepayments.

Prepaid land rentals are charged to income statement on the straight-line basis over the lease term.

Business privilege fee incurred in the valuation of the enterprise for equitization purpose amounting to VND 531,700,794,477 and has been allocated to income for 6 years from 1 January 2007. According to the Board of General Directors’ judgments, allocating business privilege fee within 6 years is in accordance with financial regulations applicable to privatized State-owned enterprises and estimated useful lives of production line.

Spare parts which are put in use at Phu My Fertilizer Plant are charged to income statement on the straight-line basis over 6 years in accordance with the depreciation duration of production lines.

Training fee for Ca Mau Fertilizer Plant incurred in the year are recorded as actually incurred but has not been charged to income statement, and will be charged to income statement when the Company finalizes the pre-operating expenses of Ca Mau Fertilizer Plant.

Other types of long-term prepayments comprise of tools and equipments which are charged to income statement on the straight-line basis from 1.5 to 2 years, and other prepaid rentals which are amortized over the validity duration of the lease contracts.

Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event, and it is probable that the Company will be required to settle that obligation. Provisions are measured at the management’s best estimate of the expenditure required to settle the obligation at the balance sheet date.

Revenue recognition

Revenue from the sale of goods is recognised when all five (5) following conditions are satisfied:(a) The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;(b) The Company 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 Company; and(e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue recognition (continued)

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 periods, revenue is recognised in each period by reference to the percentage of completion of the transaction at the balance sheet date of that period. 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 Company;(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.

Revenue of investment property rental is recognized in income statement on the straight-line basis over the lease term.

Financial income includes timely and non term interest income from banks. 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 Company’s right to receive payment has been established.

Foreign currencies

The Company applies the method of recording foreign exchange differences in accordance with Circular No.201/2009/TT-BTC dated 15 October 2009 issued by the Ministry of Finance. Accordingly, transactions arising in foreign currencies are translated at exchange rates ruling at the transaction date. Foreign exchange differences arising from these transactions are recognised in the income statement.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the rates of exchange prevailing on the balance sheet date as follows:

- Foreign exchange differences arising from revaluation of monetary items, short-term receivables and payables denominated in foreign currencies at the balance sheet date are recorded in the balance sheet under the account “foreign exchange reserve” in the Owner’s equity section.

- Foreign exchange differences arising from revaluation of long-term receivables and payables are recorded in the income statement for the reporting period.

The recognition of foreign exchange differences in accordance with Circular No.201/2009/TT-BTC differs from that as regulated in Vietnamese Accounting Standard No. 10 (VAS 10) “Effects of changes in foreign exchange rates”. According to VAS 10, all foreign exchange differences arising from revaluation of balances denominated in foreign currencies at the balance sheet date are recognized in the income statement. The Board of Directors has decided to recognise foreign exchange differences as guided in Circular No. 201/2009/TT-BTC and believes that such application and disclosure of differences at the same time, in the case where the Company would apply VAS 10, may provide more information to users of the financial statements. Accordingly, the adoption of Circular No.201/2009/TT-BTC in recording foreign exchange differences makes the Company’s profit before tax for the year ended 31 December 2011 increase by VND 835,361,854 (2010: decrease by VND 310,231,342) and the “Foreign exchange reserve” item under Owner’s equity section in the balance sheet as at 31 December 2011 changes by the same amount in comparison with the VAS 10 adoption.





4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. Investment income earned on the temporary investment of specific borrowings pending their expendi-ture on qualifying assets is deducted from the cost of those assets.

All 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 profit for the year. Taxable profit differs from net profit as reported in the 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.

For fertilizer production at Phu My Fertilizer Plant: the Company is obliged to pay corporate income tax at the rate of 15% its assessable income. The Company is entitled to corporate income tax exemption for four years from the first profit-making year (2004) and a 50% reduction in tax payable for the seven years thereafter (from 2008). The year 2011 is the fourth year the Company enjoys 50% corporate income tax reduction as it is the Company’s eighth profitable year (since the Company’s commencement of operation).

For other business activities, the Company and its subsidiaries’ corporate income tax rate is applied at 25% of its taxable income.Deferred tax is recognized on significant differences between carrying amounts of assets and liabilities in the 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 recognized for all temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized. 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 taxation authority and the Company 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.

5. CASH AND CASH EQUIVALENTS31/12/2011 31/12/2010

VND VND

Cash on hand 1,488,798,500 1,288,972,826 Cash in bank 257,291,554,739 87,194,124,273 Cash equivalents 3,375,000,000,000 2,788,000,000,000

3,633,780,353,239 2,876,483,097,099

Cash equivalents represent the time deposits with terms of 1 to 3 months at commercial banks at the interest rate of 6% to 14% per annum.

6. SHORT-TERM INVESTMENTS31/12/2011 31/12/2010

VND VND

Time deposits at commercial banks 25,000,000,000 25,000,000,000 Time deposits at Petrovietnam Trade Union Finance Investment Corporation (PVFI)

177,000,000,000 -

202,000,000,000 25,000,000,000

Short-term investments as at 31 December 2011 represent time deposits at commercial banks with terms from 06 to 12 months at the interest rate of 13.5% per annum, and time deposits at PVFI which has the matrity date at 31 December 2012 with interest rate of 2.4% per annum.

