Corporate governance | Annual report Dam Phu My 2022

Chapter 5

CORPORATE GOVERNANCE

During the past 20 years, PVFCCo has always maintained the trust of customers and partners on the basis of ensuring production and business efficiency. In particular, in 2022 PVFCCo made a spectacular breakthrough, continuously setting records when exceeding production and business targets. This is a solid premise for PVFCCo to confidently conquer higher goals in the coming age.

MEMBER LIST OF THE BOD, BOM AND BOS IN 2022

No.	Full name	Position	Number of DPM shares
No.	Full name	Position	Representative	Individual ownership
	Board of Directors
1	Hoang Trong Dung	Chairman of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations (position held since 27/04/2021)	92,300,253	-
2	Le Cu Tan	Member of the BOD cum President and CEO, not concurrently holding any position in other organizations	62,624,000	170,500
3	Duong Tri Hoi	Member of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations	39,140,000	-
4	Trinh Van Khiem	Member of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations	39,140,000	-
5	Louis T Nguyen	Independent Member of the BOD, Non-Executive, CEO of SAM (Saigon Asset Management)	-	-
	Board of Management
1	Le Cu Tan	President and CEO	62,624,000	170,500
2	Le Van Quoc Viet	Vice President	-	-
3	Le Thi Thu Huong	Vice President	-	-
4	Tran Thi Phuong Thao	Vice President	-	33,700
5	Cao Trung Kien	Vice President	-	-
6	Dao Van Ngoc	Vice President	-	-
7	Ta Quang Huy	Vice President	-	-
	Board of Supervisors
1	Huynh Kim Nhan	Chief Supervisor (Full-Time)	-	-
2	Le Vinh Van	Member of the BOS (Full-Time)	-	-
3	Luong Phuong	Member of the BOS	-	-
	Chief accountant
1	Vo Ngoc Phuong	Chief accountant	-	-

Board of Directors

Hoang Trong Dung

Position

Chairman of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations (position held since 27/04/2021)

Number of DPM shares representative

92,300,253

Number of DPM shares individual ownership

Le Cu Tan

Position

Member of the BOD cum President and CEO, not concurrently holding any position in other organizations

Number of DPM shares representative

62,624,000

Number of DPM shares individual ownership

170,500

Duong Tri Hoi

Position

Member of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations

Number of DPM shares representative

39,140,000

Number of DPM shares individual ownership

Trinh Van Khiem

Position

Member of the BOD, Full-Time, Non-Executive, not concurrently holding any position in other organizations

Number of DPM shares representative

39,140,000

Number of DPM shares individual ownership

Louis T Nguyen

Position

Independent Member of the BOD, Non-Executive, CEO of SAM (Saigon Asset Management)

Number of DPM shares representative

Number of DPM shares individual ownership

Board of Management

Le Cu Tan

Position

President and CEO

Number of DPM shares representative

62,624,000

Number of DPM shares individual ownership

170,500

Le Van Quoc Viet

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

Le Thi Thu Huong

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

Tran Thi Phuong Thao

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

33.700

Cao Trung Kien

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

Dao Van Ngoc

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

Ta Quang Huy

Position

Vice President

Number of DPM shares representative

Number of DPM shares individual ownership

Board of Supervisors

Huynh Kim Nhan

Position

Chief Supervisor (Full-Time)

Number of DPM shares representative

Number of DPM shares individual ownership

Le Vinh Van

Position

Member of the BOS (Full-Time)

Number of DPM shares representative

Number of DPM shares individual ownership

Luong Phuong

Position

Member of the BOS

Number of DPM shares representative

Number of DPM shares individual ownership

Chief accountant

Vo Ngoc Phuong

Position

Chief accountant

Number of DPM shares representative

Number of DPM shares individual ownership

BOARD OF DIRECTORS REPORT

BOARD OF DIRECTORS

The Board of Directors (BOD) for 2022 was elected by the General Meeting of Shareholders (GMS) with 5 members as clearly indicated above. There were no Sub-committees established. The activities within BOD’s authority were specifically assigned to full-time members in charge of each field for inspection and verification so that the BOD could make decisions while supervising, directing, and urging the Corporation to implement the provided resolutions and decisions depending on assigned fields.

