Review current credit and treasury controls to improve cash management and minimize risks at exxonmobil Vietnam

TRAN TRUNG NGHIA REVIEW CURRENT CREDIT AND TREASURY CONTROLS TO IMPROVE CASH MANAGEMENT AND MINIMIZE RISKS AT EXXONMOBIL VIETNAM GUIDANCE COUNSELOR: Dr.. Thesis: REVIEW CURRENT CREDIT

TRAN TRUNG NGHIA

REVIEW CURRENT CREDIT AND TREASURY CONTROLS

TO IMPROVE CASH MANAGEMENT AND MINIMIZE RISKS

AT EXXONMOBIL VIETNAM

GUIDANCE COUNSELOR: Dr NGUYEN VAN THUAN

MASTER IN MANAGEMENT THESIS

Hochiminh City

2007

true

TRAN TRUNG NGHIA

Thesis: REVIEW CURRENT CREDIT AND TREASURY CONTROLS TO

IMPROVE CASH MANAGEMENT AND MINIMIZE RISKS AT

EXXONMOBIL VIETNAM

Tutor: Doctor NGUYEN VAN THUAN

I suggest the committee should give permission for the author to present the thesis

to your kind perusal and consideration

Ho Chi Minh City, March 21 st 2007

Dr NGUYEN VAN THUAN

Comments

List of figures

List of tables

List of Abbreviations

Introduction

1 Problem statement

2 Objectives of research study

3 Scope and limitation study

4 Study method

5 Structure of the study

Chapter 1: Literature review -1

1.1 Treasury -1

1.1.1 Definition of cash -1

1.1.2 Definition of cash management -1

1.1.3 Reason for holding cash -3

1.1.4 Determine the target cash balance -4

1.2 Credit -5

1.2.1 Definition of credit -5

1.2.2 Term of sales -6

1.2.2.1 Credit period -7

1.2.2.2 Cash discounts -8

1.2.3 Credit analysis -9

1.2.3.1 Credit Information -9

1.2.4 How to finance trade credit - 11

Summary of chapter 1 - 12

Chapter 2: An overview about Exxon Mobil corporation in the world and in Vietnam - 13

2.1 Exxonmobil (global) - 13

2.2 Exxon mobil Vietnam - 20

Summary of chapter 2 - 26

Chapter 3: Current treasury controls and solutions to improve cash management - 27

3.1 Current treasury controls at emvcl - 27

3.1.1 Foreign exchange transaction - 29

3.1.1.1 Local Environment - 29

3.1.1.2 Policy and principles - 30

a General purpose - 30

b Foreign Exchange Strategies - 31

c Speculation - 32

d General - 32

3.1.1.3 Authority and controls - 33

3.1.1.4 Procedures - 34

3.1.2 Bank transfer - 35

3.1.2.1 Cash collection - 35

3.1.2.2 Internal transfer - 36

3.1.2.3 Payment processing - 37

a Payment term application - 37

3.1.3 Loan - 39

3.1.4 Working capital analysis - 40

3.1.4.1 Cash - 41

3.1.4.2 Accounts receivable - 41

3.1.4.3 Inventories - 42

3.2 Cash management solution - 42

3.2.1 Electronic banking system - 43

3.2.2 Efficient Fund transfer system - 44

3.2.3 Key benefits of electronic banking system - 45

3.2.3.1 Db-fast collect (electronic collections) - 46

3.2.3.2 Db-fund transfer (Electronic payment) - 49

3.3.4 Drawdown in USD or VND - 52

3.3.5 Financial budgeting for year 2007 - 54

3.3.5.1 Cash inflows - 55

3.3.5.2: Cash outflows - 56

Summary of chapter 3 - 58

Chapter 4: Current credit controls and solutions to reduce risks when granting credit limit - 59

