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PVI: Explanation for QIV.2008 financial statement
Petrovietnam Insurance explains QIV.2008 financial statement as follows:
1. Decrease in other income: VND 85,878,695,233
In QIII.2008, PVI together with other founding shareholders set up PVI Tower with the charter capital of VND 120 bil. of which PVI contributed VND 100 bil. (83.33%) by total value of land use right and assets attached to land.
On this basis, PVI took into account the investment increase and other income increase due to difference between book value and real value of the contributed capital by value of land use right and assets attached to land at 20 Pham Ngoc Thach – Ho Chi Minh city.
In November 2008, PetroVietnam had resolution to dissolve PVI Tower. So in December 2008, the corporation took into account the investment decrease and other income decrease an amount the same as the accounted increase.
2. Difference of 2008 profit between QIV2008 financial statement and operating results in the Board resolution on 19/12/2008.
At the time the Board of Directors met on 19/12/2008, the operating results were reported basing on operating results of the first 11 months of 2008 and expected operating result of December, 2008. However, beside the above mentioned decrease adjustment, in December 2008, insurance business had many difficulties with higher compensation rate over that of previous months, which caused higher compensation cost. At the same time, the corporation set up a provision for compensation. Furthermore, from the end of the quarter III to quarter IV.2008, VN Index decreased by 30%, hence the corporation must increase in the provision for possible contingency of stock deduction rate.
HaSTC
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