Activities of the BOD in 2022

As the highest management body, the BOD represents the interests of shareholders. In 2022, the current BOD had 05 incumbent members (01 independent member) who actively and strictly fulfilled their roles and responsibilities in compliance with good corporate governance standards. The BOD conducts organized full-time activities, makes collective decisions, and assigns tasks to its members based on their respective fields of expertise.

In 2022, the BOD held 4 periodical meetings, in which they solicited written opinions from their members 80 times. Resulting from these requests, 47 resolutions, key decisions and many directional documents on critical matters were approved as follows:

Strategic plan

Approved and monitored the implementation of the 2023 production and business plan.

The BOD developed and reviewed the Corporation development strategy.

Organization - human resources

Continued to oversee of the reorganization of the parent company’s and subsidiaries’ management system, as well as the overall restructuring.
The number of employees was approved.
Staff planning of the Corporation in the period of 2022-2025 and rotation and appointment of staff at 2 subsidiaries.
Establishing several divisions in the Corporation - Research & Development Center, Digital Transformation Project Board, while planning to reorganize Internal Audit Committee and Office of the Board of Directors.

Corporate governance, risk management and internal audit

Approving and implementing internal audit plans; monitoring activities of branch companies; directing the review and completion of the internal document system and the risk management system.

Investment and implementation of projects

Directed the implementation and handling of issues related to the completion of the final phase of the NH₃ Revamp - Phu My NPK Complex.

Issued and amended regulations

Submitting to the General Meeting of Shareholders for approval of the Regulations and Bylaws of the Corporation, issuing the Regulations on Financial Management, the Regulation on the organization of the General Meeting of Shareholders and collecting shareholders’ opinions in the form of online surveys, the Regulations on Drafting, Publishing and Managing internal normative documents.

Restructuring

The overall restructuring of the Corporation and its subsidiaries was implemented.

Investor relations

Successfully held the Annual General Meeting of Shareholders (in June 2022) and the Extraordinary General Meeting of Shareholders (in December 2022). The event was directed the IR team in order to actively implement online contact and information exchange activities to ensure continuous and full disclosure of information on performance to shareholders and investors.

Selection of an independent auditor

The BOD coordinated with the BOS to select an external audit firm for the financial statements audit as authorized by the General Meeting of Shareholders.

Apart from the periodic and extraordinary sessions, the BOD held regular weekly and monthly work briefings to inspect and evaluate its performance and oversee the BOM’s compliance with BOD’s resolutions and decisions in the production and business activities of the Corporation.

The members of the BOD directed, monitored and ensured the performance of the BOM, through the following activities:

1

The BOD attended and chaired the BOM’s meetings to implement the resolutions and executive decisions and to prepare project proposals for submission to the BOD.
2

The BOD participated in periodic briefings and provided guidance to the BOM.
3

The BOD monitored and reviewed the business operations through BOM’s reports and documentation to BOD.
4

The BOD provided guidelines and suggestions to the BOM on key issues arising from the management of operations.

Training to improve BOD’s corporate governance knowledge

At the time of their election or appointment, all members of the Board of Directors have expertise and training in Corporate Governance.

To meet job requirements, members of the BOD actively learn, train, update, and increase their understanding of corporate governance.

Implementation of corporate governance regulations

PVFCCo complied with all the legal governance regulations of a listed company:

To assure an appropriate proportion of non-executive members to independent members of the Board of Directors.
To hold Annual General Meeting of Shareholders in full compliance with provisions of laws on business and regulations of management for publicly listed companies. To organize meetings and pass the resolutions of the BOD according to the Charter of the Corporation and the law on enterprises.
To discharge all periodic and extraordinary information disclosure obligations for publicly listed companies in a timely and transparent manner.
To prepare annual report and reports for submission to the General Meeting of Shareholders with full content and information on financial and production management, administration and supervision of the Corporation.
To strictly comply with regulations on corporate governance and information disclosure in the stock market.
The Board of Directors has formulated and promulgated the Regulations on Internal governance, Operational regulation of the BOD, and Regulations on the evaluation of the level of accomplishment of tasks.

On improving corporate governance capacity in accordance with regional and international governance standards: To conduct/participate in training courses for members of the BOM/BOS/BOD.

