MINISTRY OF FINANCE -------	SOCIALIST REPUBLIC OF VIETNAM  Independence - Freedom - Happiness  ---------------
No. 134/2016/TT-BTC	Ha Noi, September 08, 2016

 

CIRCULAR

PROMULGATING REGULATIONS ON FINANCIAL MANAGEMENT OF VIETNAM DEBT AND ASSET TRADING CORPORATION

Pursuant to the Law on Enterprise No. 68/2014/QH13 dated November 26, 2014;

Pursuant to the Law on management and utilization of state capital invested in the enterprise’s business operation No. 69/2014/QH13 dated November 26, 2014;

Pursuant to the Decree No. 215/2013/ND-CP dated December 23, 2013 by the Government defining the functions, tasks, entitlements and organizational structure of the Ministry of Finance;

Pursuant to the Decree No. 99/2012/ND-CP dated November 15, 2012 by the Government on the assignment and decentralization of the exercise of the rights and the performance of the responsibilities and obligations of the state owner toward state enterprises and state capital invested in enterprises;

Pursuant to the Decree No. 87/2015/ND-CP dated October 06, 2015 by the Government on supervision of state capital investment in enterprises; financial supervision, performance assessment and disclosure of financial information of state-owned and state-invested enterprises;

Pursuant to the Decree No. 91/2015/ND-CP dated October 13, 2015 by the Government on investment of state capital in enterprises and the management and utilization of capital and assets in enterprises;

At the request of the Director of the Department of the Corporate Finance Department, the Member assembly of Vietnam Debt and Asset Trading Corporation

The Ministry of Finance hereby promulgates the Circular enclosed with the regulations on financial management of Vietnam Debt and Asset Trading Corporation:

Article 1. The regulations on financial management of Vietnam Debt and Asset Trading Corporation is enclosed with this Circular.

Article 2. This Circular comes into effect from November 01, 2016 and replaces the Decision No. 2857/QD-BTC dated November 09, 2012 by the Ministry of Finance on promulgation of regulations on financial management of Vietnam Debt and Asset Trading Corporation is enclosed with this Circular.

Article 3. The Director of the Department of the Corporate Finance Department, Heads of relevant units, the Member assembly, the General Director of Vietnam Debt and Asset Trading Corporation shall be responsible for implementing this Circular ./.

 

P.P. THE MINISTER THE DEPUTY MINISTER Tran Van Hieu

 

REGULATION

FINANCIAL MANAGEMENT OF VIETNAM DEBT AND ASSET TRADING CORPORATION
(Enclosed with Circular No. 134/2016/TT-BTC dated September 08, 2016 by the Ministry of Finance)

Chapter I

GENERAL PROVISIONS

Article 1. Governing entities and scope

This Regulation provides for the mechanism for financial management of Vietnam Debt and Asset Trading Corporation (hereinafter referred to as DATC or Company) which is owned by the State and converted under the Decision No. 1494/QD-BTC dated June 30, 2010 by the Minister of Finance on the basis of the restructuring of the company for sale and purchase of enterprises’ outstanding debts and assets which is established under the Decision No. 109/2003/QD-TTg dated June 05, 2003 by the Prime Minister.

Article 2. General principles

1. The Company may establish the ownership, the right to management and utilization of the purchased/accepted debts and assets (excluding special cases as prescribed by competent authorities), manage, use, record and monitor the debts and assets according to the provisions of this Regulation and relevant law provisions.

2. Each debt purchased by the Company (on contract or under direction) is considered a special type of goods, the Company shall record and monitor each purchased debt.

3. Debts and assets accepted from wholly state-owned enterprises that undergo rearrangement or ownership transfer, or accepted according to the direction of competent authorities; after accepting such debts and assets, the Company shall manage and monitor data other than those on the balance sheet and handle according to provisions of laws and this Regulation.

4. The conversion of debts and assets into contributed capitals in association with the restructuring of wholly state-owned enterprises which undergo rearrangement or ownership transfer shall be implemented according to the plans (in writing) agreed with competent authorities on approval for plans on restructuring of enterprises in accordance with laws on rearrangement or ownership transfer of enterprises. For other enterprises, the conversion of debts and assets into contributed capitals in association with the restructuring of the enterprises shall be conducted based on agreement with the owners of the enterprises.

5. The utilization of debts and assets as contributed capitals must ensure the efficiency on the basis of the investment plans (including plans on conversion of debts into contributed capitals of restructured enterprises) approved by competent authorities according to regulations. Before capital contribution, assets (excluding debts) must be re-evaluated by licensed valuation bodies according to laws.

6. When accepting, trading or handling debts and assets as appointed by competent authorities, the Company shall conduct on the basis of the plans conformable to the direction of competent authorities and provisions of the Charter of organization and operation issued by the Company.

7. If an enterprise has dominating shares held by DATC via the restructuring of debts in form of conversion of debts into contributed capitals and DATC has a plan on divestment within 05 years counted from the day on which DATC officially became a shareholder of the enterprise, such enterprise shall not be considered a subsidiary company of DATC. For special cases, DATC shall report to the Ministry of Finance for consideration and written response. DATC shall not consolidate financial statements of such enterprises.

Chapter II

SPECIFIC PROVISIONS

Section I. MANAGEMENT AND USE OF CAPITALS

Article 3. Capital of the Company

1. Equity capitals of the Company comprise:

a) Charter capitals of the Company according to the decision of the owner. The owner shall provide sufficiently charter capitals to ensure the operation of the Company in accordance with laws.

b) Capitals accumulated by the Company itself from its business operation which are added to the paid-in capitals.

2. Capitals raised by the Company in the form of loans from credit institutions and/or financial institutions; loans from non-enterprise organizations/individuals or from employees; issuance of corporate bonds and other forms according to laws.

