Circular No. 112/2007/TT-BTC guiding the financial management regime for Lottery Companies

CIRCULAR

Guidelines for Financial Management of Lottery Construction Companies

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Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 199/2004/NĐ-CP dated December 3, 2004 of the Government promulgating the Financial Management Regulations for State-Owned Enterprises and the Management of State Capital Invested in Other Enterprises;

Pursuant to Decree No. 24/2007/NĐ-CP dated February 14, 2007 of the Government detailing the implementation of the Law on Corporate Income Tax;

Pursuant to Decree No. 30/2007/NĐ-CP dated March 1, 2007 of the Government on Lottery Business.

The Ministry of Finance issues guidelines for financial management of Lottery Construction Companies as follows:

I- GENERAL PROVISIONS

1. These Circulars provide guidelines for financial management of Lottery Construction Companies organized and operating under the forms of a limited liability company with one member (the State owning 100% of the capital) and state-owned enterprises during the period of transitioning to a limited liability company with one member (hereinafter referred to collectively as Lottery Construction Companies).

2. Lottery Construction Companies shall implement financial management regimes as prescribed in these Circulars and other relevant laws.

3. The Chairman of the Board of Members (or the Company Chairman), the General Director (or the Managing Director) of Lottery Construction Companies shall be responsible before the law and state management agencies for the implementation of the company's financial management regime.

II- SPECIFIC PROVISIONS

A. CAPITAL AND ASSET MANAGEMENT

1. Registered Capital:

The charter capital of Lottery Construction Companies is recorded in the company's articles of association. The owner, the representative of the owner approves the initial charter capital, increases the charter capital of Lottery Construction Companies after obtaining the opinion of the Ministry of Finance. The determination of the charter capital of Lottery Construction Companies applies according to the guidance on the method of determining the charter capital for state-owned enterprises.

2. Rights and obligations of Lottery Construction Companies in managing and using capital and assets:

2.1. Lottery Construction Companies have the right to manage and proactively use all the invested owner's capital and other lawful sources of capital in business activities, while being responsible before the owner for the preservation, development of capital, the effectiveness of capital usage, and ensuring the interests of those related to the company such as creditors, customers, employees according to contracts concluded.

2.2. Lottery Construction Companies have the responsibility to monitor all existing assets and capital, perform accounting in accordance with current accounting regulations; fully, accurately, and promptly reflect the situation of capital and asset usage and changes during business operations, clearly defining the responsibilities of each department and individual for each case of asset damage or loss.

3. Handling of lost assets:

3.1. When there is asset loss due to loss, shortage, damage, poor quality, outdated technology, inventory accumulation in regular and sudden inspections, Lottery Construction Companies must determine the cause, responsibility, and handle as follows:

a) If it is due to subjective reasons, the person causing the loss must compensate. The Chairman of the Board of Members (or the Company Chairman) or the General Director (or the Managing Director) of Lottery Construction Companies decides the compensation amount according to the law and bears responsibility for their decision.

b) Insured assets, if damaged, will be handled according to the insurance contract.

c) The value of the loss after compensating with personal, collective, and insurance organization compensation funds, if insufficient, will be covered by the company's financial reserve fund. In cases where the financial reserve fund is insufficient, the shortfall will be accounted for as other expenses in the period.

3.2. Special losses caused by objective and irresistible reasons leading to serious damage. The handling of asset losses is carried out according to the state's regulations for each type of enterprise (limited liability company with one member owned 100% by the State or state-owned enterprise).

3.3. Lottery Construction Companies have the responsibility to promptly handle asset losses; in cases where asset losses are not handled, the Chairman of the Board of Members (or the Company Chairman) for a limited liability company with one member or the General Director for companies that have not yet transitioned to a limited liability company with one member will bear responsibility before the owner as in the case of reporting untruthful financial conditions of the enterprise.

4. Leasing, mortgaging, pledging, selling, liquidating assets:

4.1. Lottery Construction Companies have the right to lease, mortgage, and pledge assets belonging to the company based on the principle of efficiency, capital preservation and development, and ensuring compliance with the Civil Code and other state regulations.

