Circular No. 24/2007/TT-BTC guiding the financial regulations of state-owned single-member limited liability companies, political organizations, or socio-political organizations.

CIRCULAR

Guidelines for the financial regulations of a limited liability company with one member

owned by the state, political organizations, and socio-political organizations

_________________________________

Pursuant to the Enterprise Law No. 60/2005/QH11 dated November 29, 2005;

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

Pursuant to the Government Decree No. 95/2006/NĐ-CP dated September 8, 2006 on the conversion of state-owned companies into limited liability companies with one member;

The Ministry of Finance issues guidelines for the financial regulations applicable to limited liability companies with one member as follows:

PART I

GENERAL PROVISIONS

1. These Circulars stipulate the financial regulations applicable to limited liability companies with one member owned by the state, political organizations, and socio-political organizations.

2. Limited liability companies with one member operate in accordance with the provisions of the Enterprise Law No. 60/2005/QH10 dated November 29, 2005, guiding documents for the Enterprise Law, Government Decree No. 95/2006/NĐ-CP dated September 8, 2006, these Circulars, and the Company Charter without contravening national regulations.

3. The owner of a limited liability company with one member:

After a state-owned company is converted into a limited liability company with one member, it has only one organization as its owner. The following organizations are owners of limited liability companies with one member:

3.1. State Capital Corporation: Is the owner of limited liability companies with one member converted from independent state-owned companies managed by ministries, provincial people's committees, except for companies directly serving defense, security, and essential public service tasks of ministries, provincial people's committees, and centrally-administered municipalities according to the Prime Minister's decision.

3.2. Parent company: Is the owner of limited liability companies with one member converted from independent accounting units of state-owned corporations or subsidiaries and dependent accounting units of parent companies.

3.3. The owner of state-owned corporations, parent companies, and state-owned companies not owned by the State Capital Corporation when converted into limited liability companies with one member shall be implemented in accordance with the law and the division of responsibilities by the Government.

Organizational management structure of a limited liability company with one member (hereinafter referred to as the company):

Depending on the scale, industry, and business sector, the owner decides to apply the organizational management structure of each specific company according to the model of Board of Members, General Director (General Manager), and Supervisor or the model of Chairman of the company, General Director (General Manager), and Supervisor.

The owner of the company appoints the Chairman of the Board of Members or the Chairman of the company.

Chapter II

FINANCIAL MANAGEMENT OF THE COMPANY

A. MANAGEMENT OF CAPITAL AND ASSETS:

1. Registered capital and increase/decrease in registered capital:

1.1. Registered capital:

a) For state-owned corporations converted into limited liability companies with one member operating under the parent company-subcompany model:

The minimum registered capital must not be less than five hundred billion VND, invested by the state and recorded in the parent company's charter, including:

- Actual state capital on accounting books at the time of conversion, centralized at the corporation after being processed according to the law during the conversion process;

- Registered capital of the limited liability company with one member owned by the corporation;

- State capital contributed by the corporation to joint-stock companies, limited liability companies with two or more members, foreign joint ventures, and overseas investments;

- Additional state capital invested in the parent company (if any);

- Other sources of capital as prescribed by law.

b) For parent companies converted into limited liability companies with one member:

The minimum registered capital must not be less than five hundred billion VND, invested by the owner and recorded in the company's charter, including:

- Actual owner's equity on accounting books at the parent company up to the time of conversion after being processed according to the law during the conversion process;

- Amount of owner's equity committed to supplement the company (if any);

c) For independent state-owned companies or dependent accounting units of corporations or parent companies converted into limited liability companies with one member:

The minimum registered capital must not be less than thirty billion VND, invested by the owner and recorded in the company's charter, including:

- Actual owner's equity on accounting books at the company up to the time of conversion after being processed according to the law during the conversion process;

- Amount of owner's equity committed to supplement the company (if any);

1.2. For industries and businesses where the law requires a statutory capital, the registered capital of the company must not be lower than the statutory capital.

1.3. In cases where the corporation or parent company determines the registered capital to be higher than the actual capital of the owner, they must obtain written approval from the Ministry of Finance and clearly record the additional capital, the expected source of additional capital, and the commitment period. The owner is responsible for fully investing the registered capital in the company according to the agreed timeframe. If the owner fails to contribute the committed capital within the agreed timeframe, they will bear responsibility as stipulated in Clause 1 of Article 65 of the Enterprise Law.