4.1 Emvcl’s current credit policies and controls - 59

4.1.1 Overview about policy and process - 59

4.1.2 Roles and Responsibilities of people concerned - 60

4.1.3 Use of credit - 62

4.1.4 Customer risk revaluation - 63

4.1.4.1 Basic process and considerations - 63

4.1.4.4 Larger exposures - 66

4.1.4.5 Separate processes between customer risk evaluation and granting credit - 66

4.1.4.6 Identification and risk monitoring - 67

4.1.5 Customer credit decision - 68

4.1.5.1 Basic process and considerations - 68

4.1.5.2 Exposure limits - 69

4.1.5.3 Ongoing customer reviews - 74

4.1.5.4 Security - 75

4.1.5.5 Credit Approval Limit - 76

4.1.5.6 Reductions in credit limits - 77

4.1.5.7 Loans and product advances - 78

4.1.5.8 High Level Alarm - 79

4.1.5.9 Overdue limits - 79

4.1.5.10 Common customers across LOBs - 80

4.1.5.11 Other - 80

4.1.6 Controlling exposure - 80

4.1.6.1 Reaching the Credit Limit - 81

4.1.6.2 Procedure of block order release - 82

a Overdue orders - 82

b Excessive Credit Limit - 85

4.1.7 Invoicing and payment term - 85

4.1.7.1 Monetary limits of authority for 2006 - 86

4.1.7.2 Standard Payment term - 87

4.1.9 Risk monitoring - 90

4.1.10 Problem on collecting and bad debt - 92

4.1.10.1 Working capital - 94

4.1.10.2 Bad debt expense - 96

4.1.11 Customer analysis - 96

4.2 Solution to reduce risk - 98

4.2.1 Effective credit assessment process - 98

4.2.1.1: Lines of Business - 98

4.2.1.2 Credit group - 98

4.2.1.3 Customer Service - 99

4.2.2 Customer Risk Assessment Model - 99

4.2.2.1 Qualitative information - 99

4.2.2.1.1 Year in business -100

4.2.2.1.2 Year Exxon customer -100

4.2.2.1.3 Quality of shareholders -100

4.2.2.1.4 Quality of management -101

4.2.2.1.5 Legal form -101

4.2.2.1.6 Competitive position -101

4.2.2.1.7 Vulnerability to market changes -102

4.2.2.1.8 Exxon-customer supply relationship -102

4.2.2.1.9 Business Integrity -103

4.2.2.1.10 Quality of Operations -103

4.2.2.1.11 Suppliers and Buyers -103

4.2.2.1.12 Payment performance -104

4.2.2.2.2 Profitability -106

4.2.2.2.3 Interest cover -107

4.2.2.2.4 Gearing -107

4.2.2.2.5 Current ratio -108

4.2.2.3 Final assessment -108

4.2.3 Distributor finance -109

4.2.3.1 Spreading the statements -110

4.2.3.2 Calculate common size percentages -111

4.2.3.3 Calculate key relationships -112

4.2.3.3.1 Liquidity -112

4.2.3.3.2 Safety -113

4.2.3.3.3 Profitability -114

4.2.3.3.4 Operating performance -117

4.2.3.4 Analysis cash flow -122

4.2.3.5 Compare to trends and industry averages -123

4.2.3.6 Identify problems -123

4.2.3.7 Determine solutions -123

4.2.4 Goods distribution -123

4.2.5 High risk customers -124

4.2.6 Unacceptable terms -124

Summary of chapter 4 -125

Conclusions -126

1 The Baumol model (Cost of holding cash) 5

14 Flowchart of Exxon Mobil treasury procedure 27

Table Content Page

3 Summary of EMVCL’ balance sheet as of 31 December 2006 40

4 Summary of income statement for year 2005, 2006 40

8 Example for USD is more expensive than VND when VND/ USD exchange rate is rising 54

11 Payable forecasting for year 2007 (US$ 1,000) 56

15 Procedures for releasing orders in case of overdue debts 83

17 Exposure per risk category at the end of year 2006 (US$ 1,000) 97

34 Score on overdue 105

BIDV Bank for Investment and Development of Vietnam

DOAG Delegation of Authority Guideline

DSO Month-end days sales outstanding

EBIT Earning before Interest and Tax

EM ExxonMobil

ERP Enterprise Resources Planning

LOI Letters of Instructions

P/(L) Profit and Loss

VBA Bank for Agriculture and Rural Development of Vietnam VCB Vietcombank - Bank for Foreign Trade of Vietnam

