Circular No. 200/2015/TT-BTC guides certain contents regarding the supervision of state capital investment in enterprises, financial oversight, assessment of operational efficiency, and disclosure of financial information for state-owned enterprises and enterprises with state capital.

CIRCULAR

Guidelines on certain aspects of state capital investment supervision in enterprises, financial supervision, performance evaluation, and financial information disclosure for state-owned enterprises and enterprises with state capital
Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations at Enterprises;
Pursuant to Decree No. 87/2015/NĐ-CP dated October 6, 2015 of the Government on state capital investment supervision in enterprises; financial supervision, performance evaluation, and financial information disclosure for state-owned enterprises and enterprises with state capital;

Pursuant to Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on state capital investment in enterprises and management and use of capital and assets at enterprises;

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;

The Minister of Finance issues this Circular to guide certain aspects of state capital investment supervision in enterprises, financial supervision, performance evaluation, and financial information disclosure for state-owned enterprises and enterprises with state capital.

This Circular guides certain aspects of state capital investment supervision in enterprises, financial supervision, performance evaluation, and financial information disclosure for state-owned enterprises and enterprises with state capital as prescribed in Decree No. 87/2015/NĐ-CP dated October 6, 2015 of the Government on state capital investment supervision in enterprises; financial supervision, performance evaluation, and financial information disclosure for state-owned enterprises and enterprises with state capital (hereinafter referred to as Decree No. 87/2015/NĐ-CP).

At the proposal of the Director of the Enterprise Finance Department,

Article 1. This Circular applies to enterprises, organizations, and individuals specified in Clauses 1, 2, 3, 4, and 5 of Article 2 of Decree No. 87/2015/NĐ-CP.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 2. State-owned enterprises operating in fields specified in Clause 6 of Article 2 of Decree No. 87/2015/NĐ-CP shall implement financial supervision, performance evaluation, and financial information disclosure according to this Circular and laws on national defense, security, finance, banking, lottery, and securities. In cases where laws on national defense, security, finance, banking, lottery, and securities provide differently from this Circular, such laws shall apply.

Article 2. Applicability

SUPERVISION OF STATE CAPITAL INVESTMENT IN ENTERPRISES

Article 3. Supervision of state capital investment in enterprises

Chapter II
To implement the supervision content prescribed in Article 6 of Decree No. 87/2015/NĐ-CP, the representative body of the owner must conduct analysis and assessment of state capital investment to:

1. Establish state-owned enterprises.

2. Supplement charter capital for state-owned enterprises that are currently operating.

3. Supplement state capital in joint-stock companies and limited liability companies with two or more members.

4. Acquire part or all of an enterprise.

Article 4. Contents of supervision and reporting forms

1. Contents of supervision

Based on the supervision contents prescribed in Clauses 1, 2, 3, and 4 of Article 3 of this Circular, the representative body of the owner shall be responsible for:

a) Assessing the appropriateness of state capital investment according to the objectives and scope of state capital investment as stipulated in Articles 5, 7, 12, and 15 of Decree No. 91/2015/NĐ-CP of the Government on state capital investment in enterprises and management and use of capital and assets at enterprises (hereinafter referred to as Decree No. 91/2015/NĐ-CP).

b) Assessing compliance with procedures and processes regarding the authority to decide on establishing enterprises, the authority to decide on policy and investment decisions of state capital as stipulated in Articles 6, 9, 10, 11, 13, 14, 17, and 18 of Decree No. 91/2015/NĐ-CP.

c) Assessing sources of capital, balancing plans for capital sources, and using state capital for investment.

d) Comparing economic and social efficiency indicators of established state-owned enterprises between actual results and project proposals: Establishment of state-owned enterprises; Supplementing charter capital for state-owned enterprises that are currently operating; Supplementing state capital in joint-stock companies and limited liability companies with two or more members; Acquisition of part or all of an enterprise. If actual efficiency is lower than projected in the proposal, the representative body of the owner must explain the reasons and propose solutions.

đ) Assessing the implementation of rights and responsibilities of the representative body of the owner in state capital investment as prescribed in Chapter II of Decree No. 91/2015/NĐ-CP.

2. Reporting forms

The representative body of the owner shall prepare and submit to the Ministry of Finance reports according to the following forms attached to the report on the contents prescribed in Clause 1 of this Article:

a) Situation of state capital investment for establishing state-owned enterprises according to Form No. 01.A issued together with this Circular.

b) Situation of state capital investment for supplementing charter capital in state-owned enterprises that are currently operating according to Form No. 01.B issued together with this Circular.

c) Situation of state capital investment for supplementing capital in joint-stock companies and limited liability companies with two or more members according to Form No. 01.C issued together with this Circular.

d) Situation of state capital investment for acquiring part or all of an enterprise according to Form No. 01.D issued together with this Circular.

FINANCIAL SUPERVISION BY THE REPRESENTATIVE BODY OF THE OWNER

d) The situation regarding state capital investment to repurchase part or all of the enterprise according to Table 01.D issued together with this Circular.

