Pursuant to …;

Regarding the approval of the Charter on Organization and Operation of the Hanoi Leather and Shoes Company
________________________ 

THE MINISTER OF INDUSTRY

Pursuant to the Government Decree No. 74/CP dated November 1, 1995 on the functions, tasks, powers, and organizational structure of the Ministry of Industry;

Pursuant to the State Enterprise Law on April 20, 1995;

Pursuant to Decree No. 50/CP dated August 28, 1996 of the Government on the establishment, restructuring, dissolution, and bankruptcy of state-owned enterprises, and Decree No. 38/CP dated April 28, 1997 of the Government amending and supplementing certain articles of Decree No. 50/CP;

Considering the proposal of the General Director of the Hanoi Leather and Shoes Company at Report No. 127/TTr-DGHN dated March 27, 2003;

At the suggestion of the Director of the Department of Organization and Cadres,

Pursuant to …;

Article 1. Approves the Charter on Organization and Operation of the Hanoi Leather and Shoes Company attached hereto.

Article 2. This Decision takes effect fifteen days from the date of publication in the Official Gazette.

The Heads of the Ministry's Office, the Inspectorate, the Department Heads, Bureau Chiefs under the Ministry, and the General Director of the Hanoi Leather and Shoes Company are responsible for implementing this Decision./.

CHARTER

ORGANIZATION AND OPERATIONS OF THE HANOI LEATHER AND SHOES COMPANY
(approved pursuant to Decision No. 99/2003/QĐ-BCN dated June 17, 2003 of the Minister of Industry)

Chapter 1:

GENERAL PROVISIONS

Article 1.The Hanoi Leather and Shoes Company (hereinafter referred to as the Company) was established pursuant to Decision No. 398/CNn-TCLĐ dated April 29, 1993 of the Ministry of Light Industry (now the Ministry of Industry), is a state-owned enterprise operating independently under the Ministry of Industry, established, invested in, and managed by the State as the owner.

The Company specializes in producing and trading in various types of footwear made from leather, faux leather, rubber, fabric, PU or PVC materials, and trading and acting as agents for domestic and foreign enterprises in raw materials, chemicals, machinery, and equipment for the leather and footwear industry and other industries according to the business registration approved.

Article 2. The Company has:

1. The international trade name is: HANOI LEATHER AND SHOES COMPANY, abbreviated as: HANSHOES;

2. The headquarters is located at: 409 Tam Trinh Street, Hai Ba Trung District, Hanoi;

- Telephone: 8621254 - 8624809;

- Fax: (84-4) 8624811.

3. The Company has legal personality, enjoys civil rights and obligations as prescribed by law, bears full responsibility for its production and business activities within the capital it manages, has its own seal for transactions, owns assets and centralized funds, and can open accounts (domestic and foreign currencies) at banks in accordance with the law; the Company operates autonomously and financially, and is bound by obligations and benefits towards the Ministry of Industry in accordance with the Charter on Organization and Operations and financial regulations of the Company.

Article 3. The Company is subject to state management by the Ministry of Industry and other Ministries, agencies equivalent to Ministries, and agencies under the Government, People's Committees of provinces and centrally-administered cities as state management bodies; simultaneously, it is subject to management by these bodies as the agency exercising the rights of the owner over state-owned enterprises in accordance with the Law on State-Owned Enterprises and other provisions of law.

Article 4. The Communist Party of Vietnam organization within the Company operates in accordance with the Constitution, laws of the Socialist Republic of Vietnam, and the regulations of the Communist Party of Vietnam.

Trade Union and other political-social organizations in the Company operate according to the Constitution and laws.

Chapter 2:

Rights of the Company

PART I:

RIGHTS OF THE COMPANY

Article 5.

1. The Company has the right to manage and utilize capital, land, natural resources, and other resources allocated by the State in accordance with the law to achieve the business objectives and tasks assigned by the State.

2. The Company has the right to raise capital, invest, form joint ventures, associate, and contribute capital with economic entities both domestically and internationally to establish companies in accordance with the law.