Article 4. Capital mobilization

1. Rules for capital mobilization:

a) The capital mobilization shall be based upon the 05-year investment and development strategies/plans and annual business plan of the Company;

b) The capital mobilization plans shall ensure the efficiency and solvency;

c) The person who approves the capital mobilization plan shall monitor the use of capital to ensure that the mobilized capital is used conformably and effectively;

d) The mobilization of capital from Vietnamese organizations and individuals must be made into contracts therewith according to laws;

dd) The mobilization of capitals from foreign organizations and individuals and the application for loans and issuance of bonds guaranteed by the Government shall comply with regulations on public debt management and other relevant law provisions;

e) The capital mobilization in form of issuance of corporate bonds shall comply with law and the Charter for organization and operation of the Company.

2. Power to mobilize capital:

a) The Member assembly of the Company shall decide the capital mobilization plan for specific project where the mobilized capital must not exceed 50% of the equity capital written on the latest quarterly or annual Financial statements of the Company and must not exceed the amount of capitals invested in group B projects according to regulations in the Law on public investment.

The capital mobilization serving the business operation must ensure that the total amount of liabilities is not more than three times as much as the equity capitals of the enterprise specified on the latest quarterly or annual financial statements of the enterprise, where:

- The equity capitals written on the Balance sheets in the quarterly or annual financial statements of the Company shall not include the item “other funding resources and funds”.

- The liabilities written on the Balance sheets in the quarterly and annual Financial statements of the Company shall not include the items: Reward and welfare fund, Scientific and technological development fund; funds established at DATC under the Decision of competent authorities to implement tasks according to appointment, liabilities arising from the issuance of bonds, drafts and other debt instruments guaranteed by the Government to implement the appointed tasks.

The Member assembly shall authorize the General Director to decide the plan on capital mobilization under the competence of the Member assembly;

b) If the mobilized capital exceeds the amount specified in point a of this clause, the Member assembly shall formulate and sent a plan to the Ministry of Finance or a competent authority and make a decision after such plan is approved.

Article 5. Rules for use of capital

The Company may initiatively use its capital for its business activities in an lawful and effective manner to preserve and develop the capital, including:

1. Using capital to purchase debts and assets for trading purpose in conformity with laws; prioritizing the restructuring, rearrangement and ownership transfer of state-owned enterprises. The Member assembly shall detail the components of dossiers, procedures for formulation, assessment and competence in deciding the debt/asset purchase plan to be applied to the Company according to law and this Regulation.

2. Using capital to carry out tasks according to the assignment of competent authorities in accordance with the business of the Company.

3. Using the capital to repair and renovate the assets.

The Company may initially use its operation capital to repair and renovate assets to increase the value of the assets to facilitate the capital divestment. The investment in the repair and renovation of the asset shall be recorded as an increase in the asset value . The investment in the repair/renovation of asset in fundamental construction investment must fully comply with regulations on investment and construction management.

4. The use of capital for investment in or purchase of fixed assets serving the operation of the Company shall ensure:

- The provision of equipment suitable for the operation of the Company and the compliance with regulations.

- The compliance with current regulations on fundamental construction investment and fixed asset purchase.

- Record purchased assets according to current law provisions.

Article 6. Preservation of capital

1. The Company shall preserve and develop the state capital invested to the Company.

2. Biannually and annually, DATC shall report to the Ministry of Finance the increase/decrease and the use of the state capital for monitoring.

3. The preservation of the state capital in the Company shall be carried out by:

a) The compliance with the regulations on management and use of capitals/assets, the distribution of profits and other financial management policies and accounting policy according to law;

b) The purchase of insurance for the asset according to law;

c) The prompt settlement of losses in assets, irrecoverable debts and the making of loan loss provision according to provisions of this Regulation and the guidance of the Ministry of Finance;

d) Other measures to preserve the state capital in the Company according to law.

4. DATC shall annually assess the capital preservation level of the Company as follows:

a) After making the provisions as prescribed in Article 7 of this Regulation and in accordance with instructions of the Ministry of Finance, the bottom line of income statement shows neutral or positive numbers, such enterprises have succeeded in conserving their capital.

b) If, after making provisions in accordance with instructions of the Ministry of Finance and provisions of Article 7 of this Regulation, the bottom line of income statement shows negative numbers (including accumulated losses), such state enterprises have failed to conserve their capital.

Article 7. Making provisions

1. Subjects of making of provisions of the Company include:

a) Provision against devaluation of goods in stock:

- The Company shall make provisions against devaluation of goods in stock for goods which are in stock (including assets that DATC purchased under agreement and direction using the business capitals, distressed assets, assets pending settlement, including real estates).

- The Company is not required to make provisions against devaluation of goods in stock for assets accepted from state-owned enterprises which undergo rearrangement or ownership transfer or under the direction of competent authorities.

b) Provision against bad debts:

- The Company shall make provisions against bad debts for:

+ Debts that DATC purchased under agreement and direction using business capitals.

+ Bad debts arising from the business operation of DATC.

- The Company is not required to make provisions against bad debts for:

+ Debts accepted from enterprises which undergo rearrangement or ownership transfer or under the direction of competent authorities.

+ Receivable debts when the Company implement tasks according to the direction of competent authorities.

c) Provisions against losses of financial investment.

2. Specific regulations:

a) For debts that DATC purchased under agreements and direction using business capitals: pursuant to the plans on recovery of debts and the assessment of the solvency of the debtors, DATC shall decide the rate of provisions according to the Regulation issued by the Member assembly of the Company as prescribed in clause 3 Article 7 of this Regulation.

b) If the amount of divestment is lower than the book value of the investment, DATC shall make additional provisions to offset the financial investment at the time of formulation of capital transfer plans according to provisions of this Regulation and current law provisions.

c) For restructured enterprises, if the financial statement has not been made by the time of making of provisions (the end of fiscal year or the time when the capital transfer plan is formulated), DATC may use the financial statement of the latest time of the restructured enterprise as the basis for making provisions.

