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ANNUAL REPORT

SUSTAINABLE GROWTH - RELIABLE BRAND

4th Floor, Petrovietnam Tower, 05 Le Duan Street - District 1 - HCMC Tel.: (84-8) 39100108 - Fax: (84-8) 39100097 - Website: www.pgs.com.vn

TABLE OF CONTENTS

Responsibilities to InvestorsResponsibilities to EmployeesResponsibilities to SocietyResponsibilities to EnvironmentCommunity activities

MESSAGE FROM THE CHAIRMAN

Organization and Personnel

Introduction of Board of Directors

Introduction of Board of Supervisors

Introduction of Board of Managers and Chief Accountant

Solutions to achieve target in 2015

Report of Board of Directors

Report of Board of Managers

INTRODUCTION TO MEMBER COMPANIES

Related companiesDistribution system

CORPORATE GOVERNMENT

Operation of Board of DirectorsOperation of Supervisory BoardTransaction, remuneration, and other benefits of BOD,Supervisory Board, and Board of Managers

Shareholders’ information Risk management

DEVELOPMENT STRATEGY IN 2015

SUSTAINABLE DEVELOPMENT

AUDITED FINANCIAL STATEMENTS

Objectives – StrategiesLong-term development plan

Consolidated financial statements

LIST OF ABBREVIATIONS

LPG: Liquefied Petroleum Gas (Also known as Gas)

CNG: Compressed Natural Gas

Dry Gas: Dry gas is a natural gas or associalisted gas which has been

treated to remove mechanical impurities, water, bupro and condensate in the gas processing plant Its main composition is methane (CH4)

PVN: Vietnam Oil and Gas Group

PV Gas: PetroVietnam Gas Joint Stock Corporation

PV Gas D: PetroVietnam Low Pressure Gas Joint Stock Company

PV Gas South: PetroVietnam Southern Gas Joint Stock Company

CNG Vietnam: CNG Vietnam Joint Stock Company

VT-Gas: Vietnam Liquefied Petroleum Gas Co Ltd

PV Gas SaiGon: PetroVietnam Eastern Gas Co Ltd.

PV Gas Cylinder: PVGas Cylinder Factory

CP Price: Contractual price that Aramco Company (Arap) announces of

the beginning of each month and applies to the month of delivery.

AGM: Annual General Meeting

Staff: Officers - Employees - Workers

BoD: Board of Director

BoM: Board of Managers

Dear our valued shareholders and customers!

MESSAGE FROM THE CHAIRMAN OF BOARD OF DIRECTORS

In 2014, PV Gas South has implemented its

produc-tion and operaproduc-tion plans with a mixture of

favor-able conditions and obstacles On the one hand,

there have been some certain advantages such as

supplies, capital, infrastructure, brand name, etc

On the other hand, PV Gas South has still

encoun-tered lots of disadvantages like prolonged

economy crisis, stagnant manufacturing, reduced

LPG demand, high inventory, CP fluctuation not

following any rules; as a matter of fact, CP reduced

sharply in December 2014 by 52% in comparison

with December 2013; intense competition due to

other LPG traders applying good support for

agents and stores; there has still remained

commer-cial fraud in LPG business in most of markets while

the punishment has not been strong enough; the

world’s oil price has continuously lowered

espe-cially months of year end; price of input CNG, by

contrast, has increased, customers have moved to

substitutes such as Biomass, coal due to more

com-petitive price.

In a context of both disadvantages and advantages,

PV Gas South has concentrated all resources,

actively and flexibly managed along with all PV Gas

South’s staff’s resolution That’s the reason why It’s

operation tasks, business targets of the year of 2014

were fiercely implemented and the final results

exceed its plan numbers, pursued closely

Resolu-tion approved by AGM 2014 as follows:

- LPG output reached 236,893 tons, exceeding

- Profit before tax reached 246.61 billion dong,

exceeding 26,92% of 2014 target Chairman of BoD of PV Gas South

Do Tan

- Profit before tax reached 246.61 billion dong,

In the 2015 coming, even though it is forecast that

the world’s economy will be better, there have

existed lots of risk factors, and in unstable

condi-tion, especially the unpredictable fluctuation of oil

price, the world’s CP, etc Such factors are latent,

affecting PV Gas South’s business operations With

different oil price forecast, PV Gas South has

prepared its business operation target, financial

plan for 2015 with the goal of operation

effective-ness utilization PV Gas South key and crucial tasks

for 2015 and incoming years are as follows:

Firstly, safe, stable and effective operating the

system of depots, extraction station, and

infrastruc-ture of LPG, CNG; continuous LPG and CNG supply

to Customers.