3. Transfer, lease, mortgage, or pledge assets under the Company's management, except for important equipment and factories which must be approved by the Ministry of Industry and competent state management agencies based on the principle of preserving and developing capital; for land and natural resources under the Company's management and use, they shall be implemented in accordance with the law.

Article 6. The Company has the right to organize management and business operations as follows:

1. Organize management structures and business operations suitable for the objectives and tasks assigned by the State and the Ministry of Industry.

2. Update technology and equipment.

3. Establish branches and representative offices of the Company within and outside the country in accordance with the Government's regulations and the Ministry of Industry's classification.

4. Engage in businesses compatible with the objectives and tasks assigned by the State; expand business scale according to the Company's capacity and market demand; engage in supplementary businesses approved by the Ministry of Industry and competent state agencies.

5. Choose markets freely; export and import according to the State's regulations.

6. Determine purchase and sale prices of materials, raw materials, products, and services, except for products and services priced by the State or the Ministry of Industry.

7. Invest, form joint ventures, associate, and contribute capital shares according to the State's and Ministry of Industry's regulations.

8. Develop and apply material standards, labor norms, unit price of wages within the framework of national standards and regulations of the Ministry of Industry;

9. Select, hire, arrange employment, train labor, choose wage and bonus forms, and have other rights of employers as prescribed by the Labor Code and other laws; decide the wage and bonus levels for workers based on unit price rates for products or services and the operational efficiency of the Company approved by the Ministry of Industry.

10. Invite and meet foreign business partners of the Company in Vietnam; dispatch employees of the Company abroad for work, study, and survey visits in accordance with the provisions of the law.

Article 7. The Company has financial management rights as follows:

1. Utilize the capital and funds of the Company to promptly serve business needs according to the principle of preservation and repayment.

2. Raise capital for business operations independently but without changing ownership forms, issue bonds in accordance with the law; mortgage the value of land use rights attached to assets under the Company's management at Vietnamese banks to borrow funds for business operations in accordance with the law and regulations of the Ministry of Industry.

3. Utilize the basic depreciation fund of the enterprise; the level and ratio of contributions to the basic depreciation fund, usage and management regulations of the basic depreciation fund are prescribed by the Government.

4. After fulfilling all obligations to the State, establishing development investment funds and other funds as prescribed, the Company may distribute the remaining profits to employees based on their contributions to the Company's production and business results for the year. Detailed profit distribution rules after tax are stipulated by the Government.

5. Enjoy subsidies, price supports, or other preferential policies of the State when performing production tasks or providing services for national defense, security, disaster prevention, public welfare activities, or supplying products and services according to government pricing policies that do not cover the production costs of such products and services.

6. Enjoy investment or reinvestment preferential regimes as prescribed by the State.

7. Other rights as classified by the Ministry of Industry.

Article 8. The Company has the right to refuse and report any requests for resources not provided for by law from any individual, agency, or organization, except voluntary contributions for humanitarian and public welfare purposes.

PART II:

OBLIGATIONS OF THE COMPANY

Article 9. The Company has the obligation to accept and effectively utilize and preserve and develop the capital allocated by the State, including the portion invested in other enterprises; accept and effectively utilize natural resources, land, and other resources allocated by the State to achieve business objectives and tasks assigned by the State and the Ministry of Industry.

Article 10. The Company has the obligation to manage business operations as follows:

1. Register and operate in the business fields registered; bear responsibility before the State and the Ministry of Industry for the results of the Company's operations and bear responsibility before customers and the law for products and services provided by the Company.

2. Develop long-term and annual production and business plans consistent with the goals and tasks assigned by the State and market demands, submit them to the Ministry of Industry for approval.

3. Modernize technology and management methods; use income from asset transfers for reinvestment, modernization of equipment and technology of the enterprise.

4. Fulfill obligations towards employees as prescribed by the Labor Code, ensuring employee participation in managing the Company.

5. Implement State regulations on resource protection, environmental protection, national defense, and national security.

6. Implement reporting, statistical, accounting, regular reporting systems as prescribed by the State and extraordinary reports upon request of the Ministry of Industry; be responsible for the authenticity of the reports.