3. Pursuant to law provisions on debt management and the guidelines of the Ministry of Finance and provisions of this Regulation, the Member assembly of the Company shall issue the Regulation on making of provisions in accordance with the peculiar operation of the Company after receiving direction of the Ministry of Finance.

Article 8. Outward investment of the Company

1. Rules for outward investment of the Company

a) The Company may use assets (including cash, fixed assets, current assets and other assets) under its management for outward investment, provided that the effectiveness is ensured and the capital is preserved, conformable to the charter and law provisions and the investment and development strategies of the Company approved by the owner.

b) The Company must not contribute in or directly invest in real estate-related activities, must not contribute or buy shares from banks, insurance companies, securities companies, venture funds, securities investment funds or securities investment companies, except:

- Capital contribution via the restructuring of wholly state-owned enterprises which under go rearrangement or ownership transfer;

- Investment in the renovation of the accepted assets, assets received as replacement for the debt repayment obligation (including the land use right) for development and/or withdrawal;

- Other cases as prescribed by competent authorities.

c) If the Company has contributed or invested in the activities specified in point b clause 1 of this Article, the Member assembly must formulate a restructuring plan and shall have a plan for conversing wholly the invested capital according to regulations.

d) DATC may initiatively decide to purchase or sell stocks, convertible bonds or the right to buy shares of enterprises that the Company holds shares or has a restructuring plan to facilitate the restructuring of debtor enterprises and settle debts and the purchased/transferred assets.

dd) DATC must not make outward investments in the following cases:

- Outward investments by making financial contribution, buying shares or buying wholly of other enterprises whose manager/representative is a sprouse, natural father, natural mother, father in law, mother in law, adoptive father, adoptive mother, natural child, adoptive child, full sister, full brother, brother in law or sister in law of the Chairman or a member of the Member assembly, the inspector, the General Director, the Deputy General Director or the Chief accountant of the Company.

- Outward investments by cooperation with an enterprise whose monitoring shares are held by DATC to establish a joint-stock company or a limited liability company or conduct a business cooperation contract.

e) The Company must not use the assets that are being leased for operation, borrowed or kept by the Company (excluding transferred assets) to make outward investment..

g) Every year, the Company shall report to the Ministry of Finance the situation of investment of the Company for inspection and monitoring according to regulations.

2. Forms of outward investment

a) Capital contribution through neither the sale or purchase of debts to establish a joint-stock company or a limited liability company nor the business cooperation contract without forming a new legal status;

b) Use of the purchased assets and debts to carry out capital contribution or convert the debts into the contributed capitals of a joint-stock company, limited liability company or a partnership;

c) Purchase of shares from a joint-stock company, purchase of capital holdings of a limited liability company or a partnership according to law;

d) Whole purchase of another enterprise according to law;

dd) Purchase of public debts, bonds or other debt instruments, repurchase of bonds/drafts issued by DATC (excluding the repurchase of bonds/drafts issued by DATC to implement tasks according to the appointment of a competent authority); opening of a deposit account at the State Treasuries or commercial banks in Vietnam to receive interest.

e) Other types of invesrment according to law after receiving written approval from the Ministry of Finance.

3. Power to make decision on outward investment projects

a) The Member assembly of the Company or the General Director, if authorized by the Member assembly, shall decide the amount of outward investments of the Company which does not exceed 50% of the equity capital specified on the latest quarter or annual financial statements and does not exceed the amount of investment to a group B project as prescribed in the Law on public investment;

b) For outward investments of the Company which values over 50% of the equity capital written on the latest quarter or annual financial statements, the Member assembly shall make decision after obtaining approval for the policy from the Ministry of Finance or a competent authority.

4. These outward investments are not considered non-core business line investment:

a) Investments in the purchase of convertible shares/bonds, the purchase rights shall be divided according to the amount of shares of joint-stock companies restructured by DATC which are being held by DATC to ensure the ratio of shares of the enterprise;

b) Investments arising from the purchase and sale of debts and/or assets like share capital contribution, joint venture, associate in fixed asset, conversion of debts into contributed capitals; investments for development or lease out of the accepted assets, collateral, foreclosed assets.

Article 9. Management of the Company’s outward investments

DATC shall manage the outward investments of the Company according to regulations of the Law on management and utilization of state capital invested in the enterprise’s manufacturing and business activities, finance-related Charters and Regulations of the Company; Regulation on multi-task remuneration funds, Regulation on management of representatives issued by the Member assembly and law provisions, where:

1. The assessment and monitoring of capital contribution from the purchased assets, conversion of purchased debts into the capital contribution of a joint-stock company, limited liability company or a partnership shall depend on the debt purchase plan approved by the competent authority;

2. The management and distribution of remuneration for representatives shall be in accordance with the Regulation on multi-task remuneration funds issued by the Member assembly according to this Regulatioon.

Article 10. Transfer of the Company’s outward investments

1. Rules for transfer of outward investment

a) The transfer of the Company’s outward investments (including the transfer of the right to purchase of shares, the right to contribution of capitals to a joint-stock company/multi-member limited liability company) must comply with laws on enterprises, management and investment of state capitals in enterprises, joint-stock and other relevant law provisions; Charters of enterprises receiving contributed capital from the Company and commitment of parties in the joint-venture/associating contracts.

b) The actual value of the enterprise, including the value of the land use right, must be fully reflected according legislation on land;

c) The principles of market prices, publicity, transparency and efficiency must be ensured.

2. If the transfer price is nearly equal to the market price (price which has been assessed by the price assessment authority according to laws on price assessment) but the expected transfer value is lower than the book value of the Company and the Company has made a provision, then:

a) If the provision is equal to or higher than the difference between the expected value and the book value, the Member assembly or the General Director of the Company shall decide on the transfer to divest the Company’s outward investments.

b) If the provision is still lower than the difference between the investment value specified on the accounting records and the expected transfer value, the Member assembly or the General Director of the Company shall report to the Ministry of Finance for consideration and opinion before carrying out the transfer.

