Circular No. 42/2004/TT-BTC guides the supervision and evaluation of the effectiveness of state-owned enterprises' operations.

CIRCULAR

Guidelines for Supervising and Evaluating the Effectiveness of State-Owned Enterprises' Operations

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Pursuant to Decision No. 271/2003/QĐ-TTg dated December 31, 2003 of the Government on the issuance of the Regulation on Supervision and Evaluation of the Effectiveness of State-Owned Enterprises' Operations, the Ministry of Finance provides detailed guidance on certain Articles regarding supervision and evaluation of the effectiveness of state-owned enterprises' operations as follows:

1. Scope of application:

According to Article 3 of the Regulation on Supervision and Evaluation of the Effectiveness of State-Owned Enterprises' Operations issued together with Decision No. 271/2003/QĐ-TTg dated December 31, 2003 of the Government (hereinafter referred to as the Regulation accompanying Decision No. 271/2003/QĐ-TTg), state-owned enterprises as defined under the Law on State-Owned Enterprises 2003 that fall within the scope of supervision and evaluation of operational effectiveness include:

- State-owned company: a business entity wholly owned by the State, established, managed, and registered for operation according to the provisions of the Law on State-Owned Enterprises. A state-owned company can be organized in the form of an independent state-owned company or a state-owned corporation.

- State-owned joint-stock company: a joint-stock company where all shareholders are state-owned companies or organizations authorized by the State to contribute capital, organized and operated according to the provisions of the Enterprise Law.

- Company with state-owned controlling shares or capital: a business entity where the state-owned shares or capital account for more than 50% of the charter capital, and the State holds controlling rights over such entity.

- Single-member limited liability company (LLC) owned by the State: a single-member LLC wholly owned by the State, managed and registered for operation according to the provisions of the Enterprise Law.

- Multi-member limited liability company owned by the State: a limited liability company where all members are state-owned companies or have at least one member as a state-owned company and other members as organizations authorized by the State to contribute capital, organized and operated according to the provisions of the Enterprise Law.

- Parent company: a company having at least one subsidiary; it may be a state-owned company, a state-owned LLC, a state-owned joint-stock company...

Subsidiary company: a company with 100% of its charter capital owned by the parent company or a multi-shareholder company where the parent company's share exceeds 50% of the charter capital.

2. Non-applicable Subjects:

State-owned enterprises operating in the financial, banking, and insurance sectors are not subject to this Circular.

3. Self-supervision by enterprises:

3.1. Supervisory subjects within the enterprise as stipulated in Article 5 of the Regulation accompanying Decision No. 271/2003/QĐ-TTg include:

- Management and executive personnel of the enterprise: Board of Directors (BOD), General Director (or Director) of the enterprise.

- Employees of the enterprise.

3.2. Content of supervision:

a. The BOD, General Director (or Director) of the enterprise, through internal auditing, specialized departments, and business units of the enterprise, implement supervision in various forms before, during, and after the enterprise's activities, with the following contents:

- Reviewing the rationality of resource mobilization, distribution, and utilization: assets, materials, capital, labor for investment construction, production and business operations, product consumption of the enterprise; recruitment, utilization, and wage payment to employees.

- Checking the feasibility of short-term and long-term projects and plans; the effectiveness of capital-raising projects, investment construction projects, external investment projects; the performance of internal enterprise units: management, production, consumption, and other business schemes.

- Monitoring and inspecting the implementation process of investment projects, production and business operation plans; compliance with laws, resolutions, decisions of the owner, BOD, and General Director or Director of the enterprise without a BOD. Through representatives of contributed capital, monitor the financial situation, business results, and other aspects of the enterprise.

- Monitoring and inspecting profit distribution after tax of the enterprise; using reward funds, welfare funds, unemployment reserve funds of the enterprise to ensure employee benefits and internal regulations of the enterprise.

- Inspecting the reliability of financial report data, including: assets, receivables, capital, revenue, expenses, profits, and obligations to the State; economic and financial information and other reports of the enterprise.