Implementation of the Resolutions of the General Meeting of Shareholders and mandated tasks:

According to the Resolution of the 2022 Annual General Meeting of Shareholders, the General Meeting of Shareholders approved the amendments and supplements to the Corporation’s Charter and assigned the Board of Directors to amend and supplement the internal regulations on corporate governances and Regulation on the operation of the Board of Directors in accordance with the Charter (amended). The Board of Directors carried out the review to complete these two regulations in the project on reviewing and completing the overall system of internal documents of the Corporation.

According to the Resolutions of the 2020 Annual General Meeting of Shareholders, the General Meeting of Shareholders authorizes the BOD to seek out and actively decide on the purchase of raw gas supply for the production of Phu My Fertilizer Plant under the authority of the General Meeting of Shareholders, in accordance with the needs of the Corporation’s business and production activities and directions of the competent authorities. As a first step, the BOD approved the extension of the gas purchase and sales contract for 2020 to the end of 2022 and then focused on efforts to implement gas supply contract for upcoming years.

REPORT ON THE ACTIVITIES OF INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS

Non-executive and independent members of the BOD’s activities

Mr. Louis T Nguyen is the independent member of the BOD. He participated actively in all the official duties and assignments. He also monitored and provided guidance to BOM in discharging the operations since their participation.

Comments from the independent member of the BOD on the governance/management of PVFCCo in 2022

The Board of Directors and the Board of Management implemented their roles and duties in accordance with the laws on corporate governance, the Corporation charter and the executive decisions of the General Meeting of Shareholders and the BOD. The BOD and BOM’s members performed their duties and fully complied with the responsibilities and authorities assigned, as stipulated to protect the interests of all shareholders. The results were reflected in the production and business plans and targets that PVFCCo completed and exceeded in 2022.

In the Corporation, as did other shareholders, the State shareholders had an expectation that the value of the Corporation would increase. In addition to complying with regulations on corporate governance, administrators who are capital representatives were responsible for the management and preservation of the States capital. The Corporation relied heavily on the costs of production materials in the context of declining low-cost gas supply, and the Board of Management made every endeavor to present, propose and protect the State commitments and policies which were most beneficial to it in the field in both the short and long term. The BOD complied with corporate governance standards for listed companies, ensuring that both members and independent members of the BOD enforced their powers and responsibilities.

To approach and adhere to as closely as possible to the advanced corporate governance standards, the BOD was aware of and promoted the review and improvement of activities in the direction of enhancing the effectiveness of the management and supervision system while building up a strong and appropriate hierarchy to reduce its participation in executive activities. In 2022, the Corporation actively coordinated with professional consulting units to implement a restructuring program which would streamline the system while updating and perfecting the medium and long-term development strategy according to the orientation approved by the AGM.

The independent member of the BOD holds responsibility for investor relations, considering that a significant portion of the ownership of the Corporation is with foreign investors. With the company’s operating outcomes being improved in 2022, investor demand for information access has skyrocketed, especially related to the content proposed at the extraordinary General Meeting of Shareholders.

The independent member of the BOD has actively connected with the Management and functional divisions to continue communication to investors about the values and advantages of the Corporation and the efforts of the BOM, BOD to improve governance and ensure the interests of shareholders, as well as bringing contributions and ideas from investors to the Board of Directors on guidelines, development strategies, or directions on finding strategic investors.

Based on the newly updated medium and long-term development strategy, Independent members have been assisting the Board of Directors in finding opportunities and potential partners in the production, distribution, marketing and sales of chemicals and sustainable fertilizer products.

Among other companies which have changed from being wholly state-owned enterprises, the Corporation has demonstrated solid governance foundations.

BOARD OF SUPERVISORS REPORT

Income statement of PVFCCo and report on performance of the BOD and the President and CEO

The BOS appraised the Income statement of the BOD, the Income statement submitted by the President and CEO to the General Meeting of Shareholders and assessed that, in 2022, the Corporation had completed far beyond the business plan approved by the General Meeting of Shareholders. These statements were a true, complete and honest reflection of the real performance of the Corporation.