1.4. Increase or decrease in registered capital:

a) During the course of business, the owner of the company has the right to decide to adjust the registered capital upwards. When increasing the registered capital, the company must promptly update the balance sheet and register with the business registration authority. Sources of additional registered capital include:

- Additional investment by the owner (if any);

- Post-tax profits of the company;

- Other sources of capital as prescribed by law.

In cases where the registered capital is increased through additional contributions from other investors, the company must register to convert into a limited liability company with two or more members within fifteen days from the date the new investor commits to contributing capital to the company.

b) A limited liability company with one member may not reduce its registered capital.

1.5. The company's owner shall only be entitled to withdraw capital by transferring part or all of the registered capital to another organization or individual; In case of transferring part or all of the contributed capital out of the company in other forms, they must jointly bear responsibility for the company’s debts and other property obligations.

In case of transferring part of the registered capital to another organization or individual, the company must register to change into a limited liability company with two or more shareholders within fifteen days from the date of transfer.

2. Capital raising: Besides the capital invested by the owner, the company is entitled to raise capital from organizations and individuals both inside and outside the country according to the provisions of the law to serve business activities under the principle of not changing the form of ownership of the company. The raising of foreign organizations' and individuals' capital is regulated by the Government's regulations on external borrowing and debt management.

The company is responsible for the effectiveness of borrowed capital usage, and has the responsibility to repay raised capital and interest to creditors as committed.

The company's owner decides and bears responsibility for loan contracts with a value equal to or greater than 50% of the total value recorded in the company's latest financial report or another ratio smaller than that stipulated in the Articles of Association. In special cases, the owner may delegate this decision-making power to the Board of Members or the Company Chairman. Such delegation must be recorded in the Articles of Association.

Remaining loan projects are decided by the Board of Members or the Company Chairman.

3. Rights and obligations of the company in managing and using capital and funds:

3.1. The company has the right to manage and flexibly use the entire amount of capital invested by the owner and other legitimate sources of capital in business activities with the goal of generating profits, while being responsible before the owner for preserving, developing capital, the effectiveness of capital usage, and ensuring the rights of those related to the company such as creditors, customers, employees according to concluded contracts.

3.2. In case the company uses funds managed by the company for purposes other than those specified, the company must ensure sufficient resources to meet the needs of these funds when required. The use of capital and funds for investment construction must comply with the laws on investment management and construction.

3.3. In case the company is assigned special tasks by the State, it must concentrate capital and other resources to complete these tasks.

3.4. The company has the responsibility to preserve capital through measures:

- Implementing the correct system of capital and asset management, profit distribution, other financial management systems, and accounting systems as prescribed by the State;

- Purchasing insurance for assets as prescribed by law;

- Recording the value of lost assets, uncollectible debts, and setting aside risk reserves according to current regulations in operating expenses.

4. Investment outside the company:

4.1. The company can use capital and assets to invest outside the company according to the law and ensure the principles of efficiency, preservation and development of capital, increased income, and no impact on the company's operational objectives. The use of land use rights to invest outside the company must comply with the Land Law and relevant state regulations.

4.2. Investments outside the company (including overseas investments) are carried out in the following forms: establishing a subsidiary; purchasing shares or contributing capital to another company; contributing capital to establish a joint-stock company, limited liability company, joint venture, associated company; contributing capital for contractual business cooperation without forming a new legal entity, or other investment forms prescribed by law.

The revaluation of assets for joint ventures, establishment of joint-stock companies, limited liability companies... is implemented according to current legal regulations.

4.3. Authority to decide on investment plans outside the company:

a) Establishing a subsidiary, contributing capital to establish a joint venture with foreign investment in Vietnam, investing or contributing capital to establish a company abroad, purchasing a company belonging to another economic sector, the owner approves the plan.

b) Other investment plans: The owner decides investment plans with a value equal to or greater than 50% of the total value recorded in the company's latest financial report or another ratio smaller than that stipulated in the Articles of Association.

Remaining investment plans outside the company are decided by the Board of Members or the Company Chairman.