- The BOD, General Director or Director of the enterprise, quarterly and annually organize evaluations of the effectiveness and efficiency of management and operation decisions; the business operation effectiveness of the enterprise; report on results, existing issues, and propose measures to address them in management by the BOD and operation by the General Director or Director of the enterprise.

b. Employees of the enterprise: through people's inspection committees, trade unions, and workers' congresses of teams, workshops, and the enterprise, they carry out supervision through participation in discussions, providing opinions before competent authorities make decisions, and monitoring the implementation process regarding the following issues:

- Directions, tasks, plans, measures for developing production and business operations, restructuring production and business operations of the company.

- Internal rules and regulations of the company directly related to the rights and obligations of employees.

- Measures for labor protection, improving working conditions, material and spiritual life, environmental hygiene, vocational training and retraining, and enhancing the qualifications of employees in the enterprise.

- Voting to assess the trustworthiness of positions such as Chairman of the BOD, BOD members (if any), General Director, Deputy General Director (or Director, Deputy Director), Chief Accountant when required by competent state authorities.

- Through the General Assembly or Workers' Congress, employees have the right to discuss and vote on the following issues:

+ Contents or amendments and supplements to the collective labor agreement to be signed by the representative of the employees' collective with the General Director or Director of the state-owned company.

+ Regulations on the use of welfare funds, rewards, and production and business plan indicators of the company that directly relate to the rights and obligations of employees in accordance with state regulations.

+ Evaluate the results of activities and programs of the People's Inspectorate Board, elect the People's Inspectorate Board.

4. Supervision by owners:

4.1. The supervisory subject with the function of owner according to Article 6 of the Regulation attached to Decision No. 271/2003/QĐ-TTg includes:

- The Boards of Directors of State-owned Corporations and parent companies perform the supervisory function of the Owner towards wholly state-owned joint-stock companies, subsidiaries, and independent accounting affiliates under state-owned corporations and parent companies.

- Provincial People's Committees (People's Committees of centrally governed cities) supervise state-owned corporations, independent state-owned companies, and wholly state-owned joint-stock companies under their respective provincial people's committees.

- Ministries, central agencies, and the Ministry of Finance perform supervisory functions towards state-owned corporations and independent state-owned companies established by the Prime Minister or ministries and central agencies according to the provisions of Decision No. 271/2003/QĐ-TTg. Specifically:

+ Ministries and central agencies supervise according to the contents stipulated in points a, b, and c of Clause 3, Article 6 of the Regulation attached to Decision No. 271/2003/QĐ-TTg.

+ The Ministry of Finance supervises according to the content stipulated in point d, Clause 3, Article 6 of the Regulation attached to Decision No. 271/2003/QĐ-TTg. For enterprises producing, repairing weapons, equipment, military uniforms, and specialized supplies for national defense and security under the Ministry of National Defense and the Ministry of Public Security, these ministries shall perform supervisory functions.

Ministries and central agencies supervise wholly state-owned joint-stock companies where they are the representative owners according to the contents stipulated in Clause 3, Article 6 of the Regulation attached to Decision No. 271/2003/QĐ-TTg.

For other state-owned enterprises (including state-owned joint-stock companies, wholly state-owned joint-stock companies with two or more members, and companies with controlling shares or capital contributions from the state) according to the provisions of the Law on State-Owned Enterprises, state-owned enterprises and wholly state-owned joint-stock companies with shares or capital contributions and other shareholders or members of capital contribution base on the Company Charter, the Enterprise Law, and the provisions of the Regulation attached to Decision No. 271/2003/QĐ-TTg to supervise enterprises with the supervision content of the Owner.

4.2. Content of supervision by the Owner:

According to Clause 3, Article 6 of the Regulation attached to Decision No. 271/2003/QĐ-TTg, the owner supervises the enterprise and its management and operation personnel in the following areas:

a. The organization of business operations, management work, and the implementation of duties and powers of management and operation personnel.

b. The implementation of goals, strategies, annual and long-term production and business plans of the enterprise.

c. The compliance of the enterprise and its management and operation personnel with resolutions and decisions of the owner, the Board of Directors, and the Company Charter. Evaluate the effectiveness of owner resolutions related to ownership rights over the enterprise's activities.

d. Business performance results, efficiency of capital utilization, and debt repayment capacity of the enterprise, especially the situation regarding the achievement of indicators such as revenue, profit, and profit rate on capital, the preservation of owner investment capital, general debt repayment capacity, and timely debt repayment; the distribution of post-tax profits for capital replenishment, the establishment and use of reward and welfare funds, financial reserve funds.