7 OTHER RECEIVABLES31/12/2011 31/12/2010

VND VND

Charter capital advance to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong)

80,000,000,000 -

Accrued interest income from term deposits 54,677,916,668 24,247,891,668 Others 23,877,242,308 42,129,455,313

158,555,158,976 66,377,346,981

According to the Announcement No. 8606/TB-DKVN dated 22 September 2011 of Vietnam Oil & Gas Group, the Company advanced charter capital to Petrovietnam Urban Development Joint Stock Company (PVC-Mekong) in order to construct the Bac Lieu Tower.





8. INVENTORIES31/12/2011 31/12/2010

VND VND

Goods in transit 69,823,891,557 64,496,408,239 Raw materials 316,303,313,794 237,357,143,166 Tools and supplies 4,848,260,085 2,046,691,861 Work in process 38,953,701,976 9,861,228,348 Finished goods 129,190,073,743 89,439,656,697 Merchandise 469,500,608,140 165,138,160,242

1,028,619,849,295 568,339,288,553 Provision for devaluation of inventories (7,094,202,650) -

Net realizable value 1,021,525,646,645 568,339,288,553

9. TANGIBLE FIXED ASSETS

Buildings and structures

Machinery and equipment Motor vehicles Office equipment Total

VND VND VND VND VND

COSTAs at 01/01/2011 769,697,321,559 5,263,535,898,234 66,221,754,197 34,672,948,287 6,134,127,922,277 Purchases 2,531,986,036 17,276,990,759 8,952,749,545 23,655,108,927 52,416,835,267 Transfer from construction in progress

399,476,049,754 663,049,321 - 7,639,292,496 407,778,391,571

Other increase - - 1,664,197,273 1,192,089,739 2,856,287,012 Contribution to subsidiary

- - (30,152,622,493) - (30,152,622,493)

Other decrease - - - (104,245,033) (104,245,033)

As at 31/12/2011 1,171,705,357,349 5,281,475,938,314 46,686,078,522 67,055,194,416 6,566,922,568,601

ACCUMULATED DEPRECIATIONAs at 01/01/2011 536,822,355,886 4,771,183,604,878 51,869,073,270 12,931,740,317 5,372,806,774,351 Charge for the year 43,543,252,974 90,913,648,732 3,843,262,157 14,015,652,291 152,315,816,154 Other increase - - 272,653,756 621,424,038 894,077,794 Contribution to subsidiary

- - (17,483,791,040) - (17,483,791,040)

Other decrease (1,289,879,872) - - - (1,289,879,872)

As at 31/12/2011 579,075,728,988 4,862,097,253,610 38,501,198,143 27,568,816,646 5,507,242,997,387

NET BOOK VALUE

As at 31/12/2011 592,629,628,361 419,378,684,704 8,184,880,379 39,486,377,770 1,059,679,571,214

As at 31/12/2010 232,874,965,673 492,352,293,356 14,352,680,927 21,741,207,970 761,321,147,926

Office building at 43 Mac Dinh Chi was completed and put in use on 01 August 2011 with estimated cost of VND 842,826,174,063. In which, estimated construction value of VND 270,959,052,384 was recorded as a tangible fixed asset, and land use right value of VND 571,867,121,679 was recorded as a intangible fixed asset in 2011. Currently, part of office building at 43 Mac Dinh Chi is rented by Petrovietnam Southern Building and Development JSC (a Company’s subsidiary). However, the Company has not determined and presented value of leased areas in the investment property.

The cost of the Company’s tangible fixed assets at 31 December 2011 includes an amount of VND 5,334,205,422,387 (31/12/2010: VND 5,286,727,107,567) in respect of fully depreciated items which are still in use.

10 INTANGIBLE ASSETSLand use rights Patent Software Others Total

VND VND VND VND VND

COSTAs at 01/01/2011 12,406,575,000 159,117,493,074 18,263,140,769 9,538,318,032 199,325,526,875 Purchases - - 4,828,972,118 43,636,364 4,872,608,482 Transfer from construction in progress 571,867,121,679 12,323,643,983 21,295,167,336 - 605,485,932,998

As at 31/12/2011 584,273,696,679 171,441,137,057 44,387,280,223 9,581,954,396 809,684,068,355

ACCUMULATED AMORTIZATION

As at 01/01/2011 - 159,117,493,074 3,113,814,865 9,538,318,032 171,769,625,971 Charge for the year - 2,464,728,796 7,644,678,164 597,758 10,110,004,718

As at 31/12/2011 - 161,582,221,870 10,758,493,029 9,538,915,790 181,879,630,689

NET BOOK VALUE

As at 31/12/2011 584,273,696,679 9,858,915,187 33,628,787,194 43,038,606 627,804,437,666

As at 31/12/2010 12,406,575,000 - 15,149,325,904 - 27,555,900,904

The cost of the Company’s intangible assets at 31 December 2011 includes an amount of VND 168,792,861,106 (31/12/2010: VND 168,710,811,106) in respect of fully depreciated items which are still in use.

