Decision No. 838-TC/QĐ/TCDN on the issuance of the "Model Financial Regulations for State-Owned Corporations"

Pursuant to …;

Regarding the issuance of the "Model Financial Regulations for State-Owned Corporations"

__________________________________________

THE MINISTER OF FINANCE

Pursuant to the State Enterprise Law adopted by the National Assembly, Ninth Session, Seventh Meeting on April 30, 1995;

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government stipulating the tasks, powers, and responsibilities for state management of Ministries and ministerial-level agencies;

Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government regarding the tasks and authorities of the organizational structure of the Ministry of Finance;

Pursuant to Decree No. 39/CP dated June 27, 1995 of the Government regarding the issuance of the Model Charter concerning the organization and operation of state-owned corporations;

Pursuant to …;

Article 1. The Model Financial Regulations for State-Owned Corporations are hereby promulgated together with this Decision.

Article 2. These model financial regulations shall apply to state-owned corporations engaged in business operations. State-owned corporations shall base themselves on these model financial regulations to develop specific financial regulations for their corporation to be submitted to the Board of Directors for approval after obtaining the unified opinion of the Minister of Finance.

Article 3. This Decision takes effect from the date of signing. All previous decisions that conflict with this Decision are hereby abolished.

Article 4. The Director of the Office of the Ministry of Finance, the General Director of the State Capital and Asset Management Agency at Enterprises, the Chairman of the Board of Directors, and the General Managers of state-owned corporations are responsible for implementing this Decision.

MINISTRY OF FINANCE

Hồ Tế

(Signed)

REGULATIONS

MODEL FINANCIAL REGULATIONS FOR STATE-OWNED CORPORATIONS
(Issued together with Decision No. 838 TC/QĐ/TCDN dated August 28, 1996 of the Minister of Finance)

Chapter 1:

GENERAL PROVISIONS

Article 1.- A state-owned corporation engaged in business operations (hereinafter referred to as the Corporation) is a state enterprise; it has legal personality and economic accounting; it is assigned capital, natural resources, land, and other resources by the State; it is responsible for using such capital effectively, preserving, and developing the assigned capital; it has civil rights and obligations, and bears responsibility for its business activities within the scope of the State capital managed by the Corporation.

Article 2.- The Corporation includes independent accounting units, dependent accounting units, and public service units. The Corporation allocates capital and other resources to its affiliated units based on the capital and resources assigned to the Corporation by the State, in accordance with the business tasks of each affiliated unit and the approved capital utilization plan by the Board of Directors. Affiliated units are responsible to the State and the Corporation for the effectiveness of the use of allocated capital and resources.

Article 3.- The Corporation is subject to financial inspection and supervision by the Ministry of Finance as the state management agency and representative of the State's ownership over capital and assets in enterprises under the delegation of the Government. Affiliated units are subject to inspection and supervision by the Corporation according to the provisions stipulated in the Corporation's Charter and the financial agency's regulations on financial activities, capital management, and State asset management.

Chapter 2:

FINANCIAL REGULATIONS OF STATE-OWNED CORPORATIONS

Section I.

MANAGEMENT AND USE OF CAPITAL AND ASSETS

Article 4. When established, the Corporation is provided with initial charter capital by the State in accordance with the statutory capital requirements for the Corporation's business sector. The Corporation is responsible for continuously developing the assigned capital through its business results. The Corporation may only be supplemented with additional capital when the State deems it necessary to invest to support business development or to fulfill additional State-assigned tasks.

Article 5.

1. The State implements the transfer of State-owned capital to the Board of Directors of the Corporation. The transfer of capital is carried out in accordance with Directive No. 138/CT dated April 25, 1991 of the Chairman of the Council of Ministers (now the Prime Minister) and the regulations in the Financial Management and Business Accounting Regulations for State Enterprises. Specifically:

- When transferring capital, the market value of assets and capital must be assessed and determined at the time of capital transfer.

- The transfer of capital must be completed no later than 60 days after the Corporation receives its business registration certificate.

