Joint Circular No. 02/2002/TTLT/BKH-BCN-BTC guides the transfer and repayment of capital to foreign-invested enterprises that have invested in constructing power facilities outside the fence.

JOINT CIRCULAR

Guidelines for the transfer and repayment of capital to foreign-invested enterprises that have invested in constructing power facilities outside the fence.

These guidelines apply to foreign-invested enterprises that have invested in constructing power facilities outside the fence.

Pursuant to the Prime Minister's regulations set forth in Document No. 477/CP-KTTH dated May 8, 2002, issued by the Government Office regarding the repayment of capital to enterprises. the foreign-invested enterprises that have invested in constructing power facilities outside the fence. includes The Ministry of Planning and Investment and the Ministry of Finance provide guidance on the transfer and repayment of capital for AND Industrial direct foreign investment that has been invested in constructing power facilities outside the fence as follows: the foreign-invested enterprises that have invested in constructing power facilities outside the fence. includes SCOPE AND RESPONSIBILITIES 1. The contents and levels of expenditure from the state budget to support the implementation of initiatives as stipulated in Chapter II of this Circular are maximum levels. Based on the ability to balance resources, the Ministers of Ministries, Heads of central agencies, Provincial People's Councils, and centrally governed cities shall decide on specific contents and levels of expenditure for initiative activities that ensure appropriateness. TRANSFER OF POWER FACILITIES OUTSIDE THE FENCE person 1. Scope of Transfer:

PART I

1.1. Definitions:

Transferor:

Is a foreign-invested enterprise operating under the Law on Foreign Investment in Vietnam, including wholly foreign-owned enterprises, joint ventures, and parties involved in business cooperation contracts.

Transferee:

Is the Vietnam Electricity Corporation or units authorized by the Vietnam Electricity Corporation. Fence Line: Is the point delineating the boundary of land allocated to the Transferor according to the decision of the competent authority.

Metering Point: Is the location of the circuit breaker where the electricity meter measuring the energy purchased and sold between the seller and buyer is installed. Connection Point: Is the point at which the power supply facility of the Transferor connects to the national power grid.

Power facilities outside the fence are defined from the Fence Line to the Connection Point.1.2. Scope of Transfer of Assets for Capital Repayment:

1.2.1. The scope of transfer of assets for capital repayment includes power facilities outside the fence that the Transferor has invested in. 1.2.2. In cases where the metering point is within the fence, assets from the Fence Line to the Metering Point will be transferred if both parties agree and specify this in the transfer documentation.

The scope of transfer is determined as follows: a) For power facilities with voltage less than or equal to 0.4 kV, the scope of transfer extends to the location of the electricity meter installation.

b) For power facilities with voltage higher than 0.4 kV up to 35 kV, the scope of transfer extends to the connection point of the power line feeding into the switching equipment or high-voltage busbar of the distribution substation. c) For power facilities with voltage of 110 kV or higher, the scope of transfer includes the entire 110 kV substation (including medium-voltage switchgear).

1.3. Cases Not Included in the Scope of Transfer:

Facilities initially constructed to supply power for the enterprise's operations but actually used by the Transferor for selling power at the time of transfer.

Facilities already accepted and compensated by the Vietnam Electricity Corporation.

Power facilities located in areas requiring relocation due to land acquisition and compensation.

2. Responsibilities of the Transferor and Transferee:

2.1. Transferor:

Prepare all required documents and certificates as stipulated in Chapter I of this Circular, participate in the asset valuation committee, and facilitate the acceptance process for the Transferee. Provide favorable conditions for the Transferee to operate, maintain, and repair power facilities inside the fence as agreed upon by both parties as specified in Section 1 of this Circular..

Facilitate the Transferee's right-of-way for power lines extending from the 110 kV substation to supply nearby areas.

C2.2. Transferee: .

Accept all required documents and certificates as stipulated in Chapter II of this Circular, participate in the asset valuation committee, accept assets, and repay capital to the Transferor.

Adjust the electricity meter to a suitable position within the scope of transfer.

DOCUMENTATION FOR TRANSFER

The transfer documentation includes original documents as prescribed or substitute documents for original documents, and documents prepared during the transfer process, specifically as follows:

1. Original documents as prescribed, including:

A copy of the Investment License. I The approved power supply plan by the competent authorities. Agreement documents on the route. Land allocation documents and land lease contracts directly related to the power lines and substations.

Approved technical design.

As-built drawings of the project.

Receive all documents and certificates in accordance with Chapter II of this Joint Circular. Participate in the Appraisal Board, accept assets, and return capital to the Transferor.

Relocate the electricity metering device to a position suitable for the scope of Transfer and Acceptance.

