Directive No. 08/2008/CT-BXD on implementing measures to enhance and improve the effectiveness of operations, ensuring stable development and sustainable growth for units under the Ministry of Construction.

DIRECTIVE

On implementing measures to enhance and improve the effectiveness of operations, ensuring stable development and sustainable growth for units under the Ministry of Construction

In fulfilling the production and business plan and investment development tasks for 2008, along with the national economy, construction enterprises had to face many difficulties and challenges due to complex and unpredictable fluctuations in both the global and domestic economies; however, with the close guidance of the Ministry and the diligent efforts of units in implementing comprehensive solutions from the beginning of the year, the production and business activities of enterprises under the Ministry still achieved a relatively high growth rate.

In the first ten months of 2008, the value of production and business reached 82.1% of the annual plan, increasing by 24.4% compared to the same period in 2007; the value of investment implementation was approximately 70% of the annual plan, the progress of key projects was generally ensured, especially in the cement production and investment sector, units urgently and concentratedly mobilized all resources to complete projects and put them into operation in 2008 and 2009 to ensure the capacity utilization plan according to the Master Plan, contributing to stabilizing the cement market.

Alongside these achievements, the production and business efficiency of some units was low, particularly in the construction installation sector; financial conditions were still difficult; the review and evaluation of project investment effectiveness were delayed, formalistic, and not highly effective, causing waste and reducing investment efficiency; corporate management still had some shortcomings and issues; some units did not truly pay attention to brand promotion and long-term comprehensive development strategy building; the organizational management model and the appointment of state capital representatives of the Corporation at other enterprises in some units were merely formalistic, not implemented according to the Ministry's directives, thus failing to promote the initiative and responsibility of these enterprises; there was still a situation where one representative participated in managing and operating multiple enterprises simultaneously.

To best fulfill the goals and tasks of the 2008 plan; continue to enhance and improve production and business efficiency, investment development, ensuring stable and sustainable development of units under the Ministry in 2009 and completing the five-year plan from 2006 to 2010, the Minister of Construction instructs the Chairmen of the Management Boards, General Directors of State Corporations, Directors of Independent Companies, and Heads of Units under the Ministry of Construction to focus on implementing the following main tasks and solutions:

1. Continue to implement well the tasks and solutions stated in the Minister of Construction's Directives: number 03/2008/CT-BXD dated March 31, 2008 on certain measures to implement the production and business plan, investment development, and state budget plan for 2008 of the Ministry of Construction; number 06/2008/CT-BXD dated May 8, 2008 on implementing measures to practice thrift and combat waste in units under the Ministry of Construction.

2. Strictly implement the review and reduction of inefficient or unnecessary investment items and projects to concentrate funds for important projects and works that can quickly generate benefits and be completed in 2008-2009, especially those in the industrial production sector (electricity, cement, construction materials...); minimize costs to enhance investment efficiency and competitiveness.

Focus on directing the completion of payment procedures to accelerate the disbursement of investment funds for projects; at the same time, expedite the approval and adjustment of project budgets and total investment amounts, coupled with measures to address losses caused by the suspension or delay of ongoing construction projects to speed up progress while reducing loss and waste.

3. Concentrate on resolving inventory buildup, unfinished products, and promoting sales and capital recovery; conduct reviews, classification, and reconciliation of debts, thereby formulating specific measures to control and settle debts promptly to accelerate capital turnover. Consider debt collection, especially bad debts, as a critical and ongoing solution to ensure efficient and economical capital use; report to the Ministry on the current status of debts for key projects and works facing procedural settlement issues.

4. Implement financial auditing, assessment, and transparency systems; prevent negative incidents. Closely monitor capital raising through securities issuance by state-owned companies or joint-stock companies with state capital; securities issuance for capital raising must have plans to ensure effective use of raised capital according to legal regulations, and must be reported for approval before implementation.

In cases where state-owned companies or businesses with state capital issue securities to raise capital on the stock market, they must submit written reports to the Ministry of Construction (Department of Planning and Finance) and the Ministry of Finance (Enterprise Financial Department, State Securities Commission) for consideration and scheduling of auctions in line with overall market conditions.

5. Focus on reviewing and developing a comprehensive investment and development strategy to enhance operational effectiveness; prioritize investment in core and competitive business sectors that contribute to brand development. The capital required for core production and business activities should account for a large proportion of the total existing capital of the enterprise.

Investments by enterprises in financial, banking, and securities sectors must be carefully considered to ensure effectiveness, and be submitted to the Ministry for review and reporting to the Prime Minister for approval before implementation.

5. Focus on reviewing and building a comprehensive investment strategy for enhancing operational efficiency; prioritize investment in core business sectors with competitive advantages and for developing the enterprise's brand. The capital allocated for core production and business activities must account for a large proportion of the total existing capital of the enterprise.