11 CONSTRUCTION IN PROGRESS31/12/2011 31/12/2010

VND VND

Cai Cui - Can Tho warehouse 122,575,593,205 96,023,047,507 An Giang warehouse 40,907,321,778 - Nam Phat - Tien Giang warehouse 34,854,969,899 - Gia Lai warehouse 25,242,660,028 12,677,660,028 Amoniac project 24,397,090,908 - Tay Ninh warehouse 15,126,000,000 4,510,000,000 Office building at 43 Mac Dinh Chi 5,732,174,223 432,199,782,107 Enterprise resource planning system - 26,286,284,628 Vung Ang warehouse - 25,011,558,283 Nghi Son warehouse - 23,224,572,032 Others 25,035,820,666 90,058,746,909

293,871,630,707 709,991,651,494

According to the Decision No. 751/QD-PBHC dated 27 July 2009, the Company’s Board of Management aproved on an investment project of Cai Cui port Can Tho (the general dock warehouse 20,000 DWT) at Cai Rang District, Can Tho City (phase 1) with the total investment of VND 347,112,911,828. As of 31 December 2011, the total invested amount for the Project is VND 173,613,663,132. During the year, the Company put in use Cawaco warehouse with estimated amount of VND 51,038,069,927 in value.





12. INVESTMENT PROPERTYLand use rights Buildings and

structuresTotal

VND VND VND

COSTAs at 01/01/2011 99,499,152,000 164,164,874,037 263,664,026,037 Purchases 24,500,000,000 33,973,459,131 58,473,459,131

As at 31/12/2011 123,999,152,000 198,138,333,168 322,137,485,168

ACCUMULATED DEPRECIATIONAs at 01/01/2011 684,138,123 1,982,032,500 2,666,170,623 Charge for the year 962,302,573 8,726,829,666 9,689,132,239 Other increase - 1,289,879,872 1,289,879,872 As at 31/12/2011 1,646,440,696 11,998,742,038 13,645,182,734

NET BOOK VALUE

As at 31/12/2011 122,352,711,304 186,139,591,130 308,492,302,434

As at 31/12/2010 98,815,013,877 162,182,841,537 260,997,855,414

Investment properties represent land use rights and buildings and structures of Dong Tay Building at 27 Dinh Bo Linh Street, Ho Chi Minh City; Cuu Long Supermarket-Office Builing in Ca Mau Province; and Sao Phuong Bac Hotel in Sapa Town, Lao Cai Province. In which, Dong Tay Building is leased to Petrovietnam Southern Building and Development Joint Stock Company (a Company’s subsidiary). As of 31 December 2011, the Company has not determined fair value of investment properties because the Company does not intend to sell or transfer in the foreseeable future.

13. INVESTMENTS IN SUBSIDIARIES

Name of subsidiary Place of incorporation and operation

Proportion of

ownership interest

and voting power (%)

31/12/2011

VND

31/12/2011

VND

Principal activity

Central Petrovietnam Fertilizer and Chemicals JSC

Binh Dinh Province

75 75,000,000,000 80,000,000,000 Trading of fertilizer and chemicals

SouthWest Petrovietnam Ferti-lizer and Chemicals JSC

Can Tho City 75 127,500,000,000 100,000,000,000 Trading of fertilizer and chemicals

SouthEast tt Fertilizer and Chemicals JSC

Ho Chi Minh City

75 93,750,000,000 85,000,000,000 Trading of fertilizer and chemicals

Northern Petrovietnam Ferti-lizer and Chemicals JSC

Ha Noi City 75 90,000,000,000 65,000,000,000 Trading of fertilizer and chemicals

Phu My Fertilizer packaging joint stock Company

Ba Ria - Vung Tau Province

51 21,410,000,000 21,410,000,000 Production of packaging

Petrovietnam Southern Building and Development JSC

Ho Chi Minh City

81 58,796,800,000 41,250,000,000 Investing and trad-ing of real estates

Fertilizer and Chemicals Trad-ing-Service Company Limited

Ho Chi Minh City

- 500,000,000,000 Trading of fertilizer and chemicals

466,456,800,000 892,660,000,000

13. INVESTMENTS IN SUBSIDIARIES (Continued)

According to Resolution No. 1929/NQ-DKVN dated 11 August 2010 from Vietnam Oil & Gas Group about comprehensive restructuring plan of PVFCCo - JSC, the Company transformed its subsidiaries into joint stock companies. Accordingly, as at 30 June 2011, the Company still owned by 75% (31 December 2010: 100%) at Central Petrovietnam Fertilizer and Chemicals Limited JSC, South West Petrovietnam Fertilizer and Chemicals JSC, South East JSC, SouthEast Petrovietnam Fertilizer and Chemicals Company JSC and Northern Petrovietnam Fertilizer and Chemicals Company JSC.