7. Be subject to inspection by the Ministry of Industry; comply with inspection regulations of financial authorities and other competent State agencies as prescribed by law.

Article 11.

1. The company has the obligation to comply with the capital management system and regulations on asset management, funds, accounting, bookkeeping, audit systems, and other systems prescribed by the State; it shall be responsible for the authenticity and legality of the company's financial activities.

2. The Company has the obligation to publicly disclose annual financial reports and information to accurately and objectively assess the Company's operations as prescribed by the Government.

3. The Company fulfills tax payment and State budget contribution obligations as prescribed by law.

Chapter 3:

ORGANIZATION OF THE COMPANY'S MANAGEMENT STRUCTURE

Article 12: The corporate management structure of the company includes the General Director, Deputy General Directors, Chief Accountant, and supporting staff.

1. The General Director of the company is appointed, relieved, rewarded, and disciplined by the Minister of Industry. The General Director of the company is the legal representative of the company and is responsible before the Minister of Industry and before the law for managing the company's operations. The General Director of the company has the highest authority to manage within the company and must meet the standards and conditions as stipulated in Article 32 of the State Enterprise Law dated April 20, 1995.

2. Deputy General Directors assist the General Director in managing the company according to their assigned tasks and delegated powers, and they are responsible before the General Director and before the law for the tasks assigned and delegated to them.

3. The Chief Accountant assists the General Director in directing and organizing the accounting and statistical work of the Company and holds the rights and responsibilities as prescribed by law.

4. The office and specialized departments have the function of advising and assisting the General Director in managing and operating the business.

Article 13. Duties and powers of the General Director.

1. Accept capital, land, natural resources, and other resources from the State and the Ministry of Industry for management and use in accordance with the objectives and tasks assigned by the State, and bear responsibility for using these resources effectively, preserving, and developing the capital.

2. Develop investment development projects, long-term and annual plans of the Company, investment schemes, joint ventures, organizational management plans of the Company, and submit them to the Ministry of Industry for approval.

3. Organize the management and operation of the Company and subordinate units.

4. Establish and promulgate economic and technical norms, product and service standards, wage rates in accordance with State regulations.

5. Issue regulations on wages, bonuses, labor, and discipline in accordance with current State regulations for application within the Company.

6. Decide on purchase and sale prices of products and services in compliance with State and Ministry of Industry regulations on the principle of preserving capital and conducting effective business.

7. Submit to the Minister of Industry for the appointment, dismissal, transfer, commendation, and disciplinary action of the Deputy General Director and Chief Accountant of the Company.

8. Decide on the appointment, dismissal, transfer, reward, and punishment of department heads, deputy department heads, factory directors, deputy factory directors under the company, workshop chiefs, and deputy workshop chiefs within the company, and other rights of employers as prescribed by the Labor Code.

9. Report to the Ministry of Industry and relevant state authorities on the results of production and business operations of the Company.

10. Be subject to inspection and supervision by the Ministry of Industry and relevant state authorities regarding the performance of the Company's functions and tasks as stipulated by law.

11. Other rights as classified by the Ministry of Industry.

Chapter 4:

MANAGEMENT OF THE COMPANY'S CAPITAL IN OTHER ENTERPRISES AND JOINT VENTURES

PART I:

MANAGEMENT OF THE COMPANY'S CAPITAL IN OTHER ENTERPRISES

Article 14. The General Director of the company, upon receiving capital from the State or transferring part of the capital already allocated to contribute to other enterprises, shall have the following rights and obligations:

1. Develop a capital contribution plan to be submitted to the Ministry of Industry for approval.

2. Appoint, dismiss, commend, and discipline the representative managing the contributed capital of the Company in other enterprises.

3. Supervise and inspect the use of the company's contributed capital, be responsible for the effectiveness of its use, preservation, and development, and collect profits from the company's contributions to other enterprises.

Article 15. Rights and obligations of the representative managing the Company’s contributed capital in other enterprises:

1. Participate in the management and operation machinery of the enterprise with the Company’s contributed capital according to the enterprise’s Articles of Association.

