MINISTRY OF FINANCE --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 60/CONSOLIDATED DOCUMENT - MINISTRY OF FINANCE	Hanoi, December 31, 2020

CIRCULAR[1]

GUIDELINES FOR IMPLEMENTING THE FINANCIAL MANAGEMENT REGULATIONS FOR THE VIETNAM DEVELOPMENT BANK YEAR

Circular No. 111/2007/TT-BTC dated September 12, 2007, issued by the Minister of Finance, guiding the implementation of the Financial Management Regulations for the Vietnam Development Bank, which took effect from October 10, 2007, has been amended and supplemented by:

1. Circular No. 67/2016/TT-BTC dated April 29, 2016, issued by the Minister of Finance, amending and supplementing certain contents of Circular No. 111/2007/TT-BTC dated September 12, 2007, guiding the implementation of the Financial Management Regulations for the Vietnam Development Bank, which took effect from June 20, 2016.

2. Circular No. 26/2020/TT-BTC dated April 14, 2020, issued by the Minister of Finance, amending and supplementing certain contents of Circular No. 111/2007/TT-BTC dated September 12, 2007, guiding the implementation of the Financial Management Regulations for the Vietnam Development Bank, and Circular No. 67/2016/TT-BTC dated April 29, 2016, issued by the Minister of Finance, amending and supplementing certain contents of Circular No. 111/2007/TT-BTC dated September 12, 2007, guiding the implementation of the Financial Management Regulations for the Vietnam Development Bank, which took effect from May 29, 2020.

3. Circular No. 84/2020/TT-BTC dated October 1, 2020, issued by the Ministry of Finance, amending and supplementing regulations on periodic reporting within the authority of the Minister of Finance in the field of financial banking, which took effect from November 15, 2020.

Pursuant to Decision No. 44/2007/QĐ-TTg dated March 30, 2007, of the Prime Minister, regarding the issuance of the Financial Management Regulations for the Vietnam Development Bank (hereinafter referred to as the Vietnam Development Bank), the Ministry of Finance provides detailed guidance as follows:[2]

I - GENERAL PROVISIONS

1. This Circular applies to the financial management activities of the Vietnam Development Bank system.

2. The Vietnam Development Bank is provided with charter capital and working capital by the State to fulfill its credit investment and export credit tasks and programs set by the Government; it can mobilize medium and long-term funds, receive and manage State funds to implement the State's credit investment and export credit policies.

3. When performing State credit investment and export credit tasks, the Vietnam Development Bank is entitled to State subsidies for interest rate differences and management fees.

4. The Government guarantees the payment capacity of the Vietnam Development Bank; it is responsible for ensuring repayment and covering costs; it is exempted from paying taxes and other State budget contributions for its State credit investment and export credit activities. credit investment and export credit activities of the State; other activities must be subject to taxation as prescribed by law.

5. The Vietnam Development Bank operates without profit-making objectives, with a zero percent (0%) mandatory reserve ratio, and is not required to participate in deposit insurance.

6. The Vietnam Development Bank is a centralized accounting entity within the entire system; it may use its income to cover operating expenses; the distribution of financial revenue and expenditure differences shall be carried out in accordance with this Circular.

7. The General Director of the Vietnam Development Bank is responsible before the Law and State management agencies for the safe management, proper and effective use of funds and assets, compliance with financial, accounting, and auditing systems.

8. The Ministry of Finance performs the State management function over finance, guides, inspects, and audits the implementation of the financial system of the Vietnam Development Bank.

II - PROVISIONS ON CAPITAL, FUNDS, AND ASSETS

1. The operational capital of the Vietnam Development Bank includes:

1.1. Shareholders' equity:

a) Charter capital of the Vietnam Development Bank;

b) Differences arising from asset revaluation and exchange rate differences;

c) Additional capital reserves and development investment funds.

1.2. Mobilized capital:

a) Issuance of government bonds, government-guaranteed bonds, Vietnam Development Bank bonds, and promissory notes and deposit certificates in accordance with the law;

b) Loans from Postal Savings Service Company, Vietnam Social Security, and domestic financial and credit organizations;

c) Loans from foreign financial and credit organizations.

