Circular No. 147/2014/TT-BTC guiding certain provisions of Decision No. 58/2013/QĐ-TTg dated October 15, 2013 of the Prime Minister on the establishment, organization, and operation of the Guarantee Fund for Small and Medium Enterprises (SMEs)

CIRCULAR

Guidelines for some provisions of Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister on the issuance of regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises October 15, 2013 of the Government on the issuance of regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises

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Pursuant to the State Budget Law dated December 16, 2002;

Pursuant to the Law on Credit Institutions dated June 16, 2010;

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to Decree No. 215/2013/NĐ-CP dated December 23, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 56/2009/NĐ-CP dated June 30, 2009 of the Government on assistance for the development of Small and Medium Enterprises;

Pursuant to Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister on the issuance of regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises;

At the proposal of the Director of the Department of Financial Affairs of Banks and Financial Institutions,

The Minister of Finance issues this Circular guiding some provisions of Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister on the issuance of regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular guides some provisions of Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister on the issuance of regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises (referred to as the Credit Guarantee Fund), including:

a) Organizing and managing the operations of the Credit Guarantee Fund according to Article 12 of the Regulations on the establishment, organization, and operation of the Credit Guarantee Fund for Small and Medium Enterprises issued together with Decision No. 58/2013/QD-TTg dated October 15, 2013 of the Prime Minister (hereinafter referred to as the Regulations on the establishment and operation of the Credit Guarantee Fund);

b) Financial mechanisms for the Credit Guarantee Fund according to Article 31 of the Regulations on the establishment and operation of the Credit Guarantee Fund.

2. Other contents shall be implemented according to the Regulations on the establishment and operation of the Credit Guarantee Fund.

Article 2. Applicability

1. The Guarantee Fund.

2. Credit institutions operate according to the Law on Credit Institutions.

3. Small and medium enterprises (referred to as enterprises) are eligible for credit guarantees.

4. Other agencies, organizations, and individuals related to the matter.

Chapter II

ORGANIZATION AND MANAGEMENT OF GUARANTEE OPERATIONS

Article 3. The Credit Guarantee Fund directly organizes and manages guarantee operations

1. The Credit Guarantee Fund directly organizes and manages activities in accordance with the Regulations on the establishment and operation of the Credit Guarantee Fund and related legal documents.

2. Financial mechanisms and accounting systems of the Credit Guarantee Fund shall be implemented in accordance with this Circular.

Article 4. The Credit Guarantee Fund entrusts other financial organizations to manage operations according to point b, point c Clause 1, Article 12 of the Regulations on the establishment and operation of the Credit Guarantee Fund.

1. The entrusted entity is the Branch of the Vietnam Development Bank or the local finance fund operating in the same area as the Credit Guarantee Fund.

2. Conditions for local finance funds to conduct credit guarantee operations for enterprises

Local finance funds entrusted to manage guarantee operations must meet the following conditions:

a) Having legal personality and an independent organizational structure;

b) Having functions and responsibilities for providing credit services to customers as prescribed by law;

c) The financial situation of the entity is sound, with profits in the two consecutive years preceding the application;

d) The management board of the local finance fund and staff responsible for issuing credit guarantees for enterprises must have at least a bachelor's degree and five years of experience in economic, financial, or banking fields.

3. Entrustment Contract: The Credit Guarantee Fund and the entrusted party must sign an entrustment contract. The contract must include the following basic contents: rights and obligations of the parties, entrustment fees and payment methods; duration of the entrustment contract; information reporting system; dispute resolution and risk handling procedures, and other relevant terms as stipulated by law.