Based on the results and effectiveness of enterprise operations, supervision outcomes, the owner evaluates the effectiveness of owner resolutions related to ownership rights over the enterprise's activities.

4.3. Forms of supervision:

The owner implements supervision of enterprises through indirect or direct forms as follows:

a. Indirect supervision: This is the main form of supervision by the owner. To implement indirect supervision effectively, the owner needs to:

- Require the enterprise to submit complete and timely financial reports, statistical reports, and other reports as prescribed by law and the owner's regulations for the enterprise.

- Organize the construction of a comprehensive, continuous, and updated database on the enterprise.

- Regularly organize analysis and evaluation of the enterprise and its management and operation personnel according to the supervision content stipulated in Clause 4.2 above.

b. Direct supervision through direct inspections at the enterprise. This is a solution to supplement indirect supervision to enhance the effectiveness of supervision work. To implement direct supervision, the owner needs to:

- Classify enterprises according to scale, nature of business operations, management level and capability, and the current status of business operations and management to develop inspection programs and plans.

- Clearly define requirements, content, scope, targets, and timeframes for inspections.

- Coordinate between owner representatives and state functional agencies in inspections. Inspections at enterprises must comply with legal provisions on inspections and audits.

Specifically, for enterprises where ministries and central agencies are the owner representatives, ministries and central agencies shall take the lead and coordinate with the Ministry of Finance in developing inspection programs, plans, content, scope, and targets.

The ministries, central agencies, and the Ministry of Finance, through their supervisory functions, regularly provide and exchange information about enterprises, particularly information related to owner supervision and performance indicators for enterprise operations as stipulated in Article 12 of the Regulation attached to Decision No. 271/2003/QĐ-TTg, and solutions to help enterprises overcome difficulties. Based on these solutions, the ministries and central agencies coordinate to select and agree on optimal measures for enterprises to enhance business production and operation efficiency.

4.4. Analysis and evaluation of enterprises and reporting:

Annually, the owners organize a comprehensive analysis and evaluation of the business operations and management work of enterprises and their managing executives; propose measures to address existing issues to improve business operation efficiency. At the same time, they compile the results of evaluating the activities of subordinate enterprises and report to relevant state agencies. The contents of the report include: the situation of business production and operation, the financial status of the enterprise, and data according to the form prescribed in Section 8 of this Circular; the implementation of tasks by the enterprise's management machinery and recommendations for handling existing issues of the enterprise.

5. System of indicators for assessing the effectiveness of enterprise operations:

The assessment of the effectiveness of enterprise operations is based on the indicators stipulated in Clause 1, Article 12 of the Regulation attached to Decision No. 271/2003/QĐ-TTg, specifically as follows:

5.1. Revenue and other income:

a. Revenue and other income: The indicator of revenue and other income is determined in the Business Operation Result Report (Form B 02-DN issued pursuant to Decision No. 167/2000/QĐ-BTC dated October 25, 2000 and amended and supplemented by Circular No. 89/2002/TT-BTC dated October 9, 2002 of the Ministry of Finance), including Net sales revenue and service provision (Code 10) + Financial activity revenue (Code 21) + Other income (Code 31)

b. For enterprises that only produce one or two types of products such as electricity, coal, oil and gas, cement, the calculation is based on the quantity of products sold during the period. The unit for calculating the quantity of oil and gas, coal, cement products is tons, and electricity is kilowatt-hours.

5.2. Realized profit and profit margin on State capital:

a. Realized profit:

Realized profit includes profit from business operations and other business profits. This indicator is determined in the Business Operation Result Report - Code 50.