4.4. Management of capital invested outside the company:

The company exercises the rights and obligations of shareholders or contributors through its representatives at other enterprises according to the law and the Articles of Association of other enterprises. The company assigns tasks and requests the representative of the company's contribution capital to seek opinions on important issues of other enterprises before voting such as direction, strategy, business plan, additional share issuance, capital contribution, dividend distribution; In case holding a small number of shares or contributions in other enterprises, the company may not appoint a representative for the investment capital in other enterprises, but must organize monitoring of the invested capital and the dividends received from the investment capital in other enterprises and assign someone to perform the rights of shareholders or contributors according to the law and the Articles of Association of other enterprises.

5. Transfer of investment capital outside the company:

5.1. The company may transfer part or all of the capital invested in other enterprises to recover capital.

5.2. Authority to decide on the transfer of investment capital outside the company: the person deciding on investment outside the company is the person deciding on the transfer of investment capital outside the company.

The sale of shares or investment capital in other enterprises is carried out according to the Articles of Association of other enterprises and relevant laws. The selling price is based on market prices.

6. Fixed Assets:

6.1. The company's fixed assets include tangible and intangible fixed assets. The criteria (in terms of time and value) and original cost of fixed assets are determined in accordance with the regulations of the Ministry of Finance.

6.2. Depreciation of fixed assets: The company's fixed assets are managed and utilized in accordance with state regulations and the Company Charter. The minimum depreciation rate is determined based on the maximum usage period specified in Appendix 1 issued together with Decision No. 206/2003/QD-BTC dated December 12, 2003 of the Minister of Finance and any subsequent amendments and supplements to Decision No. 206/2003/QD-BTC dated December 12, 2003 of the Minister of Finance. There is no cap on the maximum depreciation rate, but it must ensure that production and business operations do not incur losses. The Board of Members or the Chairman of the company decides on the specific depreciation rate but it cannot be lower than the minimum depreciation rate.

6.3. The company may choose investment construction plans, procurement of fixed assets, technological equipment renewal, or changes in the structure of fixed assets in line with business objectives to enhance the efficiency of asset and capital utilization. However, the following investment plans must be approved or consented to by the owner:

- Investment plans with capital investment equal to or greater than 50% of the total value of assets recorded in the company's most recent financial report.

- Investment plans with capital investment belonging to Group A and Group B as stipulated by laws on investment management and construction.

6.4. The procedures for implementing investment projects shall be carried out in accordance with laws on investment management and construction. The General Director or Managing Director is responsible for organizing implementation and bearing responsibility before the Board of Members or the Chairman of the company, and the owner regarding the progress and quality of projects that have been decided upon for investment.

6.5. Liquidation and sale of fixed assets: The company proactively develops plans and submits them to the Board of Members or the Chairman of the company for approval to liquidate or sell fixed assets when there is no need for their use or they are damaged and unusable to recover capital.

The owner of the company decides on the liquidation and sale of fixed assets with a value equal to or greater than 50% of the total value of assets recorded in the company's most recent financial report or another ratio smaller than that stipulated in the Company Charter. Other cases are decided by the Board of Members or the Chairman of the company.

The liquidation and sale of assets are carried out through auction organizations or by the company itself in a public manner according to the prescribed procedures and formalities under laws on asset auctions. In cases where the value of assets sold is small (original cost up to thirty million dong), the General Director or Managing Director decides on selling through auction or agreement but not below market price. The difference between the recovery value (if any) from liquidation or sale of assets and the remaining book value of the assets and liquidation costs is accounted for in the company's business results.

The transfer of assets of the company attached to land is carried out in accordance with the Land Law.

6.6. Leasing, mortgaging, pledging assets: The company may lease, mortgage, or pledge its assets owned by the company based on the principles of effectiveness, preservation, and development of capital, and ensuring compliance with the Civil Code and other state regulations.

The owner of the company decides on leasing, mortgaging, or pledging contracts with a value equal to or greater than 50% of the total value of assets recorded in the company's most recent financial report or another ratio smaller than that stipulated in the Company Charter. In special cases, the owner may delegate this decision to the Board of Members or the Chairman of the company. Such delegation must be recorded in the Company Charter.

Remaining contracts are decided by the Board of Members or the Chairman of the company.

7. Management of receivables and payables:

7.1. For receivables and payables, the company has the responsibility:

- To issue regulations on managing receivables and payables, assign and clearly define the responsibilities of collectives and individuals in tracking, recovering, and paying receivables and payables according to the agreed deadlines.