4. Rights and Obligations of the Credit Guarantee Fund:

a) Rights of the Credit Guarantee Fund:

- Entrusting the entrusted party to exercise the rights and obligations of the Credit Guarantee Fund in issuing credit guarantees to customers as stipulated in Articles 24 and 25 of the Regulations on the establishment and operation of the Credit Guarantee Fund and according to the agreement in the entrustment contract signed between the entrusted party and the Credit Guarantee Fund. Entrusting the entrusted party to sign compulsory loan contracts with customers, recover principal and interest from customers;

- Inspecting and supervising the entrusted party in implementing the regulations and operational procedures of the Credit Guarantee Fund.

b) Obligations of the Credit Guarantee Fund:

- Developing and issuing regulations and operational procedures to guide the activities of the Credit Guarantee Fund transferred to the entrusted party for implementation;

- Providing information about customer policies eligible for credit guarantees during each period for the entrusted party to consider issuing credit guarantees to enterprises;

- Paying entrustment fees to the entrusted party according to the entrustment contract;

- Transferring sufficient funds to the entrusted party to fulfill the guarantee commitment to credit institutions;

- Bearing responsibility for risks or disputes arising according to the agreement in the entrustment contract signed between the Credit Guarantee Fund and the entrusted party;

- Handling risks within its authority.

5. Rights and Obligations of the Entrusted Party:

a) Rights of the Entrusted Party:

- Exercising the rights and obligations of the Credit Guarantee Fund in issuing credit guarantees to customers as stipulated in Articles 24 and 25 of the Regulations on the establishment and operation of the Credit Guarantee Fund;

- Collecting entrustment fees according to the agreement with the Credit Guarantee Fund.

b) Obligations of the Entrusted Party:

- Receiving and reviewing applications according to the regulations and operational procedures of the Credit Guarantee Fund to decide on granting or refusing credit guarantees to customers;

- Fulfilling the guarantee commitment immediately upon receipt of funds from the Credit Guarantee Fund. When fulfilling the guarantee commitment for customers, the entrusted party requires the customer to accept a compulsory loan with an interest rate not exceeding 150% of the standard interest rate applied by commercial banks in the region for loans of the corresponding term.

- Provide comprehensive reports on the implementation of entrusted activities for the Credit Guarantee Fund according to regular and ad hoc schedules as required by the Credit Guarantee Fund. Specifically, regarding mandatory loans, the entrusted party shall be responsible for providing monthly periodic reports to the Credit Guarantee Fund on the financial status of customers, debt collection situations, and debt collection capabilities.

- Bearing responsibility for risks or disputes arising according to the agreement in the entrustment contract signed between the Credit Guarantee Fund and the entrusted party;

- Carry out other tasks as agreed upon between the Credit Guarantee Fund and the entrusted party.

6. Financial mechanisms and accounting regulations of the Credit Guarantee Fund in cases of entrustment carried out as stipulated in this Circular.

Article 5. Assignment of credit guarantee tasks to local financial funds

1. Local financial funds, when assigned credit guarantee tasks, must meet all conditions as prescribed in Clause 2, Article 4 of this Circular.

2. When assigning local financial funds to manage capital and perform credit guarantee tasks as stipulated in Point c, Clause 1, Article 12 of the Charter and Operation Regulations of the Credit Guarantee Fund, the People's Committee of provinces and centrally governed cities must supplement at least 30 billion VND for local financial funds to carry out credit guarantee tasks as prescribed in Clause 1, Article 5 of the Charter and Operation Regulations of the Credit Guarantee Fund.

3. In the case of assignment of credit guarantee tasks, the Credit Guarantee Fund does not form a Management Board, Supervisory Board, and Executive Board.

4. Local financial funds shall implement capital management, capital utilization; record and monitor the entire allocated capital separately for performing credit guarantee tasks as stipulated in this Circular.

5. Local financial funds shall implement financial revenue and expenditure management, distribute financial revenue and expenditure differences from credit guarantee operations according to laws applicable to local financial funds.

6. Local financial funds shall provide credit guarantees for enterprises in accordance with the provisions of the Charter and Operation Regulations of the Credit Guarantee Fund, guidance provided in this Circular, and other relevant legal documents.