4.2. Liquidation and sale of assets.

a) Lottery Construction Companies have the right to proactively liquidate and sell fixed assets that are damaged, outdated, unused, or unnecessary; long-term investments that are no longer needed to recover capital.

b) The authority to decide on the liquidation and sale of fixed assets and long-term investments is implemented according to the state's regulations for each type of enterprise (limited liability company with one member owned 100% by the State or state-owned enterprise).

c) The liquidation and sale of fixed assets are carried out through auction organizations or publicly by the company according to the procedures and formalities prescribed by the law on asset auctions.

d) The transfer of assets of Lottery Construction Companies attached to land is carried out according to the Land Law.

đ) The proceeds from the liquidation and sale of assets are accounted for as other income, liquidation and sale expenses, and the remaining value of liquidated and sold fixed assets is accounted for as other expenses.

5. Management of customer assets and reserve funds:

5.1. With respect to assets that the Lottery Company leases, receives as collateral, pledges, deposits, or stores on behalf of customers, the Lottery Company shall be responsible for managing, storing, or using such assets according to agreements with customers in compliance with the provisions of the law.

5.2. Regarding the risk reserve fund for prize payouts in lottery operations, the Lottery Company shall implement the establishment and utilization of the fund in accordance with the provisions of this circular.

5.3. As for inventory write-down reserves, reserves for doubtful receivables, and write-down reserves for long-term investments, the Lottery Company shall establish and utilize these reserves in accordance with the regulations applicable to state-owned enterprises.

5.4. Concerning unemployment benefits reserves: The Lottery Company shall establish and utilize the unemployment benefits reserve fund in accordance with the Labor Code and the guidelines issued by the Ministry of Finance regarding the establishment, management, utilization, and accounting of the unemployment benefits reserve fund at enterprises.

B. MANAGEMENT OF REVENUE AND EXPENSES

1. Revenue:

The revenue of the Lottery Company includes revenue from operating various types of lotteries, revenue from other business activities outside lottery operations permitted by law, financial activity revenue, and other income.

1.1. Revenue from lottery business operations: This is the total amount of money from selling lottery tickets (traditional lotteries, self-select lotteries, instant result lotteries, and other types of lotteries as prescribed by the Ministry of Finance) that have been recognized as consumed during the period.

Revenue from operating various types of lotteries is reflected in two forms:

a) Revenue without value-added tax and special consumption tax (referred to as revenue without tax) to determine the company's business results.

b) Revenue with value-added tax and special consumption tax (referred to as revenue with tax) to determine commissions paid to agents, establishment of risk reserve funds for prize payouts, and expenses for preventing illegal gambling.

1.2. Revenue from other business activities outside lottery operations: This is the total amount of money receivable generated during the period from selling products and providing services.

1.3. Financial activity revenue includes: Income from royalties; rental income from assets; interest from deposits; gains from foreign exchange rate differences; interest from foreign exchange rate differences; gains from transferring capital; dividends and profits distributed from external investments; income from investing in government bonds, bonds, and bills; discounts received from purchasing goods and services.

1.4. Other income consists of revenues from infrequent activities outside regular business operations, including: Proceeds from liquidation and sale of fixed assets; fines collected from customers for breach of contract; insurance compensation received; recovery of previously written-off receivables; increases in income due to lost payees; tax refunds; gift values; income from previous years not recorded; agency fees and prizes for winners as stipulated; other legitimate income.

2. Operating Expenses:

The operating expenses of the Lottery Company include all costs incurred related to production and business operations within the fiscal year, including:

2.1. Lottery business operational costs.

a) Prize payout costs for winning tickets: The Lottery Company establishes prize structures in accordance with the Ministry of Finance's regulations for each type of lottery. Prize payout costs are the amounts recorded on the prizes that winners have actually received according to the prize payout regulations for each type of lottery.

b) Costs for agents:

- Agent commission costs: The recipients of agent commissions are direct agents who enter into contracts with the Lottery Company to distribute lottery tickets to customers.