- The Minister of Finance or his authorized representative signs the capital transfer to the Corporation. The person receiving the capital is the Chairman of the Board of Directors and the General Manager of the Corporation. The witness to the capital transfer is the agency deciding on the establishment of the enterprise.

2. The General Manager of the Corporation transfers capital to affiliated units according to the approved plan by the Board of Directors.

- The person transferring capital is the General Manager of the Corporation.

- The person receiving the capital is the General Manager of the affiliated enterprise.

Within 30 days of receiving State capital, the Corporation must proceed to transfer capital to affiliated enterprises. Within 15 days after completing the capital transfer to affiliated enterprises, the Corporation must compile and report a summary to the agency managing State capital and assets at enterprises and the agency deciding on the establishment of the enterprise.

Article 6. The Corporation may use its capital and funds to meet timely business needs in accordance with the principle of preserving and developing capital. In cases where capital and other funds are used for purposes other than those specified, they must be returned according to the repayment principle. The use of capital and funds for investment and construction must comply fully with the State's regulations on investment and construction management.

Article 7. The Corporation has the right:

- To change the capital and asset structure to serve business operations.

- To balance State capital between affiliated units with excess capital and those with insufficient capital in accordance with the business tasks approved by the Corporation.

The General Manager develops a capital reallocation plan, reports it to the Board of Directors for approval, and issues a decision on reallocation according to the principle of increasing or decreasing capital.

Within 10 days of reallocation, the Corporation must report to the agency managing State capital and assets at enterprises and the agency deciding on the establishment of the enterprise.

Article 8.

1. The Corporation has the right to use its capital, assets, and land use rights under its management to invest outside the Corporation. However, the use of land use rights to invest outside the Corporation must be carried out in accordance with the provisions of the Land Law.

Investments outside the Corporation must ensure the principles of efficiency, preservation, and development of capital, increased income, and no impact on the Corporation's business tasks.

2. Forms of investment outside the Corporation include:

- Purchasing bonds and stocks;

- Joint ventures and shareholding contributions with other enterprises;

3. In the case of investment in other domestic enterprises, the Board of Directors shall approve the investment plan proposed by the General Director. Within fifteen days from the date of the decision, it must report to the state capital and asset management agency at the enterprise and the agency that decided on the establishment of the enterprise.

In the case of joint ventures with foreign parties, the Board of Directors shall report to the agency that decided on the establishment of the enterprise for approval of the joint venture project. If authorized by this agency, the Board of Directors may make the decision. Within fifteen days from the date of the decision, the Corporation shall report to the state capital and asset management agency at the enterprise. The issuance of a joint venture license shall be carried out in accordance with current laws.

4. The Corporation is not permitted to invest in enterprises belonging to other economic sectors where the father, mother, wife, husband, or children of the Chairman of the Board of Directors or the General Director are managers or executives.

5. The Board of Directors and the General Director shall inspect and supervise the use of investment capital in other enterprises, bear responsibility for the effectiveness, preservation, and development of capital invested outside the Corporation; earn profits from such investments; appoint persons directly to manage the equity stake in other enterprises.

6. The Corporation may authorize independent accounting member enterprises to act on its behalf to implement certain forms and levels of investment outside the Corporation.

Article 9.

1. The Corporation has the right to lease, mortgage, or sell assets under its management for re-investment and technological renewal (except those assets leased, borrowed, held in custody, or received as collateral. Assets leased or borrowed can be subleased if the lessor or lender agrees). Such actions must follow the principle of being effective, preserving, and developing capital, ensuring procedures according to the law.

2. The following assets:

a) The entire main production line;

b) Assets belonging to important infrastructure such as roads, airports, ports, telecommunications systems;

Leasing, pledging, or mortgaging must be reviewed and decided by the head of the agency that established the enterprise after consultation with the state capital and asset management agency at the enterprise.

Selling must be agreed upon in writing by the state capital and asset management agency at the enterprise and the agency that established the enterprise. If selling to foreign organizations or individuals, permission from the Prime Minister is required.

3. Before selling, assets must be appraised and widely announced through mass media; public auction must be organized.

4. The difference between the proceeds from selling assets and their remaining value and any selling costs shall be recorded as an increase or decrease in capital at the enterprise.