Chapter III
FINANCIAL SUPERVISION BY THE AUTHORITY REPRESENTING THE OWNER

Article 5. Financial supervision of state-owned enterprises

1. The representative body of the owner shall carry out supervision of the enterprise according to the content of supervision prescribed in Article 9 of Decree No. 87/2015/NĐ-CP.

2. To implement this supervisory content, the enterprise must prepare an analysis and evaluation report on the current status and effectiveness of the enterprise's operations (hereinafter referred to as the Financial Situation Report) in accordance with the forms attached to this Circular and the following provisions:

a) Capital preservation and development situation:

The assessment of the degree of capital preservation and development of the enterprise shall be carried out in accordance with the Circular guiding the implementation of Decree No. 91/2015/NĐ-CP in the following contents:

- Shareholders' equity: Including shareholders' equity under code 410 of the Balance Sheet and detailed figures of shareholders' capital contribution, Development Fund, and Construction Investment Capital.

- Total assets.

- Post-tax profit.

- Capital utilization efficiency: Return on Equity (ROE), Return on Assets (ROA).

These indicators are taken from audited financial statements and approved by the Board of Members (Balance Sheet and Business Results Report according to Form B01-DN and Form B02-DN issued by Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises). For the parent company, consolidated financial statements should also be considered.

b) Management and use of state capital and assets at the enterprise

- Project investment situation: The enterprise reports supervision according to the following contents:

+ For projects in Group A and Group B: Report the total investment amount and sources of investment funds for each project; evaluate the progress of implementation and disbursement of the project compared to the plan; final account of investment capital; issues related to land use, natural resource management, environmental protection, recovery of investment permits, and other regulations on investment management; adjustments to objectives, scale of capital, progress, and principal investor during the reporting period for investment projects.

+ For remaining projects: Report the total investment amount and sources of investment funds; completion time of the project; progress of implementation compared to the plan; difficulties and issues (if any) during the implementation process.

+ For investment projects that have been put into use during the reporting period, assess the benefits generated.

The enterprise prepares the report according to Form 02.A attached to this Circular.

- Capital investment outside the enterprise: The enterprise reports supervision according to the following contents:

+ Compliance with legal regulations on external investments by the enterprise.

+ Effectiveness of investment: Dividends or profits distributed relative to the total investment value compared to dividends or profits distributed according to the Resolution of the General Meeting of Shareholders or the Board of Members of the enterprise with shareholding.

+ Plans to increase or decrease investment capital in subsidiaries, associated companies, and long-term investments.

+ Situations of divesting from non-core business investments according to the Enterprise Restructuring Plan.

In addition to the above supervision report contents, the enterprise prepares the report according to Form 02.B attached to this Circular.

- Capital raising and usage situation: The enterprise reports supervision according to the following contents:

+ Total capital raised during the reporting period and cumulatively up to the reporting period, including bond issuance, loans from credit institutions, and loans from other organizations and individuals.

+ Usage of raised capital, including construction investment expenses, production and business operation expenses, and other purposes.

+ Guarantees for loans provided to subsidiaries and associated companies (if any); usage and repayment situations for these guarantees.

+ Usage of raised capital and benefits derived from such usage.

- Asset management, receivables, and payables situation: The enterprise reports supervision according to the following contents:

+ Authority to decide on investment and procurement of assets during the reporting period as stipulated by law; depreciation of assets; asset liquidation and sale situations; handling of missing, substandard, or deteriorated goods.

+ Issuance of Debt Management Regulations at the enterprise in accordance with Decree No. 206/2013/NĐ-CP dated December 9, 2013 of the Government on debt management of enterprises wholly owned by the State and the implementation of debt management according to the Regulation.

+ Receivable situation up to the reporting period: Total receivables, including difficult-to-collect receivables (provision and disposal of difficult-to-collect receivables during the reporting period); losses from receivables not yet provided for (if any). The enterprise reports each difficult-to-collect receivable separately.

+ Payable situation up to the reporting period: Total payables, including overdue payables, ability to repay debts, debt ratio to shareholders' equity. The enterprise reports each overdue payable and the reasons for failing to repay on time.

c) Production and business operations and financial situation: The enterprise reports supervision according to the following contents:

- Production volume (or purchase volume) during the period, sales volume (or sales volume) during the period, and end-of-period inventory of key products.

- Financial indicators: Revenue and costs related to product sales during the period, financial activity revenue and costs, other income and expenses, business results. Comparison between actual performance indicators in the reporting period and annual plans and actual performance indicators in the two consecutive years prior to the reporting year.

- Enterprise operational efficiency through indicators: Actual return on equity, post-tax return on equity (ROE), post-tax return on total assets (ROA). The post-tax return on equity indicator is determined according to Clause 2, Article 12 of this Circular.

The enterprise prepares the report according to Form 02.C attached to this Circular.

