Circular No. 155/2009/TT-BTC guiding the profit distribution regime of state-owned enterprises as stipulated in Decree No. 09/2009/NĐ-CP dated February 5, 2009 of the Government.

CIRCULAR

Guidelines on profit distribution for state-owned enterprises as prescribed in Decree No. 09/2009/NĐ-CP dated February 5, 2009 of the Government Implementing the Financial Management Regulations of State-Owned Enterprises and the Management of State Capital Invested in Other Enterprises issued together with Decree No. 09/2009/NĐ-CP dated February 5, 2009 of the Government (hereinafter referred to as Decree No. 09/2009/NĐ-CP), the Ministry of Finance provides guidelines on profit distribution for state-owned enterprises as follows:

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This Circular stipulates the profit distribution of state-owned enterprises as specified at point 1, Article 2 of the Financial Management Regulations of State-Owned Enterprises and the Management of State Capital Invested in Other Enterprises issued together with Decree No. 09/2009/NĐ-CP, including independent accounting subsidiaries under state-owned corporations (hereinafter referred to as state-owned enterprises).

Article 1. For the State Capital Investment Corporation, Securities Trading Center, and Securities Depository Center, profit distribution shall be carried out according to separate guidance documents.

After-tax profits of state-owned enterprises, after being distributed according to points a, b, c, and d of Clause 1, Article 27 of Decree No. 09/2009/NĐ-CP, shall be divided between state capital investment and enterprise self-raised capital. In this regard:

Article 2. 1. The average state capital and self-raised capital during the year shall be determined based on the total balance of state capital or self-raised capital at the end of each quarter divided by four quarters.

2. The balance of state capital invested at the end of each quarter shall be determined from the following sources:

- Business capital (account 411)

- Basic construction investment capital (account 441)

- Development fund (account 414)

Regarding the use of the portion of profit allocated according to state capital as prescribed in Clause 2 and Clause 9, Article 27:

Article 3. 1. For state-owned enterprises that currently have state capital less than the registered capital approved by the competent authority according to regulations, the portion of profit allocated according to state capital shall be used to supplement the registered capital of the enterprise up to the approved level.

2. For state-owned enterprises with state capital equal to or greater than the registered capital approved by the competent authority according to regulations, the portion of profit allocated according to state capital shall be handled as follows:

- For independent accounting subsidiaries under state-owned corporations, state-owned corporations established by companies investing capital to form companies transferred to the corporation's office (or parent company); for subsidiary companies within the parent-subsidiary model, transferred to the parent company.

- For state-owned corporations or parent companies and independently affiliated state-owned enterprises under ministries and localities, transferred to the Enterprise Restructuring Support Fund at the State Capital Investment Corporation established pursuant to Decision No. 113/2008/QĐ-TTg dated August 18, 2008 of the Prime Minister.

3. Annually, based on the results of business operations and the need to supplement the registered capital of state-owned enterprises, the representative body of the state-owned enterprise shall consider the plan and submit a written proposal to the Ministry of Finance for approval so that the state-owned enterprise can use the portion of profit allocated according to state capital to supplement the registered capital or transfer to the Enterprise Restructuring Support Fund at the State Capital Investment Corporation.

For the portion of profit required to be transferred to the Enterprise Restructuring Support Fund at the State Capital Investment Corporation, within thirty days from the date the Ministry of Finance officially issues its opinion in writing, the state-owned enterprise must transfer this profit to the Enterprise Restructuring Support Fund at the State Capital Investment Corporation. Beyond this period, the enterprise must pay additional overdue interest as if it were a term loan at the corresponding bank where the enterprise has an account and will be considered non-compliant with state policies and regulations. This overdue interest amount shall be recorded as a reduction from the Management Board Reward Fund of the company.

For newly established investment companies over two consecutive years since becoming profitable, if profit distribution is conducted as above and the two reward and welfare funds do not reach two months' salary for Class A companies; do not reach one and a half months' salary for Class B state-owned enterprises; and do not reach one month's salary for Class C state-owned enterprises, then the company may reduce the amount allocated to the development fund to ensure sufficient allocation to the two reward and welfare funds as prescribed. The maximum reduction is equivalent to the entire amount allocated to the development fund from post-tax profits generated in the fiscal year.