3. Methods of transfer of investment

a) Transfer of the Company’s outward investments:

- The transfer of investment of DATC in a limited liability company shall comply with laws on enterprise;

- The transfer of the investment of DATC in a joint-stock company whose stocks have been listed on the stock exchange market shall comply with law on securities;

- For the transfer of the investment of DATC in a joint-stock company whose stocks have not been listed on the stock exchange market, open auction shall be conducted according to regulations. If the open auction is not successful, the competitive bidding shall be conducted in form of stock auction in block. If the competitive bidding is not successful, negotiation shall be carried.

- Starting price for open auction shall be determined on the basis of the assessment of the competent body which must not lower than the book value of the investment minus the provision against financial losses which is made at the time of formulation of the plan on capital transfer;

- For bonds invested by state-owned enterprises for benefits, the transfer shall be carried out according to regulations issued at the time of issuance or issuing plan of the issuing organization (issuing entity). If the state-owned enterprise transfers the bond before the due date, the transferring price must ensure the principle of capital preservation during the transfer. The transfer of bonds which have been noted or have been listed on the stock exchange market shall be carried out according to laws on securities.

b) Transfer of investment of DATC in restructured enterprises through debt sale service:

- DATC shall formulate a plan for divestment after converting the debt into the contributed capital within 05 years from the day on which DATC officially became a shareholder of the restructured enterprise. In special cases, DATC shall report to the Ministry of Finance for consideration and written response.

- For joint-stock companies which are unlisted on the UPCOM stock exchange market, DATC may hire an intermediary financial institution (securities companies or auction companies) to conduct an auction or conduct an auction by itself or conduct an auction via the Stock Exchange according to current laws. If the open auction is not successful, negotiation shall be carried, provided that the price is not lower than the starting price of the latest open auction. DATC may divest the capital in form of sale of the whole lot of shares enclosed with the receivable debts according to plans approved by the Member assembly.

4. Power to make decision on capital transfer

- The Member assembly shall decide the plan on transfer of valuable capital on books which shall not exceed 50% of the equity capital on the latest quarter or annual financial statements of the company. The Member assembly shall authorize the General Director of the Company to decide plans on the transfer of capital under the competence of the Member assembly.

- For plans on the transfer of capitals which values over 50% of the equity capital written on the latest quarter or annual financial statements of the company, the Member assembly shall make decision after obtaining approval for the policy from the Ministry of Finance or a competent authority.

Section II. ASSET MANAGEMENT

Article 11. Investment, construction and purchase of immovable assets of the Company

1. The investment in, construction and purchase of immovable assets carried by the Company shall comply with laws on management and use of state capital invested in enterprises.

a) Power to decide projects on investment, construction and purchase of immovable assets:

- The Member assembly of the Company shall decide specific investment project which must not exceed 50% of the equity capital written on the latest quarter or annual Financial statements of the Company and must not exceed the amount of capitals invested in group B projects prescribed in the Law on public investment. The Member assembly shall authorize the General Director of the Company to decide projects on investment, construction and purchase of immovable assets under the competence of the Member assembly;

- If the project on investment in, construction or purchase of immovable property values over 50% of the equity capital written on the latest quarter or annual Financial statements of the Company and does not exceed the amount of capitals invested in group B projects prescribed in the Law on public investment, the Member assembly shall make decision after obtaining approval for the policy from the Ministry of Finance or a competent authority.

b) Provisions for specific cases:

- For the investment in and purchase of immovable assets by the Company, the investment in the construction must comply with laws on construction, laws on auction and relevant law provisions.

- Regarding the investment in or purchase of immovable assets from outside for internal use, the Company must comply with laws on construction, laws on auction and relevant law provisions.

- The investment in, purchase and use of vehicles (automobiles) serving the business trips of heads and common business, the Company shall ensure the conformity with the standards of purchase and use serving common missions, ensuring the public disclosure, transparency, economy and efficiency according to applicable regulations. The equipment or replacement of vehicles shall be decided by the Member assembly within its competence or by the General Director authorized by the Member assembly.

2. The fixed asset depreciation shall be carried out in accordance with instructions of the Ministry of Finance.

3. Lease, mortgaging and pawning of assets.

The Company may lease out, mortgage or pawn assets under the possession of the Company, ensuring the efficiency to preserve and develop the capital according to law, where:

a) The Member assembly of the Company or the General Director, if authorized by the Member assembly, shall decide lease agreements of assets whose value must not exceed 50% of the equity capital specified on the latest quarter or annual financial statements and the remaining value of the leased assets must not exceed the amount of investment to a group B project according to the Law on public investment.

b) The Member assembly shall decide lease agreements of assets which value over 50% of the equity capital written on the latest quarter or annual financial statements after obtaining approval for the policy from the Ministry of Finance or a competent authority.

4. Liquidation of immovable assets.

a) The Company may initiatively liquidate immovable assets which are broken, technologically obsolete, unneeded or unuseful in the principle of public disclosure, transparency and compliance with laws.

b) Power to make decision on liquidation of immovable assets:

- The Member assembly of the Company shall decide the liquidation plans for the immovable assets with the remaining value not exceeding 50% of the equity capital written on the latest quarter or annual Financial statements of the Company and must not exceed the highest amount of capitals invested in group B projects prescribed in the Law on public investment. The Member assembly shall authorize or appoint the General Director of the Company to decide the disposal, transfer or sale of assets within the competence of the Member assembly.

- The Member assembly shall decide plans on liquidation of immovable assets with remaining value exceeding 50% of the equity capital written on the latest quarter or annual financial statements after obtaining approval for the policy from the Ministry of Finance or a competent authority.

- Where the state enterprise’s plan for transfer or sale of immovable assets is not capable of fully recovering invested capital, DATC must clearly explain and report the reasons for this incapability to the Ministry of Finance prior to the transfer or sale of such fixed assets to serve the monitoring.