- The situation regarding the implementation of public utility products and services (if applicable), including an assessment of the results of providing public utility products and services in terms of quantity and quality, revenue and costs related to the provision of public utility products and services during the period compared to the plan and the same period last year. The enterprise shall prepare the report according to Form 02.D attached to this Circular.

- Analysis of cash flow during the reporting period: The enterprise shall report on monitoring the balance between the cash flow generated by the enterprise and the needs for production and business activities, investment activities, financial activities, and timely payment of due debts of the enterprise; at the same time, update forecasts about future cash flows in the next accounting period.

d) The situation regarding the fulfillment of obligations to the state budget, profit distribution, establishment and use of funds, changes in the Enterprise Restructuring Support Fund at economic groups and state-owned corporations: The enterprise shall prepare the report according to Form 02.D.

For state-owned economic groups and corporations that establish special-purpose funds as prescribed by law, they must report on the situation of establishing and using these funds; the legal basis, sources of establishment, and mechanisms for using these special-purpose funds in the report according to Form 02.D.

đ) The situation regarding compliance with systems, policies, and laws, including an evaluation of adherence to and implementation of regulations in areas such as investment, management and use of state capital in enterprises, taxes, budget revenue, financial reporting systems, financial supervision reports, and other reports, the implementation of inspection and audit results according to the contents stipulated in Clause 4, Article 12 of this Circular.

e) The enterprise's explanation regarding the opinions of the independent auditor, the Supervisor, the representative body of the owner, and the competent state agency on the enterprise's financial statements.

g) The situation regarding the restructuring of state capital invested in the enterprise, the restructuring of the enterprise's capital invested in subsidiaries and associated companies: Based on the requirements suitable for each stage, the Ministry of Finance will issue a document requesting the enterprise to report for supervision purposes.

h) Special indicators determined by the representative body of the owner (if applicable).

3. Based on the enterprise's evaluation report as stipulated in Clause 2 of this Article and relevant documents, the representative body of the owner shall prepare a Financial Supervision Report in which it comments and evaluates the financial situation of the enterprise according to the contents specified in Article 9 of Decree No. 87/2015/ND-CP, thereby proposing recommendations from the representative body of the owner for each enterprise that is a parent company or a limited liability company with one member established or managed by the representative body of the owner. The report shall be prepared according to the following contents:

a) Detailed evaluation of the parent company's situation

- Efficiency of production and business operations: Comments on the implementation compared to the plan, fluctuations in production and business results over periods, management of production and business costs and administrative expenses.

- The financial situation of the enterprise: Comments on profitability, liquidity, debt ratios and activity ratios, the appropriateness of asset and capital structure.

- Management and use of capital and assets: Comments on investment in subsidiaries, joint ventures, long-term investments, asset investment, capital raising and use of raised capital, asset management, receivables, payables.

- Compliance with systems and policies: Situation of adherence to and implementation of regulations on tax policies, wage policies, and other policies; situation of fulfilling obligations to the state budget.

- Implementation of public utility obligations: Situation of providing public utility products and services, revenue and costs related to the provision of public utility products and services (if applicable).

- Implementation of previous recommendations of the Owner/Supervisor/Audit Inspector/financial management agency.

b) Evaluation of the consolidated production and business situation of the entire Group or State-Owned Corporation.

4. Based on the financial supervision report of each enterprise, the representative body of the owner shall compile and prepare a report on the results of financial supervision for enterprises under its management scope, and simultaneously prepare the report according to Form 03 issued together with this Circular.

The report on the results of financial supervision shall be sent to the Ministry of Finance along with the financial supervision report of each enterprise.

5. The Board of Directors of SCIC must prepare a Financial Supervision Report for the limited liability company with one member transferred from the sectoral management ministry and provincial people's committees.

Article 6. Financial supervision of subsidiary companies and associated companies

1. Enterprises shall implement financial supervision of subsidiary companies and associated companies in accordance with the provisions of Article 15 of Decree No. 87/2015/NĐ-CP.

2. The content of supervision and evaluation includes:

a) Business operation situation: Evaluation of fluctuations in revenue and profit of the reporting year compared to the immediately preceding year.

b) Effectiveness of capital investment: Evaluation of the recovery of capital, profit, and dividends distributed from investments outside the enterprise.

- Evaluation of the recovery of capital, profit, and dividends distributed compared to the annual plan. Profit and dividends distributed from investments outside the enterprise are determined based on the actual profit received by the enterprise.

- In cases where the effectiveness of capital investment in subsidiary companies and associated companies is low; or if subsidiary companies and associated companies have post-tax profits but do not distribute profits or dividends to the enterprise, the enterprise must explain the reasons and propose measures (withdrawal of capital, enhanced supervision, or other measures).

c) Ability to repay maturing debts, debt-to-equity ratio: Evaluation of the ability to repay maturing debts and the debt-to-equity ratio of subsidiary companies and associated companies. The ability to repay maturing debts and the debt-to-equity ratio are determined according to the guidance provided in Subpoint b Clause 3 of Article 12 of this Circular.

d) Transfer of invested capital

Evaluation of the results of transferring invested capital compared to the plan. In cases where the transfer does not meet the plan, the enterprise must explain the reasons and propose solutions.