1.3. Other capital sources include:

a) Post-investment support capital from the State budget;

b) Directly borrowed ODA capital and ODA capital authorized by the Ministry of Finance to lend again;

c) Accepting entrusted deposits from domestic and foreign organizations;

d) Entrusted capital, allocated for lending and debt recovery from domestic and foreign organizations through entrustment contracts between the Vietnam Development Bank and entrusting organizations;

đ) Voluntary non-refundable contributions from individuals, economic organizations, financial and credit organizations, political and social organizations, associations, societies, and non-governmental organizations both domestically and internationally;

e) Capital from the State budget allocated to perform credit investment and export credit tasks and programs set by the Government.

f) Other capital sources as prescribed by law.

2. Use of capital and assets:

2.1. The Vietnam Development Bank may use operational capital for:

a) Implementing the State's credit investment and export credit policies as stipulated by the Government;

b) Basic construction investment and procurement of assets for the Vietnam Development Bank, up to a maximum of 15% of the actual paid-up charter capital;

c) Entrusted allocation and entrusted loans at the request of the entrusting party.

2.2. The Vietnam Development Bank has the right to adjust the capital and asset structure within the system to serve its operations.

2.3. The transfer of capital and assets between units under and directly under the Vietnam Development Bank is decided by the General Director of the Vietnam Development Bank.

3. Annually, the Vietnam Development Bank must balance the plan for State credit investment and export credit with available capital to implement it. Plan the mobilization of various capital sources; when mobilizing capital at market interest rates for lending, it must ensure the principle of only mobilizing when all non-interest-bearing or lower-interest-rate capital sources have been fully utilized and balanced with the demand for capital usage, avoiding idle capital.

4. The Vietnam Development Bank is responsible for implementing regulations on capital safety assurance, including:

4.1. Manage, use capital for the intended purpose, correct target, effectively, ensuring repayment and covering costs;

4.2. Purchase insurance for assets and other insurance regimes related to capital and assets in accordance with regulations;

4.3. Idle temporary capital may be deposited at domestic banks or the State Treasury;

4.4. In necessary cases, the Development Bank is permitted to repurchase securities issued by the Development Bank in accordance with the regulations of the Ministry of Finance;

4.5. Establish a risk reserve fund in accordance with Part III of this Circular;

5. Capital for construction investment and acquisition of fixed assets

5.1. The Development Bank's capital for construction investment and acquisition of fixed assets is formed from the following sources:

a) Depreciation of fixed assets;

b) Development Investment Fund;

c) Other lawful sources as prescribed by the State.

5.2. All construction activities and acquisitions of fixed assets by the Development Bank must be carried out strictly in accordance with the State's regulations on basic construction investment, must be economical, effective, and ensure:

a) Within the approved financial plan budget range approved by the Management Board;

b) The residual value of fixed assets does not exceed 15% of the actual paid-in charter capital.

5.3. The rate of depreciation of fixed assets shall be implemented in accordance with the regulations applicable to state-owned enterprises.

6. Inventory of assets

6.1. The Development Bank conducts asset inventory when closing the accounting books to prepare annual financial reports; when implementing decisions on division, separation, merger, consolidation; after natural disasters, enemy attacks, or due to other reasons causing fluctuations in the Development Bank's assets, or as prescribed by competent state authorities.

6.2. For surplus or shortage of assets, the cause must be clearly identified, the responsibility of those involved determined, and material compensation levels established according to regulations.

7. Revaluation of assets

7.1. The Development Bank must conduct revaluation of assets in the following cases: pursuant to the decision of the Ministry of Finance; liquidation, sale of assets.

7.2. Asset inventory and revaluation must comply with current regulations applicable to state-owned enterprises. Any differences arising from revaluation of assets shall be adjusted to increase or decrease the Development Bank's capital sources in accordance with the regulations of the Ministry of Finance.

8. The Development Bank must organize reconciliation of receivables and payables when closing the accounting books to prepare annual financial reports.

9. In cases of asset losses, the Development Bank must clearly identify the causes and handle them:

9.1. If the loss of assets is due to the fault of groups or individuals, then the responsible groups or individuals must compensate according to the law.

9.2. If the assets have been insured, then they shall be handled according to the insurance contract.

9.3. The loss value after being compensated by individuals, groups, or insurance organizations, if insufficient, shall be recorded as expenses in the Development Bank's period.