- If newly-shopped immovable assets have already been used for 03 first years but not economiccally efficient as stated in an investment project approved by the competent authority, and such assets have no longer been used by DATC but the transfer or sale of these assets fail to recover the invested capital, which leads to DATC’s default on debt repayment as agreed upon in the specified loan contract or arrangement, related persons’ liabilities for this must be clearly defined and reported to the representative agency to find appropriate resolutions in accordance with laws.

c) Method of liquidation of immovable assets:

- DATC shall liquidate immovable assets by way of an auction conducted by licensed auctioneering organization or by DATC itself in an open manner according to the legitimate procedures for asset auction. In the event of liquidation of fixed assets of which the residual value reported in accounting records equals less than VND 100 million, the Director General of the Company shall decide on an auction sale or a deal provided that the selling price should not be smaller than the market price. In the event of fixed assets which are not available for transactions on the market, state enterprises shall be allowed to hire an organization that is competent to conduct an appraisal to determine the price at which such assets shall be sold by employing aforesaid methods.

- The liquidation of fixed assets associated with land must comply with legislation on land.

d) Procedures for liquidation of immovable assets shall comply with current regulations applicable to wholly state-owned enterprises.

5. The Company shall formulate Asset management regulation to clearly define the responsibilities of each phase in the management procedures; fully record to reflect sufficiently, accurately and promptly the accounting status; compile an inventory and compare it with the actual asset periodically or at the request of the owner; invest, manage and use asset according to law and provisions of this Regulation.

Article 12. Management of purchased assets and accepted assets

1. Asset handling methods

a) Selling the purchased assets (including assets as replacement for debt payment), accepted assets, assets for debt guarantee.

b) Using assets to contribute as share capitals, joint-venture or associating capitals.

c) Leasing out or swapping the assets and using such assets in business.

d) Preserving, repairing, upgrading or renovating to sell, lease out or use as contributed capitals or use for business activities.

2. Asset handling principles

a) The assessment of price of the asset to determine the starting price or the negotiation of share capitals, joint-venture capitals, associating capitals or asset swap shall comply with law provisions applicable to wholly state-owned enterprises;

b) The sale of assets in form of direct negotiation, competitive bid or auction must ensure the principle of opening, transparency and compliance with law.

The sale of assets in form of direction negotiation shall be conducted only when the open auction or competitive bid which has been conducted according to regulations is unsuccessful. The open auction must comply with law. For transfer of the land use right, the Company shall comply with legislation on land.

c) The handling of assets accapted from enterprises which undergo rearrangement or ownership transfer shall comply with regulations in Article 7 and Article 8 of Circular No. 57/2015/TT-BTC dated April 24, 2015 by the Ministry of Finance guiding the transfer, acceptance and settlement of debts and excluded assets during the arrangement or transfer of the ownership of the wholly state-owned enterprise (hereinafter referred to as the Circular No. 57/2015/TT-BTC).

d) The handling of the accepted/purchased assets under direction shall be conformable to plans on purchase, sale or handling of assets which are approved by competent authorities.

3. Recording proceeds from asset handling

a) For assets purchased under agreement (including distressed assets) and under direction:

- Proceeds from the sale or lease out of assets are revenues of the Company.

- The value of the share capitals, joint-venture capitals, associating or cooperation capitals is the investment of the Company which shall be recorded according to regulations. The difference between the book value and the amount of contributed capitals shall be handled according to current regulations applicable to wholly state-owned enterprises.

- The value of distressed assets shall not be regarded as the revenue of DATC and shall be recorded by DATC as an increase in value of assets pending handling in proportion to the amount of debt offset against its purchase price at the time of acceptance of such distressed assets. If the value of debt being offset is higher than the book value of its purchase price, the value of assets pending handling to be recorded shall be equal to the book value of purchase price.

On the basis of the result of handling of assets, DATC shall record in the same way as that for the handling of assets purchased in agreement.

b) For assets accepted from enterprises which undergo rearrangement or ownership transfer:

- If DATC sells or temporarily leases out the assets during the time of waiting for handling by other methods, the whole proceeds (excluding the required VAT amount) shall be recorded as liabilities on the Balance sheet and shall be handled as follows:

+ 30% of the proceeds from the withdrawal and handling of the accepted assets shall be recorded as revenues from the handling of the collected debts and received assets.

+ Up to 10% of the proceeds from the withdrawal and handling of the accepted assets shall be sent to the enterprises keeping such assets as prescribed in clause 2 Article 9 of Circular No. 57/2015/TT-BTC.

+ The remaining amount shall be sent to the Enterprise Arrangement and Development Fund according to regulations in clause 4 Article 9 of Circular No. 57/2015/TT-BTC.

- In case where DATC handles the accepted assets in form of capital contribution, lease or replacement or use in business operation:

+ The assets before handling shall be re-evaluated by organizations having function of price assessment according to laws.

+ On the basis of the assessed value, DATC shall pay the enterprise keeping the assets (if any) an amout not exceeding 10% of the assessment value by the time the assets are put in operation.

+ DATC shall record such collateral as an increase in value of the assets and record the re-assessment value as an increase in the paid-in capital after excluding the value which has been paid to the enterprises keeping the assets (if any). Then, the assets shall be under the ownership of DATC and shall be managed, used and developed according to regulations.

- The amount collected from the enperprises handling the assets before transfer and the amount collected from the withdrawal of assets which is lost or deficited during the keeping of the enterprises shall be accounted for the liabilities on the Balance sheet and shall be handled according to regulations in the first paragraph of point b clause 3 of this Article.

Section III. DEBT MANAGEMENT

Article 13. Responsibilities of the Company

1. Formulate and promulgate the Regulation on debt management according to current law provisions (inclusive of receivable debts, including purchased or accepted debts and liabilities); clearly assign and determine the responsibilities of the collective or individuals in the monitoring, withdrawal or payment of debts; comparison for verification, classification of debts, withdrawal and handling of debts according to the Operation charter and this Regulation and relevant regulations.