In pursuant to Decision No. 16/NQ-PBHC, dated 12 January 2011, the Company disposed Fertilizer and Chemicals Trading-Service Company Limited, a subsidiary owned 100% by the Company. Then, Fertilizer and Chemicals Trading-Service Company Limited was officially transformed into a branch of Petrovietnam Fertilizer and Chemicals Corporation JSC according to the business registration certificate No. 0303165480-010, dated on 28 January 2011. The transfers of assets, capital and labor between the Company and Fertilizer and Chemicals Trading-Service Company Limited was implemented under the Decision 265/QD-PBHC dated on 01 April 2011 with the handing-over figures being their book value as at 01 April 2011.

In accordance with Decision No. 335/NQ-PBHC, dated 05 October 2011 of the Board of Management, the Company contributed some motor vehicles with value of VND 17,248,000,000 into Petrovietnam Southern Building and Development JSC. Accordingly, the Company owned 5,879,680 shares, equivalent to 81% in Petrovietnam Southern Building and Development JSC since 05 October 2011.

14. INVESTMENTS IN ASSOCIATES

Name of associate Place ofincorporation and operation

Proportion of ownership in-

terest and vot-ing power(%)

31/12/2011

VND

Principal activity

VND

Petrovietnam Urban Development JSC (PVC-Mekong)

Ca Mau City 20 20,000,000,000 Construction and installation of works

Petrovietnam Petrochemical and Textile Fiber JSC (PV TEX)

Hai Phong City 25 499,000,000,000 Manufacturing and trading polyester

519,000,000,000

In pursuant to Decision 192/QD-PBHC dated 16 June 2011 of Board of management, the Company acquired 18,000,000 shares in Petrovietnam Petrochemical and Textile Fiber Joint Stock Company (“PV TEX”) from Petrovietnam Finance Corporation (“PVFC”) with value of VND 180 billion. Accordingly, the Company owns 45,000,000 shares, equivalent to 25% since 16 June 2011.

According to Resolution No. 01/NQ-PV TEX/DHDCD/2011 dated 25 March 2011 of the annual meeting of shareholders of PV TEX, shareholders agreed to increase charter capital of PV TEX by VND 196 billion. Accordingly, the Company contributed more VND 49 billion, equivalent to 25% of the additional charter capital of PV TEX in 2011.

As at 31 December 2011, according to financial statements of PV TEX which have not yet audited, value of net assets was VND 1,769 billion which was less by VND 189 billion than the shareholders’ equity (VND 1,958 billion). The main reason of this was from unrealized foreign exchange loss of VND 281 billion. In accordance with PV TEX’s plan, the unrealized foreign exchange loss will be charged to income statement within maximum 5 years. Moreover, PV TEX was still in testing process prior to start of operation, and plants and production lines were in investment process at the year end. Therefore, Board of General Directors did not make provision for investment in PV TEX at the year end.





15. OTHER LONG-TERM INVESTMENTS31/12/2011 31/12/2010

VND VND

Contributed capital in Petrovietnam Petrochemical and Textile Fiber JSC (PV TEX)

- 270,000,000,000

Others 43,591,357,921 43,591,357,921

43,591,357,921 313,591,357,921

As at 31 December 2011, the Board of General Directors has evaluated other long-term investments and believes that there are no diminution in value, thus no provision was made.

16. LONG-TERM PREPAYMENTS31/12/2011 31/12/2010

VND VND

Land rentals 5,618,251,495 6,180,076,651 Business privileges 88,616,799,064 177,233,598,148 Spare parts 61,700,077,851 77,125,097,319 Training fee for Ca Mau Fertilizer Plant 69,469,257,424 32,107,384,773 Others 34,616,674,786 3,954,022,701

260,021,060,620 296,600,179,592

17. DEFERRED TAX ASSETS

The following are the major deferred tax assets recognized by the Company, and the movements thereon, during the current and prior reporting periods.

Severanceallowance

Unearned revenue

Unearned profit Accruedexpenses

Total

VND VND VND VND VND

As at 01/01/2010 545,148,875 (465,867,725) - 1,954,137,637 2,033,418,787 Charge for the year (545,148,875) 1,850,879,882 613,429,889 10,860,495,754 12,779,656,650 As at 01/01/2011 - 1,385,012,157 613,429,889 12,814,633,391 14,813,075,437 Charge for the year - (1,385,012,157) (613,429,889) (991,270,518) (2,989,712,564)

As at 31/12/2011 - - - 11,823,362,873 11,823,362,873

18. TAXES AND AMOUNTS PAYABLE TO STATE BUDGET31/12/2011 31/12/2010

VND VND

Corporate income tax 83,398,140,810 46,308,171,284 Personal income tax 5,201,767,490 1,544,678,963 Other tax 9,959,741 -

88,609,868,041 47,852,850,247

19. ACCRUED EXPENSES 31/12/2011 31/12/2010

VND VND

Repair and maintenance expenses 2011 - 147,231,991,964 Repair and maintenance expenses 2013 72,380,000,000 - Social donation expenses 38,283,665,997 11,092,663,603 Others 46,981,172,306 24,651,733,516

157,644,838,303 182,976,389,083

During 2011, the Company accrued repair and maintenance expense of VND 72,380,000,000 in pursuant to the Plant of repair and maintenance in Phu My Fertilizer Plant in 2013.

