Circular No. 65/1999/TT-BTC guides the implementation of financial transparency for state-owned enterprises.

CIRCULAR

Guidelines for Financial Disclosure

for State-Owned Enterprises

Pursuant to Decree No. 59/CP dated October 3, 1996 of the Government promulgating the Financial Management and Business Accounting Regulations for State-Owned Enterprises;
Pursuant to Decree No. 27/1999/NĐ-CP dated April 20, 1999 of the Government amending and supplementing the Financial Management and Business Accounting Regulations for State-Owned Enterprises issued together with Decree No. 59/CP dated October 3, 1996 of the Government;

Pursuant to Decree No. 07/1999/NĐ-CP dated February 13, 1999 of the Government promulgating the Regulations on Implementing Democracy in State-Owned Enterprises;

Pursuant to Decision No. 225/1998/QĐ-TTg dated October 20, 1998 of the Prime Minister promulgating the Financial Disclosure Regulations for State Budgets at all levels, budgetary units, State-Owned Enterprises, and funds with revenues from contributions of the people;

The Ministry of Finance provides guidelines for financial disclosure for State-Owned Enterprises as follows:

I. OBJECTIVES OF FINANCIAL DISCLOSURE FOR STATE-OWNED ENTERPRISES

- Properly exercising the rights, obligations, and responsibilities of employees in implementing democracy within State-Owned Enterprises, practicing thrift, combating waste and corruption, enhancing the efficiency of production and business operations, and preserving and developing state capital.

- Informing state management agencies with grounds to assess the situation and effectiveness of business operations of enterprises, thereby strengthening enterprise management.

- Serving as a basis for domestic and foreign investors to study and decide on investment in enterprises; creditors to evaluate the ability to repay maturing debts.

II. CONTENT AND FORMS OF FINANCIAL DISCLOSURE

1. Disclosure to the State:

- Each year, independent State-Owned Enterprises, member enterprises with independent accounting, and centralized accounting portions of State-Owned Corporations must prepare and submit financial reports to state agencies according to current regulations. State-Owned Corporations must compile and submit consolidated financial reports to the state financial management agency at the same level and the agency that established the enterprise.

- The Board of Directors or General Director of the enterprise (for enterprises without a Board of Directors) shall be responsible for explaining financial matters to state agencies upon request when performing their management functions as prescribed by the Government.

2. Disclosure to Party organizations, mass organizations, and employees within the enterprise:

After the end of each quarter and fiscal year, the Board of Directors or General Director of the enterprise (for enterprises without a Board of Directors) shall have the obligation to disclose certain financial situations and the resolution of employee benefits within the enterprise as follows:

a) Content of Transparency:

+ Disclose the financial situation, liabilities, state capital, funds, revenue, production costs, business results, tax payments to the state budget, social insurance, health insurance, trade union fees, labor conditions, and income of employees within the enterprise, and disbursements from the state budget according to attached forms.

+ A report explaining (or detailing) the management of capital and assets, revenue and expenses, implementation of financial policies and systems, application of measures to practice thrift, combat waste and corruption, particularly the implementation of employee benefits such as salaries, bonuses, social insurance, health insurance, and other welfare.

Based on the characteristics of the industry and the information recipients of the enterprise, the Board of Directors or General Director (for enterprises without a Board of Directors) shall agree with the Standing Committee of the Party Committee and the Trade Union Executive Board on which contents need to be regularly reported to the key leaders of Party organizations, mass organizations, departments, and workshops within the enterprise, and which contents need to be reported to production teams and employees within the enterprise. The public disclosure document must be signed by the Chairman of the Board of Directors or the General Director (for enterprises without a Board of Directors) and stamped.

b) Form of Transparency:

The Board of Directors and General Director of the enterprise shall cooperate with the trade union organization to select appropriate disclosure methods suitable for each information recipient, specifically:

- Workers' Congress (all members or representatives) conducted from production teams, departments, to the entire enterprise.

- Announced at regular meetings of key enterprise officials.

- Publicized in enterprise meetings organized by professionals at workshops, production teams, and departments.

- Announced at meetings of the Trade Union and other political social organizations within the enterprise.

- Announced in writing or printed materials sent to each production team, workshop, department, or publicly posted at convenient locations within the enterprise.

- Announced through the enterprise's internal broadcasting system.

3. Disclosure outside the enterprise is for investors and customers to base their economic relationships with the enterprise:

Contents that need to be disclosed to investors and customers include: actual registered capital at the time of disclosure, liabilities (specifying overdue liabilities), asset structure, and business results of the enterprise. Additionally, the enterprise has the responsibility to respond to other requests based on its relationship with creditors and investors.

For enterprises operating in public service sectors related to national defense and security, they are not permitted to disclose data on specialized assets serving national defense and security.

III. TIME OF DISCLOSURE

The time of financial disclosure for State-Owned Enterprises is stipulated in Article 11 of Decision No. 225/1998/QĐ-TTg dated November 20, 1998 of the Prime Minister, specifically as follows:

Financial disclosure of State-Owned Enterprises is carried out periodically every quarter and annually. The time of financial disclosure for each quarter and year is specified for each form of disclosure as follows:

- Within sixty days from the end of each quarter and year for the form of issuing publications (the basis for public disclosure being quarterly and annual financial settlement reports prepared in accordance with current regulations).

- Within thirty days from the end of each quarter and year for the form of public listing at enterprises (based on the quick report data of enterprises to relevant state management agencies).

- Within fifteen days from the end of each quarter and year for the form of reporting during enterprise conference sessions (based on the quick report data of enterprises).

IV. RESPONSE TO QUESTIONS

1. Organizations and individuals receiving publicly disclosed financial information in accordance with this Circular have the right to question the contents of such public disclosures.

2. The Board of Directors and General Director of enterprises implementing financial public disclosure must respond to questions regarding the contents of such public disclosures.

3. Questions must be answered to the questioner no later than five days from the date of receipt of the questioning content. In cases where the questioning content is complex and requires more time to prepare answers, specific response dates must be rescheduled for each questioner, but not exceeding twenty days from the date of receipt of the questioning content.

4. The contents of questions and responses to questions must be publicly disclosed together with other public financial disclosure contents to the recipients of public information at the times and through the forms of public disclosure as stipulated in this Circular.

V. IMPLEMENTATION PROVISIONS

1. This Circular takes effect fifteen days from the date of signature and replaces Section II on "Public Disclosure of Annual Financial Reports of State-Owned Enterprises" prescribed in Circular No. 73 TC/TCDN dated November 12, 1996 "Guidelines for Preparation, Public Disclosure, and Audit of Financial Reports and Accounting of State-Owned Enterprises" and Point 3, Section IV on "Public Disclosure of Annual Financial Reports" prescribed in Circular No. 06 TC/TCDN dated February 24, 1997 "Guidelines for Financial Management Systems for State-Owned Enterprises Engaged in Public Services" issued by the Ministry of Finance.

2. During implementation, if there are any difficulties, state-owned enterprises are requested to promptly reflect them to the Ministry of Finance for study, supplementation, and amendment.