5. The Corporation must classify and delegate authority to member enterprises to carry out sales, leasing, pledging, or mortgaging of assets according to the State regulations specifically outlined in the Charter of organization and operation of member enterprises.

Article 10.

1. The Corporation strictly implements the system of depreciation of fixed assets. All depreciation of fixed assets belonging to state capital left with the Corporation for re-investment, replacement, and modernization of fixed assets and use for business needs as stipulated by the Ministry of Finance.

2. The Corporation may mobilize depreciation funds from independent accounting member enterprises to serve the concentrated investment needs of the Corporation. The General Director, based on the authorization of the Board of Directors, decides on the mobilization in the form of internal loans with interest rates determined by the Board of Directors. For special cases specified in the specific Charter of some Corporations, the Corporation may mobilize depreciation funds (excluding depreciation of assets financed by loans not yet repaid) from independent accounting member enterprises according to the principle of reducing capital for the unit being mobilized. 3. The Corporation uses depreciation funds, various types of capital, and reserves for basic construction investment must comply with the State's regulations on investment management and construction.

Article 11.

1. The Corporation may raise capital in all forms prescribed by law, such as borrowing from banks, credit institutions, enterprises, organizations, individuals both domestically and internationally, issuing bonds, and other borrowings to meet business activity needs. Capital raising must comply with current laws and shall not change the form of state ownership of the Corporation. The limit of a single loan is decided by the Board of Directors, but the total outstanding debt of the Corporation and its member enterprises shall not exceed the registered capital of the Corporation at the same time, except in cases where the law provides otherwise.

The Corporation shall be responsible for the purpose and effectiveness of the use of raised capital, repayment of principal and interest according to the commitments in the capital-raising contract.

2. The Corporation may borrow idle funds from member enterprises and also lend back to member enterprises with internal interest rates. Borrowing and repayment shall comply with the provisions of the law and the Charter of organization and operation of the Corporation. The Board of Directors shall decide on the internal interest rate.

3. Member enterprises may raise capital according to the classification and delegation of authority of the Corporation. For capital raising for investment in construction, equipment, and machinery, the Board of Directors shall approve the plan proposed by the General Director. The limit of a single loan is decided by the Director, and the total outstanding debt shall not exceed the registered capital of the member enterprise.

4. The Corporation may guarantee loans for member enterprises within the country according to current laws.

The guarantee for foreign loans of the Corporation and member enterprises follows the current regulations of the State.

Article 12. The Corporation shall conduct asset revaluation in the following cases:

1. Inventory and revaluation of assets according to the decision of the State.

2. Implementing shareholding, diversifying ownership forms. 3. Using assets to contribute to joint ventures, share capital.

4. Adjusting prices to ensure the actual value of enterprise assets.

The inventory and valuation must comply with the regulations of the State. Any discrepancies in asset value due to revaluation shall be recorded as increases or decreases in state capital at the Corporation.

Article 13. In case of asset loss (damage reducing asset value, loss), the Corporation must establish a committee to determine the cause and extent of the loss, develop a resolution plan, and report it to the Board of Directors. If the responsibility of individuals or groups is clearly identified, those responsible for the asset loss must compensate. The level of compensation will be decided by the Board of Directors in accordance with the law. For losses due to force majeure, the Board of Directors will decide on the handling after consulting the opinions of the state capital and asset management agency at the enterprise and the agency that established the enterprise.

The Board of Directors may delegate authority to the General Director to decide on the level of compensation for asset losses within specific limits set out in the Corporation's Financial Regulations.

All cases of asset loss, after being handled, must be reported in writing to the state capital and asset management agency at the enterprise and the agency that established the enterprise within ten days.

Article 14.

1. The Corporation may proactively liquidate assets that are obsolete, substandard, technologically outdated, no longer needed; assets that are damaged beyond repair; and assets that have exceeded their useful life.

For assets that have fully recovered their capital, the General Director decides on the liquidation and reports to the Board of Directors. For assets that have not fully recovered their capital, the General Director develops a liquidation plan, submits it for approval by the Board of Directors, and organizes the liquidation. For assets specified in Clause 2, Article 9 of this Regulation, prior to liquidation, there must be a written agreement from the state capital and asset management agency at the enterprise and the agency that established the enterprise.