7. Local financial funds have the responsibility to fully comply with periodic quarterly and annual reporting requirements (including: credit guarantee business reports, financial revenue and expenditure situation reports of local financial funds) and ad hoc reports as required by the Ministry of Finance, State Bank of Vietnam, Ministry of Planning and Investment, and the People's Committee of provinces and centrally governed cities where the main office of the local financial fund is located, in accordance with the law.

Chapter III

FINANCIAL MANAGEMENT MECHANISMS FOR THE CREDIT GUARANTEE FUND

Article 6. Principles of financial management for the Credit Guarantee Fund

1. The Credit Guarantee Fund is a financial organization operating without profit objectives, implementing credit guarantee functions for specified entities as prescribed in Article 13 of the Charter and Operation Regulations of the Credit Guarantee Fund.

2. The Credit Guarantee Fund has legal personality, its own seal, separate balance sheets, and can open accounts at the National Treasury and domestic credit institutions within the same locality as prescribed by law. The Fund is exempted from taxes or pays taxes according to current laws.

3. The Credit Guarantee Fund self-funds its expenses, ensures capital preservation and asset protection; compensates for costs and risks in operations according to current laws and regulations stipulated in this Circular.

Article 7. The operating capital of the Credit Guarantee Fund includes:

1. Shareholders' equity

a) The charter capital of the Credit Guarantee Fund includes:

- Capital provided by the provincial or centrally-administered municipal budget when establishing the Fund, with a minimum of 30 billion VND;

- Capital contributions from credit institutions;

- Capital contributions from other enterprises;

- Capital contributions from industry associations, organizations representing and supporting small and medium-sized enterprises.

The change in the charter capital of the Credit Guarantee Fund shall be decided by the People's Committee of the province or centrally-administered municipality. When changing the charter capital, the Credit Guarantee Fund has the responsibility to notify the Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam branch in the province or centrally-administered municipality where the main office of the Credit Guarantee Fund is located for monitoring and supervision.

b) Supplementary reserve fund, business development investment fund, financial contingency fund;

c) Revaluation gains on assets (if any);

d) Undistributed earnings from operations;

đ) Other capital belonging to the Credit Guarantee Fund.

2. Legal funding from organizations and individuals (including Official Development Assistance (ODA)) both domestically and internationally dedicated to the development of small and medium-sized enterprises.

3. Other lawful sources of capital as prescribed by current laws.

Article 8. Utilization of capital and guaranteeing the safety of capital of the Credit Guarantee Fund

1. The Credit Guarantee Fund may use capital for:

a) Fulfilling the commitment obligations of the Credit Guarantee Fund for the guaranteed party according to the regulations stipulated in the Charter and operation rules of the Credit Guarantee Fund;

b) Investing in purchasing fixed assets serving the activities of the Credit Guarantee Fund based on the principle that the remaining value of fixed assets at the time of purchase does not exceed 7% of the actual charter capital of the Credit Guarantee Fund;

c) Opening accounts at the National Treasury and commercial banks operating legally in accordance with Vietnamese law, within the same province or centrally-administered municipality;

d) Using idle capital to invest in purchasing government bonds.

2. The Credit Guarantee Fund is responsible for implementing regulations ensuring the safety of operational capital, including:

a) Managing and using capital for its intended purpose effectively; complying with regulations on ensuring capital safety during operations as prescribed by law;

b) Purchasing insurance for assets and other insurances as prescribed by law;

c) Setting aside risk reserves as prescribed in Article 9 of this Circular;

d) Adhering to credit guarantee limits as stipulated in Article 17 of the Charter and operation rules of the Credit Guarantee Fund;

đ) Not using operational capital for monetary trading purposes, securities investment (except government bonds), real estate business, financial investments, and other unauthorized business activities;

e) Implementing other measures to ensure capital safety as prescribed by law.