For enterprises whose financial statements have been audited or reviewed and inspected by state agencies, the revenue and profit indicators are taken from the audit or review and inspection data.

In cases where the financial statements have not been audited or reviewed and inspected, the revenue and profit indicators are taken from the figures recorded in the financial statements, with the General Director or director of the enterprise bearing responsibility for the accuracy and truthfulness of the financial statement data.

Some points to note when calculating the profit indicator are as follows:

+ Enterprises must fully account for all costs incurred in the price of products and services consumed during the period according to current regulations to ensure the principle of prudence in business operations, such as setting aside provisions for inventory write-downs, bad debts, securities write-downs, unemployment benefits, foreign exchange rate differences, interest expenses payable arising during the period, selling expenses and administrative expenses incurred during the period.

+ For actual losses in asset value, including receivables that cannot be recovered after determining individual and organizational responsibilities, the remaining portion must be accounted for as administrative expenses incurred during the period.

b. Profit margin on State capital:

Calculated as the ratio between realized profit and average State capital in the year of the enterprise.

The method of determining realized profit is as specified in Point a, Clause 5.2, Section 5 of this Circular.

State capital at the enterprise includes: Operating capital (Account 411), Development Fund (Account 414), Capital for construction investment (Account 441). Average annual State capital is calculated using the formula:

5.3. Overdue debt and ability to pay maturing debt:

a. Overdue debt:

Overdue debt refers to amounts owed that have exceeded the agreed payment deadline to creditors. The determination of overdue debt is based on the payment term recorded on loan agreements, economic contracts, or other commitment documents.

b. Ability to pay maturing debt:

The ability of an enterprise to pay maturing debt is its current ability, measured by the ratio of current assets to short-term liabilities. Formula:

+ Current assets available are determined as the ending balance of all current assets and short-term investments (Code 100 Balance Sheet).

+ Short-term liabilities: include short-term and long-term liabilities due (Code 310 Balance Sheet)

5.4. Compliance with systems, policies, and laws:

The regime, policies, and laws as stipulated in Point d, Clause 1, Article 12 of the Regulation attached to Decision No. 271/2003/QĐ-TTg include areas such as tax, budget revenue collection, credit, insurance, environmental protection, labor, wages, financial regulations, accounting, auditing, financial reporting, and other reports. Compliance with the regime, policies, and laws means adhering strictly to the provisions without any acts of implementation errors, omissions, incomplete, untimely, or non-implementation, whether unintentional or intentional. Enterprises that are subject to administrative penalties or have conclusions from competent authorities indicating violations of mechanisms or policies in any of the aforementioned fields, even if not reaching the level for administrative penalties, will be classified low in this indicator. Violations include actions by collectives, individuals under the name of the unit, or representatives of the enterprise (Board of Directors, General Director, Deputy General Director (or Director, Deputy Director), Chief Accountant, Department Heads) causing such violations.

5.5. Implementation of public goods products and services:

Implementing public goods products and services refers to directly carrying out national defense and security tasks or producing public goods and providing public services according to state policy through tendering or receiving orders or being assigned tasks by the state. Evaluation of this indicator is based on the degree of completion regarding quantity and quality of products and services.

When calculating indicators in Clauses 5.1, 5.2, 5.4, and 5.5 of Section 5 of this Circular, the following factors are excluded:

+ Due to force majeure reasons such as natural disasters, fires, unexpected accidents, beyond control despite preventive measures having been taken.

+ Due to investment expansion affecting profits in the first two years since the investment project is put into operation. Considering the exclusion of this factor is based on the enterprise's investment plan approved by the competent authority which has calculated the impact on profits.

+ Due to state price adjustments (for products with state-set prices) affecting the enterprise's revenue.

6. Classification of enterprises:

Enterprises are classified based on the indicators in Section 5 of this Circular as follows:

6.1. Evaluation Method:

Indicator 1: Revenue and Other Income: applicable to all enterprises engaged in product and service business (excluding oil, coal, electricity, cement production and trading enterprises).