In accordance with Decision No. 1762/QD-DKVN dated 24 June 2011 of Vietnam Oil and Gas Group, the Company accrued social donation expenses with amount of VND 150 billion in order to perform the social donation program of the Group. As at 31 December 2011, social donation expenses which have not been paid to donation parties are VND 38,283,665,997.

20. LONG-TERM LOANS AND LIABILITIES31/12/2011 31/12/2010

VND VND

Asia Commercial Bank (ACB) and Petrovietnam Finance Corporation - Vung Tau Branch (PVFC)

- 246,087,577,105

- 246,087,577,105

The long-term loan pursue to Credit Agreement No. 60095579 dated 29 May 2009 from Petrovietnam Finance Corporation - Vung Tau Branch (PVFC - Vung Tau Branch) and Asia Commercial Bank (ACB) for a credit facility of USD 23,905,925, of which USD 7,200,000 is from ACB and USD 16,705,925 from PVFC - Vung Tau Branch. The loan purpose is for the payment of investment cost in the Primary Reformer CO2 recovery system to upgrade capacity of Phu My Fertilizer Plant from 740,000 tons to 800,000 tons of Ure per year. The term of the loan (include the grace period of 24 months) is 120 months from the first withdrawal date.

As at 31 December 2010, the loan balance of this agreement is USD 17,331,332 which is equivalent to VND 328,116,769,473. In which, USD 5,199,302 which is equivalent to VND 98,433,190,955 is from ACB and USD 12,132,029 which is equivalent to VND 229,683,578,518 is from PVFC - Vung Tau Branch. This loan was refunded before due date in 2011.

143Golden HarvestThese notes are an integral part of and should be read in conjunction with the accompanying financial statements


FORM B 09-DN


FORM

B 0

9-DN

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

Note

s To

The

Fina

ncia

l Sta

tem

ents

(con

tinue

d)Fo

r the

yea

r end

ed 3

1 De

cem

ber 2

011

21.

OWNE

R’S

EQUI

TY

Mov

emen

t in

owne

r’s e

quity

Char

ter c

apita

lTr

easu

ry s

hare

sFo

reig

n ex

chan

ge re

serv

eIn

vest

men

t and

de

velo

pmen

t fun

dFi

nanc

ial r

eser

ve

fund

Reta

ined

ear

ning

sTo

tal

VND

VND

VND

VND

VND

VND

VND

Bala

nce

as a

t 01/

01/2

010

3,80

0,00

0,00

0,00

0 (4

3,29

6,08

9,29

9)31

0,15

7,52

1 29

1,04

5,35

3,19

7 19

4,25

8,11

2,77

5 1,

188,

655,

706,

062

5,43

0,97

3,24

0,25

6 Pr

ofit

for t

he y

ear

1,63

2,82

2,71

3,25

1 1,

632,

822,

713,

251

Acqu

isitio

n of

trea

sury

sh

are

for t

he y

ear

(39,

981,

041,

328)

(39,

981,

041,

328)

Prof

it di

strib

utio

n52

8,34

6,03

0,87

5 12

8,11

0,07

9,81

8 (7

32,9

05,9

90,6

31)

(76,

449,

879,

938)

Recla

ssifi

ed16

,075

,687

,277

10

,717

,124

,849

-

26,7

92,8

12,1

26

Divi

dend

s pa

id(8

71,6

45,4

20,0

00)

(871

,645

,420

,000

)Ot

hers

- 73

,821

(2

29,0

99,0

00)

(229

,025

,179

)

Bala

nce

as a

t 01/

01/2

011

3,80

0,00

0,00

0,00

0 (8

3,27

7,13

0,62

7)31

0,23

1,34

2 83

5,23

7,97

2,34

9 33

3,08

5,31

7,44

2 1,

216,

927,

008,

682

6,10

2,28

3,39

9,18

8 Pr

ofit

for t

he p

erio

d -

- 3,

120,

178,

464,

581

3,12

0,17

8,46

4,58

1 Ac

quisi

tion

of tr

easu

ry

shar

e fo

r the

yea

r (1)

(684

,211

,020

) -

- -

-

(684

,211

,020

)

Prof

it di

strib

utio

n (2

)-

- -

572,

159,

290,

996

155,

236,

443,

831

(727

,395

,734

,827

) -

Prov

ision

for b

onus

and

w

elfa

re fu

nds

(2)

- -

- -

(227

,366

,864

,770

)(2

27,3

66,8

64,7

70)

Divi

dend

s pa

id (3

) -

- -

- -

(755

,291

,940

,000

)(7

55,2

91,9

40,0

00)

Othe

rs-

- (1

,145

,593

,196

) -

- -

(1

,145

,593

,196

)

Bala

nce

at 3

1/12

/201

13,

800,

000,

000,

000

(83,

961,

341,

647)

(835

,361

,854

)1,

407,

397,

263,

345

488,

321,

761,

273

2,62

7,05

0,93

3,66

6 8,

237,

973,

254,

783

(1):

Durin

g th

e ye

ar, t

he C

ompa

ny h

as a

cqui

red

28,5

40 tr

easu

ry s

hare

s w

ith a

vera

ge b

uyin

g pr

ice p

er s

hare

of V

ND 2

3,97

4 pe

r sha

re.