2. Spare parts and scrap recovered from liquidated assets, if used for production and business operations of the enterprise, must be revalued. The Board of Directors determines the value of recovered assets; if sold, public notice must be given and auctioned according to the State's regulations.

3. The difference between the value obtained from liquidating assets and the remaining value of the assets and liquidation costs (if any) shall be recorded as an increase or decrease in capital at the enterprise.

4. The Corporation delegates authority to member enterprises in the liquidation of assets at specific levels detailed in the Charter of Organization and Operation of Member Enterprises consistent with this Regulation.

5. Within ten days after liquidating assets, the Corporation reports to the state capital and asset management agency at the enterprise and the agency that established the enterprise about the results of the liquidation.

Article 15.

1. The Corporation needs to have specific regulations on debt management, clearly defining the responsibilities of each level in managing, monitoring, reconciling, recovering debts, analyzing repayment capacity, and delegating authority in handling difficult debts. For difficult debts, a committee must be established to identify the amount unrecoverable, causes, responsibilities of groups and individuals, and recommend measures for handling. The Board of Directors decides on the resolution plans for difficult debts. The discrepancy between unrecoverable debt and the compensation for the responsibility of groups and individuals (if any) shall be covered by the provision for difficult debts. If insufficient, it shall be recorded as operating expenses or in the results of operations depending on specific circumstances as prescribed.

2. The Corporation may delegate authority to member enterprises to handle difficult debts. The degree of delegation is specifically reflected in the Charter of the member enterprises.

Within ten days after handling difficult debts, the Corporation must report in writing to the state capital and asset management agency at the enterprise.

Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…ục II.

MANAGEMENT OF REVENUE AND OPERATING EXPENSES

Article 16.

1. The revenue of the Corporation includes the revenue of its member enterprises. Revenue includes the following types:

a) Revenue from business activities, including: revenue from selling products, goods, and services provided on the market after deducting sales discounts, price reductions, returned goods; income from subsidies and price supports from the State when performing tasks to supply goods and services as required by the State;

b) Revenue from financial activities, such as: buying and selling promissory notes, bonds, stocks, leasing assets, joint ventures, deposit interest, and loan interest;

c) Other revenues, such as: recovery of previously written-off debts, proceeds from liquidation and sale of assets; and other revenues.

2. The Corporation delegates authority to member enterprises to manage revenues in accordance with State regulations and the specific charters of member enterprises.

Article 17.

1. The expenses of the Corporation include the expenses of member enterprises and the expenses of the Corporation's management body. The expenses of member enterprises are specifically defined in Article 24 of this Regulation.

The operational budget of the Corporation's management and operation body is raised from member enterprises. The annual raising level is proposed by the General Director and approved by the Board of Directors after receiving written comments from the finance agency. The Corporation manages and uses this budget according to current regulations. Unspent funds in the year are carried over to the next year for expenditure and must reduce the surplus funds from the units' contributions in the next year.

Delegation of authority to member enterprises in managing production costs is reflected in the specific charter of the Corporation consistent with current regulations.

2. The General Director of the Corporation establishes economic and technical norms, indirect cost standards to submit for approval by the Board of Directors as a basis for directing production and managing costs of the Corporation.

Special enterprises classified as state-owned corporations must register their manpower quotas with the Ministry of Labor, Invalids, and Social Affairs. Based on the registered manpower quotas and the wage system prescribed by the State, the corporation shall establish unit price wages for products and services to be submitted to the competent authority for approval.

The General Director approves economic and technical standards, manpower quotas, indirect cost quotas, and unit wage prices of member enterprises in accordance with the quotas and unit prices of the corporation approved by the Board of Directors or the competent authority.

For expenditures not in accordance with regulations, the person who decides on such expenditures shall bear responsibility for compensation. Expenditures exceeding approved quotas must clearly identify responsibilities and propose solutions to be submitted to the Board of Directors for handling. The Board of Directors of the corporation is responsible under the law for its decisions and must report in writing to the state capital and asset management agency at the enterprise.