Corporation’s production results

Production output

Phu My urea

917

thousand tons

achieving 111% of the plan
15% compared to 2021

Phu My NPK

157

thousand tons

achieving 94% of the plan

Consolidated revenue

19,013

VND billion

achieving 110% of the plan
45% compared to 2021

Sales volume

Phu My urea

791

thousand tons

achieving 99% of the plan
6% compared to 2021

Phu My NPK

129

thousand tons

achieving 78% of the plan
15% compared to 2021

Profit before tax

6,606

VND billion

achieving 160% of the plan
74% compared to 2021

Implementation of investment projects

The NH₃ Revamp - Phu My NPK Complex was completed and went into operation and is now in process of deploying the Final Acceptance Certificate (FAC), Final settlement of EPC contract, other relevant contracts and project capital settlements. Completing the BCC contract negotiation with PVChem regarding the building of the project for a hydrogen peroxide (H₂O₂) factory. The Corporation has selected a contractor and started the EC bidding package for the project on a warehouse with a capacity of 20,000 tons of finished products at Phu My Fertilizer Plant.

Regarding restructuring and completion of the governance and administration

Continued to accelerate the implementation of overall restructure of PVFCCo’s organizational and operational model, phase of 2020-2025, merged 13 functional divisions of the Parent company into 8 divisions, signed the contract of consulting and planning the Corporation’s development strategy vision to 2035.

Operational and financial supervisory activities

Production and business activities, as well as financial activities, were accurately and reasonably reflected in the financial statements; data and statistics were recorded, classified and presented in line with Vietnamese accounting standards and current regulations, and have been reviewed and audited by Deloitte Vietnam.

Consolidated revenue targets expanded tremendously; selling and administrative expenses were controlled; consolidated pre-tax profit was higher than expected and exceeded the business plan; payment to the State budget reached VND 1,521 billion, an increase of 91% compared to 2021’s amount. The Corporation’s financial statements honestly and reasonably reflected its situation of production, business and financial activities; the recording, classification and presentation were in accordance with accounting standards; the use of capital, investment and procurement were done in accordance with current accounting regulations.

Self-assessment report on the activities of the Board of Supervisors and its members

The BOS completed regular and periodical inspection and supervision, cooperated in organization and examination and made reports on production and business activities in 2022. The members of the BOS made efforts and proactively acted independently; proposed solutions to issues they were assigned and successfully completed assigned tasks; complied with the provisions of the Enterprise Law, the company’s Charter and operation regulations of the BOS.

Remuneration, operating expenses and other benefits of the BOS and members

Salary, bonus and remuneration of members were setup and complied with the Decree No. 53/2016/NDCP and the Resolution approved by the 2020 Annual General Meeting of Shareholders.
The operating expenses of the BOS and each of its members worth VND 546.49 million, including stationery costs, equipment, phone charges, internet charges, business trip expenses and expenses for receiving guests and meetings, were accounted as business expenses in accordance with the laws on corporate income tax and recorded as a separate section in the Corporation’s 2022 financial statements.

Summary of the meetings of the BOS, conclusions and recommendations, results of supervision of the Corporation’s operation and financial situation

The BOS organized 4 regular meetings, assigned tasks to members, approved the plans for inspection and supervision of units, appraised the quarterly/semi-annual/annual financial statements, approved the supervision reports, responded to shareholders’ opinions, approved the report on salary appraisal and report on summary of task performance of the BOS’s individuals and collectives.

Assessment report on transaction between PVFCCo, subsidiaries and other companies with more than 50% charter capital control rights held by PVFCCo, members of the BOD, the President and CEO or its related persons

As of 31 December 2022, the total contributed capital to subsidiaries was unchanged, the capital contribution ratio of 75%/charter capital is VND 386.25 billion. These Companies are agents and distributors, making purchases and sales transactions in accordance with regulations and the Company’s charter, ensuring the interests of shareholders.

Transactions between the Corporation and companies in which the BOD member is / was a founding member or business manager (subsidiary) within the 3 years preceding the transaction: None

Monitoring results of the BOD, President and CEO and other managers

The Corporation held the Annual General Meeting of Shareholders and the Extraordinary General Meeting of Shareholders to resolve business and production issues in 2022, authorize the final settlement of gas prices for the 2014-2018 period, and increase the dividend payout ratio. The members of the BOD are in charge of their own fields, directing items within their power on behalf of the BOD to make decisions, supervise, direct and urge the Corporation to implement the BOD’s resolutions and executive decisions according to the assigned field, completely organize regular meetings. In governance, the BOD works with a sense of responsibility and transparency. The decisions, in collaboration with the BOM to direct and implement the resolution of the General Meeting of Shareholders, swiftly exceeded the production and business plan targets in 2022.