3. In cases where subsidiary companies and associated companies exhibit signs of financial instability as stipulated in Article 24 of Decree No. 87/2015/NĐ-CP, the parent company shall analyze, evaluate, and decide on implementing special financial supervision for these subsidiary companies and associated companies.

4. Based on the financial statements of subsidiary companies and associated companies, enterprises shall prepare a report on the investment situation in subsidiary companies and associated companies according to Form 02.B issued together with this Circular and submit it to the representative body of the owner and the same-level financial authority.

Article 7. Supervision of capital of enterprises investing abroad.

1. The representative body of the owner shall implement supervision of foreign investment projects in accordance with the provisions of Article 20 of Decree No. 87/2015/NĐ-CP.

2. The content of supervision includes:

a) Situation of capital investment abroad and repatriation of investment capital back to Vietnam, progress in implementing projects abroad

- Enterprises base their reports on the Certificate of Investment Abroad issued by the competent authority of Vietnam and the feasibility study report, total registered investment capital of the project abroad (in detail by equity contribution, loans) and total registered investment capital abroad (in detail by equity contribution, loans, loan guarantees - if applicable).

- Enterprises base their reports on the Explanation of the Financial Statement (Model B09 - EN issued together with Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance) and detailed accounting books at domestic enterprises to report on the implementation of capital investment abroad (in detail by equity contribution, loans, loan guarantees - if applicable); changes in investment capital abroad compared to the immediately preceding period; sources of capital for investment abroad (from equity, borrowed funds); situation of repatriating investment capital including profits transferred back to the country, interest received from loans made to projects abroad, recovery of capital from depreciation of fixed assets of projects abroad or from selling or liquidating invested capital in projects abroad and other recoveries.

For projects that have been fully liquidated or must be terminated early, enterprises need to clearly state the reasons, assess the extent of capital loss, responsibility of related parties, and handling measures.

- Enterprises report on the issuance and implementation of the Operating Regulations and management and use of capital and assets of enterprises abroad, monitoring compliance of projects abroad according to these regulations.

- Enterprises report on the progress of implementing projects abroad, disbursement progress; in cases where the implementation progress is slower than planned, enterprises report to the representative body of the owner the reasons, assess the impact on project efficiency, responsibility of relevant collectives and individuals causing delays due to subjective reasons, remedial measures, and plans for capital contribution, basic construction progress, and plans to put the project into operation.

b) Financial situation and business operation results of foreign investment projects

- Enterprises base their analysis and evaluation on the audited Financial Statements (if applicable) of foreign investment projects; Operating Regulations, management, and use of capital and assets of enterprises abroad; business plans and laws on foreign investment to assess:

+ Asset management: Authority to decide on investment projects and asset purchases of projects abroad; situation of depreciation, liquidation, and sale of assets;

+ Debt management up to the reporting period: Total debt, maturing debt, overdue debt, ability to repay maturing debt; specifying loans and overdue debt from domestic enterprises and the parent company, enterprises must clarify the reasons and repayment plans.

+ Receivables management up to the reporting period: Total receivables, including difficult-to-collect receivables (provisioning and handling of difficult-to-collect receivables in the reporting period).

+ Changes in equity of foreign projects: Owner's investment capital, cumulative profit or loss. For projects with cumulative losses exceeding 50% of the owner's investment capital, or two consecutive years of losses (excluding planned loss periods), enterprises must report to the representative body of the owner the reasons and remedial measures.

+ Business operation results of foreign projects: Monitoring fluctuations in revenue and post-tax profit, dividends distributed by domestic enterprises (comparing actual performance indicators in the reporting period with planned indicators for the year and actual performance indicators in the same period of the immediately preceding year).

+ The situation regarding the use of distributed profits and the fulfillment of financial obligations to the state budget: Evaluate compliance with legal provisions on transferring profits back to the country and regulations on fulfilling financial obligations related to distributed profits from foreign investment projects.

- Enterprises base their assessment of risk levels on market trends in the host country and global consumption markets, as well as political and legal conditions in the host country. For projects that pose risks potentially affecting project operations, enterprises must promptly report to the representative body of the owner for resolution plans or submit to the Prime Minister for consideration and resolution if beyond their authority.

3. For projects with accumulated losses exceeding 50% of the owner's invested capital, or those with consecutive two-year losses, or with a debt repayment capacity ratio below 0.5, the representative body of the owner shall strengthen supervision based on the financial situation of the project abroad and the level of control stipulated in the company's charter.

4. Enterprises prepare Reports on the situation of capital investment abroad and recovery of invested capital according to Form 04.A and Reports on the financial status and production and business results of foreign investment projects according to Form 04.B issued together with this Circular.