The specific level of agent commission costs in each period and region is determined by the Lottery Company based on the principle that the agent commission cost for each agent of each type of lottery at any given time shall not exceed 15% of the revenue from ticket sales with tax (the value of sold lottery tickets).

Organizations and individuals involved in the distribution process through receiving lottery tickets from lottery agents to sell to customers shall enjoy agent commissions according to their contracts or agreements.

In cases where the Lottery Company acts as an agent to sell tickets for another Lottery Company, it must also adhere to this principle.

Costs for agents authorized to pay prizes to winning customers: The fee for authorizing agents to pay prizes shall not exceed 0.2% of the total value of prizes paid by the agent according to authorization. The basis for payment is the agency contract between the Lottery Company and the lottery agent, which must include a clause on prize payment authorization and other supporting documents proving that the agent has paid the prize to the customer. Authorized agents shall not charge any fees from winning customers.

- The Lottery Company is responsible for withholding taxes payable by agents before paying them according to current tax laws. The Lottery Company will only make payments to agents after confirming the quantity of tickets they have sold during the period and fulfilling all other obligations stipulated in the lottery agency contract.

c) Costs for drawing numbers and supervisory work of the Lottery Supervision Council.

These costs include: venue rental fees, allowances for members of the Lottery Supervision Council performing supervision duties for number drawings, recovery, and destruction of tickets, and other expenses serving the number drawing process.

The allowance for兼任补贴给彩票监督委员会成员的金额应根据财政局提交省或直辖市人民委员会批准的标准兼职补贴定额确定，该标准需符合各地方市场价格原则，并提高成员履行监督职责的责任感。实际工作日数是计算补贴的基础。

租用会议厅和其他为开奖工作服务的费用应按实际发生的费用计算，这些费用由彩票发行公司从外部租赁或购买产生。

在共同摇号开奖的情况下，摇号开奖费用应基于实际产生的用于摇号开奖工作的费用，该费用由被指派进行共同摇号任务的公司承担。共同摇号开奖的费用必须有现行制度规定的有效凭证。负责摇号开奖的彩票发行公司对与共同摇号开奖相关的所有费用的有效性承担责任。

d) 打击利用彩票进行地下六合彩活动的费用：支持打击地下六合彩的工作，以帮助当地公安机关直接执行调查、破案和受理案件的任务。该费用依据彩票发行公司的财务能力和打击地下六合彩的效果来确定，以便促进彩票业务的发展。

- 具体支出限额如下：每宗地下六合彩案件提起诉讼的最大支出限额为15万元。

每个财政年度内打击地下六合彩的最大支出限额根据不同地区而定：

+ 对于在北方和中部地区经营的彩票发行公司，最大支出限额不得超过该公司每年彩票销售收入（含税）的1%。

+ 对于在南方地区经营的彩票发行公司，最大支出限额不得超过该公司每年彩票销售收入（含税）的0.5%。

支持打击地下六合彩的方式：

+ 彩票发行公司直接通过公安机关支付调查、破案和受理案件的费用；公安机关负责根据案件复杂程度、参与人数和单位以及调查时间，公开分配资金给有功人员。

+ 支出依据是法院判决书的副本。

đ) 提取风险准备金用于兑奖：

- 提取条件：在财政年度内，彩票发行公司的实际兑奖比例（传统彩票、乐透彩票、刮刮乐和即开型彩票的实际兑奖价值占销售总收入的比例）低于规定兑奖比例（传统彩票为50%，即时开奖的刮刮乐为55%）或计划兑奖比例（乐透彩票为60%）。

彩种类型：风险准备金提取仅适用于传统彩票、乐透彩票、即时开奖的刮刮乐和即开型彩票。

提取时间：每年公历12月31日。

各类彩票的提取比例根据以下公式确定：

DP = DT x TL - TT

Where:

DP: 各类彩票的风险准备金提取比例。

DT: 各类彩票在财政年度截至公历12月31日的总销售收入（含税）。

TL: 根据各类彩票的规定，在财政年度内的规定兑奖比例或计划兑奖比例。

TT: 各类彩票在财政年度截至公历12月31日的实际兑奖总额。

年度提取金额必须确保风险准备金余额不超过所有可提取彩票种类总销售收入（含税）的5%，且企业不得亏损。如果风险准备金余额超过上述限制，彩票发行公司必须停止提取，直到余额低于允许的上限。未使用的风险准备金余额可以结转到下一年。

彩票发行公司在实际兑奖比例高于规定兑奖比例或计划兑奖比例时使用风险准备金。如果风险准备金不足以支付实际兑奖，则剩余的实际兑奖金额将计入营业成本。

e) 彩票票面费用：包括根据彩票发行公司与印刷厂之间的经济合同，按照实际支付给印刷厂的票面印刷费，运输、装卸、保管及合理合法的附加费用（如有）。如果彩票发行公司自行印刷票面，印刷费则为实际发生的合理费用，并计入公司总成本。

g) 开奖结果信息费用：包括在广播电台、电视台及其他大众媒体上发布开奖结果信息的费用，以及印制供客户和代理使用的开奖结果传单的费用。支出依据为经济合同、合法有效的发票和凭证。

h) 彩票协会区域活动贡献费用：对于彩票发行公司，每年最高贡献额为48,000,000元（每月4,000,000元）。具体每个公司的贡献额由区域彩票协会统一确定并执行。如果区域彩票协会采用轮流支付方式，则彩票发行公司的支出上限必须遵守上述控制原则（不超过历年累计贡献额）。

支出内容包括：检查工作的费用、常设理事会成员的兼职补贴、会议费用、集体和个人奖励以及其他直接服务于协会活动的费用。

All expenditures must be supported by lawful and valid vouchers. In cases where the Lottery Management Council oversees expenditure, the Council must unanimously approve the expenditure limits; the Chairman of the Lottery Management Council is responsible for the legality and validity of all expenditures. At the end of each fiscal year, financial statements must be settled and publicly disclosed after being reviewed and approved by the Council. After settlement, any surplus may be carried over to the next year for continued use according to the originally specified purposes.

2.2. Operating expenses of the Lottery Company.

a) Raw material, material, fuel, energy, and actual goods costs used in production and business activities related to revenue and taxable income during the period shall be calculated based on reasonable consumption rates and actual warehouse prices determined by the Lottery Company and the company shall bear legal responsibility for these costs.

b) Wages, salaries, and wage-like expenses payable to employees in accordance with current state regulations.

c) Depreciation expenses for fixed assets used in business operations shall be implemented in accordance with the general system for managing, using, and depreciating fixed assets.

d) The value of provisions for inventory write-downs, provisions for doubtful debts, and provisions for severance pay.

đ) External service costs:

- Electricity, water, telephone, office supplies, fire prevention and firefighting, insurance premiums for property, insurance premiums for personal accidents; transportation rental fees, legal services, consulting, auditing, fees for organizations with appraisal functions to determine the value of collateral assets, design; payments for technical documentation, patents, technology licenses not included in fixed assets; travel expenses, allowances for vacation travel expenses as prescribed, and other external service costs.

All such expenditures must be fully supported by invoices or valid vouchers as stipulated by the Ministry of Finance.

- Repair costs for fixed assets can be recorded as expenses in the year according to actual expenditures. For special fixed asset repair costs under a cycle, they can be pre-deducted from expenses according to the budgeted cost, with the deduction point at the end of the fiscal year. When repairs are carried out, if the actual expenditure exceeds the pre-deducted amount, the difference is recorded as an expense; if it is less, the expense is reduced accordingly.

- Fixed asset lease costs are implemented according to the lease agreement. In cases where lease payments are made in one lump sum for multiple years, the lease costs are gradually allocated into operating expenses over the number of years the asset is used. For lease-related costs involving land, the Lottery Company must allocate them into expenses over the usage period of the leased land according to regulations.

e) Financial activity costs, including: Costs related to external investments, interest payable due to capital raising, exchange rate differences when settling payments, discount payment costs, leasing costs, provisions for long-term investment write-downs.

g) Other costs:

- Mid-shift meal costs for employees as prescribed by the Lottery Company in line with business efficiency, but the monthly cost per employee must not exceed the national minimum wage set by the state.