Article 9. Classification of debts, setting aside risk reserves, and handling risks of the Credit Guarantee Fund

1. Debt classification:

The Credit Guarantee Fund implements debt classification for amounts paid on behalf of the guaranteed party (compulsory debt recipient) according to the regulations of the State Bank of Vietnam for credit institutions.

2. Establishing risk reserves: The Credit Guarantee Fund establishes risk reserves as follows:

a) General risk reserve at 0.75% per annum calculated on the outstanding balance of credit institutions' loans to borrowers guaranteed by the Credit Guarantee Fund at the time of establishment;

b) Based on the results of debt classification and annual financial income and expenditure of the Credit Guarantee Fund, the Credit Guarantee Fund establishes specific risk reserves for amounts paid on behalf of the guaranteed party, with the maximum amount not exceeding the specific risk reserve required according to regulations for credit institutions.

3. Amounts recovered from guarantees that have been risk-managed, including amounts recovered from the disposal of collateral, are recorded as other income of the Credit Guarantee Fund as prescribed.

4. The Credit Guarantee Fund may use the risk reserve to offset compulsory loan losses when fulfilling guarantee obligations for customers without recovering the debt. At year-end, if the risk reserve is not fully utilized, the remaining balance of the risk reserve is carried forward to the next year.

5. The Management Board of the Credit Guarantee Fund issues regulations on the establishment, management, and utilization of the risk reserve.

Article 10. On Waiving and Reducing Interest Rates on Compulsory Debts and Credit Guarantee Fees of the Credit Guarantee Fund

1. The Management Board of the Credit Guarantee Fund shall issue regulations on waiving and reducing interest rates on compulsory debts and credit guarantee fees in accordance with the provisions of the Charter of the Credit Guarantee Fund after being approved by the People's Committee of the province or centrally governed city.

2. The Credit Guarantee Fund shall implement the waiving and reduction of interest rates on compulsory debts and credit guarantee fees in accordance with the regulations issued.

Article 11. Investment in Construction, Purchase, and Depreciation of Fixed Assets of the Credit Guarantee Fund

1. The Credit Guarantee Fund may invest in and purchase fixed assets of the Credit Guarantee Fund in accordance with the principles stipulated in point b, Clause 1, Article 8 of this Circular. Investments and purchases of fixed assets to serve the operations of the Credit Guarantee Fund shall be proposed by the Director of the Credit Guarantee Fund for approval by the Management Board of the Fund according to the annual financial plan and within the scope of the Fund’s capital.

2. Procedures and formalities for investment in and purchase of fixed assets of the Credit Guarantee Fund shall be carried out in accordance with the laws on management of investment and procurement of fixed assets and current regulations applicable to state-owned limited liability companies holding 100% of the charter capital. The Credit Guarantee Fund has the responsibility to purchase insurance for its assets in accordance with the law.

3. The Credit Guarantee Fund shall manage, use, and depreciate fixed assets in accordance with the current laws applicable to state-owned limited liability companies holding 100% of the charter capital.

Article 12. Handling Losses of the Credit Guarantee Fund's Assets

When suffering asset losses, the Credit Guarantee Fund must determine the cause, responsibility, and handle them as follows:

1. If it is due to subjective reasons, the person causing the loss must compensate; the Management Board of the Credit Guarantee Fund decides or authorizes the Director of the Credit Guarantee Fund to decide the amount of compensation in accordance with the law and is responsible for their decision.

2. If the asset has been insured, it shall be handled in accordance with the law in the field of insurance.

3. The value of the loss, after being offset by personal, collective, and insurance organization compensation, if insufficient, shall be offset by the financial reserve fund of the Credit Guarantee Fund.

Article 13. Income of the Credit Guarantee Fund

The income of the Credit Guarantee Fund includes receivables during the period, including:

1. Income from business activities:

a) Fees for reviewing applications for credit guarantees;

b) Guarantee fees;

c) Interest on compulsory debt from customers.