Secondly, regarding LPG business operation: stay

the leading civil LPG trading unit in the South area;

reinforce and develop the markets which are

com-petitive and have brought about business

effec-tiveness; expand potential consumption market

Regarding CNG: establish consumption network on

the whole country; negotiate and make a flexible

price policy to convince customers switching their

current fuel into CNG; use CNG widely in

transpor-tation and industrial manufacturing; Research and

development the product of LNP as PV Gas South’s

new product line

Thirdly, improve the quality of after sales service.

Fourthly, continue to investment, amend, expand

LPG and CNG infrastructure to fulfil market

demand

Finally, determine properly capital demand for each phase, ensuring reasonable and effective capital structure in order to pursue investment projects, making sure that PV Gas South’s business plans are executed in financially active condition, conserving and developing investment capital Although there exist lots of obstacles, with proper and consistent business strategy as well as clearly operating, associating company’s benefits with shareholders’ welfares; PVN’s concerns, timely support from PV Gas – parent company, I do believe that PV Gas South will continue to firmly step up, show that PV Gas South is strong enough to over- come hinders to make accomplishment in the near future.

On be half of Board of Directors, I would like to thank our valued customers and clients for close coordination cooperation, and shareholders for belief, trust, and support Especially, I highly appre- ciate all PV Gas South’s staff for their tireless and important contribution to the success of PV Gas South over the year, their effort for its firm status in the industry today Thus, PV Gas South keep its solid position of Vietnam’s leading enterprise as well as brand of “PETROVIETNAM GAS”

Best regards with success, Chairman of BoD of PV Gas South

Do Tan

OVERVIEW OF PV GAS SOUTH

GENERAL INFORMATION

PETROVIETNAM SOUTHERN GAS JOINT STOCK COMPANY

(PV Gas South)

Head office: 4th floor, PetroVietnam Tower,

No 1 - 5 Le Duan, Ben Nghe Ward, District 1, HCMC

On March 28th 2000, Gas Trading Southern Enterprise directly under Gas Processing and ing Company (PV Gas), PV Gas South’s predecessor, was established under the Decision No 389/QD-HDQT issued by Board of Directors of PetroVietnam Corporation (currently known as PetroVietnam)

Trad-On April 12th 2006, Board of Directors of PetroVietnam Corporation (PetroVietnam Group) signed Decision No 825/QD-DKVN on the establishment of PetroVietnam Southern Gas Company (PV Gas South) on the basis of the Gas Trading Southern Enterprise directly under Gas Processing and Trad- ing Company (PV Gas) and LPG Business Division of Oil and Gas Trading Company (Petechim)

On July 23rd 2007, PetroVietnam Southern Gas Joint Stock Company celebrated its first annual general meeting When completing legal procedures, Company official come into operation since July 25th 2007

PV Gas South Shares listed

Carrying out AGM Resolution, Company’s Board of Directors implemented plan to legally list Company’s shares on the Hanoi Stock Exchange With support of PetroVietnam Securities Joint Stock Company as listing consultant, Company finalized its prospectus and other legal documents

to list its shares on the stock exchange

On November 15th 2007, Company’s shares was officially listed on Hanoi Stock Exchange with stock code of PGS

MEMORABLE MILESTONES

PVGas South’s predecessor

PV Gas South established

PV Gas South transformed into Joint stock company

Since the date of establishment on 2000, with sales level of only 5,000 ton and sale revenue of 15 billion dong per year, after more than 14 years of operation, with guide- line of “Safety – Quality – Efficiency” , PetroVietnam Southern Gas Joint Stock Company has become one of Vietnam’s leading Liquefied Gas businesses PV Gas South’s network

of business covers all provinces and cities in the Southern area Nowadays, Company’s output has reached 200,000 ton per year and sale revenue has reached 7,000 billion dong per year and continues to fast grow in the near future.