Evaluate the increase or decrease in revenue compared to the previous year. The evaluation is divided according to the National Economic Industry Classification System Level II issued with Decision No. 143 TCTK/PPCĐ dated December 22, 1993 by the General Statistics Office Director and detailed as follows:

a. For agriculture (Industry Code 01); forestry (Industry Code 02); fisheries (Industry Code 05); mining industry (Industry Codes 10, 12, 13, 14); mechanical industry (production of metal products, machinery and equipment with Industry Codes 27, 28, 29, 30, 31, 32, 33, 34, 35, 37):

Increase of 5% or more: classified as A.

Increase or decrease less than 5%: classified as B.

Decrease of 5% or more: classified as C.

b. For processing industry (Industry Codes 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26); electricity, gas, water production and distribution (Industry Codes 40, 41); construction (Industry Code 45); oil and gas extraction (Industry Code 11); transportation, storage, telecommunications (Industry Codes 60, 61, 62, 63, 64); trade (Industry Codes 50, 51, 52); hotel (Industry Code 55), tourism, and other industries:

Increase of 7% or more: classified as A.

Increase less than 7%, decrease less than 3%: classified as B.

Decrease of 3% or more: classified as C.

Indicator 2: Realized Profit and Return on State Capital:

- Enterprises with profit and return on capital higher than the previous year: classified as A.

- Enterprises breaking even and those with profit but with return on capital equal to or lower than the previous year: classified as B.

- All enterprises with losses: classified as C.

For enterprises with planned losses, based on the approved plan to determine the completion level of this indicator to classify enterprises as follows:

+ Enterprises with realized losses lower than planned losses: classified as A.

+ Enterprises with realized losses equal to planned losses: classified as B.

+ Enterprises with realized losses higher than planned losses: classified as C.

In cases where additional tasks are implemented, they are excluded when determining the realized loss indicator compared to the planned loss.

Indicator 3: Overdue Debts and Payment Capacity:

- Enterprises without overdue debts and with a debt repayment capacity ratio greater than 1: classified as A.

- Enterprises without overdue debts and with a debt repayment capacity ratio between 0.5 and 1: classified as B.

- Enterprises with overdue debts or a debt repayment capacity ratio less than 0.5: classified as C.

Indicator 4: Compliance with Current Legal Regulations:

- Enterprises without conclusions from competent authorities regarding violations of current legal regulations: classified as A.

- Enterprises with conclusions from competent authorities regarding violations of current legal regulations but not reaching the level for administrative penalties in compliance with legal regulations: classified as B.

- Enterprises subject to administrative penalties in compliance with regimes and policies or managers and executives of enterprises committing violations of the law during the execution of their duties to the extent of being criminally prosecuted: classified as C.

Indicator 5: Implementation of Public Goods Products and Services:

- Exceeding targets in terms of quantity with product and service quality meeting prescribed standards: classified as A.

- Meeting targets in terms of quantity with product and service quality meeting prescribed standards: classified as B.

- Not meeting targets in terms of quantity or product and service quality not meeting prescribed standards: classified as C.

6.2. Classification of enterprises for multi-industry operating enterprises:

Based on the nature and circumstances of each enterprise's operations, the Ministries, central agencies, People's Committees of provinces and centrally governed cities shall decide on the classification of industries for enterprises. The industry of an enterprise is determined according to the industry with the highest revenue share averaged over three years: two consecutive preceding years and the year being implemented.

Example: Company X engaged in livestock farming has business activities including poultry farming and animal feed trading. In 2001, 2002, and 2003, the company's revenues from these activities were as follows:

2001 2002 2003 Average 3 years

Poultry farming 15 billion 16 billion 15.5 billion 15.5 billion

Animal feed trading 15 billion 17 billion 16.5 billion 16.2 billion

Total revenue: 30 billion 33 billion 32 billion

Company X is classified in the commerce sector and its revenue target is evaluated according to point b, Clause 6.1, Section 6 of this Circular.

6.3. Classification of Enterprises:

a. For enterprises engaged in business activities, based on the classification results for each criterion 1, 2, 3, and 4 above, classify enterprises into categories A, B, and C as follows:

- An enterprise classified as A is one that does not have any criterion classified as C, where the profit realization and profit rate on state capital (Criterion 2) and compliance with legal regulations (Criterion 4) must be classified as A.