- To maintain complete records of short-term and long-term receivables and payables for each debtor (including interest amounts).

- To regularly urge the recovery of receivables, identify difficult-to-collect receivables, and establish provisions for doubtful receivables.

- To periodically evaluate and classify receivables according to current regulations to promptly detect overdue and difficult-to-collect receivables, analyze the causes, and take timely measures.

- Before closing the accounting books to prepare the annual financial report, to inventory and reconcile receivables and payables with debtors and creditors.

7.2. The company has the right to sell receivables in accordance with the law to recover capital. The selling price of receivables is agreed upon by the parties involved. The difference between the recovered value and the receivable amount is treated as uncollectible receivables, specifically: The uncollectible amount after deducting compensation from related individuals or groups is covered by the provision for doubtful receivables, financial reserve fund, if insufficient, it is recorded as business expenses of the company. If the total uncollectible amount in a year is large, leading to a loss in business results, it can be allocated over the next two fiscal years at most. The Board of Members or the Chairman of the company, the General Director or Managing Director is responsible for promptly handling difficult-to-collect receivables and uncollectible amounts.

After such treatment, if the company still cannot recover non-recoverable debts, it must continue to track them outside the balance sheet account and organize recovery efforts. Recovered amounts are recorded as income of the company.

7.3. For foreign currency debts payable, the company must account for the entire exchange rate difference arising from the balance of such debts payable in the operating results for the period. In cases where accounting for the exchange rate difference in expenses leads to a loss in the operating results, part of the exchange rate difference may be allocated to the following year so that the company does not incur a loss, but the amount accounted for as expenses in the year must at least equal the exchange rate difference of the foreign currency payable in that year.

8. Inventory management:

8.1. Inventory includes goods purchased for sale remaining in stock, raw materials, materials, tools, equipment in stock or purchased and still in transit, work-in-progress during production, finished products not yet warehoused, finished goods in stock, finished goods on consignment for sale.

8.2. The company has the right and is responsible for promptly handling inventory items that are substandard, deteriorated, outdated in style, technologically obsolete, stagnant, or slow-moving to recover capital. The authority to decide on handling such items is as stipulated in Clause 6.5, Point 6, Section A, Chapter II of this Circular.

8.3. The method for determining the value of inventory shall be implemented in accordance with Accounting Standard No. 02 Inventory issued together with Decision No. 149/2001/QD-BTC dated December 31, 2001 of the Minister of Finance on the issuance and announcement of Vietnamese Accounting Standards.

8.4. At the end of the accounting period, if the book value recorded in the accounting books is higher than the realizable value, the company must establish a provision for reduction in inventory value according to the regulations.

8.5. Current assets include labor tools after full allocation of their value into production and business costs of the company over one or two years, which are still usable, the company must continue to maintain detailed records for management.

9. Asset verification:

Before closing the accounting books to prepare the annual Financial Statements or after natural disasters, enemy attacks, or other reasons causing changes in the company's assets, or according to state policy, the company must organize asset verification, re-determine the quantity of assets (fixed assets and long-term investments, current assets and short-term investments), reconcile the accounting records to determine excesses or shortages, identify the causes and responsibilities of those involved, and determine the level of material compensation (if applicable) according to the regulations.

10. Handling of asset losses:

10.1. Asset losses due to loss, shortage, damage, poor quality, outdated style, technologically obsolete, stagnant inventory in periodic and sudden verifications. The company must determine the value of the loss, the cause and responsibility, and handle it as follows:

- If the cause is due to the subjective fault of individuals or groups, the person causing the loss must compensate according to the law. The Board of Members or the General Director decides the level of compensation and is responsible for their decision;

- Assets that have been insured, if they suffer losses, will be handled according to the insurance contract;

- The value of the loss after being offset by individual, group, and insurance organization compensation, if there is a shortfall, will be covered by the company's financial reserve fund. If the financial reserve fund is insufficient to cover the shortfall, the remaining amount will be accounted for as production and business costs for the period.

10.2. In cases of extraordinary losses caused by objective and irresistible factors such as natural disasters, fires, pests, etc., if the company has mobilized all legitimate sources of funds to offset the losses but still cannot overcome them, the company must develop a plan to handle the losses and submit it to the owner and the Ministry of Finance for approval. After receiving the opinion of the Ministry of Finance, the owner will decide on the handling of the losses within their authority.