Assessment on cooperation between the BOS and the BOD, President and CEO and shareholders

The BOS received close coordination from the Corporation’s BOD and BOM in carrying out management and administration. There was participation in and contribution of ideas to meetings, as well as directing the functional divisions to implement and respond in writing to recommendations and opinions of the BOS and BOM.

INVESTOR RELATIONS REPORT

Objectives

Strengthening information disclosures and transparency activities, ensuring fair treatment for all shareholders and protecting their interests, thereby improving the quality of corporate governance and implementation of quality control according to standards for sustainable development, creating a premise to expand the network of cooperation with large and professional organizations while building the shareholders’ trust.

The Corporation was committed to consistently implementing principles in investor relations activities, ensuring compliance with regulations on information disclosure for listed companies, based on transparency and access to information in a fair manner to all shareholders and stakeholders.

The Corporation has a focal point of implementing investor relations activities, smoothly connecting information from specialized departments within the company to ensure that the information disclosed to the outside was consistent and shared, approved, directed and supervised from the highest level of leadership in the Corporation.
PVFCCo ensured that all shareholders and investors had fair and favorable access to information through various forms of communication (direct, indirect, intermediary organizations etc.) to ensure that information was conveyed promptly, accurately and transparently. Shareholders and investors could contact through information channels connected to the Investor Relations (IR) team such as website www.dpm.vn; PVFCCo’s IR focal point; through the focal points in charge of the industry at brokerage organizations in the market etc.

In 2022, the IR team implemented activities with the following primary goals

Transparent, accurate and timely disclosure of information: In 2022, the stock market and fertilizer industry in the world and in the country witnessed many complicated fluctuations, greatly affecting the general operation of the Corporation (both positive and negative), PVFCCo’s IR team actively participated in networking activities, met with domestic and foreign shareholders and investors to promptly update information and respond to inquiries of shareholders and investors in the market. Specifically, in 2022, the Corporation conducted more than 30 meetings with shareholders periodically and on request; attended 5 forums and conferences to meet domestic and foreign investors etc. In addition, quarterly, the IR department held online meetings with representatives of domestic and foreign investment funds and analysts from major brokerage organizations in the market place to update information on business results and respond to investors about issues of their interest.
Efforts to protect shareholders’ rights and ensure fair treatment for all shareholders - owners of the company, from small shareholders to groups of foreign shareholders: Doing this through full, transparent and fair disclosure of information to ensure that all shareholders had full access to information to be able to make accurate decisions during sessions at the General Meeting of Shareholders; ensuring that all shareholders had the opportunity to express their opinions, make suggestions and recommendations and receive satisfactory information and answers; supporting and assisting the Board of Directors in performing the task of carefully protecting shareholders’ interests in accordance with the principles and provisions in the Corporation’s Charter and Vietnamese laws etc.
Carrying out periodic and extraordinary information disclosure, specialized media publications for shareholders and investors (Investor newsletter and annual report, quarterly reports summarizing the results of daily activities through meetings with investors etc.).

Successfully organizing effective General Meetings of Shareholders: In 2022, PVFCCo successfully conducted 2 General Meetings of Shareholders (annual and extraordinary) in June and December to approve important contents in the general operations of the Corporation.
The IR team actively implemented coordination and connection to ensure timely provision of information to shareholders before, during and after meetings in accordance with regulations and support procedures related to the full implementation of shareholders’ rights at meetings. Minutes of the meetings were compiled accurately and fully in compliance with the timely disclosure of information as regulated etc.
There was close connection to ensure the participation of functional departments; leadership at various levels (members of the Board of Directors and Board of Management) was present and ready to promptly answer shareholders’ questions at meetings with shareholders and investors; and all shareholders had equal access to information. The Board of Directors assigned responsibilities of focal point to a member of the Board of Directors (independent) to coordinate and support the network with minority shareholders (other than PVN).
Implementing a stable dividend policy and paying dividends fairly and consistently based on actual performance during the year.
Monitoring, tracking and reporting transactions with related parties, while avoiding conflicts of interest.
Risk management and sustainable development: The Corporation disclosed details in the Risk Management Report and Sustainability Report in the Annual Report (Chapter 6).