Article 18. Semi-finished products circulating internally among member units for further completion, and internal services circulated among member units to serve production, are exempt from turnover tax. The list of semi-finished products and services is specified by the Ministry of Finance for each corporation.

Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…ục III.

PROFIT AND ESTABLISHMENT OF FUNDS

Article 19. The profit of the corporation is the total profit of its member enterprises. The principles for determining profits are stipulated in Article 25 of this Charter.

Article 20. The corporation may establish and utilize the following centralized funds:

1. Financial Reserve Fund: The corporation may mobilize the annual financial reserve fund contributions of independently accounted member enterprises to form a centralized financial reserve fund of the corporation. Specific mobilization levels are defined in the financial charter of each corporation. This fund is used to compensate and support losses of capital due to natural disasters, enemy attacks, business risks of the corporation and its member enterprises when the reserves deducted in costs and insurance compensation are insufficient. In necessary cases, the corporation may raise funds through internal loans with interest rates from the financial reserve fund of independently accounted member enterprises for common use within the corporation or to support member enterprises in case of capital loss risk.

2. Development Investment Fund: Formed from the following sources:

- Non-refundable investment development fund contributions of independently accounted enterprises in the year. Specific mobilization levels are defined in the financial charter of each corporation.

- Remaining post-tax profits of dependent member enterprises and dividends from joint ventures directly managed by the corporation. Specific levels are approved by the Board of Directors based on the General Director's proposal.

- The corporation may raise funds through internal loans with interest rates from the development investment fund and basic depreciation capital left for reinvestment of independently accounted member enterprises. Mobilization levels are decided by the General Director based on the Board of Directors' authorization. Internal interest rates are determined by the Board of Directors but cannot be lower than the rate of return on budgetary capital usage prescribed by the State.

Additionally, for certain special cases stipulated in the Articles of Incorporation of some corporations, the corporation may mobilize basic depreciation capital (excluding basic depreciation of fixed assets purchased with borrowed funds that have not been fully repaid) of independently accounted member enterprises according to the principle of reducing capital for the unit being mobilized.

The development investment fund is used for concentrated investments, including supplementary registered capital for the corporation and member enterprises to develop business in line with the corporation's strategic direction.

3. Scientific Research and Training Fund: Formed from the following sources:

a) Mobilizing investment development fund contributions of independently accounted member enterprises in the year. Specific mobilization levels are defined in the financial charter of each corporation.

b) A portion of the surplus from scientific research and training activities conducted by public service units within the corporation with units inside and outside the corporation. Specific deduction levels are defined in the financial charter of each corporation.

c) Scientific research and training funding supported by the state budget (if applicable).

The fund is used to finance the corporation's centralized scientific research and training work and to support member enterprises in their scientific research and training efforts.

4. Welfare Fund: The corporation may mobilize a portion of the welfare fund contributions of member enterprises in the year to form a welfare fund of the corporation. Specific mobilization levels are defined in the financial charter of each corporation.

The fund is used to finance welfare benefits for the management and operation staff of the corporation according to current regulations and to support the welfare funds of other member units. In cases where high-level mobilization is required to build welfare facilities for the entire corporation, the General Director will develop a mobilization plan for independently accounted member enterprises to be submitted to the Board of Directors for approval and implementation.

5. Reward Fund: The corporation may mobilize reward fund contributions of independently accounted member enterprises in the year to form a reward fund of the corporation. Specific levels are defined in the financial charter of each corporation. This fund is used to finance rewards for the corporation's management and operational staff; rewards for member units with outstanding achievements; and to support the reward funds of member units when necessary, as decided by the Board of Directors.

Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…ục IV.

ACCOUNTING - STATISTICAL REPORTING - AUDITING

Article 21. The Corporation is obligated to comply with the Accounting and Statistics Ordinance, accounting regulations, auditing procedures, and to prepare and submit quarterly and annual final reports in accordance with prescribed forms and deadlines. It shall be responsible for the truthfulness and accuracy of the data and documents. The Corporation's comprehensive annual financial final report includes forms such as the financial final report for enterprises issued together with Decision No. 1141 TC/QĐ/CĐKT dated November 1, 1995, by the Minister of Finance. In the final report, there must be a clear distinction between the centralized accounting portion of the Corporation and the consolidated final report of independent accounting member enterprises and public service units.