2. Income from financial activities:

a) Interest from deposits at the State Treasury and commercial banks where the Credit Guarantee Fund maintains accounts;

b) Interest from investments in government bonds.

3. Other income:

a) Income from the liquidation and sale of assets;

b) Insurance compensation for asset losses;

c) Penalties for breach of economic contracts;

d) Other lawful revenues as prescribed by law.

Article 14. Expenses of the Credit Guarantee Fund

The expenses of the Credit Guarantee Fund include necessary costs incurred during the period for the operation of the Credit Guarantee Fund, supported by valid invoices and receipts. The level of expenditure and the objects of expenditure are implemented in accordance with the law. In cases where the law does not provide specific regulations, the Credit Guarantee Fund will base its decisions on its financial capacity, establish standards, and bear responsibility under the law. All expenses must be included in the annual financial plan approved by the Management Board, including:

1. Expenses for business activities:

a) Payment of fees for mobilizing and receiving sponsorships from organizations and individuals both domestically and internationally in accordance with the law (if applicable);

b) Payment of service fees to entrusted units providing credit guarantees in accordance with the entrustment contract;

c) Provision for risk reserves as stipulated in Article 9 of this Circular;

d) Purchase of business risk insurance and other types of insurance in accordance with the law;

đ) Payment of taxes and fees as prescribed by current laws;

e) Other business activity expenses as prescribed by the law.

2. Expenses for employees of the Credit Guarantee Fund in accordance with the regulations of the State for state-owned limited liability companies holding 100% of the charter capital:

a) Wages, salaries, and other payments of a wage or salary nature for employees of the Credit Guarantee Fund;

b) Allowances for members of the Management Board and Supervisory Board of the Credit Guarantee Fund;

c) Social insurance, health insurance, unemployment insurance for employees of the Credit Guarantee Fund;

d) Payments for meal allowances, female employee allowances, labor protection allowances, transaction attire allowances, and severance pay for employees.

3. Administrative management expenses:

a) Travel expenses for employees of the Credit Guarantee Fund traveling domestically and internationally in accordance with the regulations of the State for state-owned limited liability companies holding 100% of the charter capital;

b) Procurement of office supplies, stationery, documents, books, newspapers, and other materials;

c) Service payment fees;

d) Depreciation of fixed assets in accordance with regulations for enterprises; purchase of asset insurance; repair and maintenance of assets; sale and liquidation of assets (including the remaining value of sold and liquidated assets); procurement of labor tools;

đ) Compensation for asset losses in accordance with regulations;

e) Postal, telephone, and communication fees;

g) Rental fees for assets and equipment serving the operations of the Credit Guarantee Fund;

h) Conference, seminar, training, and research expenses for Credit Guarantee Fund staff in accordance with the regulations of the State for public institutions. The Credit Guarantee Fund can cover accommodation, travel, and meal expenses for participants in accordance with the State regulations; expenses for fuel serving the agency's work;

i) Publicity, printing, reception, external relations, hospitality, conference, and advertising expenses in accordance with the law;

k) Expenses for inspection, supervision, and auditing of the Credit Guarantee Fund's activities;

l) Support expenses for the activities of the Party and mass organizations of the Credit Guarantee Fund;

m) For electricity, water, office sanitation, environmental protection, and office health care expenses;

n) Other expenses as provided for by law;

Article 15. Expenses that cannot be recorded as costs of the Credit Guarantee Fund;

1. Losses that have been supported by the State or compensated by insurance agencies, the party causing damage.

2. Administrative fines, including traffic law violations; accounting and statistics law violations, and other administrative fines as prescribed by law.