Article 4. Special state-owned enterprises implement profit distribution as prescribed in Clause 8, Article 27 of Decree No. 09/2009/NĐ-CP.

Article 5. Special state-owned enterprises include:

1. Enterprises with more state capital than self-raised capital or without self-raised capital;

2. State-owned enterprises undergoing ownership transformation, including enterprises that have received decisions from competent authorities regarding privatization, transfer, or sale but have not yet officially changed ownership (have not been issued a new business registration certificate according to the new form);

3. State-owned enterprises undertaking certain economic and social tasks assigned by the state in border areas, islands, strategic regions; combining economic activities with national defense; providing employment for ethnic minorities...as decided by authorized bodies.

Allocation to the Management Board Reward Fund of state-owned enterprises is implemented as prescribed in Subpoint b, Clause 3, Article 27 of Decree No. 09/2009/NĐ-CP, specifically:

Article 6. 1. Based on the classification of the results of the Board of Directors and General Director's performance, the Management Board Reward Fund of state-owned enterprises shall be established as follows:

In cases of outstanding performance, up to 5% of the profit allocated according to self-raised capital can be set aside for the Management Board Reward Fund of the state-owned enterprise, with the annual amount not exceeding 500 million dong (for enterprises with a Board of Directors) and 200 million dong (for enterprises without a Board of Directors).

In the case of outstanding completion of tasks, up to 5% of profits distributed according to self-raised capital may be allocated to establish a management board incentive fund; the annual allocation amount shall not exceed five hundred million VND for companies with a Board of Directors, and two hundred million VND for companies without a Board of Directors.

In the case of completing the assigned tasks, up to a maximum of 2.5% of the profit distributed according to self-raised capital may be allocated to establish a management board incentive fund, with the annual allocation not exceeding 250 million VND (for companies with a Board of Directors), and 100 million VND (for companies without a Board of Directors).

In the case of failing to complete the assigned tasks, no allocation for the management board incentive fund shall be made, even if the state-owned company makes a profit.

2. For special state-owned enterprises where the state capital exceeds the self-raised capital or has no raised capital, if the Board of Directors and General Director complete or excel in completing their tasks, they may allocate funds from the investment development reserve fund or from the profit distributed according to state capital if the investment development reserve fund is insufficient. The amount allocated shall be determined in accordance with Clause 1 of this Article.

3. The classification results A, B, C for state-owned enterprises and the level of completion of tasks by the Board of Directors and General Director shall be determined in accordance with the provisions of Decision No. 224/2006/QĐ-TTg dated October 6, 2006 of the Prime Minister on the issuance of regulations on supervision and evaluation of state-owned enterprise operations; Point 5, Part III of Circular No. 115/2006/TT-BTC dated September 25, 2007 of the Ministry of Finance guiding certain contents on supervision and evaluation of state-owned enterprise operations. Among them: State-owned enterprises that fail to submit financial reports and reports on supervision and evaluation of operations within the time limit prescribed by the current Accounting Law and Decision No. 224/2006/QĐ-TTg shall be deemed to have violated state policies and regulations.

4. The source of the incentive and welfare fund, as stipulated, shall be used to pay employees in state-owned enterprises who participated in business activities during the fiscal year, in accordance with internal regulations on the use of incentive and welfare funds of the company.

Article 7. The allocation of the incentive and welfare fund for special state-owned enterprises as provided for in Article 5 above shall apply from 2007. Among them: state-owned enterprises that have allocated or temporarily allocated the incentive and welfare fund for the 2007 fiscal year shall be adjusted in accordance with this Circular. If the temporary allocation is lower than the stipulated amount in this Circular, additional allocations shall be made, and if it is higher than the stipulated amount in this Circular, the excess temporarily allocated amount shall be deducted from the source of the incentive and welfare fund allocation for the subsequent fiscal year.

Article 8. This Circular takes effect 45 days from the date of issuance. All previous regulations on profit distribution of state-owned enterprises that conflict with the provisions of this Circular are hereby abolished. During implementation, if there are difficulties or obstacles, enterprises should report to the Ministry of Finance for consideration and resolution./.