With adverse and favorable developments intertwined in 2022 and efforts to achieve outstanding results, PVFCCo’s staff and leaders were proud of their efforts to overcome difficulties and make good use of potential opportunities in the market in order to bring the highest profits and benefits to shareholders, with operating results that exceeded the key targets defined by shareholders. The impressive growth and performance was clearly reflected in stock valuation in the context of Vietnam’s stock market volatility, going through levels from “highs” to “lows”. From the historic peak of 1,528.57 points on January 6, 2022, the market plummeted to the lowest closing level of 2022 of 911.9 points on November 15, 2022, an equivalent to a decrease of 40.34 %. This was the biggest drop in the world.

In that context, according to market data, DPM’s share price in 2022 was adjusted down slightly by 4.4% with average liquidity remaining at a positive level of over 4 million shares/day. Foreign ownership ratio nearly doubled, to 20% by the end of 2022 from about 9% at the beginning of the year.

In 2023, following the foundation and orientations on Investor Relations activities, under the direction and support of the Corporation’s Board of Directors, the IR segment will continue to be consolidated and deployed in order to connect with the strategic goals of the company with the goal of constantly improving the quality of corporate governances; transparency in information disclosure in all fields; ensuring compliance with regulations and principles of fair treatment of shareholders; heading to stable, sustainable development and constantly adding value to Vietnamese society, shareholders, partners and employees.

REPORT ON IDENTIFICATION AND RISK MANAGEMENT

In 2022, with the motto “Managing volatility risks, promoting internal resources, increasing creativity, improving techniques for sustainable development”, PetroVietnam Fertilizer and Chemicals Corporation not only standing outstanding achievements in production and business activities, set new records in terms of output, revenue, profit, etc. in its history, preparing for the 20^th anniversary of its establishment and development..

Right from the first months of 2022, the world economy was in trouble when the war between Russia and Ukraine pushed up oil prices because of economic sanctions against Russia, while China had not opened its economy yet. These obstacles limited the supply of raw materials, increasing input costs and increasing freight costs. In addition, continuing to fight against the Covid-19 epidemic, the VAT policy was not adjusted accordingly; rising inflation caused economic recession; lending interest rates of banks continued to increase; production costs for agriculture, especially high fertilizer prices, directly affected farmers’ profits, leading to reduction of investment in fertilizers for crops, affecting in the long run the general production and business activities of the Corporation. At the same time, Phu My Fertilizer Plant, after 19 years of operation, had many hidden risks from machinery and equipment expenditures.

In 2022, PVFCCo has identified key risk groups and implemented effective risk management solutions to limit those risks to ensure the safety of production, business and investment activities and has achieved the following:

The Phu My Fertilizer Plant was operated safely and efficiently in the context of equipment degradation, highly fluctuating raw material costs and increasingly fierce competition in the consumption market.
PVFCCo continued its diversification into new products while still developing its traditional products to expand market share and affirm its leading position in fertilizer production and trading in the domestic market and increase exports.
PVFCCo researched and implemented new investment projects, tested and launched new products, deployed and traded fertilizer and chemical products manufactured by PVFCCo, in order to fulfill its long-term strategic objectives.

To realize the above-mentioned goals for the sustainable development and best protection of shareholders’ interests while fulfilling social responsibilities in 2022, PVFCCo successfully managed the following key risk groups.

Market risk

In order to sustain the top position in the domestic fertilizer sector, PVFCCo has comprehensively reviewed and controlled the following risks:

Oversupply risk
Input material prices risk
Commodity price risk
Liquidity risk
Product development risk

Risks in the production activities of PVFCCo

In 2022, PVFCCo has continuously operated the Plant safely and achieved impressive records. However, the plant has been continuously operated for 19 years, thus, there potential risks remain. Therefore, risk management activities in the following years would focus on:

Managing product quality;
Managing and resolving production problems;
Coordinating with NH₃ Revamp - Phu My NPK Complex Management Unit to finalize capital settlements;
Enhancing application in technological advancement and initiative promotion.

Risks in project’s investment progress

In 2022, The NH₃ Revamp - Phu My NPK Complex has completed the preparation of the audit report for settlement.

In addition, PVFCCo is also focusing on creating new investment projects to invest in various products while taking all advantage of available resources.