Article 8. Financial Supervision of Enterprises in Which the State Holds More Than 50% of the Registered Capital

1. The representative body of the owner shall specify in writing the role, responsibilities, delegation of powers, reporting mechanisms, and feedback procedures for the Representative; rules for coordination between the unit responsible for consolidating supervisory outcomes and the Representative.

2. Every six months and annually, the Representative shall prepare a financial supervision report according to the contents specified in Clause 1 of Article 33 of Decree No. 87/2015/NĐ-CP, specifically as follows:

a) General information about the enterprise with contributed capital: Basic information; Registered capital; Contributed capital up to the reporting date (in value, holding ratio); Corporate governance structure (Board of Directors/Board of Members; Audit Committee; Management Board; Legal Representative); Business sectors.

b) Information about representatives (number of representatives, list of representatives).

c) Preservation and development of state capital in the enterprise, effectiveness of capital utilization.

d) Management and use of state capital and assets in the enterprise:

- Investment activities with capital and assets within the enterprise and external capital investments (funding sources linked to investment projects, progress in implementing investment projects, disbursement progress of investment capital); Situation of investment and funding for projects forming fixed assets and basic construction; Evaluation of project/plan implementation progress; Issues arising; Goal adjustments; Achieved benefits;

- Funding mobilization and use of raised funds; issuance of bonds;

- Asset management and debt management in the enterprise, the ability to repay debts, debt-to-equity ratio;

- Cash flow situation of the enterprise.

đ) Business operation situation of the enterprise:

- Business operation results: Revenue, pre-tax profit, post-tax profit, return on equity (ROE), return on total assets (ROA);

- Fulfillment of financial obligations to the state budget.

e) Implementation of plans for divestment of state capital, recovery of state capital, distribution of profits, dividends from the enterprise (Dividend payout ratio, value, actual dividends received in the reporting year)

g) Difficulties faced by the enterprise.

a) Assessment of the financial situation of enterprises with contributed capital.

b) Assessment of management and effectiveness of capital use in enterprises with contributed capital.

c) Conclusion of the representative body of the owner: Whether to continue investing or divest.

4. The Board of Members of SCIC is responsible for preparing Reports on the Results of Financial Supervision for enterprises in which the state holds more than 50% of the registered capital that SCIC has taken over from the Ministry managing the industry and provincial People's Committees at the time of reporting.

5. In cases where enterprises show signs of inefficient operations and potential financial instability, the representative body of the owner directs the Representative to exercise shareholder rights as stipulated in Clause 2 and Clause 3 of Article 114 of the Enterprise Law 2014, specifically requesting the Audit Committee to conduct detailed checks on issues related to management and operation of the enterprise or requesting the Board of Directors/Board of Members to convene the Shareholders' Meeting/members in cases where the Board of Directors/Board of Members seriously violate shareholders'/members' rights or the duties of managers or make decisions beyond delegated authority.

At the same time, the representative body of the owner requires the Representative to report quarterly on the financial situation of the enterprise to provide timely guidance.

6. The representative body of the owner bears ultimate responsibility for supervising enterprises, the Representative being an individual authorized by the representative body of the owner to supervise enterprises and bear responsibility for matters delegated by the representative body of the owner.

7. For Representatives concurrently holding leadership positions in enterprises, in addition to responsibilities for matters authorized by the representative body of the owner, the Representative must also bear responsibility as a leader of the enterprise in accordance with applicable laws.

Article 9. Financial supervision for enterprises in which the State holds not more than 50% of the registered capital

1. The representative body of the owner shall specify in writing the role, responsibilities, delegation of authority, reporting mechanism, and feedback mechanism of the Representative (if any) or unit/person assigned to supervise state capital at the enterprise (referred to as the managing unit/person); the coordination mechanism between the unit designated as the focal point for consolidating supervisory results and the Representative.

2. Annually, the Representative or the managing unit/person shall prepare a financial supervision report according to the contents stipulated in Clause 2, Article 33 of Decree No. 87/2015/ND-CP, specifically as follows:

a) General information about the enterprise: Registered Capital; Contributed capital up to the reporting date (including state contribution and holding ratio); Representative/Manager.

b) Preservation and development of state capital at the enterprise.

c) Situation of capital raising and utilization of raised capital.

d) Business operation situation of the enterprise:

Business performance results: revenue, pre-tax profit, post-tax profit, return on equity (ROE), return on assets (ROA).

đ) Implementation of plans to divest state capital, recover state capital, and distribute profits/dividends from the enterprise.

e) Dividends/profits distributed in the reporting year (According to the Resolution of the Shareholders' Meeting: amount, dividend rate).

g) Actual dividends/profits received in the reporting year.

a) Assessment of the financial situation of enterprises with contributed capital.

b) Assessment of management and effectiveness of capital use in enterprises with contributed capital.

c) Conclusion of the representative body of the owner: Whether to continue investing or divest.