10. Leasing, mortgaging, pledging assets

10.1. The Development Bank has the right to lease, mortgage, or pledge assets under its ownership in accordance with the principle of efficiency, preservation, and development of capital as prescribed by law.

10.2. The General Director of the Development Bank decides and is responsible for leasing, mortgaging, and pledging assets.

11. Liquidation, sale of assets

11.1. The Development Bank can liquidate or sell assets that are obsolete, deteriorated, irreparable, technologically outdated, or unused without effectiveness. The Management Board of the Development Bank decides on the liquidation or sale of office premises and reports to the Ministry of Finance.

11.2. When liquidating or selling assets, the Development Bank must appraise the assets and organize auctions in accordance with the law.

11.3. Revenue or expenses from the liquidation or sale of assets shall be recorded as income or expenses of the Development Bank. Proceeds from the sale of assets, residual values of sold assets, and sale expenses shall be recorded as income or expenses of the Development Bank.

III - CLASSIFICATION OF DEBTS, ESTABLISHMENT OF RISK RESERVE FUNDS

1. The Development Bank implements debt classification in accordance with the regulations of the State Bank of Vietnam.

2. The Development Bank is allowed to establish a risk reserve fund from operating costs to cover losses and damages caused by objective factors during the lending process for government credit investment and export credit projects, guaranteed credit investment and export credit projects, and bid guarantees and contract performance guarantees. Banks.

3. The Development Bank temporarily establishes a risk reserve fund with a maximum deduction rate of 0.5% of the average loan balance for investment loans, export credit loans, guarantee obligations for investment credit, export credit, and bid guarantees and contract performance guarantees of the Development Bank. Annually, after receiving the Financial Settlement Notification from the Ministry of Finance, the Development Bank reviews and adjusts entries if there are discrepancies.

4. The balance of the risk reserve fund at the time Decision No. 44/2007/QĐ-TTg dated March 30, 2007 of the Prime Minister on the issuance of the Financial Management Regulations for the Development Bank took effect shall be transferred to the risk reserve fund.

5. The risk reserve fund shall be used in cases where principal debts are waived for projects (including cases where the sale price of debts is lower than the principal amount) as decided by the Prime Minister. Based on the Prime Minister's decision on waiving principal debts, the Development Bank uses the risk reserve fund to offset the corresponding principal amount waived.

6. At year-end, if the risk reserve fund is not fully utilized, the remaining balance shall be transferred to the next year's risk reserve fund. In cases where the risk reserve fund balance is insufficient to cover losses incurred in the year, Branches of Commercial Joint Stock Banks, Credit Cooperatives, Credit Guarantee Fund, and Basic Credit Cooperatives the Development Bank shall report to the Ministry of Finance to submit to the Prime Minister for consideration and decision on measures to address the situation.

IV - POST-INVESTMENT SUPPORT CAPITALIZATION

1. Before July 20 each year, the Development Bank prepares the budget for post-investment support capitalization for the planned year and sends it to the Ministry of Finance and the Ministry of Planning and Investment for consolidation in the state budget expenditure plan to be submitted to competent authorities for approval.

2. On the basis of the state budget expenditure plan assigned by the competent authority, quarterly, based on the implementation progress of the Development Bank, the Ministry of Finance shall provide post-investment support capital according to the Development Bank's proposal.

3. The Development Bank manages and uses post-investment support capital in accordance with Decree No. 151/2006/NĐ-CP dated December 20, 2006 of the Government on state investment credit and export credit, and Circular guiding Decree No. 69/2007/TT-BTC dated June 25, 2007 of the Ministry of Finance; it shall not use post-investment support capital for other purposes.

4. At the end of the year, the Development Bank has the responsibility to settle accounts with the Ministry of Finance regarding the post-investment support capital received and actually provided to project sponsors, and implement adjustments:

4.1. In cases where the actual amount provided to project sponsors exceeds the amount allocated by the Ministry of Finance during the year, the Ministry of Finance will supplement the shortfall within the scope of the notified budget estimate. Any difference between the officially supplemented amount for the entire year and the notified budget estimate (if any) will be arranged in the next year's budget for post-investment support capital allocation.

4.2. In cases where the actual amount provided to project sponsors is less than the amount allocated by the Ministry of Finance during the year, the difference will be considered as temporarily allocated for the following year (in case the following year still involves support); or must be returned to the State Budget (in case the following year does not involve support).