Risks regarding exchange rate

In recent years, the foreign exchange rate has been fluctuating with an upward trend. Exchange rate fluctuations can affect the performance of business activities as well as the performance of PVFCCo’s investment projects which use foreign currency. Recognizing the importance of managing exchange rate risks, PVFCCo frequently updated the macroeconomic situation, domestic and global financial status, seriously monitored exchange rate fluctuations to build up and execute appropriate and flexible import and business plans and enhance the efficiency of capital use. In addition to this, PVFCCo also seriously considered its financial management, analyzing and assessing the effect of exchange rate differences on executed projects.

Financial risks and the goal of reforming investment activities contributing capital to Associates

In 2022, PVFCCo has continued to gradually find solutions to divest investments in joint ventures and associates. Although PVFCCo’s objective was to divest capital in these enterprises, it proved extremely difficult to reform long-term capital investment activity when the associate is not operating effectively. To support such members to gradually improve their performance, PVFCCo reinforced supervising associates managing activities through capital representatives while executing activities to support members in managing and directing enterprises.

Risks regarding environment and regulations

In recent years, climate change has impacted the majority of regions in our country, in which some have suffered from the detrimental effects of tropical storms, flash floods and long-lasting heavy rain, others have suffered from long-lasting drought, and were affected by soil salinity, and so on. Climate change also negatively influenced agricultural production and plants. In the future, climate change is expected to become even more unpredictable, indirectly affecting the business and production activities of fertilizer companies in general, and PVFCCo in particular.

Vietnam has to open its fertilizer market in the integration progress, and many foreign enterprises are expected to invest in fertilizer production and business which can partly alter urea. Foreign enterprises with experience and great business management will become our strong counterparts in Vietnam.

SALARIES, BONUSES, REMUNERATION AND BENEFITS OF THE BOD, BOM AND BOS

PVFCCo implemented an executive remuneration scheme for members of the BOD, BOS and BOM in accordance with the law and PVFCCo’s Compensation and Benefits Policy. This is aligned with its annual salary review and budget and the provision of fair reward for the competence and performance of each member.

Part-time members of BOD or BOS are entitled to remuneration according to job role and responsibility.

Details of salaries, remuneration and bonuses in 2022

(Unit: VND million)

No.	Full name	Position	Salary and bonus fund
No.	Full name	Position	Salary fund	Bonus fund	Total income
I	Board of Directors		6,938	832	7.815
1	Hoang Trong Dung	Chairman of the BOD	1.732	216	1.948
2	Le Cu Tan	Member of the BOD cum President and CEO	1.848	231	2.079
3	Duong Tri Hoi	Member of the BOD	1.595	199	1.795
4	Trinh Van Khiem	Member of the BOD	1.477	185	1.662
5	Louis T Nguyen	Independent member of the BOD	331	-	331
II	Vice president and Chief accountant		10.642	1.330	11.972
1	Le Van Quoc Viet	Vice President	1.595	199	1.795
2	Le Thi Thu Huong	Vice President	1.595	199	1.795
3	Dao Van Ngoc	Vice President	1.468	184	1.652
4	Tran Thi Phuong Thao	Vice President	1.595	199	1.795
5	Cao Trung Kien	Vice President	1.520	190	1.709
6	Ta Quang Huy	Vice President	1.420	178	1.598
7	Vo Ngoc Phuong	Chief accountant	1.447	181	1.628
III	Board of Supervisors		3.199	363	3.562
1	Huynh Kim Nhan	Chief supervisor	1.595	199	1.795
2	Le Vinh Van	Member of the BOS	1.313	164	1.477
3	Luong Phuong	Member of the BOS	291	-	291
		Total	20.824	2.525	23.349

