CORPORATE
GOVERNANCE

Impact: Medium

It is a key and decisive factor for a company’s success to identify market changes to timely adjust and meet the petroleum demand. In the context of big and fast changes caused by Covid-19 pandemic, it has become more urgent and necessary. Flexible changes of social distancing measures and travel restrictions of the State depending on pandemic developments have caused serious impacts on petroleum consumption demands of domestic market toward unpredictable changes. Besides, there is now a fierce competition in Vietnam petroleum market, especially since the State of Vietnam allowed 38 wholesale traders to import petroleum products and over 300 distributors are allowed to purchase products from many different petroleum hubs. In 2021, the Group has strengthened coordination with authorities to promptly grasp policy changes. Statistics, big data analysis and market demand forecast is always a top priority, apart from applying solutions to enhance forecast efficiency, member units always closely follow up with customers to timely understand consumption demands in case of sudden changes. The Group’s specialized departments have proactively adjusted sales plans, importation plans as well as mobilization of products between localities to adapt with changes in each specific stage. In addition, the Group also enters close cooperation with petroleum stations to timely capture information on competitors nationwide, adjusting sales policies and creating favorable conditions for petroleum stations to enhance their competitiveness and take initiative in sales.

Impact: Medium

Poor quality petroleum causes direct impacts on end-users, not only does it cause direct impacts on operation, durability of transport means but also causes harm to consumers, risk of fire. Therefore, the Group’s leaders always prioritize ensuring petroleum quality under strict supervision from importation, circulation, storage to sales. Apart from contributing opinions to construction of national petroleum standards, Petrolimex has always pioneered complying and meeting the highest standards. The Group has issued petroleum product sourcing standards, petroleum quality management regulations, frequently conducting periodic and extraordinary inspections at member units. In November 2021, the Group has issued a set of basic standards and technical requirements on procurement based on the latest draft of QCVN 01:2021/BKHCN. In addition, the Group has been doing research on supplementing control solutions on petroleum quality management at petroleum terminals by SAP-ERP, applying database software in corporate governance systems to monitor inspection, calibr/ation of measuring instruments at petroleum stations, applying technological advances to monitor leakages of storage tanks. Petrolimex is now installing 2-layer underground storage tanks at some new petroleum stations and expand this model at newly-built petroleum stations.

Impact: Medium

In the petroleum trading activities, fire and explosion safety, environment safety and occupational health and safety are the issues that the Group’s leaders always pay special attention. To enhance fire and explosion safety, environment safety and occupational health and safety, the Group has developed and issued a full range of technical procedures, labor regulations, regulations on entry and exit of the unit and petroleum buildings. All regulations come with detail on basic safety rules (regulations on fire prevention and fighting, regulations on environmental protection, regulations on occupational health and safety, regulations on prevention and fighting natural disasters and reaching, together with report forms). The mentioned procedures are reviewed annually. To promptly respond to incidents, the Group has instructed the units to develop specific procedures on incident response, firefighting plans, natural prevention and rescuing plans, response to oil-spillover incident, etc. Besides, grassroots units have frequently organized training sessions, creating favorable conditions for laborers to get used to possible situations and to perfectly operate any incident. In 2021, the Group has strongly focused on investing modern equipment and technology, step by step automating, replacing manual labor and improving safety ratio. In addition, the Group has signed training cooperation programs with international organizations such as JCCP, strategic partner ENEOS (Japan) to organize training courses to improve labor safety.

Impact: High

Petrolimex is aware that compliance with tax policies and tax risk management is extremely important to serve customers’ interests, maximizing benefits for shareholders and contributing to the State Budget. These are prerequisite conditions for sustainable development. Therefore, we always make efforts to fully comply with tax obligations to meet State’s principles of fairness, equality in taxation and establishing cooperation relations with tax departments based on mutual trust. Our core principles of tax risk management are strictly complying with provisions of the laws. To ensure compliance, we have issued appropriate procedures and assigned specialized human resource to generate and update policy related changes, legal regulations on tax and provide full information to related department sin a timely manner. The implementation of tax related policies and regulations has been implemented in accordance with procedures issued by the Group and being ensured through closely inspections and supervisions (E.g., inspection of every procedure and process, cross checking, checking multiple control layers, etc.). We have maintained transparent relations with tax departments and provided full certified documents on request of tax authorities.

Contributing to community by tax payment

Petrolimex is proud of making significant contributions to local economic development through tax payment and creation of jobs for many localities nationwide. We ensure that all our member units nationwide to fully fulfil corporate income tax obligations as well as any other tax payment to increase revenue for tax departments, e.g., VAT, environmental protection tax, import-export tariffs, special consumption tax, contractor tax. In 2021, total of tax payments made to the State Budget reached 33,826.3 billion VND. Petrolimex’s risk management system has been well-built and become a periodic activity closely attached with professional activities of professional departments. In 2022, the Group will continue implementing application of information technology into risk management, step by step automating risk management procedures, improving risk management efficiency and turning risk management into a unique corporate culture of Petrolimex.