5. Unutilized post-investment support capital allocated to the Development Bank in the year may be transferred to the next year for continued use.

V. INTEREST RATE DIFFERENCE SUBSIDY REIMBURSEMENT

1. Prepare the interest rate difference subsidy budget.

1.1. Before July 20 each year, based on the forecast of mobilizing various sources of capital and the policy on state investment credit development, the Development Bank shall prepare the interest rate difference subsidy budget for the planning year and submit it to the Ministry of Finance and the Ministry of Planning and Investment for consolidation in the state budget expenditure plan to be submitted to the competent authorities for decision.

1.2. Based on the state budget expenditure plan assigned by the competent authority, quarterly, based on the implementation progress of the Development Bank, the Ministry of Finance shall provide interest rate difference subsidies and management fees according to the Development Bank's proposal.

2. Principles for implementing interest rate difference subsidy reimbursement.

2.1. The temporary quarterly provision to the Development Bank shall be carried out based on the actual situation of capital mobilization and balance, and the loan disbursement progress of each project in the quarter. At the end of the fiscal year, based on the settlement approved by the Management Council of the Development Bank, the Ministry of Finance shall determine the official total amount to be reimbursed for the year and make adjustments.

2.2. The principle for temporary quarterly reimbursement is as follows:

a) First Quarter: Provide 75% of the first quarter budget estimate.

b) Second Quarter: Provide 75% of the second quarter budget estimate ± adjustment for the first three months.

c) Third Quarter: Provide 75% of the third quarter budget estimate ± adjustment for the first six months.

d) Fourth Quarter: Provide 75% of the fourth quarter budget estimate ± adjustment for the first nine months.

3. Amount of interest rate difference subsidy reimbursement.

3.1. Formula for determining the amount of interest rate difference subsidy reimbursement

3.2.[3]. Method for determining factors to calculate the amount of interest rate difference subsidy reimbursement

a) Average loan balance: is the total average monthly loan balance of programs and projects funded by the state budget for interest rate difference subsidy (hereinafter referred to as subsidized projects).

b) Average interest rate of capital sources is determined as follows:

Where:

- Total actual interest paid for capital mobilization is the total actual interest paid for capital that must pay interest used for lending subsidized projects and retained funds in cash, deposits at the State Bank of Vietnam, deposits at credit institutions to ensure liquidity for subsidized projects (hereinafter referred to as subsidized retained funds); specifically determined as follows:

Capital mobilization includes issuing government-guaranteed bonds in accordance stipulating with the law; issuing bonds, bills, deposit certificates, negotiable instruments denominated in domestic currency of the Vietnam Development Bank in accordance with the law; borrowing from the Vietnam Social Security; borrowing from domestic and foreign financial and credit organizations in accordance with the law; borrowing from the State Bank of Vietnam in accordance with the law and guidelines of the State Bank of Vietnam; receiving deposits of from domestic and foreign organizations; other capital mobilization sources in accordance with the law.

Designated capital mobilization sources include borrowings from foreign financial and credit organizations and borrowed foreign government funds for lending to programs and projects not eligible for interest rate difference subsidy.

Non-interest-bearing capital includes the registered capital of the Vietnam Development Bank; gains from asset revaluation, exchange rate differences; additional reserve funds, development funds; undistributed results of previous quarters and years; state budget construction investment capital and other assets belonging to the Vietnam Development Bank. When determining non-interest-bearing capital, the Vietnam Development Bank determines according to the average monthly method and excludes:

+ The actual amount of capital actually used for investment and fixed asset purchases (original value of fixed assets minus depreciation) and unfinished construction costs but not exceeding 30% of the registered capital and additional reserve funds of the Vietnam Development Bank.

+ The actual amount of registered capital contributed by the Vietnam Infrastructure Development and Financial Investment Corporation.