Trading of internal shareholders’ and related persons’ shares

On March 4^th 2022, the related shareholders in a group of shareholders of Nghe An Agricultural Materials Joint Stock Corporation announced they sold shares, decreasing their ownership rate to 5.998%.
On March 25^th 2022, Chief Accountant Vo Ngoc Phuong reported the sale of 24,700 shares, decreasing his ownership rate to 0%.
On May 6^th 2022, Deputy General Director reported the sale of 1,000 shares, decreasing the number of shares owned to 33,700 shares.
On June 10^th 2022, the related shareholders in a group of foreign shareholders i.e., Amersham Industries Ltd, CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Grinling International Ltd, KB Vietnam Focus Balanced Fund, Vietnam Enterprise Investment Ltd, and Wareham Group Ltd announced the purchase of 1,400,000 shares, increasing their share of ownership rate to 5.0852%.
On June 22^nd 2022, the related shareholders in a group of foreign shareholders i.e., Amersham Industries Ltd, CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Grinling International Ltd, KB Vietnam Focus Balanced Fund, Samsung Vietnam Securities Master Investment Trust, Vietnam Enterprise Investment Ltd, and Wareham Group Ltd announced shares purchased, increasing their share of ownership rate to 6.1604%.
On September 29^th 2022, the related shareholders in a group of foreign shareholders i.e., Amersham Industries Ltd, CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Norges Banks, Grinling International Ltd, KB Vietnam Focus Balanced Fund, Samsung Vietnam Securities Master Investment Trust, Vietnam Enterprise Investment Ltd, and Wareham Group Ltd announced shares sold, decreasing their share of ownership rate to 5.9472%.

On October 7^th 2022, the related shareholders in a group of foreign shareholders i.e., CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Norges Banks, Grinling International Ltd, KB Vietnam Focus Balanced Fund, Samsung Vietnam Securities Master Investment Trust, and Vietnam Enterprise Investment Ltd announced shares purchased, increasing their share of ownership rate to 6.2424%.
On November 15^th 2022: the related shareholders in a group of foreign shareholders i.e., CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Norges Banks, KB Vietnam Focus Balanced Fund, and Samsung Vietnam Securities Master Investment Trust announced shares purchased, increasing their share of ownership rate to 7.0544%.
On December 5^th 2022: the related shareholders in a group of foreign shareholders i.e., CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Norges Banks, KB Vietnam Focus Balanced Fund, Samsung Vietnam Securities Master Investment Trust announced shares purchased, increasing their share of ownership rate to 8.1035%.
On December 30^th 2022: the related shareholders in a group of foreign shareholders i.e., CTBC Vietnam Equity Fund, DC Developing Markets Strategies PLC, Norges Banks, KB Vietnam Focus Balanced Fund, and Samsung Vietnam Securities Master Investment Trust announced shares purchased, increasing their share of ownership rate to 9.2023%.

Contract or transaction with internal shareholders

In 2022, there were no transactions between the Corporation and the members of the Board of Directors, Board of Supervisors, Board of Management and managers.

Contracts or transactions with related organizations and individuals

Gas sales contract with PetroVietnam Gas Joint Stock Corporation (PV Gas).
Trademark transfer contract with Vietnam Oil and Gas Group (PVN).
Purchase and sales contract between the Corporation and 4 affiliated subsidiaries.
Contracts and transactions between the Corporation and other related parties (as disclosed in Corporate Governance Report in 2022).

Download chapter 5

GENERAL INFORMATION

Introduction of PVFCCo

CORPORATE PERFORMANCE REPORT 2022

THE MEDIUM AND LONG-TERM DEVELOPMENT STRATEGY

CORPORATE GOVERNANCE

Sustainable development report

FINANCIAL STATEMENTS

Chapter 5

MAINTAINING

TRUST

MEMBER LIST OF THE BOD, BOM AND BOS IN 2022

BOARD OF DIRECTORS REPORT

REPORT ON THE ACTIVITIES OF INDEPENDENT MEMBERS OF THE BOARD OF DIRECTORS

BOARD OF SUPERVISORS REPORT

Phu My urea

917

Phu My NPK

157

Consolidated revenue

19,013

Phu My urea

791

Phu My NPK

129

Profit before tax

6,606

INVESTOR RELATIONS REPORT

Objectives

REPORT ON IDENTIFICATION AND RISK MANAGEMENT

Market risk

Risks in the production activities of PVFCCo

Risks in project’s investment progress

Risks regarding exchange rate

Financial risks and the goal of reforming investment activities contributing capital to Associates

Risks regarding environment and regulations

PORT ON TRANSACTIONS, REMUNERATION AND OTHER BENEFITS OF THE BOD, BOM AND BOS

SALARIES, BONUSES, REMUNERATION AND BENEFITS OF THE BOD, BOM AND BOS