Investments by enterprises in financial, banking, and securities sectors must be carefully considered to ensure effectiveness, and submitted to the Ministry for review before reporting to the Prime Minister for approval prior to implementation.

6. Continue to improve and innovate the corporate governance model suitable for the Parent Company - Subsidiary structure; reform administrative procedures to enhance the autonomy and dynamism of member enterprises.

6.1. Improve the Regulations on the operation of the Board of Directors and the Audit Committee of the Corporation; clearly defining the functions, tasks, authorities, responsibilities of each Board of Directors member and each Audit Committee member; at the same time clearly defining the relationship between the Board of Directors, the Audit Committee, and the General Director's Office and the support staff of the Corporation. On this basis, monitor, inspect, and evaluate the implementation situation of organizations and members participating in management and operation of the Corporation.

6.2. Improve the Regulations on the management of the Corporation's capital in other enterprises in accordance with the provisions of the law and the business management conditions of the Corporation. The Regulations must clearly define the standards for representatives; specific functions, tasks, authorities, responsibilities, and obligations of each representative corresponding to their assigned positions. Pay special attention to the reporting system of representatives in other enterprises.

6.3. Promptly review, develop plans, and organize the implementation of appointing state capital representatives of the Corporation in all enterprises with its share capital according to the direction:

- End the practice of appointing the Chairman of the Board of Directors, General Director, Board of Directors member, Deputy General Director, Chief Accountant of the Corporation as representatives in member enterprises when they are privatized; in cases where it is truly necessary, only appoint representatives in newly established joint-stock enterprises when there is an investment project of the Corporation, and must report to the Ministry before implementing.

- The selection and appointment of representatives and the choice of enterprise management models such as the Chairman of the Board of Directors concurrently or not concurrently serving as the General Director (Director) of a joint-stock company must ensure the principle of creating initiative for enterprises and representatives; clearly defining the specific functions, tasks, authorities, and responsibilities of representatives; linking the interests and responsibilities of representatives with the effectiveness of enterprise operations. Depending on the scale, position, and role of other enterprises within the Corporation, decide on the number of representatives appointed at the necessary level. The amount of capital managed by each representative must be appropriate and commensurate with the position appointed, allocated as a percentage (%) of the total share capital of the Corporation in the enterprise to stabilize responsibility when the enterprise changes its registered capital. Increase the appointment of dedicated representatives and limit the appointment of兼任代表。

- Appointed representatives must meet the standards set by the State and the Ministry of Construction, and meet the requirements of corporate governance. Each cadre shall not be assigned to serve as a representative in more than three enterprises.

Units must complete the review and develop plans for appointing state capital representatives of the Corporation in other enterprises, and report the results to the Standing Office of the Enterprise Reform and Development Steering Committee of the Ministry of Construction (Department of Organization and Cadre Affairs) before December 15, 2008.

6.4. Organize regular evaluations of the effectiveness of the Corporation's capital management in other enterprises for those cadres appointed as representatives; build and implement training plans for the cadre representatives to develop capable cadres and create a pool of cadres to participate in other managerial positions when needed. Timely replace cadres who lack capability and fail to meet the requirements and tasks assigned.

6.5. Review the list of enterprises that have been privatized and meet the conditions to be Public Companies, and instruct state capital representatives in these enterprises to register with the State Securities Commission and strictly comply with the legal regulations applicable to this type of company.

7. Along with focusing on directing the successful completion of production and business tasks, investment development in 2008, enterprises and units under the Ministry must review and specifically determine their own production and business plan targets, investment development plan, and budget plan for 2009, along with solutions to implement them, with the key task for 2009 being: proactively prevent decline, ensuring sustainable development with a higher growth rate than the average growth rate of the national industry and construction sector as stipulated in the National Assembly's Resolution.

The unit's 2009 plan indicators must ensure feasibility, inheriting the strengths and achievements of 2008 and previous years, and measures aimed at significant qualitative improvements, efficiency, and competitiveness of the enterprise and its products and services; particularly paying attention to profit/revenue and profit/capital ratios.

Regarding the investment development plan: align with the ability to mobilize and balance resources for implementation; concentrate funds and resources to accelerate the progress of projects nearing completion, which have the potential to yield high returns, especially in the industrial production sector (electricity, cement, building materials...). Particularly, strict control and acceleration of construction progress of cement plants must be emphasized to ensure early operation, increase supply to the market, and guarantee capacity utilization as per the Plan.

8. Regarding implementation:

Assign the Department of Planning and Finance to coordinate; the Departments of Organization and Cadre Affairs, Economic Construction, and Construction Activity Management, according to their assigned functions, to guide, urge, inspect, and report to the Ministry Leadership on the results of implementing this Directive.

Chairmen of the Board of Directors, General Directors of Corporations; Directors of Independent Companies, Heads of the Ministry's Office, and Heads of units under the Ministry of Construction are responsible for strictly organizing the implementation of this Directive.