- Actual total capital is determined by the average loan balance;

c) Average loan interest rate for projects: is the weighted average interest rate calculated between the actual average monthly loan balance and the loan interest rate determined for each project and calculated as follows:

Total interest income from loans is the actual interest received (including both on-time and overdue interest) from subsidized projects and the actual interest received from retained funds for subsidized projects, including:

The actual interest income received from the subsidized reserve (quarterly, annually)

=

Subsidized reserve (quarterly, annually)

x

Average deposit interest rate (quarterly, annually)

Average deposit interest rate (quarterly, annually)	=	Total actual interest income from deposits (quarterly, annually)
		Average total reserves (cash, deposits) (quarterly, annually) calculated using the monthly average method

4. Procedure for subsidizing interest rate differential

4.1. Quarterly provisional subsidy

a) On the 15th day of the first month of each quarter, based on consolidated data from branches, the Development Bank prepares a quarterly subsidy budget estimate with an accompanying explanation to send to the Ministry of Finance.

b) Based on the subsidy allocation in the state budget expenditure plan; based on the Development Bank's quarterly subsidy estimate, the Ministry of Finance provisionally subsidizes the Development Bank according to point 2 - Section V of this Circular on the 25th day of the first month of each quarter.

c) Adjusting the quarterly subsidy amount

- On the 15th day of the first month of each quarter, based on consolidated data from branches, the Development Bank calculates the actual subsidy required for the previous quarter, the difference with the previously provisionally subsidized amount, and sends it along with an explanation to the Ministry of Finance.

- Based on the allocation in the state budget expenditure plan, based on the Development Bank's subsidy request, the Ministry of Finance determines the actual subsidy required for the previous quarter:

+ If the actual subsidy required for the previous quarter is higher than the previously provisionally subsidized amount, the Ministry of Finance will supplement the shortfall together with the next quarter's provisional subsidy.

+ If the actual subsidy required for the previous quarter is lower than the previously provisionally subsidized amount, the Ministry of Finance will deduct the overpayment from the next quarter's provisional subsidy.

4.2. Annual adjustment based on final settlement

a) At the end of the fiscal year, based on officially approved final settlement figures, the Development Bank determines the annual subsidy requirement, accompanied by an explanation sent to the Ministry of Finance.

b) Based on the annual subsidy allocation in the state budget; based on the final settlement figures, the Ministry of Finance determines the full-year subsidy for the Development Bank and implements adjustments.

c) The adjustment of the annual subsidy based on the final settlement is carried out as follows:

- If the annual subsidy determined through final settlement is higher than the provisional subsidy provided throughout the year (by quarters), the Ministry of Finance will supplement the shortfall within the scope of the announced budget. Any excess difference between the officially settled subsidy for the entire year and the announced budget (if any) will be allocated in the following year's subsidy budget.

The supplementary amount during the final settlement adjustment period is included in the budget execution settlement of the current fiscal year, while the supplementary amount after the final settlement adjustment period is included in the budget settlement of the following fiscal year.

-[4] If the annual subsidy determined through final settlement is lower than the provisional subsidy provided throughout the year (by quarters), the excess amount must be returned to the state budget, except in cases where the Prime Minister permits an extension of the implementation period until December 31 of the following year, which can then be transferred to the following year.

4.3. In the case where the Development Bank's annual subsidy budget for interest rate differential is not fully utilized, it will be carried over to the following year for continued use.

VI - MANAGEMENT FEES

1. Establishing the management fee budget

1.1. Before July 20 each year, the Development Bank establishes and submits the management fee budget to the Ministry of Finance and the Ministry of Planning and Investment for inclusion in the annual state budget plan to be decided by the Prime Minister.

1.2. Based on the annual management fee allocation in the state budget expenditure plan, the Development Bank establishes the quarterly management fee budget together with the interest rate differential subsidy budget and sends it to the Ministry of Finance.

2. Method of calculating management fees

Management Fee

=

Total loan interest revenue collected

x

25%

Total loan interest revenue collected includes actual interest received (including both on-time and overdue interest) from the lending activities of state credit investment and export credit; penalty interest on projects guaranteed but not repaid on time, forcing the Development Bank to repay instead.

3. Principles and procedures for granting management fees

3.1. Principles for granting management fees: The granting of management fees to the Development Bank is implemented on a quarterly provisional basis, alongside interest rate differential subsidies, based on actual loan interest revenue in the quarter.

3.2. Procedures for granting management fees

a) On the 15th day of the first month of each quarter, based on actual loan interest revenue data up to the end of the previous quarter from Development Bank branches, the Development Bank issues a request for management fees with an accompanying explanation to send to the Ministry of Finance.