10.3. The company is responsible for promptly handling asset losses. If asset losses are not handled, the Board of Members or the General Director, the Director or the General Manager will be held accountable to the owner as if they had reported false financial information about the company.

11. Revaluation of assets:

The company shall conduct a revaluation of assets in the following cases:

- As decided by the competent state agency;

- When implementing ownership transfer of the company;

- Using assets to invest outside the company.

The revaluation of assets must comply with the relevant state regulations. Any increases or decreases in value resulting from the revaluation of assets shall be handled according to the state regulations specific to each case.

B. MANAGEMENT OF REVENUE, EXPENSES AND BUSINESS OPERATING RESULTS

1. Revenue:

The revenue and income of the company is the total amount of money already received or expected to be received from providing products, goods, services; financial activities and other activities of the company. These revenue and income items are determined in accordance with Accounting Standard No. 14 Revenue and Other Income issued together with Decision No. 149/2001/QD-BTC dated December 31, 2001 of the Minister of Finance on the issuance and announcement of Vietnamese Accounting Standards and the implementation guidelines for accounting standards.

2. Business operating expenses:

The business operating expenses of the company are expenses incurred related to production and business activities in the fiscal year, including:

a) Production and business expenses:

- Raw material, fuel, power, semi-finished product, external service purchase costs (based on actual consumption and actual cost price), depreciation of labor tools, repair costs of fixed assets, prepayment for major repairs of fixed assets;

- Depreciation of fixed assets;

- Wages, salaries, meal allowances, and other wage-like expenses payable to employees as decided by the Board of Members or the General Director according to the guidance of the competent state agency;

- Union fees, social insurance, health insurance for employees that the company must pay according to regulations;

- Transaction, brokerage, hospitality, marketing, trade promotion, advertising, meeting costs based on actual expenses incurred;

- Other monetary expenses include: resource taxes, land taxes, business license taxes; land rental fees, severance pay, unemployment benefits for employees; training to enhance management capabilities and skills for employees; health care expenses; scientific research expenses, technological innovation research expenses; bonuses for improvement initiatives, productivity enhancement bonuses, material savings bonuses, and other expenses. The bonus amount is determined by the Director or General Manager based on the work's effectiveness but shall not exceed the cost savings generated by that work within one year; expenses for female workers; environmental protection expenses; expenses for Party and mass organization activities at the company (expenses outside the budget of the Party and mass organizations funded from the specified source) and other monetary expenses as prescribed by law;

- Actual loss value of assets and unrecoverable receivables as stipulated in Point 7.2 and Point 10, Part A, Chapter II of this Circular;

- Value of provisions for inventory write-downs, bad debt provisions, unemployment benefit provisions established according to state regulations; exchange rate differences based on long-term foreign currency loan balances, pre-paid warranty costs, and other provisions as prescribed by law;

- Financial activity expenses, including: expenses related to external investments, interest payable due to capital raising, exchange rate differences when settling payments, discount payment expenses, asset leasing expenses, and provisions for long-term investment write-downs;

b) Other expenses, including:

- Expenses for selling and liquidating fixed assets, including the remaining value of fixed assets when liquidated or sold;

- Expenses for recovering difficult-to-collect debts that have been written off;

- Expenses for collecting fines;

- Expenses for contractual breach penalties;

- Other expenses;

c) Not included in production and business expenses are those items that are guaranteed by other sources or unrelated to production and business, including:

- Expenses for purchasing, constructing, and installing tangible and intangible fixed assets;

- Interest expenses on investment capital that are included in investment and construction costs, and exchange rate differences of foreign currency investments occurring before the project is put into use;

- Other expenses unrelated to the production and business activities of the Corporation; expenses without valid supporting documents;

- Penalties for legal violations caused by individuals rather than the company.