2. Formulate monitoring books, record and pay debts in accordance with specific debts; receivable debts, liabilities (including unpaid profits), regularly classify debts by their periods (undue debts, due debts, overdue debts, bad debts, irrecoverable debts) in accordance with the characteristics of the debts (long-term debts, short-term debts, concessional loans, commercial loans, foreign debts, debts under the guarantee by the Government (including receivable or liabilities arising according to the direction of the Government, the Prime Minister));

3. Regularly check, evaluate and analyze the payment capability, expedite the recovery of debts, avoid the arising of overdue liabilities or unrecoverable debts; periodically make debt comparison.

4. Make provision against bad debts according to regulations in Article 7 of this Regulation.

5. For receivable debts dereived from foreign currencies, formulate books for monitoring original currencies (including principals and interest), convert them into VND and settle the exchange differences according to regulations.

6. Formulate dossiers to monitor the off-balance sheet of the value of the principal debts to form the basis for the monitoring or comparison of the debt according to the records for debtor and the evaluation of the effectiveness of debt purchase plans. Regarding accepted debts, DATC shall conduct off-balance sheet monitoring and management of the conformity with the characteristic and time of acceptance of debts for monitoring and handling.

7. Formulate guarantee plans for debts purchased or accepted under direction, debts arising during the implementation of appointed tasks in compliance with the direction of competent authorities. Monitor and record to separate accounting entries so as to determine the result of the implementation of tasks.

8. Any difficulties, overdue debts or irrecoverable debts arising during the implementation shall be reported to the Ministry of Finance by DATC for solution.

9. Determine clearly whether the reasons are objective or subjective for irrecoverable debts (excluding receivable debts arising during the implemenation of tasks assigned by the Government and/or by the Prime Minister). For subjective reasons, DATC shall manage the compensation for relevant individuals and collectives. For objectove reasons, the Member assembly, Steering Committee and relevant divisions shall determine the reasons and make records. If such debts are determined relevant to the manufacture and operation, they shall be covered by the provisions against bad debts. If the amount of the provisions is insufficient, the difference shall be recorded as operating cost of the Company.

10. After handling irrecoverable debts according to regulations, continue monitoring the off-balance sheet the Notes to the financial statement for at least 10 years from the date of implementation and shall take measures to recover debts. If debts are paid, the remaining amount of the recovery shall be recorded as other revenues of DATC after deducting the relevant costs.

11. Draw up plans on debt payment and balance of cash flows to ensure debt payment sources; pay debts according to committed schedule; manage and direct activities to ensure the ability to pay debts (exclusive of liabilities arising after carrying out tasks according to the instructions of competent authorities); promptly determine difficulties in debt payment to promptly take remedial measures to avoid the arising of overdue debts. If remedial measures are not promptly taken and debts are overdue for more than 06 months, depending on the result of the lateness in handling of debts, the owner shall decide the disciplinary measures according to regulations. If the lateness in handling of debts leads to the insolvency, the Company shall be responsible before the owner and law.

12. Where DATC fails to pay sufficiently debts and other financial obligations which are due, the General Director shall request the Member assembly to take remedial measures for financial difficulties and report the financial situations of DATC to all the creditors. In such case, the President of the Member assembly, members of the Member assembly and the General Director of DATC do not have power to decide on increase of wage and must not give awards to its administrative officers or employees using the interests of the Company. Particularly for liabilities which arise when DATC is carrying out tasks according to the direction of the Government or the Prime Minister, DATC shall send a report to competent authorities in case it fails to ensure the solvency of due debts so that the Ministry of Finance and the Government can consider taking handling measures.

13. DATC is entitled to exclude receivable and payable debts when carrying out tasks according to the direction of competent authorities to assess and monitor the investment of state capital, monitor the financial situations, conduct performance assessment and disclose financial information of DATC.

Article 14. Handling of receivable debts araising during the operation (excluding purchased or accepted debts or debts arising during the implementation of tasks according to the direction of the Government and the Prime Minister).

1. The Company shall handle receivable debts arising during the operation according to laws on debt management of wholly state-owned enterprises.

2. Forms and methods of debt handling

a) Collecting debt directly or via debt collection service providers which legally operate in Vietnam.

b) Handling debts in forms of debt freezing, debt expansion, debt remission.

c) Selling receivable debts according to laws, including overdue debts, bad debts, irrecoverable debts, to divest capital in the principle of making of provisions according to regulations. Debts must not be sold directly to the debtors. Parties shall discuss the selling prices of debts and take responsibility for the decision on the selling price of debts.

If the sale of debt leads to the losses in the operation or the loss of the payability of the Company that cause the dissolution or bankruptcy, the Member assembly shall specify the responsibilities of relevant collectives or individuals to provide compensation according to laws, Operation charter and this Regulation.

3. Specific regulations:

a) Regarding the handling of recoverable debts:

DATC must take any measure to collect recoverable debts. For debts under guarantee, debts with collateral or where the debtor is being in the process of dissolution or bankruptcy, DATC shall continue taking measures to collect debts according to law provisions relevant to the characteristic of the debt.

b) Regarding the handling of irrecoverable debts:

- The causes, the responsibilities of the collectives and individuals shall be determined and collectives and individuals shall be requested to provide compensation according to Regulation on debt management issued by the Member assembly.

- Provisions against bad debts shall be used.

- In case of debt sale according to laws, after determining the causes and the responsibilities of collectives and individuals and asking for compensation (if any), the difference between the value of debts and the selling prices shall be offsetted by the provisions against bad debts, the outstanding amount shall be included in the operational expenses of the Company.