In order to catch up with global integration trend and enhance management efficiency

as well as ensure safety in business activities, PV Gas South has successfully built up quality management and safety management which were recognized by British Stan- dards Institution (BSI) with certificate of Quality management system of ISO 9001:2008, Environmental management system of ISO 14001:2004 and Safety management with standard of OHSAS 18001:2007, respectively Most recently, Company was certified with integrated management system of PAS 99:2006 coming into effect since March

2013 till March 2016

PetroVietnam Southern Gas Joint Stock Company has been investing in setting up age depots and filling station in Southern provinces for market expansion, taking initia- tive in supply to fullfil customer demand.

stor-PETROVIETNAMGAS-Trustworthy Brand

With business guideline of “always customers oriented”, PV Gas South

always a trustworthy partner for domestic and foreign companies,

a reliable brand for consumers

- Company was awarded with prize of being one of

“The most 30 transparent enterprises” by Hanoi Stock Exchange 2013-2014

- Continue the success in

2013, Company ranked 14th of the “Top 50 of Viet- nam most effective enter- prises” in 2014 awarded by Nhip Cau Dau Tu magazine voting hosting This is the 3rd year of PV Gas South being awarded which con- firms that PV Gas South is a big, sustainable and effec- tive enterprise The pro- gram purpose is to seek and rank listing companies whose significant achieve- ments in their business indi- cated from basic financial ratios

- Awarded with “Top 50 of best annual reports in 2014

” hosted by Ho Chi Minh Stock Exchange and Dau Tu Chung Khoan newspaper

Second-class Labor Medal, 2012

Unit with outstanding achievements in 2014

Top 50 of Vietnam most effec tive enterprises in 2011, 2012, 2013

Top 50 of best annual reports in 2011, 2012, 2013, 2014

MAJOR ACHIEVEMENTS

INDUSTRY SECTORS AND BUSINESS LOCATIONS

Industry sectors:

Trade, import and export petroleum products: gas, materials, equipment, and vehicles used for transportation, storage, cylinder bottled, and LPG trading.

Trade CNG: materials, equipment, vehicles used for transportation, storage, CNG trading.

Design, construct, and consult investments on projects of liquefied leum gas, industrial gas, technology transfer, business operators, mainte- nance of civil works related to liquefied petroleum gas

petro-Transport liquefied petroleum gas, fill and extract LPG, and other services related to LPG and gas products used for industrial, civil and transportation purposes.

Trade petroleum, viscid oil, and other additives related to petroleum and viscid oil

Do business in fertilizer, real estate, palletizing.

Manufacture tank, basin, and metal containers

Repair fabricated metal products

PV Gas South’s Business network of LPG

has up-to-now covered all provinces from

Da Nang to Ca Mau, including storage

depots, LPG filling stations in Southern

area As to Ho Chi Minh, a major market of

cylinder consumption, PV Gas South

focused on building up satellite filling

and extraction systems allocated evenly

throughout Southwest, Southcentral,

Southeast markets At the same time,

Company also sets up head system of LPG

distribution agency to periodically meet

and exchange policies so as to

strengthen, promote and unify price

level, enhance distribution system and

competitive capabilities.

Regarding CNG business, PV Gas South

currently manages 3 mother stations of

CNG My Xuan A (Ba Ria – Vung Tau), Hiep

Phuoc (Ho Chi Minh), and compressed

gas station Phu My I (Ba Ria – Vung Tau)

which is of CNG Vietnam Subsidiary with

total design capacity of 215 million m3.

Major CNG consumers are industries like

steel, construction materials, bricks,

ceramics, and so on in the Southern area,

which are located within 200 km far from

the factory Current CNG distribution

poli-cies are quite flexible, depending on the

features and customers’ requirements of

gas receiving, tank truck can move into

areas of rough terrain

It is the wide distribution and business

network that PV Gas South is able to

expand market, take initiative in supply

and well serve its customers

Business locations:

PVGas South owns wide network of

Locations of CNG mother stations

Users: 45kg cylinder is mainly for consuming

purpose with small scale but high frequency of

using like in restaurants, hotels, schools,

collec-tive kitchens, factories with small to medium

scale of production.

Weight of cover: 37-40 kg

Weight of LPG: 45kg ÷ 200gram

Manufacturing standard: DOT-4BW-240

Cover material: manufactured with steel

imported from Japan ensuring standards of

DOT-4BW-240 and Vietnamese standards of

QCVN 04:2013/BCT issued on September 15th

2013 The cylinder can endure pressure when

containing and transporting LPG at the pressure

state which was verified and certified with safety

and allowed to be circulated and used

This type of LPG is sold to factories, manufacturing areas, gas trading companies by tankers

Users: 12kg cylinder is mainly for consuming

purpose with small scale like households’ daily usage, small eateries, small businesses using gas fuel.