The General Director is responsible for preparing the annual final report of the entire Corporation, including its member units, to be submitted for approval by the Board of Directors and publicly disclose the Corporation’s financial situation according to the guidelines of the Ministry of Finance, and shall be legally accountable for the published figures.

The Corporation and independent accounting member enterprises shall implement auditing systems, publish their annual financial performance results according to the guidelines of the Ministry of Finance, and shall be legally accountable for the contents they have published.

Financial authorities shall carry out inspection and verification tasks regarding these publications of the Corporation and independent accounting member enterprises.

Briefly describe technical improvements, production processes, raw materials, designs; new technology applications such as automation, digitalization, clean technology; management, marketing, distribution solutions; products winning awards or certifications related to innovation…):…ục V.

 FINANCIAL PLANNING WORK

Article 22.- The General Director of the Corporation shall develop an annual financial plan consistent with the business plan to be submitted for approval by the Board of Directors and registered with the Ministry of Finance. Quarterly and annually, the Corporation shall report to the Ministry of Finance on the implementation of the business plan and financial plan according to state-prescribed forms. The General Director shall approve the financial plans for member units based on the Corporation's financial plan; monitor, supervise, and consolidate the implementation status of the plans by member units.

Chapter 3:

FINANCIAL REGIME OF CORPORATION MEMBER ENTERPRISES

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INDEPENDENT ACCOUNTING MEMBER ENTERPRISES

Article 23. In managing capital and assets, the enterprise:

1. Shall be allocated capital by the Corporation to manage and utilize in accordance with the scale and business tasks approved by the Board of Directors. Member enterprises shall be responsible to the General Director for the effectiveness of the utilized capital, its preservation, and development.

2. Apart from the capital allocated by the Corporation, the enterprise may raise capital for business activities without changing the ownership form of the enterprise as stipulated by law and in accordance with the Corporation's decentralization; it shall bear responsibility for the effectiveness of raising capital. For borrowing to invest in basic construction, purchase equipment, and machinery, the enterprise must prepare a plan to report to the General Director for approval by the Board of Directors before implementation. The enterprise must strictly adhere to the state's investment management and construction regime; the single loan limit and total debt as specified in Article 11 of this Regulation.

3. Shall be permitted to sell, lease, pledge, mortgage, or liquidate assets under its management to serve business operations according to the principles of capital preservation and development and the Corporation's decentralization. For assets specified in Clause 2, Article 9 of this Regulation, the enterprise can only sell, lease, pledge, or mortgage after obtaining approval from the competent authority.

4. Shall be allowed to proactively adjust the capital structure and assets of the enterprise according to business requirements and the effectiveness of capital and asset utilization; external investments must comply with legal provisions and the Corporation's decentralization and delegation. The enterprise shall be responsible to the Corporation for the effectiveness of external investments; the preservation and development of that capital; appointing personnel to directly manage the enterprise's equity stake in other enterprises; and collecting profits from that equity stake.

5. Regarding lost capital and assets, and difficult-to-collect receivables, the enterprise shall handle them according to the Corporation's decentralization and delegation and in accordance with legal provisions. The enterprise shall be responsible to the Corporation and the law for its decisions. After handling, the enterprise must report in writing to the Corporation and the state capital and asset management agency at the enterprise.

6. Shall comply with the Corporation's mobilization and allocation of capital and assets according to the approved plan by the Board of Directors. If the Corporation raises funds through loans, the enterprise shall collect interest at the rate set by the Board of Directors.

Article 24.

1. The enterprise's revenue includes business revenue, financial activity revenue, and other revenues. The contents of each revenue item are defined in Article 16 of this Regulation.

2. The enterprise's expenses include business operation costs, financial activity costs, and other activity costs; all expenses must comply with economic and technical norms, unit prices approved by the Board of Directors, and must be supported by legitimate and valid invoices and receipts.