4. The Board of Members of SCIC is responsible for preparing the Report on the Results of Financial Supervision for state-owned enterprises in which SCIC holds not more than 50% of the registered capital, which have been transferred from the relevant ministries and provincial People's Committees up to the reporting date.

5. In cases where enterprises show signs of inefficient operations and potential financial instability, leading to possible loss of state capital, the representative body of the owner shall instruct the Representative or the managing unit/person to exercise shareholder rights as prescribed in Clause 2 and Clause 3, Article 114 of the Enterprise Law 2014.

Article 10. Special supervision for enterprises showing signs of financial instability.

Enterprises showing signs of financial instability shall be subject to special supervision as prescribed in Section 4 of Decree No. 87/2015/ND-CP and shall report according to the model forms specified in this Circular as for other enterprises.

Chapter IV
ASSESSMENT OF OPERATIONAL EFFECTIVENESS AND RATING FOR STATE-OWNED ENTERPRISES

Article 11. Organization of the assessment and rating of enterprises and the performance of enterprise managers

1. Based on the annual financial plan of the company approved by the Board of Members/General Director (after being reviewed by the representative body of the owner and the same-level financial agency and officially commented on in writing by the representative body of the owner), the representative body of the owner shall consider and assign evaluation targets to serve as the basis for assessing and rating the enterprise.

2. The representative body of the owner must base the assignment of evaluation targets on the specific business characteristics of each enterprise. For revenue and business outcome targets, specific numerical data must be provided.

3. For enterprises engaged in public services and special obligations, the representative body of the owner must clearly assign plans and tasks for the provision of public goods/services so that the performance of these tasks can be evaluated based on quantitative, value-based, and quality-based indicators.

4. For enterprises with planned losses according to approved schemes, the assessment and rating of enterprises shall be carried out in accordance with the provisions of Point b, Clause 1 of this Circular.

5. Evaluation targets must be defined and assigned to enterprises before April 30 of the planning year and may not be adjusted during the implementation period (except in cases of major force majeure).

6. The assessment of the operational effectiveness of enterprises must be based on the financial supervision report of the enterprise prepared by the representative body of the owner, the audited annual financial statements of the enterprise, and other reports.

For audited financial statements where the independent auditor has reservations regarding certain issues affecting business results, the enterprise must provide a detailed written explanation to the representative body of the owner for the owner's body to consider whether to maintain or adjust the figures in the financial statement. The representative body of the owner must bear responsibility for its decision and clearly explain it in the document seeking comments from the Ministry of Finance on the enterprise rating.

7. The representative body of the owner must send the content of the Decision assigning evaluation targets to enterprises established by the Prime Minister or the relevant ministry to the Ministry of Finance; and send the content of the Decision assigning evaluation targets to enterprises established by the provincial People's Committee to the provincial Department of Finance for the financial agency to participate in providing opinions on the assessment and rating of enterprises.

Article 12. Indicators for evaluating the effectiveness of business operations

The evaluation of the effectiveness of business operations is based on the criteria stipulated in Clause 1, Article 28 of Decree No. 87/2015/NĐ-CP, including:

1. Total revenue: The total revenue indicator is determined in the Business Operation Results Report (Form B02 - DN issued pursuant to Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises), which includes Gross Revenue from Sales and Services (Code 10) + Financial Activity Revenue (Code 21) + Other Income (Code 31).

For businesses producing main products of the economy such as electricity, coal, oil and gas, cement, the assessment is based on the volume of products sold during the period; the unit for calculating crude oil production volume is tons, natural gas is cubic meters, coal and cement are tons, and electricity is kilowatt-hours.

2. Post-tax profit and post-tax profit rate on equity capital:

a) Post-tax profit: Includes net profit from business activities and other profits after deducting current corporate income tax expenses and refunded corporate income tax expenses. This indicator is determined in the Business Operation Results Report - Code 60 (Form B02 - DN issued pursuant to Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises).

b) The post-tax profit rate on equity capital is calculated as the ratio between post-tax profit and the average equity capital of the enterprise in the year.

The determination of post-tax profit is as prescribed in point a, Clause 2 of this Article.

The equity capital investment at the enterprise is determined in the Balance Sheet (Form B01-DN issued pursuant to Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises), including Share Capital Contributed by Owners (Code 411), Development Fund (Code 418), Basic Construction Investment Capital (Code 422). The average annual equity capital is determined by dividing the total end-of-quarter balances by four quarters.

In cases where the enterprise has not yet distributed or established funds when preparing the annual financial report, when assessing the effectiveness of the enterprise's operations, the amount of the Development Fund established according to point b, Clause 3, Article 31 of Decree No. 91/2015/NĐ-CP must be added to the equity capital indicator to determine the post-tax profit rate on equity capital.