Weight of cover: 13.5-14.5 kg Weight of LPG: 12kg ÷ 100gram Manufacturing standard: DOT-4BA-240 Cover material: manufactured with steel

imported from Japan ensuring standards of DOT-4BA-240 and Vietnamese standards of QCVN 04:2013/BCT issued on September 15th

2013 The cylinder can endure pressure when containing and transporting LPG at the pressure state which was verified and certified with safety and allowed to be circulated and used

CNG is compressed natural gas with main component of CH4 – methane (accounting for 85-95%) which is extracted from natural gas mines, oil (associated gas) mines or gas plant (obtained in the process of production of the refinery), processed and compressed at high pressure (200 to 250 bar) for storage in special tank and transported to consumption places such as plants using thermal energy and apartment buildings, and so on bBecause components are simple and easy to process

to remove toxic mixture like Sox, Nox, CO2 , without benzene and aromatic hydrocarbon, when this fuel fires, there is not much of SO2 , NO2 , CO2 , etc and does not release dirt Therefore, using CNG

as a substitute for traditional fuels like coal, oil, will contribute to protect environment and cut cost.

Petroleum: is a fuel processed from petrochemical technology Petroleum can be produced

domes-tically or by import from overseas Categories, quality are determined by producer on the basis of market demand and regulations in Vietnam

Lube/Grease: are lubricants for engines, produced mainly from mineral oil After being processed,

the products are packed in barrels, loncan, box, etc to preserve and sell to the market, mModels, categories, quality of product are determined by producers on the basis of market demand and regulations in Vietnam

PV Gas South’s petroleum business is mainly conducted by trading petroleum in domestic market consisting of both wholesale and retail

Wholesale: Trade with large quantity, or deliver by special vehicle (tankers) to customers.

Retail: Trade with small quantity directly to customers at petroleum stores or where customers

require (negotiated).

CNG products

Petroleum/ viscid oil products

Nowadays, PV Gas South has 31 extraction and filling stations with total capacity of 24,580 tons/month from Da Nang to Ca Mau among which 16 stations belong to PV Gas South with total capacity of 12,900 tons per month and the other 15 stations are of monthly hiring Except for 16 LPG extraction and filling stations, PV Gas South currently owns 04 warehouses with total capacity of 7,700 tons In the coming time, PV Gas South is going to build up warehouses and extraction and filling stations in the Middle area, South east, and South west area

Up to now, PV Gas South has invested Compressed CNG filling station to supply transportation and industrial manufacturing This is a new sector and highly potential Its designed capacity is

215 million m3 gas per year, among which the parent company with 2 industrial zones named

My Xuan and Hiep Phuoc is of designed capacity of 100 million m3 gas per year and 20 million m3 gas per year respectively, and CNG Vietnam – Phu My Industrial zone is of the design capac- ity of 95 million m3 gas per year

BUSINESS CAPACITY

System of wharves, storage of LPG and extraction and filling stations of PV Gas South

in southern provinces

List of PV Gas South storage depots and extraction and filling stations

No Item Address Total capacity

Storage depots (MT)

Can Tho Warehouse

Go Dau Warehouse

VT-Gas Dong Nai Warehouse

Dung Quat Warehouse Eastern Dung Quat Industrial Park, Binh Thuan,

Binh Son district, Quang Ngai Province

Highway No 55, Thanh Binh, Dat Do Town,

Ba Ria Vung Tau Province

Tuyet Diem Hamlet, Binh Thuan Commnune, Binh Son District, Quang Ngai Province

Km No 11, Highway 14, Hoa Phu Commune, Buon Me Thuot City, Dak Lak Province

Dong Nai Port, Long Binh Tan Ward, Bien Hoa City,

Dong Nai Province

Lot G, Street N4, Bac Dong Phu Industrial Park, Tan Phu Town,

Dong Phu District, Binh Phuoc Province

Lot II.5, II.6, Tra Noc II industrial park, Can Tho City

Dong Xuyen Industrial Park, Ba Ria-Vung Tau

Lot 4, Tra Da Industrial Park, Tra da Commune,

Pleiku City, Gia Lai Province

Lot II.5, II.6, Tra Noc II Industrial Park, Can Tho City

157 Xom Nui, Vinh Phương Commune, Nha Trang CityTan My Chanh Industrial Park, Ward 9, Tien Giang Province

Quan Ngang Industrial Park, Gio Linh, Quang Tri Province

Lien Chieu Industrial Park, Hai Chau, Da NangLot BI – 11 Phu Hoi Industrial Park, Duc Trong District, Lam Dong