- Labor protection costs for those who need protective equipment while working and uniform costs for staff working in the Lottery Company according to prescribed regulations.

- Severance and unemployment benefits for employees according to prescribed regulations.

- Costs for female workers according to prescribed regulations.

- Membership fees for domestic industry associations that the Lottery Company participates in, at levels approved by the Ministry of Finance as stipulated by the Association.

- Costs for Party and mass organization work at the Lottery Company (costs outside the organizational budget funded from designated sources).

- Rewards for innovation, increased labor productivity, and cost-saving initiatives: in accordance with the principle of being commensurate with the actual benefits generated. The reward level is decided by the Director (or General Director) based on the effectiveness of the work, but it cannot exceed the cost savings generated by that work within one year. The Director (or General Director) of the Lottery Company must establish and publicly announce reward regulations within the company.

- Research and development costs: The Lottery Company can record research and development costs that bring practical application benefits to its business operations, and costs for technological innovation aimed at improving business efficiency, in its expenses. Research topics and research cost estimates for each topic must be approved by the Chairman of the Board of Members (or the Chairman of the company) for a limited liability company with one member or the Director for a company not yet converted to a limited liability company with one member, and the approver bears responsibility for the effectiveness of the project.

- Training and education support costs as prescribed by law.

- Medical costs include costs for employees according to current state regulations, calculated based on actual costs beyond the scope of social insurance and employee contributions.

- Expenditure for protecting the organization.

- Environmental protection costs. If the costs incurred in a year are significant and have effects lasting several years, they can be allocated to subsequent years.

- Costs for the sale and liquidation of fixed assets and residual values of fixed assets upon sale and liquidation.

- Reception, celebration, publicity, advertising, brokerage, marketing, promotional costs for business activities outside lottery business, transaction costs, conference costs, and other related costs with invoices or vouchers as stipulated by the Ministry of Finance are capped at a maximum of 10% of total costs (excluding costs specified in Clause 2.1 and 2.2 but excluding these costs) of the Lottery Company minus prize payout costs.

- Reasonable and lawful costs for other business activities.

2.3. Expenditures for tax payment, fee payment, and land rental fees related to the business and service activities of the Lottery Construction Company (excluding corporate income tax) as prescribed by law, including:

a) Special consumption tax on lottery sales activities;

b) Value-added tax on lottery sales activities and other business activities;

c) Business license tax;

d) Real estate tax;

đ) Other types of taxes (if any);

e) Fees and charges as prescribed by law;

g) Land rental fees.

2.4. Other monetary expenditures, including:

a) Costs for recovering debts that have been written off from accounting records;

b) Costs for collecting fines;

c) Costs for penalties due to breach of contracts;

d) Other monetary costs.

3. The following items shall not be considered reasonable expenses:

3.1. Wages and salaries paid by the Lottery Construction Company if it fails to comply with labor contract regulations as stipulated by labor laws, except in cases of hiring workers for specific tasks.

3.2. Pre-deducted expenses that were not actually incurred, such as pre-deductions for major repairs of fixed assets, warranty fees for products and goods, construction projects, and other pre-deductions.

3.3. Expenses without invoices or receipts, or with illegal invoices or receipts.

3.4. Penalties for administrative violations, such as traffic law violations, lottery business system violations, tax violations, business registration system violations, accounting and statistics violations, and other administrative violations.

3.5. Expenses unrelated to revenue and taxable income, such as basic construction investment expenses; support expenses for localities; support expenses for social organizations outside the company; charitable expenses; and other expenses unrelated to revenue and taxable income.

3.6. Expenses covered by other non-tax sources, such as public service expenses, regular hardship allowances, and sudden hardship allowances.