2. Monitor and supervise the operational situation of the enterprise with the Company’s contributed capital.

3. Implement reporting systems and be responsible to the General Director of the Company for the Company’s contributed capital in these enterprises.

PART II:

MANAGEMENT OF THE COMPANY'S CAPITAL IN JOINT VENTURE ENTERPRISES

Article 16. Joint ventures in which the company participates shall be established, managed, and operated in accordance with the Law on Foreign Investment in Vietnam, the Enterprise Law, related laws, and the Joint Venture Company Charter.

The Company fulfills all rights, obligations, and responsibilities towards these joint ventures as prescribed by law and in accordance with signed contracts.

(List of joint venture units in the Appendix attached to the Charter).

Chapter 5:

LABOR UNION AT THE COMPANY

Article 17. The Workers' Congress is a direct form for workers in the Company to participate in managing the Company. The Workers' Congress exercises the following rights:

1. Participate in discussions, drafting, or supplementing and amending collective labor agreements for the representatives of the workers' collective to negotiate and sign with the General Director of the company.

2. Discuss and approve the rules for using funds directly related to the interests of workers in the Company.

3. Discuss and provide opinions on planning, evaluating the effectiveness of production and business operations, proposing measures to protect workers, improve working conditions, material and spiritual life, environmental hygiene, and retraining of workers of the company.

4. Other benefits as stipulated by the Trade Union Law.

Article 18. The Workers' Congress of the company is organized and operates in accordance with the State Enterprise Law, the Trade Union Law, and the guidance of the Vietnam General Confederation of Labor and the Vietnam Industrial Trade Union.

Chapter 6:

SUBSIDIARY ACCOUNTING UNITS OF THE COMPANY AND RELATIONSHIPS BETWEEN THE COMPANY AND SUBSIDIARY ACCOUNTING UNITS

Article 19: The company has subordinate units including factories, plants, and production workshops.

(List of subsidiary accounting units in the Appendix attached to the Charter).

1. Unit heads are responsible to the General Director of the company for production and business management, product quality, capital preservation, assets, internal accounting according to the company's management hierarchy.

2. Production and business units of the company are organized and operate according to the operational mechanism and rules issued by the General Director of the company.

3. Organizational structure of subordinate units:

- Factories and Plants have a Director, Deputy Director, and supporting staff;

- Production Workshops have a Workshop Chief, Deputy Workshop Chief, and supporting staff.

Article 20. Duties and authorities of subsidiary accounting units under the company.

1. Develop production and business plans for the unit in line with the company's overall production and business plan based on the economic and technical norms set by the company, report to the General Director for approval, and be responsible for implementing the plan.

2. In addition to main products, the unit may engage in other product and commodity trading according to market demand, laws, and the company's hierarchical regulations, utilizing existing resources optimally and self-funding according to the principle of independent profitable business accounting.

3. Report to the General Director for consideration and decision-making regarding the establishment, dissolution, merger of production organizations, appointment, dismissal, and disciplinary actions against employees under the unit's management.

4. Within the approved staffing framework of the company, units have the right to arrange and organize personnel reasonably, efficiently, and effectively.

5. Based on the salary fund plan provided by the company, units develop reasonable salary plans, allocate salaries to teams and management structures, and pay monthly salaries directly to workers according to current regulations.

6. Have the right and responsibility to care for and develop human resources to fulfill the unit's production and business tasks, meeting market mechanisms, improving working conditions, living conditions, and income of workers according to the Labor Code and the Trade Union Law.

Chapter 7:

FINANCIAL ASPECTS OF THE COMPANY

Article 21.

The Company implements independent accounting and financial autonomy in business operations in accordance with the Law on State-Owned Enterprises, other legal provisions, and the Company's Charter.

Article 22.

1 ||| The charter capital of the Company includes:

a) Capital granted by the State at the time of the Company's establishment.

b) Additional State investment capital for the Company.

c) Portion of post-tax profits supplemented according to current regulations;

d) Other sources of capital (if any)

2 ||| When there is an increase or decrease in the charter capital, the Company must promptly adjust it in the Balance Sheet and announce the adjusted charter capital of the Company.