262 Nguyen Luong Bang, Hoa Thanh Commune, Tay Ninh

Go Dau A Port, Phuoc Thai Commune,Long Thanh District, Dong Nai ProvinceDong Nai Port, Long Binh Tan Ward,Bien Hoa City, Dong Nai Province

Lot D1/1 Street 1B, Vinh Loc Industrial Park,Binh Hung Hoa B, Binh Tan District, HCM

Lot D6-01, Nhon Hoi Industrial Park (Zone A), Nhon Hoi Economic Zone, Quy Nhon City, Binh Dinh Province

1,2004,0001,0001,500

1,000500

400600500

5005005006004002,500400400

1,500

6002,000

LPG filling station

(Ton)

Total

Capacity of filling and extraction (Ton/ month)

7,700

12,900

Total

CNG compressed gas supply at PV Gas South

System of CNG mother stations and daughter stations at PV Gas South

Total capacity (million m 3 /year)

Management unit Project Notes

I CNG mother station

II CNG Daughter stations

Parent company – PV Gas South

Parent company – PV Gas South

Parent company – PV Gas South

Parent company – PV Gas South

Parent company – PV Gas South

Parent company – PV Gas South

Parent company – PV Gas South

My Xuan CNG Station

Hiep Phuoc CNG Station

Daughter station at Tan Kien, Binh Chanh, HCMC Daughter station at

An Suong, HCMC

Mobile Refuelling Unit at

My Xuan Daughter station at

Ho Chi Minh National University

Daughter station at

449 Nguyen An Ninh, Vung Tau Daughter station at

654 Nguyen An Ninh, Vung Tau

Phu My I Industrial Park CNG Station

II CNG Daughter stations

Daughter station (gas fillingstation for buses) Pho Quang Street

Completed and put into operation in 2010 with initial capacity of

50 million m3, it is now expanded

Completed and put into operation of first phase in 2011.

CompleteaCompleted and put into operation

in 2010 with initial capacity of 50 million

m3, it is now expanded.

d and put into tion of first phase in 2011.

opera-Since the establishment, PV Gas South has identified its strategic objectives to develop a focal wholesale business of LPG in the Southern market, contributing to the overall development of the industry Over the last few years, PV Gas South’s production and business activities have con- stantly grown, which put significant impacts on Southern market, building up brand reputation of PETROVIETNAM GAS In the context of increasingly competitive market of Civil LPG (cylinder LPG) and industrial LPG (LPG pipeline) with the existence of the world’s fuel companies, PV Gas South’s

market share has still been leading company among LPG sellers in Southern area with 34.50%, increasing by 1% compared to 2013 This achievement thanks to following advantages:

Human resource

PV Gas South owns skilled and qualified staff force Company’s staff, especially operational staff are trained in vocational colleges specializing in oil and gas industry, 100% operational workers hold certificate of safe operation of technical equipment under pressure

Technology

During operation, Company has always focused on the quality of growth, ensured safety in production and trading Especially, in 2013, Company was certified with integrated management system PAS 99:2006 on trading LPG and CNG which came into effect between 3/2013 and 3/2016, consisting of: safety and occupational health management system according to the standard of BS OHSAS 18001:2007, quality management system according to the standard of ISO 9001:2008, environment management system of ISO 14001:2004 Especially, Company sets up and success- fully apply corporate operating management (COS) contributing to build up corporate culture and save management cost

COMPANY’S POSITION

Dominant position

Regardless of an increasingly severe competition, PV Gas South’s market share has been still at the top posi- tion in the Southern area which sustainably maintains

Besides Gas business, Company has done business involving related gas products like CNG, petro, oil, lube, gas using accessories used for daily consumption and industrial activities, installing and maintenance industrial Gas systems, which enables Company’s busi- ness diversification