Based on the allocation in the state budget expenditure plan; based on the Development Bank's request, the Ministry of Finance grants management fees to the Development Bank according to regulations.

b) At the end of the fiscal year, based on officially approved final settlement figures, the Development Bank recalculates the annual management fee entitlement, accompanied by an explanation sent to the Ministry of Finance.

- Based on the annual management fee allocation in the state budget; based on the Development Bank's actual loan interest revenue data for the year, the Ministry of Finance determines the management fee entitlement for the Development Bank for the year, implements adjustments, and grants it to the Development Bank.

- If the annual management fee determined through final settlement is greater than the provisional amount granted during the year, the Ministry of Finance supplements the shortfall within the scope of the announced budget. Any excess difference between the officially settled amount and the announced budget (if any) will be allocated in the following year's subsidy budget.

- If the annual management fee determined through final settlement is less than the provisional amount granted during the year, the difference is considered as the provisional amount for the next year (if the next year still involves management fee grants) or must be returned to the state budget (if the next year does not involve management fee grants).

- The supplementary amount during the final settlement adjustment period is included in the budget execution settlement of the current fiscal year, while the supplementary amount after the final settlement adjustment period is included in the budget settlement of the following fiscal year.

3.3. In the case where the Development Bank's annual management fee budget is not fully utilized, it will be carried over to the following year for continued use.

VII - INCOME AND EXPENSES

1. The Development Bank's income consists of all revenues generated from its business operations and other services, including:

1.1. Income from business operations:

a) Collection of interest (both within-term and penalty interest) on investment loan projects of the Development Bank (excluding interest from ODA lending activities, entrusted funds from localities, domestic and foreign organizations); penalty interest on guaranteed projects that fail to repay debts on time, forcing the Development Bank to repay instead;

b) Collection of export credit interest;

c) Collection of interest on deposits made by the Development Bank at the State Treasury and other domestic banks; Domestic bank;

d) Collection of fees for entrusted capital disbursement and lending;

đ) Collection of interest rate differential compensation;

e) Collection of management fees for lending projects using domestic capital sources;

f) Collection of management fees for lending projects using ODA capital according to the Rescheduling Lending Regulation issued by the Prime Minister;

g) Collection of fees for other management activities;

h) Collection of exchange rate differences;

i) Collection from payment services, information, and treasury operations;

k) Collection from other business and service activities;

1.2. Collections from service activities, collections from leasing assets;

1.3. Income from other activities:

a) Penalties;

b) Collection from asset liquidation and sale;

c) Collection from capital amounts previously processed through risk provisions;

d) Other lawful income.

2. Expenses of the Development Bank are reasonable costs incurred during the period, including:

2.1. Operational activity expenses:

a) Payment of interest on raised capital (excluding interest payments on rescheduled ODA loans), including bond interest, interest on borrowing from domestic and foreign organizations;

b) Payment of customer deposit interest at the Development Bank;

c) Capital raising costs, including bond issuance, promissory note, and deposit certificate issuance costs;

d) Printing costs for bank seals and negotiable instruments of the Development Bank;

đ) Payment service costs;

e) Entrusted service costs, including entrusted debt recovery costs;

f) Risk provision costs;

g) Exchange rate difference costs;

h) Treasury operation costs, including transportation, loading and unloading, counting, sorting, packaging, security, and other treasury operation costs;

i) Environmental protection costs;

k) Association and industry costs that the Development Bank participates in;

l) Litigation costs related to the resolution of collateralized loan assets and costs associated with debt collection;

m) Other operational costs;

2.2. Administrative expenses:

a) Costs for Development Bank staff:

- Salary and allowances according to regulations (including costs for contractual labor); The salary system is implemented according to Article 24 of Chapter III of Decision No. 44/2007/QĐ-TTg dated March 30, 2007 of the Prime Minister regarding the Financial Management Regulations for the Development Bank.

- Social insurance, health insurance contributions, and trade union fees as prescribed by state regulations;

- Midday meal expenses: the expense per person must not exceed the minimum wage stipulated by the State for workers and staff;

- [5] Uniform allowance: The amount does not exceed half of the maximum uniform allowance for cash expenses to be deducted when determining taxable income for enterprises.

- Allowances for part-time members of the Management Council and the Working Group as stipulated by law.