Bruxelles, Solvay Business School and Hochiminh City Open University for providing very sophisticated lessons and giving valuable experience during my study

I wish to give my special thanks to my Tutor, Dr Nguyen Van Thuan, for his enthusiastic and valuable guidance, advices and encouragement throughout my thesis

Many appreciation and thanks are also extended to my colleagues, classmates, program co-ordinators, ExxonMobil Vietnam and my family for their supports and encouragements during the program

Ho Chi Minh City, 17 March 2007

Tran Trung Nghia

Vietnam has been a member of WTO, a very important jumping step in economic development process It is a bright signal for everyone as well as enterprises However, The fierce competition from the global economy is not easy at all The companies having grown up and are developing as well as many having just been born are facing with a lot of difficulties and challenges from the result of this integration process In front of those difficulties and challenges, all companies must find out the way to go a head One of the basic ways to exist is

to improve the internal controls, of which financial controls is really very necessary

Treasury and Credit are not much mentioned in Vietnamese companies They only show up at the big corporations

Treasury activities are related to cash, payment, banking, which is very sensitive

in business All companies, either small or large, have to pay or receive cash They have to use the banking services or facilities to meet the very basic need Therefore, with the effective treasury activities and valid payment procedures, the company will be able to minimize cost, maximize profit, reduce risks, create more value and trustworthy from suppliers

Nowadays, due to competition, all most companies do not sell products or services in cash but by deferred payment Therefore, setting up the payment conditions and methods complied with the company’s financial ability is not easy

ExxonMobil is a huge company in the world specializing in oil and gas production It has attended everywhere ExxonMobil has been and is very successful in the world and in Vietnam market thanks to the super quality lines of product and its very successful controls Working for ExxonMobil Vietnam, I have a lot of opportunities to learn a lot about financial management, processes and effective procedures On the occasion of completing my Master program, I would like to choose the Treasury and Credit subject for my thesis

2 OBJECTIVES OF RESEARCH STUDY

The objectives of the research study are described as follows

Firstly, The study will state the importance of Treasury and Credit management

in the big companies and introduce effective controlling processes, procedures, models in cash and credit controls

Secondly, This research will help us review the Credit and Treasury to improve the cash management as well as reduce risks when granting credit lines to distributors

Finally, We will give some recommendations and ideas for improving cash management and reducing credit risks for the next years

Analysis, assessment and supplement

Base on the available information and data collected, we focus on analyzing explaining, giving assessments and supplements

5 STRUCTURE OF THE STUDY

Introduction

Chapter 1 Literature review

Chapter 2 An overview about ExxonMobil corporation in the world and in Vietnam

credit limit

Conclusions

CHAPTER 1

LITERATURE REVIEW 1.1 TREASURY

1.1.1 Definition of cash 1 :

The term cash is surprisingly imprecise concept The economic definition of cash includes currency, checking account deposits at commercial banks, and un-deposited checks However, financial managers often use the term cash to include short-term marketable securities Short-term marketable securities are frequently referred to as “cash equivalents”, treasury bills, certificates of deposit and purchase agreements

1.1.2 Definition of cash management 1 :

Cash management is balance the cash collection and disbursement, i.e determining the appropriate target cash balance, collecting and disbursing cash effectively and investing excess cash in marketable securities:

Determining the appropriate target cash balance involves an assessment of the trade off the benefit and the cost of liquidity The benefit of holding cash is the convenience in the liquidity it gives the firm The cost of holding cash is the interest income that the firm should have received from investing in the treasury bills and other marketable securities If the firm has achieved its target cash balance, the value it gets form the liquidity provided by its cash will be exactly equal to the value forgone in interest on an equivalent holding securities In other words, the firm should its holding of cash until the net present value from