3. Expenses without valid and legal invoices and supporting documents.

4. Expenses from other funding sources.

Article 16. Revenue and expenditure discrepancies of the Credit Guarantee Fund;

1. The revenue and expenditure discrepancy of the Credit Guarantee Fund is determined as the difference between total income and total expenses as prescribed by law occurring within the fiscal year;

2. A profit-making revenue and expenditure discrepancy occurs when the difference between total income and total expenses during the fiscal year results in a positive outcome (+);

3. A loss-making revenue and expenditure discrepancy occurs when the difference between total income and total expenses during the fiscal year results in a negative outcome (-);

Article 17. Distribution of revenue and expenditure discrepancies and transfer of losses of the Credit Guarantee Fund;

1. When the revenue and expenditure discrepancy in the fiscal year yields a profit, after paying fines for violations of laws and compensating previous years' losses (if any), the remaining amount shall be distributed as follows:

a) Allocate 15% to supplement the Additional Capital Reserve Fund;

b) Allocate 20% to supplement the Financial Provision Fund;

c) Allocate 30% to supplement the Business Development Investment Fund;

d) Allocate to two funds: the Reward Fund and the Welfare Fund, with the maximum allocation to each fund being three months' salary implemented in the year. In cases where the return on equity (ROE) in the following year is higher than the preceding year, the Credit Guarantee Fund may allocate up to three months' salary implemented in the year. If the ROE in the following year is lower or equal to the preceding year, the Fund will allocate up to two months' salary implemented in the year;

The method for determining ROE is as follows: ROE = Profit / Shareholders' Equity;

Where:

- Profit is determined according to Clause 1 and Clause 2 of Article 16 of this Circular;

- Shareholders' Equity is defined according to Clause 1 of Article 7 of this Circular and is calculated as follows:

d) The remainder is used to distribute profits to organizations participating in capital contributions to the Credit Guarantee Fund;

The profit distribution amount for the provincial state budget's capital contribution to the Credit Guarantee Fund is supplemented to the registered capital of the Credit Guarantee Fund based on the decision of the Chairman of the Provincial People's Committee upon approval and endorsement by the Provincial People's Council;

2. When the revenue and expenditure discrepancy in the fiscal year results in a loss, the Credit Guarantee Fund can carry forward the loss to the next year, with the carry-forward period not exceeding five consecutive years from the year following the year in which the loss occurred. If after five years the Credit Guarantee Fund has not fully carried forward the loss, the Fund must report to the Chairman of the Provincial People's Committee for consideration and decision regarding reduction of operational capital, restructuring, or dissolution of the Credit Guarantee Fund;

Article 18. Purpose of using the funds established after distributing revenue and expenditure discrepancies of the Credit Guarantee Fund;

1. The Additional Capital Reserve Fund is used to supplement the registered capital of the Credit Guarantee Fund;

2. The Financial Provision Fund is used to cover the remaining losses and damages to assets and debts occurring during operations after compensation from the organizations or individuals causing the damage and insurance organizations;

3. The Business Development Investment Fund is used to invest in expanding the scale of operations and updating equipment and working conditions to develop business related to credit guarantee activities;

4. The Reward Fund:

a) The Reward Fund is used to provide regular or special rewards to individuals or groups of the Credit Guarantee Fund who have innovative ideas improving technical processes and business procedures yielding high efficiency; rewards for groups or individuals inside and outside the Credit Guarantee Fund who effectively contribute to its operations;

b) The Management Board of the Credit Guarantee Fund guides the budget for reward expenditures for each recipient group for the Credit Guarantee Fund to implement;

5. The Welfare Fund:

a) The Welfare Fund is used for sports, cultural, and public welfare activities for the staff of the Credit Guarantee Fund; to provide regular and emergency assistance to staff of the Credit Guarantee Fund; to invest in building or repairing welfare facilities of the Fund;

b) The Director of the Credit Guarantee Fund collaborates with the Trade Union Executive Board to plan the use of the Welfare Fund for the year and submit it to the Management Board for approval;

6. The Management Board of the Credit Guarantee Fund reviews and decides on the authority to use the Additional Capital Reserve Fund, the Financial Provision Fund, the Business Development Investment Fund, the Reward Fund, and the Welfare Fund;