- Costs for female workers as stipulated;

- Costs for labor protective equipment as stipulated;

- Costs for establishing a severance pay reserve fund. The annual contribution rate is between 1% and 3% of the actual wage fund of the Development Bank.

b) Depreciation costs of fixed assets. The rate is as prescribed for state-owned enterprises.

c) Costs for management and public service activities:

- Purchase and maintenance costs for labor tools and office supplies;

- Fire prevention and firefighting costs;

- Postal and telecommunication costs: costs for postal fees, telecommunications, telephone, telegraph, leased communication channels, telex, fax... paid according to invoices from postal authorities. The installation of official phones at home and mobile phones for Development Bank leaders follows the Ministry of Finance's regulations on phone usage for administrative and state enterprise leaders.

- Electricity, water, health, and sanitation costs for the agency.

- Fuel costs for transporting officials and employees on business trips and for bank leaders' work, following the Ministry of Finance's regulations on vehicle usage in administrative and state enterprises.

- Travel expenses for officials and employees traveling domestically and internationally, paid according to current regulations of the Ministry of Finance.

- Publicity, press conference, transaction, diplomatic, and conference costs. These costs should not exceed 5% of total costs.

- Costs for auditing and inspecting units under and directly affiliated with the Development Bank, as stipulated.

- Maintenance and repair costs for assets.

- Training, professional instruction, scientific research, technological innovation costs such as organizing short-term training, professional development, and computer and language classes for Development Bank staff; purchasing and printing materials for training and professional development.

d) Other management costs.

2.3. Asset rental costs.

2.4. Other costs:

a) Costs for recovering written-off debts, ensuring that the cost is lower than the recovered amount;

b) Costs to compensate for asset losses as prescribed;

c) Costs to collect penalties as prescribed;

d) Tax payment costs as prescribed;

đ) Insurance costs for assets and other types of insurance as prescribed;

e) Liquidation and asset sale costs, including residual values of liquidated and sold assets;

f) Costs to support Party and mass organization activities of the Development Bank as prescribed by the State;

g) Other reasonable and legitimate costs.

3. The Development Bank shall not include the following items in its expenses:

3.1. Losses compensated by the Government or insurance agencies, or by the party causing the loss;

3.2. Administrative fines and financial system violation fines;

3.3. Construction and basic infrastructure investment costs, procurement, upgrading, and renovation of fixed assets from construction investment funds;

3.4. Costs for welfare facilities;

3.5. Costs for supporting localities, social organizations, and other agencies;

3.6. Domestic and international travel costs exceeding the national standard;

3.7. Costs covered by other funding sources.

VIII - DISTRIBUTION OF INCOME AND USE OF FUNDS

1. Distribution of Income

The annual financial surplus after paying fines for violations of laws, and covering previous years' deficits (if any) shall be distributed as follows:

a) Allocate 50% to the development investment fund;

b) Allocate to the reward fund and welfare fund. The maximum allocation rate for each fund shall not exceed three months' salary. The annual allocation ratio for each fund shall be decided by the General Director after consulting with the Trade Union of the Development Bank in writing.

c) Allocate to the supplementary capital reserve fund, the amount allocated being the remainder after establishing the aforementioned funds.

2. Purpose of using the allocated funds

2.1. The development investment fund shall be used for expanding the scale of operations, modernizing technology and equipment, and improving working conditions for the Development Bank in accordance with the State's Investment Management Regulations.

2.2. The reward fund shall be used for:

a) Year-end bonuses or regular bonuses based on labor productivity and achievements of each employee at the Development Bank. The bonus level shall be decided by the General Director after consulting with the Trade Union of the Development Bank in writing.

b) Special bonuses for individuals or groups within the Development Bank who have innovative ideas that improve techniques or business processes, resulting in efficiency. The bonus level shall be decided by the General Director.

c) Bonuses for individuals or units outside the Development Bank that have good relations and fulfill contractual conditions effectively, contributing to the bank's activities. The bonus level shall be decided by the General Director.

2.3. The welfare fund shall be used for:

a) Investing in constructing or repairing welfare facilities of the Development Bank, contributing capital to build common welfare facilities within the industry or with other units according to agreed contracts.

b) Expenditure on sports, cultural, and public welfare activities for the collective of employees of the Development Bank.

c) Contributions to the Social Welfare Fund and support for associations.

d) Regular and emergency hardship allowances for employees of the Development Bank.

đ) Other welfare expenses.