- An enterprise classified as C is one that has Criterion 2 (profit realization and profit rate on state capital) or three other criteria (Criterion 1, 3, 4) classified as C.

- An enterprise classified as B is one that remains unclassified as A or C.

b. For enterprises established and operating regularly and primarily providing public goods and services, based on the classification results for each criterion 3, 4, and 5, classify enterprises into categories A, B, and C as follows:

- An enterprise classified as A is one that does not have any criterion classified as C and the implementation of public goods and services (Criterion 5) is classified as A.

- An enterprise classified as C is one that has Criterion 5 classified as C or Criterion 5 classified as B and Criteria 3 and 4 classified as C.

- An enterprise classified as B is one that remains unclassified as A or C.

If an enterprise's revenue share from implementing public goods and services provided by the State is less than 70% of the total revenue of the enterprise, it will be classified like a business enterprise.

c. For State-owned Corporations, based on the classification results of member enterprises including wholly state-owned limited liability companies, independent accounting subsidiaries, corporation offices (also considered as independent enterprises), and companies with controlling shares or contributions from the corporation, classify the corporation as follows:

- Category A: Corporation with member enterprises classified as A accounting for more than 50% of the total revenue of the entire corporation;

- Category C: Corporation with member enterprises classified as C accounting for more than 50% of the total revenue of the entire corporation;

- Category B: Other corporations.

The parent company is classified independently.

6.4. Announcing the Results of Enterprise Classification:

a. Based on the classification criteria for enterprises stipulated in this Circular and guidance documents issued by Ministries, central agencies, People's Committees of provinces and centrally governed cities, enterprises annually self-assess and classify themselves; report their enterprise classification to relevant authorities for review and announcement according to the following procedures:

- State-owned Corporations and parent companies holding control over member enterprises shall review and announce classifications for member enterprises.

- People's Committees of provinces and centrally governed cities shall announce and classify State-owned Corporations, independent state-owned companies, wholly state-owned limited liability companies established by them, and companies with controlling shares or contributions from them.

- Ministries and central agencies shall announce and classify State-owned Corporations, independent state-owned companies, wholly state-owned limited liability companies established by them or delegated by the Government to represent ownership, and companies with controlling shares or contributions from them.

- The classification of State-owned Corporations, independent state-owned companies, and parent companies shall be announced after receiving written comments from the Ministry of Finance; for companies with controlling shares or contributions from state-owned companies, it shall be announced after receiving comments from the General Meeting of Shareholders.

- Owners, shareholders, or the General Meeting of Shareholders shall announce and classify other state-owned enterprises.

b. By the second quarter of the following year, Ministries, central agencies, People's Committees of provinces and centrally governed cities, and Boards of Directors of State-owned Corporations shall report the annual enterprise classification results to the Ministry of Finance for consolidation and reporting to the Prime Minister.

7. Awards:

Based on the announced classification results of enterprises, owners shall implement awards as follows:

7.1. For State-Owned Companies: bonuses for management and operation teams are taken from the enterprise's award fund. The owner decides the amount of the bonus for the enterprise but it cannot exceed 300 million dong. Specifically, as follows:

+ For enterprises classified as A (good, excellent), the maximum is 300 million dong for State-owned Corporations (offices) and 200 million dong for independent state-owned companies and independent accounting subsidiaries.

+ For enterprises classified as B, the maximum is 150 million dong for State-owned Corporations (offices) and 100 million dong for independent state-owned companies and independent accounting subsidiaries.

+ For State-owned Corporations (offices) without profits due to not directly engaging in business or insufficient funds in the award fund, they can take management fees from higher-level entities paid by member enterprises.