1 Stephen A Ross, Randolph W Westerfield, Jeffrey Jaffe, Corporate Finance

doing so is zero The incremental liquidity value of cash should decline as more

of it is held

After the optimal amount of liquidity is determining, the firm must establish procedures so that cash is collected and disbursed as efficiently as possible This usually limit circumstance of collect early and pay late

The companies must invest temporary idle cash in short-term marketable securities which are not popular in Vietnam

The basic objective in cash management is to keep the investment in cash as low

as possible while still operating the firm’s activities efficiently and effectively The challenges of cash management are:

- How to minimize cost

- How to maximize profit

- How to control cash flow

- How to manage risk

- How to employ technology

- How to create value

Almost the Vietnamese companies manage their cash as traditional way, they manage as actual requests, without strategy or cash flow forecast This leads to many risks, waste of money, un-liquidity

1.1.3 Reason for holding cash:

There are two primary reasons for holding cash

Firstly, cash is needed to satisfy the transaction motive Transaction-related needs come from normal disbursement and collecting activities of the company The disbursement of cash includes the payment of wage, salary, trade debts, taxes, dividends Cash is collected from sales from operations, sales of assets, and new financing The cash inflows and cash outflows are not perfectly synchronized, and some level of cash holdings is necessary to serve as a buffer

If the company maintains too small cash balance, it may run out of cash If so, it must sell marketable securities or borrow Selling marketable securities and borrowing involve trading costs

Another reason to hold cash is for compensating balances Cash balances are kept at commercial banks to compensate for banking services rendered to the company A minimum required compensating balance at banks providing credit services to the company may impose a lower limit on the level of cash the company holds

The cash balance for most companies can be thought of as consisting of transaction balances and compensating balances However, it would not be correct for the company to add the amount of cash required to satisfy its transaction needs to the amount of cash needed to satisfy its compensatory balances to produce a target cash balance The same cash can be used to satisfy both requirements

The cost of holding cash is, of course, the opportunity cost of lost interest To the determine the target cash balance, the company must weigh the benefit of holding cash against the cost It is generally a good idea for the companies to figure out first how much cash to hold to satisfy the transaction needs Next, the company must consider compensating-balance requirement, which will impose a lower limit on the level of the company’s cash holdings Because compensating balances merely provide a lower limit, we shall ignore compensating balances for the following discussion of the target cash balance

1.1.4 Determine the target cash balance:

The target cash balance involves the trade-off cost between the opportunity costs

of holding too much cash and the trading costs of holding cash too little If the company tries to keep its cash holdings too low, it will find itself selling marketable securities (and, of course, buying marketable securities to replace those sold) more frequently than if the cash balance was higher Thus, trading costs will tend to fall as the cash balance becomes larger In contrast, the opportunity costs of holding cash rise as the cash holdings rise

Figure 1: The Baumol model (Cost of holding cash) 2

1.2 CREDIT

1.2.1 Definition of credit 1 :

When the firm sells goods and services, it can be paid in cash immediately or wait for a time to be paid, that is, extend credit to customers Grading credit is investing in a customer, an investment tied to the sale of a product or service

An account receivable is created when credit is granted These receivables include credit granted to other firms, called trade credit, and credit granted customers, called consumer credit

Size of cash balance (C)

Optimal size of cash balance (Target balance)

- Trading costs are increased when the company must sell securities to establish a cash balance

- Opportunity costs are increased when there is a cash balance because there no return cash

The investment in accounts receivable for any firm depends on both the amount

of credit sales and the average collection period For example, if the firm’s credit sales per day equal US$ 1,000 and its average collection period is 30 days, its accounts receivable will be equal to US$ 30,000 Thus, a firm’s investment in accounts receivable depends on factors influencing credit sales and collection A firm’s credit policy affects these factors