- Where the irrcoverable debts have been handled (in the form other than debt sale) but the debtor is still exist, DATC shall continue monitoring them off balance sheet and in the notes to the financial statement for at least 10 years from the date of handling. If recovering these debts, DATC may record the recovered amounts minus related expenses as its incomes.

c) Debt remission:

Subjects of and conditions for debt remission

- For economic organizations:

+ If the debtor has completely dissolved or gone bankrupt according to laws, an application for debt remission shall contain: a Decision of the Court declaring the bankruptcy of the enterprise according to the Law on Bankruptcy or a decision of a competent person on the dissolution of an enterprise. For case of self-dissolution, a notification of the enterprise or a confirmation of the agency issuing the Establishment Decision for such enterprise is required.

+ If the debtor is an enterprise/organization which has terminated its operation and cannot pay the debt and have nobody taking over their debt payment obligation, an application for debt remission shall contain: a confirmation of the agency deciding the establishment of the enterprise or of the business registry office or a tax authority of that the enterprise/organization has terminated its operation and is unable to pay debt.

- For individuals, any of the following documents is required:

+ A Death Certificate (the duplicate) or a confirmation of local government stating that the debtor was died or lost and does not have any inheritance to pay debts.

+ A confirmation of local government stating that the debtor is still alive but does not have working ability or the heritor of the debtor is unable to pay debt.

+ The arrest warrant or the confirmation of a legal authority stating that the debtor incapable of civil acts has makes a getaway or is being prosecuted or is serving a imprisonment sentence.

Article 15. Handling of purchased and accepted debts

1. Debt handling methods

a) Direct collection from the debtors;

b) Handling of collateral serving debt collection;

c) Selling debts to other organizations and individuals, excluding the debtors;

d) Receiving distressed assets;

dd) Transferring debt payment obligation from the debtors to a third party;

e) Authorizing debts collection or collecting debts via debt collection service providers which legally operate in Vietnam;

g) Converting debts into contributed capitals in the enterprises which are the debtors;

h) Initiating lawsuits to request debt payment;

i) Other forms in accordance with laws and decisions of competent authorities.

2. During the debt payment period, on a case-by-case basis, the Company may be handled by any of the following methods:

a) Debt payment periods are structured in form of debt freezing, debt expansion, depending on the solvency of the debtors on the basis of specific conditions of debt collection; in conformity with the capacity of monitoring of the operation of DATC towards the debtors to ensure the effectiveness of debt buying plans.

b) The Member assembly of the Company shall consider reducing the interest debts according to the principal debt payment progress in the principle of ensuring the effectiveness of debt collection plans.

- If the debtor pay sufficiently the principal debts withiin 12 months from the day on which the debtor undertakes to pay fully the principal debts, then the Member assembly of the Company shall consider cancelling the interest debts after collecting fully the principal debts, provided that the effectiveness according to the approved debt buying plans is ensured.

- If there are losses in the business of the debtor and the debtor has paid the debt according to the undertaking within 6 months, DATC may reduce the principal debts of the debtor enterprise, provided that the effectiveness according to the approved debt buying plans is ensured; the amount of deduction in such case must not exceed the accumulated loss of the enterprise and must not exceed the difference between the book value of the debt and the debt buying cost price by the time of debt remission;

c) Regarding purchased debts, DATC shall adjust the interest of the debt in accordance with the solvency of the debtor and the market situation, provided that such interest is not lower than the average interest applicable to 12-month term deposits issued by the Transaction Offices of four dominant commercial banks (Vietcombank, Vietinbank, Agribank, BIDV) at the time of consideration of adjustment of the interest. The interest of a 12-month term deposit at a bank is the interest of a 12-month term deposit that is posted on Website of such bank or on a written notification defining the interest rate, applicable to customers being organizations.

d) Assets (including the land use right) are collected as the replacement for debt payment according to the decision of the Member assembly of the Company. Distressed assets must have documents defining the lawful right to ownership or right to enjoyment (applicable to land use right). The value of the distressed assets must have high liquidity, be effective during the development and must be agreed by the parties. Before being accepted, the assets must be evaluated by a functional authority.

dd) An agreement with the debtor and the third party on the transfer of debt payment obligation to the third party shall be concluded to ensure the advantage of DATC in the collection of debt, where the value of the transferred debts shall be regarded as the revenue of DATC;

e) The conversion of debts into contributed capitals must be carried after being agreed by the debtor enterprise and must be in conformity with regulations in the Operation Charter of the Company and this Regulation.

g) Debts are sold by direction agreement with the buyer according to laws in any of the following cases:

- The sale of debt by open auction is unsucessful.

- A third party has undertaken to buy partially or wholly the debt before DATC signs the debt buying contract and satisfied the requirements for price, payment and deposit or ability to participate in the restructuring of the enterprise or support the post-restructuring operation of the enterprise.

h) Collateral for the debt (including the land use right) is sold. The sale of collateral shall be agreed by DATC and the debtor and shall be in accordance with relevant law provisions. The sale of land use right must comply with legislation on land.

i) Debt remission

- For accepted debts:

+ Every year, the Company shall review and classify debts to evaluate the receoverability of the accepted debts.

+ For irrecoverable debts which are accepted and have been monitored off-balance-sheet for more than 10 years (including the time of off balance sheet monitoring before transfer to DATC, if any), DATC shall gather documents and send a report to the Ministry of Finance for consideration and decision to terminating the monitoring on accounting books.

- For debts which are purchased under an agreement or purchased under a direction using the business capital of DATC, debt remission shall be performed in the following cases:

+ Entities and requirements for consideration of debt remission: as prescribed in point 3.3 Clause 3 Article 14 of this Regulation.

+ When performing debt remission, the Company shall formulate different dossier for each debtor and specify the responsibility of the collective and individuals in the purchase of irrecoverable debt, send a report to the Member assembly to request the consideration of decision on debt remission in the scope of debt buying plans under the competence of the Member assembly. The debt remission shall be financed from the difference between the value of the debts on accounting books and the cost price for buying the debts. If the amount of debt eligible for remission is higher than such difference, it shall be offsetted by the provisions against bad debts. If the provisions are not sufficient for making up for the inadequacy, the difference shall be included in the operational expenses of the Company.