The General Director shall decide on the expenditure levels after consulting with the Trade Union of the Development Bank in writing.

2.4. The supplementary capital reserve fund shall be used to supplement the registered capital. At the end of the fiscal year, the balance of the supplementary capital reserve fund shall be used to supplement the registered capital within the scope stipulated in Article 2 of the Financial Management Regulation for the Vietnam Development Bank issued together with Decision No. 44/2007/QĐ-TTg dated March 30, 2007 of the Prime Minister.

The balance of the supplementary capital fund at the time Decision No. 44/2007/QĐ-TTg dated March 30, 2007 of the Prime Minister on the issuance of the Financial Management Regulation for the Vietnam Development Bank took effect shall be transferred to registered capital.

IX - ACCOUNTING SYSTEM AND FINANCIAL PLANNING

1. Before July 20th each year, the Development Bank shall be responsible for preparing and reporting to the Ministry of Finance and the Ministry of Planning and Investment the following plans:

1.1. Capital source and utilization plan:

a) Annual capital source plan includes:

- Additional state budget capital;

- State budget capital provided for post-investment support; capital for implementing national goals and programs.

- Implementation of guarantee obligations;

- Loan recovery capital;

- Capital raised from various sources;

- Other capital

b) Capital utilization plan:

- Total credit investment and export credit capital of the state under various forms of support: investment loans, post-investment support, investment loan guarantees, and sectoral, regional structures; repayment plan for raised capital sources;

- Export credit loan plan, export credit guarantee plan, bid guarantee plan, and contract execution plan.

1.2. Interest rate differential subsidy and management fee plan.

1.3. Basic construction investment plan: Accompanied by detailed explanations about planned basic construction, fixed asset purchases, and capital balancing.

1.4. Post-investment support plan;

1.5. Income and expenditure financial plan: Accompanied by detailed explanations about income and expenditure items.

1.6. Labor and wage plan.

These plans serve as the basis for the Development Bank to implement and settle financial accounts with the financial authority.

2. Periodic reports

2.1. Monthly, quarterly, and annually, in addition to reports according to the Accounting System and Circular No. 69/2007/TT-BTC dated June 25, 2007 of the Ministry of Finance (from Form 01/BC-VDB to Form 09/BC-VDB), the Development Bank shall be responsible for preparing and submitting to the Ministry of Finance the following financial reports:

a) Interest rate differential subsidy report (from Form 10/BC-VDB to Form 12/BC-VDB);

b) Management fee subsidy report (Form 13/BC-VDB).

2.2. The submission deadlines are as follows:

a) Quarterly report: no later than the 15th day of the first month of the next quarter;

b) Annual report: no later than January 30 of the following year;

c) Settlement report: no later than June 30 of the following year.

2.3.[6] Data collection period for quarterly and annual reports: The data collection period starts on the first day of the reported quarter or year and ends on the last day of the reported quarter or year.

2.3.[7] Methods of submitting reports shall be carried out through one of the following methods:

a) Directly in paper form;

b) Through postal service in paper form;

c) Sending via email system or specialized information reporting software;

d) Other methods as prescribed by law.

3. The Development Bank shall implement internal audit systems, publicly disclose annual financial results, and be responsible for published figures.

The Development Bank's annual financial report must be compulsorily audited in accordance with the law and approved by the Board of Directors before reporting to the Ministry of Finance (reporting to the Ministry of Finance no later than June 30 of the following year).

4. The Development Bank shall be subject to financial inspection by the Ministry of Finance, including:

4.1. Inspection of accounting reports and settlement reports periodically or unexpectedly.

4.2. Inspection according to specific topics based on financial management requirements.

4.3. Financial supervision and approval of annual financial settlement.

X - IMPLEMENTATION ORGANIZATION[8]

1. This Circular shall take effect fifteen days from the date of publication in the Official Gazette.

2. The Development Bank shall be responsible for guiding subordinate units to implement the financial system in accordance with the Financial Management Regulation for the Development Bank issued by the Prime Minister and the guidance content in this Circular.

During the implementation process, if there are any difficulties, the Development Bank is requested to report to the Ministry of Finance for research and resolution./.

CERTIFIED CONSOLIDATED DOCUMENT DEPUTY MINISTER DEPUTY MINISTER Huynh Quang Hai

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