3. Cost of goods sold and services consumed:

Total cost of all goods sold and services consumed during the period includes: cost of goods sold and services consumed during the period; management expenses incurred during the period; sales and service expenses incurred during the period;

Principles and methods for determining the cost of goods sold and services are as follows:

a) Production cost of goods and services includes:

- Expenses for raw materials, materials, fuel, and power directly used in producing goods and services;

- Amounts payable to direct production workers such as wages, salaries, and allowances with wage characteristics, mid-shift meal expenses, social insurance, medical insurance, and trade union fees;

- Common production expenses: common expenses incurred in workshops and business departments such as wages, allowances, mid-shift meal expenses, material expenses, tool expenses, depreciation of fixed assets, purchased service expenses, and other monetary expenses;

b) Total cost of goods and services consumed includes:

- Production cost of goods and services as specified above in point a;

- Sales expenses: expenses incurred during the process of selling products, goods, and services such as wages, allowances payable to sales personnel, commissions, marketing, packaging, transportation, storage, material expenses, packaging materials, tools, and purchased service expenses;

- Management expenses: business management expenses, administrative management expenses, and other common expenses related to the company's operations;

All sales expenses and management expenses are transferred to the cost of goods and services consumed in the year to determine the business results;

For products with production periods exceeding one year, management expenses incurred in the year are allocated to unfinished products;

4. Realized profit: The realized profit of the company in the year is the total of operating profit and other operating profit;

a) Operating profit includes:

- Difference between revenue from selling products and providing services and the total cost of all goods or consumption expenses in the period;

- Difference between financial activity revenue and financial activity expenses incurred in the period. Profits obtained from external investments if already taxed at the company level shall still be recorded as financial activity profits. Taxation of these income is carried out according to current tax laws;

b) Other operating profit is the difference between other activity income and other activity expenses incurred in the period;

C. PROFIT AND DISTRIBUTION OF PROFITS

1. Profit Distribution:

After paying corporate income tax according to the Corporate Income Tax Law and covering previous years' losses that cannot be deducted from pre-tax profit, the owner decides to allocate the profit as follows:

a) Allocate 10% to the financial reserve fund; when the balance of this fund reaches 25% of the charter capital, no further allocation is required;

b) After deducting the amount in a, the remaining profit is used for:

+ Allocating up to 10% to establish a reward fund, 10% to establish a welfare fund; however, the maximum allocation for both the reward and welfare funds does not exceed three months' actual salary provided that the pre-tax profit margin on equity of the company is equal to or greater than the planned profit margin, and does not exceed two months' actual salary in cases where the pre-tax profit margin is lower than planned.

||| Extract a maximum of 5% to establish a reward fund for the Management Board of the company. The Management Board includes the Board of Members or the Company Chairman and the General Director (Director and Deputy Directors or General Manager and Deputy General Managers). The annual extraction amount for this fund shall not exceed VND 300 million (for companies with a Board of Members) or VND 100 million (for companies without a Board of Members), provided that the actual pre-tax profit margin on the company's equity capital must be equal to or greater than the planned profit margin; in cases where the actual pre-tax profit margin is lower than the plan, the corresponding reduction must be made.

||| Allocate a minimum of 30% to the investment development fund.

||| The remainder shall be decided by the owner to continue supplementing the company's investment development fund, to invest in other businesses, or to pay into the State Budget.

||| 2. Purposes of using the funds:

||| a) Investment Development Fund: Used to supplement the registered capital of the company.

||| b) Financial Reserve Fund is used for:

||| - To offset losses from non-performing debts, natural disasters, enemy threats, and risks occurring during business operations;

||| - To offset the company's losses according to the decision of the Board of Members or the Company Chairman;

||| c) Reward Fund is used for:

||| - Year-end or regular rewards based on the productivity and work achievements of each employee in the company; the reward level is determined by the Director or General Manager after consulting with the Chairman of the company's trade union.

||| - Special rewards for individuals or groups within the company who have innovative ideas or improvements that bring about business efficiency; the reward level is determined by the Director or General Manager.

||| - Rewards for individuals and units outside the company that have contractual relationships and have fulfilled the conditions of the contract, contributing significantly to the company's production and business activities, and management tasks; the reward level is determined by the Director or General Manager.

||| d) Welfare Fund is used for:

||| - Investing in building or repairing welfare facilities of the company;

||| - Spending on public welfare activities for the collective workforce in the company, social welfare;

||| - Contributing part of the capital to invest in common welfare projects within the industry or with other units according to contracts;

||| - Additionally, part of the welfare fund can be used to provide emergency assistance to employees, including those who have retired, lost their health, fallen into difficult circumstances, or have no support, or for charitable and social work.

||| The use of the welfare fund is decided by the Board of Members or the Company Chairman after consulting with the Chairman of the company's trade union.