Article 23.

1 ||| The Company is established and uses funds to ensure high-efficiency development.

2 ||| Funds of the Company are established by the Director's decision, including:

a) The investment and development fund is established from basic depreciation funds and profits of the company as prescribed by the Ministry of Finance, returns from the company's contributions to other enterprises, foreign joint ventures, and other sources.

Basic depreciation capital and reinvestment returns of dependent accounting units of the Company are centralized at the Company for annual investment plans.

b) Financial Reserve Funds, Reward Funds, Welfare Funds established according to the guidelines of the Ministry of Finance. Specific levels of contribution, payment, and usage of these funds follow the guidelines of the Ministry of Finance.

Article 24.

Financial autonomy of the Company:

1. The company operates on the principle of financial autonomy, balancing revenues and expenditures, and is responsible for preserving and developing the company's business capital, including the portion invested in other enterprises and foreign joint ventures.

2. The company conducts financial activity inspections and supervision throughout the company. Subsidiary accounting units implement according to their classification and ensure centralized unified management principles throughout the company.

3 ||| The Company's material responsibility in business relations and civil relations is limited to the level of the Company's charter capital at the time of the most recent announcement.

Chapter 8:

RELATIONSHIP BETWEEN THE COMPANY AND STATE AGENCIES AND LOCAL AUTHORITIES

Article 25.

The Company is subject to inspection and supervision by the Ministry of Industry and relevant state management agencies as prescribed by law in the following areas:

1 ||| Adhere to laws, implement government and Ministry of Industry regulations related to the Company.

2. Implement the planning and development strategy of the Company within the overall planning and development strategy of the industry; implement economic and technical norms, product and service quality standards set by the Ministry of Industry and the State.

3 ||| Adhere to financial systems, credit, tax, profit distribution; accounting and statistical systems as prescribed by laws on accounting and statistics.

4. Adhere to the regulations of the State and the Ministry of Industry regarding organizational work and cadres, including establishment, division, merger, reorganization, dissolution; approval and amendment of the Company's Articles of Association; appointment, dismissal, transfer, commendation, and disciplinary action for the General Director, Deputy General Director, and Chief Accountant of the Company.

5 ||| Implement regulations on natural resource protection and environmental protection.

6 ||| Implement regulations on external relations and import-export.

7 ||| Ensure the implementation of rights and obligations towards employees in the Company as prescribed by law.

Article 26.

With respect to local authorities, the Company is subject to state management and complies with administrative regulations and obligations towards People's Councils and People's Committees at all levels as state management agencies within its territorial jurisdiction as provided by law.

Chapter 9:

REORGANIZATION, DISSOLUTION, BANKRUPTCY OF THE COMPANY

Article 27. The Minister of Industry shall examine and decide on the restructuring, division, merger, or dissolution of the Company.

Article 28. If the Company loses the ability to pay maturing debts and such inability cannot be remedied even after applying necessary measures, it shall be handled in accordance with the provisions of the Bankruptcy Law for Enterprises.

Chapter 10

IMPLEMENTING PROVISIONS

Article 29. These Articles consist of ten chapters and thirty articles and apply to the Hà Nội Da Shoes Company. All individuals and units subordinate to the Hà Nội Da Shoes Company are responsible for implementing these Articles.

Article 30.

In case of need to supplement or amend the Charter, the General Director of the Company shall submit to the Minister of Industry for approval./.

 

ANNEX

(Attached to the Articles on Organization and Operation of the Hà Nội Da Shoes Company)

LIST

SUBSIDIARY ACCOUNTING UNITS AND JOINT VENTURE UNITS OF THE COMPANY AT THE TIME OF APPROVAL OF THE ARTICLES

I. Subordinate accounting units of the Company:

1. Thai Nguyen Shoe Factory.

2. Sewing Workshop.

3. Rubber Workshop.

4. Foundry Workshop.

3. Mechanical Workshop./.

I. Joint venture units of the Company:

Ha-Viet Tung Shing Joint Venture Company./.