There are three main components in credit policy:

- Terms of the sale: A firm must decide on certain conditions when selling its good and services for credit For instance, the terms of sale may specify the credit period, the cash discount, and the type of credit instrument

- Credit analysis: When granting credit, the firm tries to distinguish between customers that will paid and customers that will not pay Firms use a number of devices and procedures to determine the probability that customers will pay

- Collection policy: Firms that grant credit limit must establish a policy for collecting the cash when it becomes due

1.2.2 Term of sales:

The terms of sale refer to the period for which credit is granted, the cash discount, and the type of credit instrument For example, suppose a customer is granted credit with terms of 2/10, net 30 This means that the customer has 30 days from the invoice date In addition, the cash discount of 2 percent from stated sales price is to be given if payment is made in 10 days If the stated terms

are net 60, the customer has 60 days from the invoice date to pay and no discount

is offered for early payment

Figure 2: Trade credit

Figure 3: The cash flows of granting credit 1

1.2.2.1 Credit period:

Credit period vary among different industries General a company must consider three factors in setting a credit period as follows:

a The profitability that customer will not pay A company whose customers are

in high risk businesses may find itself offering restrictive credit terms

Accounts payable

Accounts receivable

Company’s

customer

- Trade credit extended to a customer by a company appears as an

accounts receivable

- Trade credit extended by company’s supplier to the company

appears as an accounts payable

Company’s supplier Company

Time

Bank credits company’s account

Company deposits check

in bank

Customer mail check

b The size of the account If the account is small, the credit period will be shorter Small accounts are more costly to manage, and small customers are less important

c The extent to which the goods are perishable If the collateral values of the goods are low and can not be sustained for long periods Less credit will be granted

Lengthening the credit period effectively reduced the price paid by customer Generally this will increase sales

1.2.2.2 Cash discounts:

Cash discounts are often part of the terms of sale One reason they are offered is

to speed up collection of receivables The company must trade this off against the cost of the discount Let’s take example of financial officer’s decision on whether he would discount or not

Mr B, a financial officer of company A, is considering the request of the company’s largest customer, who want to take a 3-percent discount for payment within 20 days on a US$ 10,000 purchase In other words, he intends to pay US$ 9,700 {$10,000 x (1-0.03)} Normally, this customer pays in 30 days with no discount The cost of debt capital for company A is 10 percent Mr B has worked out the cash flow implications as follows:

a Current policy:

PV1= $10,000/{1+(0.1 x 30/365)}= $9,918.48

b Proposed policy:

PV2= $9,700/{1+(0.1 x 20/365)}= $9,647.14 His calculate shows that granting the discount would cost company A US$ 271.34 {$9,918.48 - $9,647.14} in present value Consequently, company A is better off with the current credit arrangement

1.2.3 Credit analysis:

When granting credit, a company tries to distinguish between customers that will pay and customer that will not pay There are a number of sources of information for determining creditworthiness

1.2.3.1 Credit Information

Information commonly used to assess creditworthiness includes the following:

a Financial statements A company can ask a customer to supply financial statements Rules of thumb based on financial ratios can be calculated

b Credit reports on customer’s payment history with other companies Many organizations sell information on the credit strength of business firms In the world, the best known and the largest firm of this type is Dun and Bradstreet, which provides subscribers with a credit-reference book and credit reports on individual firms The reference book has credit ratings on many thousand of businesses

c Banks Banks will generally provide some assistance to their business customers in acquiring information on the creditworthiness of other companies

d The customer’s payment history with the company The most obvious way to obtain an estimate of a customer’s profitability of nonpayment is whether he or she has paid previous bills

