Circular No. 29/2005/TT-BTC guiding the Financial Disclosure Regulation of State-owned Enterprises

CIRCULAR

Guidelines for the Financial Disclosure Regulations of State-Owned Enterprises

Implementing Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister on the issuance of financial disclosure regulations for state budgets at various levels, budgetary units, organizations supported by state budgets, construction investment projects using state budget funds, state-owned enterprises, funds sourced from state budgets, and funds originating from contributions of the people, the Ministry of Finance provides detailed guidelines on certain Articles regarding financial disclosure in state-owned enterprises as follows:

1. Scope and applicability.

State-owned enterprises must disclose financial information in accordance with Clause 1, Article 3 of Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister, including:

a) State-owned corporations, independent accounting subsidiaries under state-owned corporations.

b) Independent state-owned companies.

c) State-owned joint-stock companies.

d) Companies with state-controlled shares or capital contributions.

e) Single-member limited liability company (LLC) owned by the state.

f) Multi-member LLC owned by the state.

2. Enterprises not subject to application.

State-owned enterprises operating in the financial, banking, and insurance sectors.

3. Purpose of financial disclosure for state-owned enterprises.

a) To ensure transparency in the financial situation of state-owned companies, truthful and objective information data. Timely detection of violations of financial management systems and accounting regulations by enterprises.

b) Properly exercising rights, obligations, and responsibilities of employees in implementing democracy within state-owned companies, practicing thrift, combating waste and corruption, enhancing business efficiency, preserving and developing state capital.

c) Serving as a basis for domestic and foreign investors to study and decide on investment in enterprises; creditors have information to monitor and evaluate the debt repayment capacity of enterprises.

4. Principles of financial disclosure.

a) Annual financial reports of enterprises serve as the basis for disclosing financial information; financial reports are prepared and presented in accordance with current accounting laws.

b) State-owned enterprises have the responsibility to provide complete, timely, and accurate financial information to be disclosed, suitable for each recipient according to Point 5 of this Circular.

c) The Board of Directors and General Director (Director) of the company bear legal responsibility for the accuracy of the disclosed content as stipulated in this Circular.

5. Content of financial disclosure.

The content of financial disclosure for enterprises as prescribed in Article 12 of Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister is as follows:

a) Recipients of financial disclosure information are state management agencies according to their functions, receiving financial reports, and enterprise owners:

Enterprises implement the disclosure of financial information contents in the annual financial report system, including information about assets, equity, production and business results, implementation of obligations towards the state budget, cash flow, and explanatory information about the financial report.

b) Recipients are employees in enterprises, trade unions, youth organizations, the Party, and other entities.

Enterprises implement the disclosure of financial information contents about: financial status, business operation results, establishment and use of enterprise funds, contributions to the state budget by enterprises, income and average income of employees, state capital contribution and effectiveness in enterprises according to Model No. 01 of this Circular.

For joint-stock companies and limited liability companies where the state holds more than 50% of the charter capital, they implement financial disclosure in the following contents: financial status, business operation results, contributions to the state budget by enterprises, state capital contribution and effectiveness in enterprises according to Model No. 02 of this Circular.

6. Forms of disclosure.

a) For state agencies; owners of state-owned companies, state-owned limited liability companies from one member or more, state-owned joint-stock companies, independent accounting subsidiaries directly under state-owned corporations: financial disclosure is implemented through submitting financial reports in accordance with current accounting laws.

b) Shareholders and contributors in joint-stock companies and limited liability companies where the state holds more than 50% of the charter capital: disclosure and receipt of financial information are carried out through shareholders or contributors accessing financial reports at the General Meeting of Shareholders or members' meetings.

c) For employees in enterprises and other entities: Enterprises may proactively choose forms of financial disclosure as follows: publishing publications; posting at the enterprise; announcing at employee, worker, and staff meetings of the enterprise.

7. Time of financial disclosure.

The time of financial disclosure for state-owned companies as stipulated in Article 13 of Decision No. 192/2004/QĐ-TTg dated November 16, 2004 of the Prime Minister (no later than 120 days from the end of the fiscal year).

8. Answering inquiries.

a) Organizations and individuals receiving financial disclosure information as prescribed in this Circular have the right to inquire about disclosed financial information.

b) The Board of Directors and General Director (Director) of the company responsible for financial disclosure have the duty to answer inquiries about disclosed financial information.

c) Inquiries must be answered to the inquirer no later than 10 days from the date of receiving the inquiry content. In cases where the inquiry content is complex and requires more time to prepare answers, specific dates for answering each inquirer must be set, but not exceeding 45 days from the date of receiving the inquiry content.

9. Implementation organization.

a) For contents not specified in this Circular, enterprises shall implement in accordance with the regulations on supervision and assessment of state-owned enterprise operations stipulated in Decision No. 271/2003/QĐ-TTg dated December 31, 2003 of the Government.

b) Ministries, provincial People's Committees, enterprises, workers within enterprises, and political and socio-political organizations within enterprises are responsible for supervising and inspecting the implementation of financial transparency as prescribed in this Circular.

c) Enterprises that fail to comply with the provisions of this Circular shall be subject to disciplinary action, administrative fines pursuant to Decree No. 185/2004/NĐ-CP dated November 4, 2004 of the Government, or criminal prosecution under the law depending on the nature and severity of the violation.

This Circular takes effect fifteen days from the date of publication in the Official Gazette and replaces Circular No. 65/1999/TT-BTC dated June 7, 1999 of the Ministry of Finance guiding the implementation of financial transparency for state-owned enterprises.

In the course of implementation, if there are any difficulties, state-owned enterprises are requested to promptly report them to the Ministry of Finance for study, supplementation, and amendment./.