3. Overdue liabilities and ability to pay maturing debts:

a) Overdue liabilities: These are amounts owed that have exceeded the agreed payment deadlines to creditors. The determination of overdue liabilities is based on the payment terms recorded in loan agreements, economic contracts, or other commitment documents.

b) Ability to pay maturing debts: The ability to pay maturing debts of the enterprise is the current ability to pay, determined by the ratio between current assets and short-term liabilities, and calculated using the following formula:

Where:

- Current assets are determined by the end-of-period balance (Code 100 of the Balance Sheet - Form B01 - DN issued pursuant to Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises).

- Short-term liabilities are determined by the end-of-period balance (Code 310 of the Balance Sheet - Form B01 - DN issued pursuant to Circular No. 200/2014/TT-BTC dated December 22, 2014 of the Ministry of Finance guiding the Accounting System for Enterprises).

4. Compliance with regulations and policies:

b) Compliance with regulations, policies, and laws means adhering to the provisions, without any actions that violate, omit, implement incompletely, untimely, or fail to implement.

c) Violations include actions by organizations or individuals under the guise of organizations or by enterprise management officials.

5. Implementation of public goods and services:

Implementing public goods and services involves directly performing national defense and security tasks or producing public goods and providing public services according to state policy through bidding, receiving orders, or being assigned tasks by the state. The evaluation of this indicator is based on the degree of completion regarding quantity and quality of products and services.

Depending on the field of operation, specialty, and unique characteristics, the representative body of owners sets appropriate evaluation criteria.

6. When calculating the indicators specified in Clause 1, 2, 4, and 5 of Article 12 of this Circular, the effects of factors as prescribed in Clause 2, Article 28 of Decree No. 87/2015/NĐ-CP are excluded.

The evaluation of the results of business management activities shall be carried out in accordance with the provisions of Clause 4, Article 28 of Decree No. 87/2015/ND-CP, including:

1. The criteria for evaluating the results of business management activities shall be implemented in accordance with the guidelines of the Ministry of Home Affairs.

2. The level of completion of state-set targets regarding the post-tax profit margin on equity capital: This is the ratio of achievement, exceeding, or falling short of the post-tax profit margin on equity capital set by the representative body of owners at the beginning of the plan year and not adjusted throughout the implementation period (except for major force majeure cases). For businesses providing public utility products and services, the basis for assessing the completion of plans regarding production volume and product/service quality meeting prescribed standards will be considered.

3. The classification result of the enterprise is the result determined and announced by the representative body of owners.

1. Evaluation of the effectiveness of enterprise operations is based on the following criteria:

a) Criterion 1: Total revenue

- An enterprise is classified as type A when its total revenue achieved equals or exceeds the assigned plan.

- An enterprise is classified as type B when its total revenue achieved is lower but at least 90% of the assigned plan.

- An enterprise is classified as type C when its total revenue achieved is below 90% of the assigned plan.

b) Criterion 2: Post-tax profit margin on equity capital

- An enterprise is classified as type A when its post-tax profit margin on equity capital achieved equals or exceeds the assigned plan.

- An enterprise is classified as type B when its post-tax profit margin on equity capital achieved is lower but at least 90% of the assigned plan.

- An enterprise is classified as type C when its post-tax profit margin on equity capital achieved is below 90% of the assigned plan.

- For enterprises with planned losses: If actual losses are lower than planned losses: Classified as type A; If actual losses equal planned losses: Classified as type B; If actual losses exceed planned losses: Classified as type C. In cases where additional tasks are added and excluded from determining the actual loss compared to the planned loss.

c) Criterion 3: Overdue payable debts and ability to pay maturing debts

- An enterprise is classified as type A if it has no overdue payable debts and its debt payment capability ratio is greater than 1.

- An enterprise is classified as type B if it has no overdue payable debts and its debt payment capability ratio is between 0.5 and 1.

- An enterprise is classified as type C if it has overdue payable debts or its debt payment capability ratio is less than 0.5.

For enterprises operating in special sectors, the representative body of owners considers and decides on the debt payment capability ratio suitable to the characteristics of the enterprise's operations as the basis for classifying this criterion.

d) Criterion 4: Compliance with current laws and regulations

- An enterprise is classified as type A if it does not have a conclusion from the competent authority regarding violations of mechanisms and policies in any of the areas mentioned in Clause 4, Article 12 of this Circular or has been reminded by the competent authority about the implementation of mechanisms and policies according to the law without reaching the level of administrative penalties.

- An enterprise is classified as type B if it violates any of the following situations:

+ It has been reminded once in writing by the representative body of owners or financial authorities about submitting monitoring reports, enterprise classification reports, financial statements, and other reports not in accordance with regulations or deadlines.

+ It has been administratively penalized by warning or fines (each fine amounting to less than VND 10,000,000) arising during the fiscal year of the enterprise classification assessment.

- An enterprise is classified as type C if it violates any of the following situations:

+ It fails to submit monitoring reports, enterprise classification reports, financial statements, and other reports as required or submits them incorrectly or late, being reminded in writing twice or more by the representative body of owners or financial authorities.