Distribution

Up to now, company’s LPG network has covered all provinces in the Southern area LPG cylinder retail output has reached from 12,000 ton to 13,000 ton per month, LPG pipeline output has reached from 7,000 to 8,000 ton per month, which position Brand of “PETRO- VIETNAM GAS” in the Southern Market

With its own financial advantage, Company made investment in focal wholesale storage depot and ports, total storage capacity of PV Gas South’s ware- houses is now approximately 7,700 ton and it plans to increase by 6,000 ton by the end of 2021

Support from PetroVietnam National Group and PetroVietnam Corporation

As a member of PetroVietnam National gGroup, PV Gas South gets support in terms of expertise and partici- pates in business projects as well as trade products of the Group’s members Company has the opportunity

to receive, process and trade LPG from Dung Quat Oil Refinery and other oil refineries to meet market demand, increase initiative in sources of goods in nationwide LPG market

In addition, PV Gas South is also guaranteed with raw material supply and other preferential on acquiring raw materials from the Group’s oil refineries and gas plants Such advantages along with company’s signifi- cant market share (more than 30%) and wide network

of distribution across the region will ensure that PV Gas South may increasingly expand and sustainably develop

100%

Vietnam Liquefied Petroleum Gas Co Ltd

PV Gas Saigon

Currently, PV Gas South operates with model of Parent company – Subsidiary company, including one member company of CNG Vietnam Joint Stock Company, and two companies directly under parent company: PVGas SaiGon: PetroVietnam Eastern Gas Co Ltd and Viet- nam Liquefied Petroleum Gas Co Ltd; with 12 branches which are assigned specific areas in Southern area to manage and develop (from Da Nang to Ca Mau)

BUSINESS MODEL

ORGANIZATION AND PERSONNEL

INTRODUCTION TO BOARD OF DIRECTORS

Mr: Do Tan - Member of BOD, CEO

Year of birth: 1972 Place of Birth: Hai Duong Qualifications: Master of Business Administration Bachelor of commercial economy

Mr: Vu Quy Hieu - Member of BOD

Year of birth: 1977 Place of Birth: Thai Binh Qualifications: Master of Business Administration Bachelor of Finance and Accounting

Ms: Nguyễn Minh Ngọc - Member of BOD

Year of birth: 1964 Place of Birth: Hai Phong Qualifications: Bachelor of Russian Literature Bachelor of Industrial Economic Management

Mr: Ha Anh Tuan - Member of BOD

Year of birth: 1953 Place of Birth: Hai Phong Qualification: Engineer of Petroleum Technology Bachelor of Foreign Trade

Mr: Vu Van Thuc - Member of BOD

Year of birth: 1976 Place of Birth: Nam Dinh Qualifications: Civil Engineer of Roads and Bridges

SUPERVISORY BOARD

Ms: Nguyen Thuc Quyen - Head of Supervisory Board

YYear of Birth: 1970 Place of Birth: Ha Noi Qualifications: Bachelor of Finance and Accounting Bachelor of English language

Mr: Vo Dinh Quang - Member of Supervisory Board

Year of Birth: 1976 Place of Birth: Nghe An Qualification: Bachelor of Laws

Mr: Tran Thi Thu Hien - Member of Supervisory Board

Year of Birth: 1975 Place of Birth: Hai Duong Qualifications: Bachelor of Accounting Bachelor of Laws

Mr: Vu Quy Hieu - Member of BOD, CEO

Year of Birth: 1977

Place of Birth: Thai Binh

Qualification: Master of Business Administration

Bachelor of Finance and Accounting

1

Mr: Dao Huu Thang - Deputy CEO

Year of Birth: 1976

Place of Birth: Can Tho

Qualifications: Bachelor of General Accounting

4

Mr: Vu Van Thuc - Deputy CEO

Year of Birth: 1976

Place of Birth: Nam Dinh

Qualifications: Civil Engineer of Roads and Bridges

2

Mr: Ngo An Hoa - Chief Accountant

Year of Birth: 1984

Place of Birth: Long An

Qualifications: Bachelor of Accounting and Auditing

5

3 Mr: Tran Van Nghi - Deputy CEO

Year of Birth: 1975

Place of Birth: Nam Dinh

Qualifications: Engineer of Geophysics

1

2

34

5

BOARD OF MANAGERS AND CHIEF ACCOUNTANT

By the end of 2014, PV Gas South’s officers and

staff are 1,107 persons including its member

companies, increasing by 84 persons compared

to previous year The reason for that increase is to expand customer’s network

PV Gas South organizational structure

In 2014, PV Gas South has made its great effort to establish organizational chart, staffing policy suitable for company business plan Simultane- ously, Company actively amended its rules and regulations, as well as consolidated its organiza- tional and operational rule of Departments, Branches directly under PV Gas South