1.2.3.2 Credit scoring:

Once information has been gathered, the company faces the hard choice of either granting or refusing credit Many companies use the traditional and subjective guidelines referred to as the “five Cs of credit”

a Character The customer’s willingness to meet credit obligations

b Capacity The customer’s ability to meet credit obligations out of operating cash flows

c Capital The customer’s financial reserves

d Collateral A pledged asset in the case of default

e Conditions General economic conditions

1.2.3.3 The decision to grant credit 3 :

Trade credit is more likely to be grant by the selling firm if:

a The selling firm has a cost advantage over other lenders

b The selling firm can engage in price discrimination

c The selling firm can obtain favorable tax treatment

3 Shezad I Mian and Clifford W Smith, Extending Trade Credit and Financing Receivables

d The selling firm can has no established reputation for quality products or services

e The selling firm perceives a long-term strategic relationship

1.2.4 How to finance trade credit:

There are three general ways of financing accounting receivables: secured debts,

a captive finance company, securitization

Use of secured debt is usually referred to as asset-based receivables financing This is the predominant form of receivables financing Many lenders will not lend without security to their clients with substantive uncertainty or little equity With secured debt, if the borrower gets into financial difficulty, the lender can repossess the asset and sell it for its fair market value

Many large companies with good credit ratings use captive finance companies The captive finance companies are subsidiaries of the parent company This is similar to the use of secured debt because the creditors of the captive finance company have a claim on its assets and, as a consequence, the accounts receivable of the parent company A captive financing is attractive if economies

of scale are important and if an independent subsidiary with limited liability is warranted

Securitization occurs when the selling company sells its accounts receivable to a financial institution The financial institution pools the receivables with other receivables and issues securities to finance items

SUMMARY OF CHAPTER 1

In the first chapter, we gave the literature reviews on treasury, reviewed definition of cash, cash management, the reason why we hold cash and determine target cash balance

We have clarified the term “cash” by giving the economic definition of cash and introduced some cash equivalents Another important point related to treasury is cash management; how to manage cash, the reasons for holding cash and ways to determine the target cash balances and some objectives in cash management was stated obviously is this chapter

We also mentioned about credit, some specific examples and figures offered to illustrate for trade credit as well as terms of sales such as credit period, cash discounts Moreover, this chapter has shown some methods like gathering credit information, how to score credit in order to analyze as well as to grant credit limit to customers

In next chapter, we will state an overview of ExxonMobil corporation in the world and Vietnam

CHAPTER 2

AN OVERVIEW ABOUT EXXON MOBIL CORPORATION IN THE

WORLD AND IN VIETNAM

2.1 EXXONMOBIL (GLOBAL)

ExxonMobil is the world’s largest publicly traded international oil and gas company An industry leader in almost very aspect of the energy and petrochemical business, It operates facilities or market products in nearly 200 countries and territories around the world and explore for oil and natural gas on six continents

ExxonMobil is involved in the exploration and production of crude oil and natural gas; manufacture of petroleum products ; and transportation and sale of crude oil, natural gas, and petroleum products Exxon Mobil is a major manufacturer and marketer of basic and specialty petrochemicals and also has interest in electric power generation facilities In addition, we conduct extensive research programs in support of these business

Upstream Exxon Mobil’s asset base is highly profitable and geographically diverse The company has interest in exploration and production acreage in 36 countries and production in 26 countries located in Africa, Asia Pacific, the Middle East, Europe, North and South America, and the Russia Exxon Mobil sells natural gas in 25 countries and across five continents Total of oil and gas production was 4.1 million oil-equivalent barrels per day in 2005

Figure 4: ExxonMobil’s upstream activities

Figure 5: ExxonMobil’s upstream activities

Downstream ExxonMobil has interest in 45 refineries located in 25 countries and more than 35,000 retail outlets in nearly 100 countries The company

markets fuels and lubricants in more than 150 countries In 2005, refinery throughput was 5.7 million barrels per day, and the petroleum product sales were 8.3 million barrels per day Worldwide, we market products under the Exxon, Mobil, and Esso brands