3.7. Lottery business operation expenses exceeding the limits set forth in this Circular.

3.8. Promotional expenses for lottery business operations under all forms.

C. DISTRIBUTION OF PROFITS AND ESTABLISHMENT OF FUNDS

After covering previous years' losses according to the Corporate Income Tax Law and paying corporate income tax as prescribed by law, the profits of the Lottery Construction Company will be distributed as follows:

1. Covering previous years' losses that have exceeded the allowable deduction period from pre-tax profits.

2. Deducting actual expenses related to the company's business activities in the year but not included in reasonable expenses when determining taxable income.

The Lottery Construction Company may not use post-tax profits to pay excessive agent commissions beyond the maximum limit specified in this Circular.

3. After deducting the amounts specified in Clauses 1 and 2 above, the remaining profits will be distributed in the following order:

3.1. Allocating 10% to the financial reserve fund; when the balance of this fund reaches 25% of the registered capital, no further allocations will be made.

3.2. Allocating at least 30% to the Development Investment Fund of the Lottery Construction Company.

3.3. The remaining profit will be distributed as follows:

a) Allocating up to 5% to establish a bonus fund for the company management board. The management board includes the Board of Members or the Chairman of the company and the General Management Board (Director and Deputy Directors or General Director and Deputy General Directors).

The annual allocation amount shall not exceed 200 million VND provided that the pre-tax profit margin on state capital at the Lottery Construction Company is equal to or greater than the planned profit margin.

b) Establishing two reward and welfare funds.

- The Lottery Construction Company can allocate up to three months' salary for the two reward and welfare funds, provided that the pre-tax profit margin on state capital of the company is equal to or greater than the planned profit margin, and not more than two months' salary for the case where the pre-tax profit margin is lower than the plan. The profit margin on state capital is calculated as the ratio between realized profit and average state capital in the company during the year.

- The realized profit margin on state capital is determined as follows:

+ The profit margin on state capital is calculated as the ratio between pre-tax realized profit and average state capital in the company during the year.

+ State capital at the company includes operating capital, the Development Investment Fund, and basic construction investment capital.

+ Average state capital at the company = (Beginning balance of state capital + Ending balance of state capital) / 2

- The allocation amount to each fund is decided by the Chairman of the Board of Members (or the Chairman of the company) for a limited liability company with one member, and the Director for a company that has not converted to a limited liability company with one member, after consulting the views of the Company Trade Union Executive Committee.

c) The remainder will be deposited into the state budget to serve the investment in important educational, health, and social welfare projects in the locality.

4. The People's Committee of the province or centrally-administered city decides the specific allocation ratio to the Development Investment Fund and the reward fund for the company management board based on the proposal of the Chairman of the Board of Members (or the Chairman of the company) for a limited liability company with one member, and the Director of the Lottery Construction Company for a company that has not converted to a limited liability company with one member.

5. For newly established Lottery Construction Companies, within two consecutive profitable years, if the distribution of profits does not reach two months' salary for the two reward and welfare funds, the company may reduce the allocation to the Development Investment Fund to ensure sufficient funding for these two funds. The maximum reduction is equal to the entire allocation to the Development Investment Fund for the profit distribution period of that year.

D. PURPOSES OF THE FUNDS

1. The financial reserve fund is used for:

1.1. Compensating for asset losses and damages occurring during business operations after deducting compensation from relevant organizations and individuals and insurance organizations.

1.2. Covering the company's losses as decided by the company's owner.

2. The Development Investment Fund: To supplement the company's registered capital.

3. The incentive fund shall be used for:

Year-end bonuses or regular bonuses based on the productivity and performance of each employee in the company; special bonuses for individuals or groups within the company; bonuses for individuals and units outside the company that have made significant contributions to the company's business activities and management (excluding agents who have already received agent commission fees as prescribed); the bonus amount shall be decided by the General Director or the Director of the Lottery Savings Company.

4. The welfare fund shall be used for:

4.1. Investment in constructing or repairing welfare facilities of the company.

4.2. Expenditure on public welfare activities for the employees' collective, social welfare.

4.3. Contributing part of the capital to invest in welfare projects within the industry or with other units according to contracts.

4.4. Providing hardship allowances to workers, including those retiring, losing their health, falling into difficult circumstances without support, or engaging in charitable social work.