Salary policy

PV Gas South issued payment and bonus tions Employees have been paid according to their performance, which is associated with productivity, quality and working effectiveness The salary policy follows the Government Decree No.205 with basic salary and payment in accor- dance with job position level Such approaches aim at motivating employees to make their great effort, work actively, complete their tasks allocated due to their job positions PV Gas South has considered to increase their salary annually as prescribed In fact, in 2014, there were 139 employees approved to increase their basic salary according to the Government Decree No.205 and 72 persons are approved to increase their job position payment Company’s

regula-average income in 2014 was 13.1 million

dong/person/month

Bonus and welfare fund was used in proper purpose which had been approved in 2014 labor meeting: improved employees’ spiritual and material life, gave sickness benefit, contributed

to social programs, gave charity following lines of the State, Group, Corporation, and local; gave financial support for staff vacations

guide-Recruitment and Training policy

Human resource is Company’s key and major resource for sustainable growing enterprise Aware of such important role, PV Gas South prioritizes attracting competent employees so as

to enhance Company’s human resource quality, meet its business development demand

PV Gas South is aware of not only the importance

of current human resource but also the necessity

of future personnel demand Therefore, pany has attached the importance to training, improvement, officer scheming for successive positions In 2014, 53 training courses were held for 1,035 turns among which the courses were mainly about professional capability, enhancing employee’s skills in order to fulfill company’s operation requirements.

Com-LABOR STRUCTURE Contract labor structure

Gender labor structure

Education labor structure

Primary

Situation of business and production activities

Situation of investment and project implementation

Situation of finance

SUMMARY OF 2014 OPERATION PERFORMANCE

SITUATION OF BUSINESS AND PRODUCTION ACTIVITIES

Advantages:

- Supported by The PVN, PV Gas regarding

sources of goods, timely fulfilled PV Gas South

business demand

- The State policies and legal framework has been

gradually amended, making the business

environ-ment become more equal, there are favorable

conditions for true legitimate enterprises to

develop

- PV Gas South infrastructures have basically met

its operation requirements It is more active for PV

Gas South inventory and make full use of its

current storage depots and extraction and filling

stations

- Brand name of PETROVIETNAM GAS has become

more and more reliable in the market

- PV Gas South organizational chart becomes

more complete, its business units and branches

are nationally allocated covering the whole market

areas

- All PV Gas South staff are always united and

determined to complete targets assigned

Overview of Company’s operation

In 2014, the world’s political situation was so complicated, domestic economy was not fully recovered, crude oil price sharply fluctuated In particular, It unpredictably deeply reduced since October 2014 In such context of macroeconomic situation, PV Gas South’s 2014 performance encountered advantages and disadvantages as follows:

Disadvantages Regarding LPG business:

- The economic crisis is prolonged, the recovery is slow, badly affecting Enterprises’ business opera-tions as well as people’s living

- LPG demand dramatically reduced to the low level, LPG business encountered more and more difficulties while the there has not been yet the economy has not had signal of recovery yet Most

of agent clients’ consumption volume was low; industrial clients were in the indifferent level of operation

- Situation of commercial fraud in LPG trading has been present at most of markets whereas the legal punishment has not been strong enough

- In 2014, the world’s CP has not followed the rules

In fact, CP was continuously lowered: it was USD 1,162.5 per ton in December 2013 and reduced to USD 560 per ton in December 2014, which means a reduction of 52% In addition, the world’s oil price was continuously sharply lowered, negatively affecting PV Gas South business performance

- Difficulty in supply sources:

+ During first 10 months of the year, the supply was not stable with a decrease in the supply from Dung Quat, PV Gas South had to request supplement from Dinh Co, import at high price to ensure sufficient goods for customers Such situation negatively impacted PV Gas South’s business outcome