Figure 6: ExxonMobil’s downstream activities

Figure 7: ExxonMobil’s downstream activities

Chemical. Exxon Mobil is one of the leading manufacturers of petrochemicals with operations in 50 wholly owned and joint-venture facilities around the world The company is one of the largest producer of olefins This basic petrochemical building block is a raw material for products used in variety of consumer applications including packaging, automobile parts, and household goods We are also the largest producer of polyolefin, which include polypropylene, one of the fastest –growing polymers More than 90 percent of our chemical capacity is employed in businesses where we rank first or second in the market share by

worldwide volume

Figure 8: ExxonMobil’s chemical activities

Technology Exxon Mobil maintains one of the industry’s largest research and development efforts with more than USD 700 million spent in 2005 and USD 3.2 billion in 2001 We emphasize proprietary solutions that solve critical business challenges and pursue research into proprietary breakthrough technologies that will not only enhance existing businesses, but also provide step changes in Exxon Mobil’s competitive position

Exxon Mobil is publicly traded company The New York Stock Exchange (NYSE) is the principle exchange on which Exxon Mobil Corporation common stock (symbol XOM) is traded

Worldwide, Exxon Mobil markets fuels and lubricants under three brands

The Exxon emblem is the primary trademark used to brand Exxon products and

services in the United States

Figure 9: Exxon trademark

The Mobil trademark is the primary trademark used to brand Mobil products and

services worldwide

Figure 10: Mobil trademark

The Esso oval is the primary trademark used to brand Esso products and

products outside the United States

Figure 11: Esso trademark

For the past years, Exxon Mobil has accomplished a lot of achievements on safety and health, spills, human rights and security, greenhouse gas (GHG) management, investments, transparency, educating women and girls initiative, workplace flexibility and diversity,… and faced with a lot of challenges of fatalities and injuries, maintaining momentum in energy efficiency, skills development

Exxon Mobil ranks the first in Fortune 500 2006 with total revenue of

US$ 339,938,000,000 and profit of US$ 36,130,000

Table 1: Performance data

Financial and operating (Billions of dollars)

Net income 11.5 21.5 25.3 36.1

Sales and other operating revenue 201 237 291 359

Capital and exploration expenditures 14 16 15 18

Total assets at year end 153 174 195 208

Return on average capital employed (%) 13.5 2.09 23.8 31.3

Distribution to shareholders 10 12 15 23

Benefits to employees (wage, salary, pension, … 9 11 11 12

Spending with suppliers 114 128 162 211

Safety

Fatalities - employees 3 4 0 3

Fatalities - contractors 7 19 6 5

Employees

Number of regular employees (thousands) 92 88 86 84

Percent of workforce – non-US 62 61 62 63

Percent new professional hires – non-US 60 64 78 73

Social

Community investment (million dollars) 98 103 106 133

US 78 103 106 133

Rest of world 27 30 36 52

Corporate political contributions (million dollars) 5 3 3 3

2.2 EXXON MOBIL VIETNAM

Esso and Mobil re-entered Vietnam in 1994 with representative offices in Hanoi

and Ho Chi Minh City In 1998, Mobil took 50% equity in the Vietnam joint

venture of Mitsui (Japan) and Unique Gas (Thailand) which became Mobil

Unique (Vietnam) Company Limited (MUCL) Following the merger of Exxon Corporation and Mobil Corporation, the Esso

business in Vietnam was integrated to MUCL to form ExxonMobil Unique

Vietnam Company Limited (EMUCL) EMUCL at that time employed some

260 regular and contract employees

Since December 2006, EMUCL has transferred to ExxonMobil Vietnam Limited

Company (EMVCL) with 100% foreign-owned under ExxonMobil Vietnam

Holding Limited located at 25/F, Far East Fin CTR, 16 Harcourt Rd., Hong Kong

Today EMVCL has more than 150 regular and contract employees working at a

factory in Dong Nai and two offices in Ha Noi and Ho Chi Minh City

• Company Headquarters:

Unit 709, 7th Floor, Diamond Plaza

34 Le Duan Street, District 1

Ho Chi Minh City

Tel: (84-8) 8233250 / 8233255 / 8233256