Chapter II

TRANSFER AND ACCEPTANCE DOCUMENTATION

The Transfer and Acceptance documentation includes original documents as prescribed or substitute documents for original documents, and documents created during the transfer and acceptance process, specifically as follows:

1. Original documents as prescribed, including:

A copy of the Investment License.

The approved power supply plan by competent authorities, agreement documents, land allocation documents, and land lease contracts directly related to the transmission lines and substations.

Approved technical design.

As-built drawings of the project.

Part of the works handed over and settled with independent audit by an auditing company legally operating in Vietnam.

The registration of depreciation rate or depreciation period of fixed assets approved by the financial authority.

2. In case there are not enough documents as prescribed in Section 1 above: The Delivering Party shall cooperate with the Receiving Party to perform the following tasks: Provide the documents that the Delivering Party has (as specified in Section 1 above) to the Receiving Party.

Prepare an inspection report on the current status of quality and determine the value of the assets to be handed over according to Chapter III of this Circular.

In case there are no land allocation documents and agreement on the route, prepare the documentation for the right-of-way of the power line and substation outside the fence, with confirmation from the People's Committee of the province.

3. Documents prepared during the handover process:

Sketch map of the actual site condition of the works to be received. Sketch of the connection diagram (single line) of the works to be received.

Sketch map of the actual site condition of the works to be received. Inventory list of quantity, type, and quality of equipment and materials.

Handover certificate according to the prescribed model.

Certificate determining the residual value of the assets handed over, which is appraised by the Appraisal Board according to the prescribed model.

4. Quantity

of documents: The Delivering Party shall hand over two sets of documents to the Receiving Party, all copies must be notarized. However, the route agreement, land allocation documents, and lease contracts must be original documents.

DETERMINATION OF THE VALUE OF ASSETS TO BE HANDOVERED AND CAPITAL REPAYMENT

Chapter III

1. In case there are sufficient documents: TRANSFEROR, The value of the assets to be repaid shall be determined as follows:

repayment Original cost of fixed assets recorded in accounting books - Accumulated depreciation of fixed assets recorded in accounting books

- The book value of the security is determined according to the Accounting System of the State Bank and the guidance document of the State Bank on the accounting treatment of foreign securities investment operations. 2. In case there are insufficient documents: = Value of repayment = Actual quantity of assets x unit price of each asset - Accumulated depreciation of fixed assets

a) The Original cost of fixed assets recorded in accounting books - Accumulated depreciation of fixed assets recorded in accounting books

actual quantity of assets is determined based on the actual inventory data of the works being handed over.

Where:

b) The unit price of each fixed asset is determined based on: The ceiling price of the locality at the time of construction investment. If the locality does not issue a ceiling price at the time of construction investment, it will be based on the standard price of Hanoi, Da Nang, and Ho Chi Minh City depending on where the project is located in the North, Central, or South region.

For the part of the compensation value for land clearance, it is accepted based on valid invoices and documents provided by the Delivering Party.

c) The usage period of fixed assets is calculated in months and starts from the date when the fixed assets are put into use until the month when the certificate determining the residual value of the assets is signed. d) The accumulated depreciation is determined as follows: In case the Delivering Party has registered the depreciation rate, the accumulated depreciation is determined by multiplying the original cost of the fixed assets by the registered depreciation rate and the usage period of the fixed assets. The original cost of the fixed assets refers to the original cost recorded in the accounting books if there are sufficient documents or the re-evaluated original cost in case of insufficient original documents according to regulations.

In case the Delivering Party has not registered the depreciation rate or depreciation period of fixed assets with the financial authority, the depreciation rate is calculated at 7%/year.

3. In case the assets have been fully depreciated but are still in use:

Both the Delivering and Receiving Parties shall determine the quantity and quality of each component to determine the actual remaining value of the entire project, to be reported to the Appraisal Board. The actual remaining value of the entire project shall not exceed 10% of the initial asset value.

4. Appraisal Board:

4.1. The Appraisal Board is decided to be established by the People's Committee of the province where the power project outside the fence is located, including the leadership of the Department of Finance - Price as Chairman, the leadership of the unit authorized by the Vietnam Electricity Corporation as a permanent member, and representatives from the Department of Industry, the Department of Planning and Investment, the Provincial Industrial Zone Management Board (for projects within industrial zones), and the Delivering Party. In addition to these members, the Chairman may invite other organizations, technical experts, economic, financial, and accounting specialists as necessary. 4.2. The Appraisal Board is responsible for:

Organizing the appraisal or hiring an audit to determine the value of the assets being handed over. The results of the appraisal or audit must be recorded in a certificate signed by all members. The Appraisal Board is responsible for the legal validity of the handover documents submitted to the People's Committee of the province for approval as the basis for capital repayment. Audit costs are included in the value of the assets to be handed over:

Summarize and report monthly on the progress of handover and capital repayment to

ORGANIZATION FOR RECEIVING AND CAPITAL REPAYMENT Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).1. Procedure for handover and capital repayment: Develop a plan for receiving and repayment: a) Within thirty days from the date this Circular takes effect, the Department of Planning and Investment or the Provincial Industrial Zone Management Board shall send this Circular to foreign-invested enterprises and request those enterprises eligible for repayment of power projects outside the fence to officially notify the local electricity company about their handover and repayment requirements. b) Within thirty days from the date of receipt of the notification from the Department of Planning and Investment or the Provincial Industrial Zone Management Board, foreign-invested enterprises wishing to hand over and repay capital shall submit a written request to the local electricity company. After this deadline, if enterprises do not submit a document to the local electricity company, it will be considered that they have no intention to hand over the power project and repay capital. c) Within fifteen but not more than thirty days from the date of receipt of the enterprise's document, the local electricity company must notify in writing the time, place, and content of the meeting with the enterprise related to the handover and valuation of assets.

1.2. The Delivering Party prepares documents as prescribed in Chapter II of this Circular.

1.3. Both the Delivering and Receiving Parties jointly conduct an inventory of the quantity, assess the remaining quality of each asset, review the original documents, and prepare a handover certificate to be reviewed by the Appraisal Board.

1.4. Within fifteen days from the date of receipt of the handover certificate submitted by the Delivering and Receiving Parties, the Appraisal Board shall appraise the value of the assets to be handed over and submit it to the People's Committee of the province for approval.

Summarize and report monthly on the implementation status of transfer and acceptance and capital repayment to Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).provincial People's Committees.

Chapter IV

THE ORGANIZATION FOR RECEIPT AND CAPITAL REPAYMENT

1. Procedures for transfer and capital repayment:

1 1. Develop plans for receipt and repayment:

a) Within thirty days from the date this Joint Circular takes effect, the Provincial Department of Planning and Investment or the Provincial Industrial Zone Management Board shall send this Circular to foreign-invested enterprises and request those enterprises eligible for repayment of external power infrastructure costs to officially notify the local power company of their transfer and repayment requirements. b) Within thirty days from the date of receiving notification from the Provincial Department of Planning and Investment or the Provincial Industrial Zone Management Board, foreign-invested enterprises wishing to transfer and repay capital shall submit a written request to the local power company. If enterprises do not submit a written request to the local power company within this period, it will be considered that they have no intention to transfer power infrastructure and repay capital.

c) Within fifteen but not more than thirty days from the date of receiving the enterprise's document, the local power company must notify in writing the time, location, and content of the meeting with the enterprise regarding the transfer and acceptance and asset valuation.

1.2. The Transferor prepares the documents in accordance with Chapter II of this Joint Circular.

1.3. Both the Transferor and the Acceptor jointly conduct an inventory of the quantity and assess the remaining quality of each asset, review the original documents, prepare a handover record for submission to the Appraisal Board for examination.

1.4. Within fifteen days from the date of receiving the handover record submitted by the Transferor and Acceptor, the Appraisal Board shall appraise the value of the transferred assets and submit it for approval by the Provincial People's Committee.

1.4. Within fifteen days from the date of receipt of the handover record of assets presented by the Transferor-Recipient Party, the Appraisal Board shall appraise the value of the transferred assets and submit it for approval by the People's Committee of the provincial level.

1.5. Pursuant to the approval decision of the Provincial People's Committee, the two Receiving and Delivering Parties shall proceed with the transfer of assets and repayment of capital.

2. The Receiving Party shall accept the assets and complete the repayment of capital to the Delivering Party within thirty days from the date of the approval decision of the provincial-level People's Committee.

3. Monthly, Vietnam Electricity Corporation shall report to the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Industry, and the provincial-level People's Committee on the situation of asset acceptance and capital repayment.

Chapter V

IMPLEMENTATION

1. The provincial-level People's Committee shall direct the establishment of the Valuation Board, approve the value for repayment, and supervise and monitor the capital repayment of power facilities outside the fence for foreign-invested enterprises.

2. Vietnam Electricity Corporation shall direct the Electricity Companies and Provincial Electricity Enterprises to organize the acceptance, repayment of capital, and management of accepted assets in accordance with this Joint Circular.

3. In case of any difficulties during the Transfer process, the Valuation Board shall promptly report to the Joint Ministries of Planning and Investment, Industry, and Finance and the provincial-level People's Committee for consideration and resolution.

4. This Joint Circular shall take effect fifteen days from the date of issuance./.