+ Dung Quat Oil Refinery temporarily stopped its operation due to its periodic repair for long time (between May and July 2014), which resulted in the competition of supply, quality and price in compari-son with LPG from Dung Quat

+ Since October 2014, the bidding price of supply from Thi Vai/Dinh Co increased by USD 26 per ton compared to previous time, resulting in high input price Mean while, the consumption was lower, making PV Gas South business situation worse in the year ending months

Regarding CNG: business:

- During the phase of 2012 and 2014, the gas selling price to industrial users via PV Gas D, PV Gas, PV Gas South, and CNG Vietnam has increased according got the PV GAS route The price still continued

to rise so as to be equal to the world’s price when PV Gas imports LNG

- The oil price happened complex and unpredictable The world oil price was continuously down, putting strong impact on business performance of PVS Gas South’s gas products

- Some organizational customers have switched into other substitutes with more competitive price like coal, biomass, etc

RESULTS OF BUSINESS AND PRODUCTION MANCE IN 2014

PERFOR-In the context of challenging economy and industrial sector, PV Gas South’s performance in 2014 can’t escape from being impacted However, PV Gas South tried its best to maintain and make unceasing increase in LPG market share; vigorously implement projects aiming at expanding market share and seeking for potential customers so as to enhance CNG business outcome As a result, PV Gas South did complete all the targets in terms of both output and financial performance It is encouraging for

PV Gas South to make such accomplishment in the unfavorable conditions

SITUATION OF INVESTMENT AND PROJECT IMPLEMENTATION

Investment and project implementation activities are crucial for PV Gas South operation expansion and opment Instantaneously, these activities enable PV Gas South to step forward in future revenue and profit Over the year of 2014, PV Gas South has carried out projects with total investment amount of 222.37 billion dong for capital construction which had been approved to 246.93 billion dong Details are as follows:

devel-1/ Complete and operate the Project of “Relocation of Petroleum cylinder factoryPV Gas Cylinder”.

2/ Complete the settlement of the Project of Supply CNG to Transportation means

3/ Complete the purchase of all VT Gas’s shares owned by PTT Company

4/ Complete the purchase of 10 modules shipping CNG, meeting customers’ demand

PV Gas South business results in 2014

Target Unit in 2014 Plan Performance in 2014 achievement % of plan

in 2014

% of plan achievement

Cylinders output Cylinder

New cylinders Cylinder 200,000 294,259 147.13%

Repaired cylinders Cylinder 180,000 183,503 101.95%

Consolidated financial targets

Charter Capital Billion dong 380 380 100.00%

Total revenue Billion dong 6,784.90 7,657.77 112.86%

Profit before tax Billion dong 194.3 246,61 126.92%

Separate financial targets

Total revenue Billion dong

Amount disbursed Billion dong 246.93 222.37 90.10%

Capital construction and

equipment purchase Billion dong 162.93 141.38 86.80%

Financial investment Billion dong 84.00 80.99 96.40%

Borrowing and others Billion dong 168.51 149.95 89.00%

FINANCIAL SITUATION

SOME FINANCIAL RATIOS IN 2014

PV GAS SOUTH FINANCIAL SITUATION IN 2014

Target

Total assets

Total owner’s equity

Net revenue

Gross operating profit

Profit before tax

Profit after tax

EPS

Dividend rate

OPERATION CAPACITY 2013 2014

Average No of inventory days 10.30 11.20

Average collection period (days) 35.60 42.30

Average No of days payables 58.70 69.40

Net revenue / total assets 2.30 2.40

Profit after tax/Net revenue 3.30% 2.60% Profit after tax /Owner’s equity 20.30% 15.20%Profit after tax /Total assets 5.80% 4.50%

Unit

Billion dong Billion dong Billion dong Billion dong Billion dong Billion dong Billion dong

%

3,0709026,9022572772284,56915

3,2039427,4842522471913,69115

2012 2013 2014250,920 264,543 273,168

LPG Output (Ton)

2012 2013 2014

116.76 140.74

159.34

PV Gas South Net revenue and profitability ratio in 2014

LPG and CNG output over the years

Revenue growth: in comparison with 2013, the PV Gas South revenue growth rate in 2014

still remained sustainable growth rate with the average rate above 8% In which:

7,484

Revenue Cost of Good Sold Gross Profit margin

6,375

Oil price fluctuation

LPG price fluctuation

USD/barrel

USD/ton