Chapter IV

ACCOUNTING REGIME, STATISTICAL RECORDS, AUDIT AND FINANCIAL REPORTING SYSTEM

Article 19. Accounting and Statistics of the Credit Guarantee Fund

1. For the Credit Guarantee Fund that directly organizes and manages operations or entrusts the Vietnam Development Bank branch or local financial fund to manage operations, the Credit Guarantee Fund shall implement accounting for all economic transactions arising, open accounting books, record vouchers, and prepare financial reports in accordance with current laws and regulations of the Ministry of Finance.

2. In cases where the People's Committee of provinces and centrally-administered cities assigns the local financial fund to manage capital and perform credit guarantee tasks for enterprises:

a) The local financial fund shall be responsible for accounting and monitoring the entire operational capital for credit guarantees separately, ensuring its proper and effective use, and safeguarding its safety. All revenues and expenses generated from credit guarantee activities shall be consolidated into the revenues and expenses of the local financial fund to determine the surplus or deficit of the local financial fund;

b) The local financial fund shall implement the provision of risk reserve funds for credit guarantee activities according to Article 9 of this Circular.

c) The accounting system for credit guarantee activities shall be implemented in accordance with the regulations applicable to local financial funds.

3. The Credit Guarantee Fund shall implement accounting and statistical systems in accordance with current laws, fully, promptly, truthfully, accurately, and objectively reflecting all financial activities.

4. The fiscal year of the Credit Guarantee Fund runs from January 1 to December 31 each year.

Article 20. Preparation of Annual Financial Plan of the Credit Guarantee Fund

1. The Credit Guarantee Fund shall be responsible for developing the annual financial plan, income and expenditure plans, and fixed asset procurement plans to submit to the Fund Management Board for approval, detailed in Appendix 1, Appendix 1a, and Appendix 1b attached to this Circular.

2. The approval and issuance process of the annual financial plan is as follows:

a) Before December 1 each year, the Management Board of the Credit Guarantee Fund shall report to the People's Committee of provinces and centrally-administered cities on the annual financial plan;

b) After receiving formal written comments from the People's Committee of provinces and centrally-administered cities, the Management Board shall approve the annual financial plan as the basis for implementation.

Article 21. Financial Reporting and Information Provision

1. The Credit Guarantee Fund shall be responsible for preparing and submitting periodic quarterly and annual financial reports to the Ministry of Finance, State Bank of Vietnam, Ministry of Planning and Investment, People's Committees, Departments of Finance, Branches of the State Bank of Vietnam in provinces and centrally-administered cities where the Credit Guarantee Fund operates.

2. Types of Reports:

a) Quarterly Report:

- Financial report including: Balance sheet; profit and loss statement; cash flow statement; equity changes report; explanatory notes to the financial statements;

- Operational report including: Summary of project operation status receiving guarantees.

b) Annual Report:

- All reports specified in point a of this clause;

- Audited annual financial report;

- Other reports: Financial income and expenditure report; report on distribution of surplus and deficit and use of funds according to Appendix 2 and Appendix 3 attached to this Circular.

3. Deadline for submitting reports:

a) Quarterly reports must be submitted no later than 45 days after the end of the quarter;

b) The annual report shall be submitted no later than 90 days after the end of the fiscal year; specifically, the audited annual financial report of the Credit Guarantee Fund conducted by an independent auditing organization shall be submitted no later than 120 days after the end of the fiscal year.

4. The Credit Guarantee Fund shall be responsible for providing information and ad hoc reports upon request of the Ministry of Finance, State Bank of Vietnam, Ministry of Planning and Investment, People's Committee of provinces and centrally-administered cities where the Credit Guarantee Fund operates, in accordance with the law.

Article 22. Audit and Public Financial Reporting

1. The annual financial statements of the Credit Guarantee Fund shall be audited by an independent auditing organization in accordance with current laws.