||| e) The reward fund for the Management Board is used to reward the Board of Members or the Company Chairman, the General Director of the company, with the reward level determined by the owner based on the business results of the company, following the proposal of the Board of Members or the Company Chairman.

||| The use of these funds must be carried out openly in accordance with financial transparency regulations, grassroots democracy regulations, and state regulations.

||| The company may not allocate funds for rewards, welfare, or management rewards until all overdue debts and other financial obligations have been fully settled.

||| D. FINANCIAL PLANNING - ACCOUNTING - AUDITING WORK

1. Financial Plan:

||| Based on the equity capital profit ratio indicators set by the owner, the company develops annual and long-term financial plans consistent with the company's business development plan. By March 31 at the latest of the planning year, the Board of Members or the Company Chairman reports to the owner the company's financial plan to serve as the basis for monitoring and evaluating the management and operation results of the Board of Members or the Company Chairman and the Director or General Manager of the company.

||| 2. Accounting and auditing work:

||| - The company implements the accounting system for business entities in accordance with the Accounting Law, accounting standards, and current accounting regulations. At the end of the accounting period (quarterly, annually), the company must prepare financial statements in accordance with the financial regulations stipulated in this regulation, related financial accounting guidance documents, and the company's charter.

||| - Annually, the company must prepare consolidated financial statements in accordance with accounting standards and implementation guidelines for accounting standards issued by the Ministry of Finance.

||| Consolidated financial statements reflect the total capital, assets, liabilities, business situation, financial results, profit distribution, and usage of the entities included in the consolidated financial statements.

||| Consolidated financial statements are sent to the owner, the Ministry of Finance, and relevant agencies as stipulated in the enterprise accounting regulations of the Ministry of Finance. The Board of Members or the Company Chairman is responsible for the accuracy and truthfulness of the financial statement figures, settlement figures, and other financial information.

||| - The company must implement financial auditing in accordance with the law;

||| - Monitoring and evaluating the effectiveness of the company's operations is carried out in accordance with Decision No. 224/2006/QĐ-TTg dated October 6, 2006, of the Government Chairman on the issuance of the Supervision and Effectiveness Evaluation Regulation for State-Owned Enterprises and related guidance documents.

3. Inspector:

||| 3.1. The company's owner appoints one to three Supervisors with a term not exceeding three years. The Supervisor is responsible under the law and to the company's owner for performing the rights and duties specified in point 3.2, Part D, Chapter II of this Circular.

||| 3.2. Duties and powers of the Supervisor:

- The supervisor examines the legality, honesty, and diligence of the Board of Members, the Chairman of the company, and the Director or General Director in organizing the exercise of ownership rights, in managing and operating the company's business activities; reviews financial reports, business situation reports, management work assessment reports, and other reports before submitting them to the company owner or relevant state agencies; submits the review report to the company owner; advises the company owner on solutions to amend, supplement, and restructure the management organization and business operation activities of the company; and performs other tasks stipulated in the Company Charter or as required or decided by the company owner.

- The supervisor has the right to examine any file or document of the company at its headquarters or branches, representative offices. Members of the Board of Members, the Chairman of the company, the Director or General Director, and other managers have the obligation to provide complete and timely information about the exercise of ownership rights, about management, operation, and business activities of the company according to the supervisor's request.

Chapter III

IMPLEMENTATION

1. Ministries, ministerial-level agencies, agencies under the Government, People's Committees of provinces and centrally governed cities, Departments of Finance, Taxation Bureaus of provinces and centrally governed cities, wholly state-owned limited liability companies, political organizations, and political-social organizations shall be responsible for implementing this Circular's guidelines.

2. This Circular takes effect fifteen days from the date of publication in the Official Gazette. This Circular replaces Circular No. 58/2002/TT-BTC dated June 28, 2002, issued by the Ministry of Finance guiding the financial regulations of wholly state-owned limited liability companies, political organizations, and political-social organizations, and Circular No. 49/2006/TT-BTC dated June 6, 2006, amending and supplementing Circular No. 58/2002/TT-BTC dated June 28, 2002, issued by the Ministry of Finance. In the course of implementation, if there are any difficulties, they are requested to be promptly reported to the Ministry of Finance by ministries, sectors, localities, and enterprises for research and guidance on resolution./.