(2):

Prof

it di

strib

utio

n to

fun

ds in

clude

s th

e Co

mpa

ny’s

addi

tiona

l dist

ribut

ed t

o In

vest

men

t an

d De

velo

pmen

t fu

nds

and

Fina

ncia

l Res

erve

fun

ds w

ith r

espe

ctiv

e am

ount

of

VND

572,

159,

290,

996

and

155,

236,

443,

831

out o

f the

pro

fit a

fter

tax

for t

he y

ear e

nded

31

Dece

mbe

r 201

0 ac

cord

ing

to th

e Re

solu

tion

of th

e an

nual

shar

ehol

ders

’ mee

ting

on 9

Apr

il 20

11. P

rovi

sion

for b

onus

and

wel

fare

fund

s in

the

year

inclu

des

VND

119,

785,

690,

852

from

the

prof

it af

ter t

ax o

f the

yea

r end

ed 3

1 De

cem

ber 2

010,

and

VND

107

,581

,173

,918

w

hich

was

tem

pora

rily

dist

ribut

ed fr

om th

e pr

ofit

afte

r tax

of t

he y

ear e

nded

31

Dece

mbe

r 201

1.

(3):

Acco

rdin

g to

the

Reso

lutio

n of

the

annu

al sh

areh

older

s’ m

eetin

g on

9 A

pril 2

011,

the

Com

pany

dec

lared

and

paid

divi

dend

s of V

ND 7

55,2

95,4

80,0

00 (V

ND 2

,000

per

shar

e) fo

r the

fisc

al ye

ar

ende

d 31

Dece

mbe

r 201

0. In

whi

ch, t

he fi

rst d

ivide

nd ad

vanc

e am

ount

ing t

o VND

377

,647

,740

,000

(VND

1,0

00 pe

r sha

re) w

as pa

id in

third

quar

ter 2

010.

On 2

1 Ap

ril 2

011,

the C

ompa

ny de

clare

d th

e se

cond

divi

dend

pay

men

t for

the

year

end

ed in

31

Dece

mbe

r 201

0 af

ter d

istrib

utin

g to

fund

s am

ount

ing

to V

ND 3

77,6

47,7

40,0

00. O

n 25

Aug

ust 2

011,

the

Corp

orat

ion d

eclar

ed th

e fir

st

divide

nd a

dvan

ce fo

r the

yea

r end

ed in

31

Dece

mbe

r 201

1 w

ith a

mou

nt o

f VND

1,0

00/s

hare

(10%

face

valu

e). A

s a re

sult,

the

Corp

orat

ion te

mpo

raril

y pa

id VN

D 37

7,64

4,20

0,00

0.

21. OWNER’S EQUITY (CONTINUED)

Charter capital is in detail as below:

Shareholders Proportion 31/12/2011(%) VND

Vietnam Oil & Gas Group 61.37 2,332,042,530,000Others 38.63 1,467,957,470,000

100.00 3,800,000,000,000

The number of shares registered and issued to public by the Company as at 31 December 2011 was 380,000,000, in which, the Company is holding 2,380,800 treasury shares (equivalent to 2,380,800 shares). The Company has only ordinary shares with par value of VND 10,000 per share. The shareholders of ordinary shares are entitles to receive dividends as declared from time to time and are entitled to one vote per share at the Company’s shareholders meetings. All shares rank equally with regard to the Company’s residual assets.

22. NET REVENUES AND COST OF SALESLocally-produced

productsImported goods Total

VND VND VND

2011Net sales 6,743,897,263,643 858,122,608,900 7,602,019,872,543Cost of goods sold 2,961,065,703,397 837,229,218,800 3,798,294,922,197

Gross profit 3,782,831,560,246 20,893,390,100 3,803,724,950,346

2010Net sales 4,692,304,090,466 43,304,644,664 4,735,608,735,130Cost of goods sold 2,555,839,748,179 40,921,085,048 2,596,760,833,227

Gross profit 2,136,464,342,287 2,383,559,616 2,138,847,901,903

Revenue from locally-produced products is as follows2011 2010

VND VND

Sales of Ure 6,242,801,579,888 4,508,705,348,029 Sales of Amoniac 36,273,170,013 186,892,922,108 Sales of electricity 7,682,902,076 10,201,609,113 Others 510,798,797,802 27,450,312,153