2. Annually, the Chairman of the Supervisory Board of the Credit Guarantee Fund shall present to the Management Board of the Credit Guarantee Fund for selection an independent auditing organization established and operating in Vietnam to audit the financial statements of the Credit Guarantee Fund.

3. The Supervisory Board of the Credit Guarantee Fund shall organize, inspect, and supervise according to a plan the implementation of the financial accounting system at the Credit Guarantee Fund and report the results of such inspections and supervision to the Management Board of the Credit Guarantee Fund.

4. The Credit Guarantee Fund shall implement public financial reporting in accordance with the provisions of the law.

Chapter V

RESPONSIBILITIES OF THE AUTHORITIES

Article 23. Responsibilities of the Ministry of Finance

1. Fulfill the responsibilities stipulated in Article 37 of the Charter on the Establishment and Operation of the Credit Guarantee Fund.

2. Amend and supplement the financial management regime for the Credit Guarantee Fund (if necessary).

Article 24. Responsibilities of the People's Committee of the Province/City under Central Government

1. Fulfill the responsibilities stipulated in Article 40 of the Charter on the Establishment and Operation of the Credit Guarantee Fund.

2. Direct and monitor the Management Board of the Credit Guarantee Fund and the Credit Guarantee Fund to implement the financial mechanism as prescribed in this Circular.

3. Decide on increasing or decreasing the charter capital; approve the results of annual operations and other related matters within its authority in accordance with current laws.

4. Decide on the additional charter capital of the Credit Guarantee Fund from the profit distribution for the provincial/city central government's contributed capital based on the approval and consent of the Provincial/City People's Council.

5. Regularly organize inspection and examination work on the financial situation of the Credit Guarantee Fund.

6. Periodically or unexpectedly inspect and supervise the comprehensive activities of the Credit Guarantee Fund to ensure that the Fund operates effectively, preserves, and develops capital.

Article 25. Responsibilities of the Credit Guarantee Fund

1. The Credit Guarantee Fund shall provide guarantees for enterprises borrowing funds from credit institutions in accordance with Decision No. 58/2013/QĐ-TTg, detailed guidance in this Circular, and other relevant legal regulations.

2. Adhere to the financial management regime as prescribed in this Circular and other relevant legal normative documents.

3. Based on the provisions of this Circular and related regulations, the Fund has the responsibility to issue business rules and financial regulations to ensure the safe and effective management and use of state-owned capital managed by the Fund.

Chapter VI

IMPLEMENTATION

Article 26. Transitional Provisions

For Credit Guarantee Funds that have been established and are implementing the financial mechanism as prescribed in Circular No. 93/2004/TT-BTC dated September 29, 2004, of the Ministry of Finance on guiding certain contents of the Charter on the establishment, organization, and operation of Credit Guarantee Funds for small and medium-sized enterprises, the handling of balances of these funds as of December 31, 2013 (Business Reserve Fund, Supplementary Capital Reserve Fund for Operations, Financial Reserve Fund, Business Development Investment Reserve Fund, Reward Fund, Welfare Fund) established in accordance with Circular No. 93/2004/TT-BTC shall be as follows:

1. The balance of the Business Reserve Fund shall be transferred to the risk reserve account as stipulated in Article 9 of this Circular.

2. The balance of the funds deducted after surplus income and expenditure shall be transferred to the fund with the same purpose of use as stipulated in Article 18 of this Circular.

Article 28. Effective Date

1. This Circular takes effect from November 25, 2014, and applies from the 2014 fiscal year; replacing Circular No. 93/2004/TT-BTC dated September 29, 2004, on guiding certain contents of the Charter on the establishment, organization, and operation of Credit Guarantee Funds for small and medium-sized enterprises.

2. In the course of implementation, if there are difficulties or obstacles, the relevant agencies and units are requested to report to the Ministry of Finance for guidance in accordance with the law./.