7.2. Wholly State-Owned Limited Liability Companies:

Bonuses for management and operation teams are taken from the management board's award fund of the enterprise:

Annual net profit, after deducting corporate income tax and compensating for previous years' losses that cannot be deducted from pre-tax profit; set aside 10% to establish a financial reserve fund in accordance with current regulations; the remainder shall be allocated up to a maximum of 10% to establish a bonus fund; allocate up to a maximum of 10% to establish a welfare fund; allocate up to a maximum of 5% to establish a Bonus Fund for the Management Board of the company as follows:

+ For enterprises classified as type A (good, excellent), the maximum amount shall not exceed VND 200 million:

+ For enterprises classified as type B, the maximum amount shall not exceed VND 100 million.

7.3. For other state-owned enterprises including joint-stock companies or those with controlling capital contributions, the Owner, Capital Contributors, or the Shareholders' Meeting may apply the provisions of Clause 7.2, Section 7 of this Circular to decide on bonuses for the Chairman of the Board of Directors, General Director, Deputy General Director, or Company Director, Deputy Director, and Leaders of various departments.

7.4. In cases where, after announcing the enterprise classification results, the enterprise has already allocated bonuses to the management board, if the competent authority discovers through inspection or audit that the report is incorrect, fraudulent behavior, or intentional violations in accounting leading to misclassification of the enterprise's results, in addition to having to return the bonus amount already disbursed, the enterprise will also be subject to penalties according to current regulations and fined at 50% of the amount disbursed.

7.5. Enterprises classified as type C are not allowed to establish a bonus fund for the management board.

8. Reporting System:

8.1. Quarterly Reports:

- State-owned enterprises, based on monitoring results, have the responsibility to quarterly report estimated performance of business operations and financial status of the enterprise according to Form 1, specifically as follows:

+ For member enterprises of a Holding Company or parent company (hereinafter referred to as the Holding Company) have the responsibility to submit reports to the Holding Company. The deadline for submitting reports is no later than 15 days after the end of the quarter.

+ For independent state-owned companies, state-owned holding companies, and parent companies directly under Ministries and central agencies, they have the responsibility to submit reports to the agencies designated by the Government as representatives of the owner, including Ministries, central agencies, and the Ministry of Finance (State Enterprise Financial Department). The deadline for submitting reports is no later than 30 days after the end of the quarter.

+ Joint Stock Companies with one state-owned shareholder shall submit reports to the agency representing the owner. The deadline for submitting reports is no later than 15 days after the end of the quarter.

+ For state-owned holding companies, state-owned companies, and Joint Stock Companies with one state-owned shareholder established by provincial People's Committees or centrally-administered municipalities, they have the responsibility to submit reports to the provincial People's Committee or centrally-administered municipality. The deadline for submitting reports is no later than 15 days after the end of the quarter. Quarterly, the provincial People's Committee or centrally-administered municipality (Department of Finance) shall compile reports according to the regulations of the Ministry of Finance regarding the consolidation and analysis of state-owned enterprise financial situation reports in their jurisdiction.

8.2. Annual Reports:

a. Annually, enterprises base their self-assessment and classification according to the enterprise classification regulations stipulated in this Circular and submit the enterprise classification report according to Form 2 (for trading enterprises), Form 3 (for enterprises implementing public goods and services of the state), and Form 4 (for state-owned holding companies or parent companies) to the relevant agencies for review and publication of the enterprise classification.

Specifically, for Joint Stock Companies with one state-owned shareholder, only reports to the central agency or the Ministry managing the industry as the representative owner are required.

The enterprise classification report is submitted simultaneously with the financial report according to current regulations.

b. Before June 30 of the following year, Ministries, central agencies, provincial People's Committees, and Boards of Directors of state-owned holding companies shall submit consolidated annual enterprise restructuring results according to Form 5 to the Ministry of Finance (State Enterprise Financial Department) for compilation and reporting to the Prime Minister.

9. Implementation Provisions:

This Circular takes effect 15 days after its publication in the Official Gazette. Specifically, for enterprise evaluation and classification, it applies from 2004 onwards.

Matters not specified in this Circular shall be implemented in accordance with the Supervision and Evaluation Regulations for the Effectiveness of State-Owned Enterprise Operations issued together with Decision No. 271/2003/QĐ-TTg dated December 31, 2003 of the Prime Minister./.