6,797,556,449,779 4,733,250,191,403 Sales discounts 53,659,186,136 40,946,100,937

6,743,897,263,643 4,692,304,090,466





23. PRODUCTION COST BY NATURE2011 2010

VND VND

Raw materials and consumables 2,173,695,813,486 1,580,402,261,150 Labour 320,666,105,255 227,554,464,285 Depreciation and amortization 172,114,953,111 673,180,983,042 Out-sourced services 430,981,958,254 433,672,098,150 Other expenses 549,616,426,043 353,699,151,007

3,647,075,256,150 3,268,508,957,634

24. FINANCIAL INCOME2011 2010

VND VND

Interest income 448,555,064,135 272,338,659,153 Dividend 141,725,201,087 83,657,226,279 Gain from realized foreign exchange rate difference 7,755,473,997 - Others 79,379 308,356,946

598,035,818,598 356,304,242,378

25. FINANCIAL EXPENSES2011 2010

VND VND

Loan interest 25,377,064,463 7,633,940,298 Loss from exchange difference 39,067,463,965 62,278,698,560 Others 4,350,234,914 10,074,053,803

68,794,763,342 79,986,692,661

26. CORPORATE INCOME TAX2011 2010

VND VND

Current corporate income tax calculated on the current tax-able incomes

317,645,112,808 176,936,737,983

Tax adjustments in previous years 63,558,620 -

Current corporate income tax expense 317,708,671,428 176,936,737,983

27. OPERATING LEASE COMMITMENTS

At the balance sheet date, the Company had outstanding commitments under non-cancelable operating leas-es, which fall due as follows:

31/12/2011 31/12/2010VND VND

Within one year 7,188,223,094 12,873,721,961In the second to fifth years inclusive 27,565,696,375 22,924,219,188After five years 31,795,489,104 28,702,378,545

66,549,408,572 64,500,319,694

On 3 September 2005, the Company was handed over with a land-subleasing contract No. 178/HD/TLD/UDEC.2001 dated 1 June 2001 signed between the PMU of Phu My Fertilizer Plant and Ba Ria-Vung Tau Urban Development and Construction Company for long-term rental of land and infrastructure in Phu My I Industrial Zone, Tan Thanh Commune, Ba Ria Vung Tau Province. The contract is valid for 17 years from the date of 3 September 2004 with the rental fee and infrastructure use fee of USD 378,392 per annum.

On 1 November 2010, the Company signed the office rental contract in Cambodia with rental period of 3 years and rental fee of USD 1,500 per month.

28. FINANCIAL INSTRUMENTS

Capital risk management

The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of equity attributable to equity holders (comprising capital, reserves and retained earnings).

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.





28. FINANCIAL INSTRUMENTS (CONTINUED) Categories of financial instruments

Carrying amounts

31/12/2011 31/12/2010VND VND

Financial assetsCash and cash equivalents 3,633,780,353,239 2,876,483,097,099 Trade & other receivables 287,894,983,307 184,765,026,757 Short-term investments 202,000,000,000 25,000,000,000 Long-term investments 43,591,357,921 313,591,357,921 Other financial assets 151,850,200 6,839,137,844

Total 4,167,418,544,667 3,406,678,619,621Financial liabilitiesBorrowings - 328,116,769,473 Trade & other payables 375,712,089,362 372,240,996,959 Accruals 157,644,838,303 182,976,389,083

Total 533,356,927,665 883,334,155,515

The Company has not assessed fair value of its financial assets and liabilities as at the balance date since there are no comprehensive guidance under 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 IFRS on presenta-tion 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

Financial risks include market risk (including foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company does not hedge these risk exposures due to the lack of a market to purchase financial instruments.

Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company does not hedge these risk exposures due to the lack of any market to purchase financial instruments.

Foreign currency risk management

The Company undertakes certain transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Company does not hedge this risk due to the lack of any market to purchase such instruments.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabili-ties at the end of the reporting period are as follows:

Liabilities Assets

31/12/2011 31/12/2010 31/12/2011 31/12/2010 VND VND VND VND

United States Dollar (USD) 4,260,029,420 597,806,637,247 147,465,726,357 1,755,187,612 Euro (EUR) 150,052,595 - 39,588,091 40,793,413 Singapore Dollar (SGD) - - - 6,619,819

Price risk management

The Company is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments.

Commodity price risk management

The Company purchases materials, commodities from local and foreign suppliers for business purpose. There-fore, the Company is exposed to the risk of changes in selling prices of materials, commodities. The Company does not hedge this risk due to the lack of any market to purchase such instruments.

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Company does not have any significant credit risk exposure to any counterparty.