Business operation costs include factors such as raw materials, fuel, and supplies; wages and wage supplements, social insurance, health insurance, trade union fees, depreciation of fixed assets, outsourcing service costs, and other monetary costs.

Selling expenses and enterprise management costs (including payments to higher levels) incurred during the year shall be allocated to goods and services sold during the year.

Financial activity costs include expenses for buying and selling bonds, bills, stocks, basic depreciation of leased fixed assets, joint venture activity costs...

Other activity costs include costs for recovering written-off debts, fines, and costs for selling and liquidating assets...

Brokerage commissions shall not apply to agents of the enterprise, designated customers, managerial positions within the enterprise, or employees responsible for supplying materials and product sales. The level of brokerage commission shall be decided by the Director and shall be accountable to the Corporation and the law for this decision.

The level of control for expenses on meetings, hospitality, and transactions approved by the Board of Directors for member enterprises shall not exceed the national ceiling prescribed by the State.

In addition to the aforementioned expenses, enterprises may include the following in their costs:

- Provisions for inventory write-downs, provisions for doubtful debts, and provisions for reductions in value of financial investments in accordance with the guidelines of the Ministry of Finance.

- Severance pay for employees as stipulated in Decree No. 198/CP dated December 31, 1994 of the Government guiding certain provisions of the Labor Code.

- Expenses for product warranty services consumed during the period.

For expenses that are not permitted under regulations, enterprises are not allowed to record them as part of their costs.

Any person who decides on unauthorized expenses must compensate for such expenses.

For expenses exceeding the prescribed limits, the Board of Directors shall handle them according to the current State regulations.

Article 25. Profit and profit distribution.

An enterprise's profit is the difference between total revenue and total costs including all taxes as prescribed by law for business operations, financial activities, and other activities. Profits also include profits from previous years discovered and recognized in the current year, less any losses from two previous years (if any) determined in the final settlement.

Profit distribution shall be carried out in accordance with the Financial Management and Business Accounting Regulations of state-owned enterprises.

Article 26. Enterprises shall prepare financial plans linked to business plans, submit them to the Corporation for approval, implement them, and periodically report on the implementation of annual financial plans to the Corporation.

Article 27. Apart from the above provisions, member enterprises have rights and obligations as prescribed by law similar to those of independent state-owned enterprises.

PART II.

MEMBER ENTERPRISES WITH DEPENDENT ACCOUNTING AND NON-BUSINESS UNITS

Article 28. Member enterprises with dependent accounting perform their rights and obligations according to the分级制度的总公司的规定。

Article 29. Non-business units within the Corporation operate under the current State system and organizational and operational rules approved by the Board of Directors. Their financial mechanism is based on revenue covering expenditures. Revenue sources come from economic funds, training, scientific research, healthcare, education, and various training and service activities conducted with units inside and outside the Corporation. These units enjoy welfare and incentive funds according to current regulations applicable to revenue-covering expenditure units.

Article 30. Each member unit of the Corporation has its own financial accounting and statistics department; they implement accounting and bookkeeping systems strictly in accordance with the Accounting and Statistics Ordinance, National Accounting Charter, and Accounting Standards issued by the Ministry of Finance. Financial reports of member enterprises must ensure truthfulness and accuracy, and be prepared and submitted at the time and address specified.

Article 31. Member units are responsible for strictly implementing current State financial management regulations, capital management, and asset management rules, as well as the Corporation's Charter provisions. They are subject to financial activity oversight, capital management, and asset management inspections and supervision by financial authorities and the Corporation as stipulated in the Corporation's Charter.

Chapter 4:

IMPLEMENTING PROVISIONS

Article 32. Based on the provisions of this model financial regulation, state-owned corporations shall develop specific financial regulations for each corporation.

The Corporation's financial regulations are established by the General Director and promulgated by the Board of Directors after receiving written comments from the Ministry of Finance. In cases requiring supplementation or amendment to the financial regulations, the General Director must report to the Board of Directors and obtain approval from the Ministry of Finance before signing the amendments or supplements.

Article 33. Apart from the above provisions, the Corporation and its member units must fully comply with current State financial regulations.