+ It has been administratively penalized by means other than warnings or fined (each fine amounting to VND 10,000,000 or more) during the fiscal year of the enterprise classification assessment.

+ The enterprise manager engages in illegal acts during the execution of their duties that reach the level of criminal prosecution.

đ) Criterion 5: Implementation of Public Utility Products and Services

- Completing or exceeding the plan regarding production volume with product or service quality meeting prescribed standards: Classified as type A.

- Completing at least 90% of the plan regarding production volume with product or service quality meeting prescribed standards: Classified as type B.

- Completing less than 90% of the plan regarding production volume or product or service quality not meeting prescribed standards: Classified as type C.

2. Enterprise classification is conducted in accordance with the provisions of Clause 3, Article 30 of Decree No. 87/2015/ND-CP.

a) Completing tasks well when:

- Implementing well the criteria for evaluating the results of business management activities as guided by the Ministry of Home Affairs.

- Achieving or exceeding the target set by the representative body of owners regarding the post-tax profit margin on equity capital; For enterprises providing public utility products and services: Completing or exceeding the plan regarding production volume with product or service quality meeting prescribed standards.

- The enterprise is classified as type A.

b) Not completing tasks if they fall under any of the following circumstances:

- Not implementing well the criteria for evaluating the results of business management activities as guided by the Ministry of Home Affairs.

- Completing less than 90% of the target set by the representative body of owners regarding the post-tax profit margin on equity capital; For enterprises providing public utility products and services: Completing less than 90% of the plan regarding production volume or product or service quality not meeting prescribed standards.

- The enterprise is classified as type C.

c) Completing tasks: All other cases not covered by points a and b of Clause 3 of this Article.

4. Classifying enterprises to conduct the enterprise classification assessment:

a) An enterprise with the proportion of revenue from performing public goods services of the state being less than 70% of the total revenue of the enterprise shall be classified according to the provisions stipulated in point a, Clause 3, Article 30 of Decree No. 87/2015/NĐ-CP.

b) An enterprise with the proportion of revenue from performing public goods services of the state being equal to or greater than 70% of the total revenue of the enterprise shall be classified according to the provisions stipulated in point b, Clause 3, Article 30 of Decree No. 87/2015/NĐ-CP.

5. The Board of Members of the Parent Company bases on the criteria for evaluating and classifying enterprises and Enterprise Managers as provided in Clause 1, 2, 3, and 4 of this Article to carry out the evaluation and classification of enterprises and Enterprise Managers at a limited liability company wholly owned by the Parent Company.

Article 15. Reporting Forms

Enterprises submit reports on the assessment of efficiency and classification for the reporting year to the representative body of the owner and the financial authority at the same level (the Ministry of Finance for enterprises established by the Prime Minister's decision and assigned to ministries for management, and the provincial Department of Finance for enterprises established by the People's Committee of the province) in accordance with the regulations of the representative body of the owner but must ensure the submission time of the report as prescribed in Article 31 of Decree No. 87/2015/NĐ-CP. The report is prepared according to Form 05.A and Form 05.B attached to this Circular.

Chapter V
PUBLIC DISCLOSURE OF FINANCIAL INFORMATION

Article 16. Public Disclosure of Information by the Representative Body of the Owner on the Situation of State Capital Investment, Management, and Utilization in Enterprises

The representative body of the owner shall publicly disclose information on the situation of state capital investment in enterprises according to Form 06.A, the financial situation and business results of enterprises according to Form 06.B and Form 06.C before June 30 each year.

Chapter VI
IMPLEMENTATION

Article 17. Effective Date

1. This Circular takes effect from February 1, 2016 and applies to fiscal years starting from 2016 onwards. The disclosure of financial information for the year 2015 of state-owned enterprises shall be carried out in accordance with the provisions of this Circular.

2. Repeal Circular No. 158/2013/TT-BTC dated November 13, 2013 of the Ministry of Finance guiding certain contents regarding supervision and assessment of the effectiveness of operations of enterprises owned by the state and enterprises with state capital, and Circular No. 171/2013/TT-BTC dated November 20, 2013 of the Ministry of Finance guiding the public disclosure of financial information as prescribed in Decree No. 61/2013/NĐ-CP dated June 25, 2013 of the Government.

3. During the implementation of supervision over state capital investment, financial supervision, assessment of operational effectiveness, and public disclosure of financial information at state-owned enterprises operating in certain special sectors (debt trading, capital investment), adjustments appropriate to actual activities shall be made according to the provisions of this Circular. Enterprises shall report to the representative body of the owner for consideration and decision after obtaining written approval from the Ministry of Finance.

4. In case the normative legal documents referred to in this Circular are amended, supplemented, or replaced, they shall be implemented according to such normative legal documents.

5. If there are difficulties or obstacles during the implementation process, units are requested to promptly reflect them to the Ministry of Finance for guidance on handling.