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 period is kept to manageable levels relative to the amount of funds that the Company believes can generate within that period. The Company policy is to regularly monitor current and expected liquidity requirements to ensure that the Company maintains sufficient reserves of cash, borrowings and adequate committed funding from its owners 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 liabili-ties with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

Less than 1 year Over 1 year TotalVND VND VND

31/12/2011Borrowings - - - Trade & other payables 375,712,089,362 - 375,712,089,362 Accruals 157,644,838,303 - 157,644,838,303

Total 533,356,927,665 - 533,356,927,665

31/12/2010Borrowings 82,029,192,368 246,087,577,105 328,116,769,473 Trade & other payables 372,240,996,959 - 372,240,996,959 Accruals 182,976,389,083 - 182,976,389,083

Total 637,246,578,410 246,087,577,105 883,334,155,515

148 PVFCCo Annual Report 2011 These notes are an integral part of and should be read in conjunction with the accompanying financial statements

Notes To The Financial Statements (continued)For the year ended 31 December 2011 FORM B 09-DN

28. FINANCIAL INSTRUMENTS (CONTINUED)


The management assessed the liquidity risk at low level. The management believes that the Company will be able to generate sufficient funds to meet its financial obligations as and when they fall due.

The following table details the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets, if any. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Less than 1 year Over 1 year TotalVND VND VND

31/12/2011Cash and cash equivalents 3,633,780,353,239 3,633,780,353,239 Trade & other receivables 287,894,983,307 287,894,983,307 Short-term investments 202,000,000,000 202,000,000,000 Long-term investments - 43,591,357,921 43,591,357,921 Other financial assets 20,000,000 131,850,200 151,850,200

Total 4,123,695,336,546 43,723,208,121 4,167,418,544,66731/12/2010Cash and cash equivalents 2,876,483,097,099 2,876,483,097,099 Trade & other receivables 184,765,026,757 184,765,026,757 Short-term investments 25,000,000,000 25,000,000,000 Long-term investments - 313,591,357,921 313,591,357,921 Other financial assets 6,706,638,044 132,499,800 6,839,137,844

Total 3,092,954,761,900 313,723,857,721 3,406,678,619,621

29. COMPARATIVE FIGURES

Comparative figures are figures in the audited financial statements for year ended 31 December 2010.


SUBSIDIARIES

* Phu My Fertilizer Plant Address: Phu My 1 Industrial Zone, Tan Thanh District, Ba Ria - Vung Tau Province Tel : +84 64 392 1468 Fax : +84 64 392 1477

* Branch in Hochiminh City Address: PVFCCo Tower, 43 Mac Dinh Chi Street, Da Kao Ward, District 1, Hochiminh City Tel : +84 8 3911 8126 Fax : +84 8 3911 8127

* Branch in Cambodia Address: 55 Sothearos Street, Sangkat Tonle Bassac, Khan Chamkarmon, Phnom Penh, Cambodia Tel : + 855 23 630 27 27 Fax : + 855 23 99 63 56

* North Petrovietnam Fertilizer and Chemicals JSC (PVFCCo - North) Address: 4th Floor, VPI Tower, 173 Trung Kinh Street, Cau Giay District, Hanoi City Tel : +84 4 3537 8256 Fax : +84 4 3537 8255

* Central Petrovietnam Fertilizer and Chemicals JSC (PVFCCo - Central) Address: Lot A2, Nhon Binh Industrial Complex, Nhon Binh Ward, Quy Nhon City, Binh Dinh Province Tel : +84 56 384 8488 Fax : +84 56 384 8588 Website : www.pce.vn

* South East Petrovietnam Fertilizer and Chemicals JSC (PVFCCo - SE) Address: 9th Floor, No 27 Dinh Bo Linh Street, Ward 24, Binh Thanh District, Hochiminh City Tel : +84 8 35 111 999 Fax : +84 8 35 111 666 Website : www.pse.vn

* South West Petrovietnam Fertilizer and Chemicals JSC (PVFCCo - SW) Address: 151/18 Tran Hoang Na Street, Hung Loi Ward, Ninh Kieu District, Can Tho City Tel : +84 710 376 5080 Fax : +84 710 376 5078 Website : www.dpmtnb.com.vn

* Dam Phu My Packaging JSC (PVFCCo - Packaging) Address: Street 1B, Phu My Industrial Zone, Tan Thanh District, Ba Ria - Vung Tau Province Tel : +84 64 392 1999 Fax : +84 64 392 1966

* Petrovietnam Southern Building & Development JSC (PVFCCo - SBD) Address: 6th Floor, No 27 Dinh Bo Linh Street, Ward 24, Binh Thanh District, Hochiminh City Tel : +84 8 6285 3922 Fax : +84 8 6285 3933 Website : www.pvfcco-sbd.vn

PETROV

IETNA

M FERTILIZER A

ND

CHEM

ICALS CO

RPORATIO

N

AN

NU

AL REPO

RT 2011 STOCK CO

DE: D

PM

PETROVIETNAM FERTILIZER AND CHEMICALS CORPORATIONPVFCCo Tower, 43 Mac Dinh Chi, Da Kao Ward, District 1, HCMC, VietnamTel : +84 8 3825 6258Fax: +84 8 3825 6269Email: [email protected]

www.dpm.vn

golden harvest - dpm.vn · 2 message from leaders 4 golden foundation 6 establishment and...

Documents