The use of the welfare fund shall be decided by the General Director (or Director) after consulting the opinions of the Company Trade Union.

5. Bonus Fund of the Management Board:

Used to reward members of the Board of Directors or the Chairman of the company, the Board of Directors of the company. Specific bonus amounts shall be decided by the People's Committee of the province or centrally-administered city based on the results of the company's production and business operations, upon the proposal of the Chairman of the Board of Members (or the Chairman of the company) for a limited liability company with one member or the Director for a company not yet converted to a limited liability company with one member.

D. ACCOUNTING SYSTEM, AUDITING, REPORTING

AND FINANCIAL DISCLOSURE

1. Accounting system, auditing:

1.1. The Lottery Savings Company shall implement the accounting system as prescribed by the Accounting Law and guidelines of the Ministry of Finance. At the end of each accounting period (quarter, year), the company must prepare financial statements in accordance with this Circular, related financial accounting guidance documents, and the Company Charter. The Chairman of the Board of Members (or the Chairman of the company) for a limited liability company with one member or the Director for a company not yet converted to a limited liability company with one member shall be responsible for the accuracy and truthfulness of the financial statement figures, settlement figures, and other financial information.

1.2. The annual financial report of the Lottery Savings Company must be audited by an independent auditing organization according to the legal regulations. In cases where the State Audit Agency has already audited the Lottery Savings Company during the year, there is no need to hire an independent auditing organization to audit the financial report.

2. Reporting System:

2.1. Quarterly and annually, the Lottery Savings Company shall submit financial reports and statistical reports as prescribed by law and this Circular.

2.2. Quarterly financial reports must be submitted to the Ministry of Finance within twenty days from the end of the quarter's accounting period; annual financial reports audited by an independent auditing organization must be submitted to the Ministry of Finance no later than ninety days from the end of the year's accounting period; in cases where annual financial reports have been audited by the State Audit Agency, they must be submitted to the Ministry of Finance no later than five working days after the audit report is approved.

2.3. In addition to complying with current financial reporting requirements, monthly, the Lottery Savings Company shall submit the following reports to the Ministry of Finance (Department of Financial Affairs of Banks and Financial Organizations):

a) Report on business operation status (Form 01/BCXS).

b) Report on ticket sales status (Form 02/BCXS).

c) Report on the implementation of agency debt terms and payment obligations (Form 03/BCXS).

d) Report on agency commission payments and authorized prize payouts (Form 04/BCXS).

Monthly reports must be submitted to the Ministry of Finance no later than the tenth day of the following month.

3. Financial Transparency:

The Lottery Savings Company shall implement annual financial transparency in accordance with current laws (currently Decision No. 192/2004/QD-TTg dated November 16, 2004 of the Prime Minister and Circular No. 29/2005/TT-BTC dated April 14, 2005 of the Ministry of Finance guiding the financial transparency regulations of state-owned companies).

E. INSPECTION AND SUPERVISION

1. The Lottery Savings Company is subject to management, inspection, and supervision by the People's Committees of provinces and centrally-administered cities and local competent authorities as prescribed by law.

2. The Ministry of Finance shall conduct periodic or ad hoc supervision and inspection of the Lottery Savings Company regarding compliance with the financial management system stipulated in this Circular. In cases where violations of financial discipline by the Lottery Savings Company are found, or if the financial report data is not sufficiently reliable, the Ministry of Finance shall conduct inspections or request the People's Committees of provinces and centrally-administered cities to conduct inspections and audits of the Lottery Savings Company in accordance with the law.

3. Annually, the Lottery Savings Company shall conduct enterprise evaluation and classification according to the guidelines of the Ministry of Finance.

III - IMPLEMENTATION

This Circular shall take effect fifteen days after its publication in the Official Gazette and shall replace Circular No. 77/2005/TT-BTC dated September 13, 2005 of the Ministry of Finance guiding the financial management system for lottery business operations of the Lottery Savings Company.

During the implementation process, if there are difficulties or obstacles, please promptly reflect them to the Ministry of Finance for consideration and specific guidance./.