3. Recording of proceeds for handling purchased and accepted debts

a) For assets purchased under agreements and under directions:

- The amount of debts collected from the debtors in cash or collected from the sale of debts or collateral shall be considered the revenues of the Company.

- For capitals contributed from the difference between the value of the debts and the cost price of the debts, DATC shall record and monitor the investment off balance sheet by face value. For cases of conversion of debts into contributed capitals from the debt buying cost price, the Company shall record the contributed capitals as an increase and record the debt buying cost price by the amount converted into contributed capital by the time of conversion of debts into contributed capitals. The Company shall record its proceeds and cost of transfer of such capital holding into accounting entries according to current regulations.

- In case of agreement with the debtor and the third party on transfer of the debt payment obligation from the debtor to the third party, the value of the transferred debt shall not be considered the revenues of DATC.

b) For accepted debts:

- The proceeds from the recovery and handling of accepted debts shall be recorded according to regulations in Article 9 of Circular No. 57/2015/TT-BTC dated April 24, 2015 by the Ministry of Finance. To be specific:The whole of proceeds from the recovery and handling of accepted debts (excluding VAT prescribed by law) shall be defined as liabilities on the Balance sheet and shall be handled as follows:

+ 30% of the proceeds from the recovery and handling of the abovementioned debts shall be recorded as the proceeds from the handling of debts and accepted assets.

+ Up to 10% of the proceeds from the recovery and handling of the accepted assets shall be sent to the enterprises to offset against the cost of management and keeping of such assets (if any) as prescribed in clause 2 Article 9 of Circular No. 57/2015/TT-BTC.

+ The remaining amount shall be sent to the Enterprise Arrangement and Development Fund according to regulations in clause 4 Article 9 of Circular No. 57/2015/TT-BTC.

- For case of collection and handling of accepted debts: The proceeds from enterprises (for accepted debts which are handled before transfer), money collected from the debtors and interests sent from the former debt handling enterprise; money collected from the sale of the received debts; the proceeds from the sale, lease out or development of the collateral for the debt shall be considered the money collected from the recovery and handling of accepted debts as prescribed in the first paragraph of point b of this clause.

Article 16. Handling of debts in association with restructuring of debtors

The conversion of debts into contributed capitals associated with the restructuring of the debtor enterprises must be on the basis of the plan on restructuring approved by a competent authority according to the agreement between DATC and the owner of the enterprise, facilitating the restructuring, administration and supevision of the enterprise and divestment when necessary.

1. DATC shall reduce the debt payment obligation of the debtor during the implementation of the plan on restructuring and ownership transfer as follows:

- For state-owned enterprises which undergo restructuring or ownership transfer:

+ The reduction in debt payment obligation shall be in association with the plans on restructuring and ownership transfer according to laws on transfer of ownership of state-owned enterprises.

+ The rate of reduction of debt payment obligation must not exceed the negative number of equity capital according to the result of determination of enterprise value of the restructured enterprise which as been approved, minus the reduction in debt payment obligation from other debtors (if any) any does not exceed rthe difference between the book value of the debt and the cost of debt purchase by the time the debt payment obligation is made.

+ From the time of determining the enterprise value to the time of officially transformed into joint-stock company, if losses are incurred, the representative of the owner shall direct the restructured enterprise to clarify the reasons and responsibility of the collective and individuals concerned to carry out any possible remedy and compensation as stipulated; for the remaining losses, DATC and creditors involving in the restructuring shall consider reducing the debt payment obligation after deducing the difference according to regulations.

- The reduction of debt payment obligation of enterprises other than state-owned enterprises which undergo restructuring or ownership transfer must be in association with the plans on conversion of debts into contributed capitals approved by a competent authority of DATC. The amount of reduction must not exceed the negative number of equity capital on the latest financial statement which has been audited by an independent audit organization and must not exceed the difference between the book value of the purchased debt and the cost of debt purchase by the time of decision on reducing debt payment obligation.

- The reduction of debt payment obligation shall not cause any change in the responsibility of organizations or individuals which have caused financial losses.

- For enterprises being debtors which are restructured under the direction of DATC and 50% of charter capital of which is held by DATC, if the debtor has paid an amount sufficient to offset the cost of debt purchase within 12 months from the undertaken date, DATC shall consider reducing the debt payment obligation to offset the accumulated lossed in case the difference for handling is still available.

- DATC shall formulate a divestment plan to divest capital after converting the debt into the contributed capital within 5 years from the day on which DATC officially became a shareholder of the restructured enterprise. For special cases, DATC shall report to the Ministry of Finance for consideration and written response.

2. When the restructuring progress is completed, DATC shall request the debtor enterprise to determine the amount of the transferred debt and expedite the collection of debt according to the agreed plan.

Article 17. Handling of liabilities

1. Liabilities without debtors shall be recorded as proceeds of the Company.

2. When mobilizing capitals from the issuance of bonds and drafts guaranteed by the Government and the Prime Minister to implement tasks according to the direction of competent authorities, DATC shall comply with the Project which has been approved by competent authorities.

3. Debts arising in the implementation of tasks according to the direction of the Government, the Prime Minister, DATC shall conduct the debt handling plan according to the direction of competent authorities and conduct separate supervision to clearly determine the result of the implemenation of tasks.

Any difficulties arising during the handling of debts shall be reported to the Ministry of Finance for consideration and solution to the best of their competence and ability or report to the Government and the Prime Minister for instruction.

Article 18. Wage fund and multi-task remuneration

1. Wage fund of DATC shall be determined according to current regulations on wholly state-owned enterprises. The management, allocation and use of the Fund shall accord with the Regulation issued by the Member assembly of DATC.

2. Multi-task remuneration shall be used for paying the officers of DATC, including managers of enterprises of DATC, officers of DATC who are appointed to take over positions at other enterprises, officers of DATC carrying out or assisting the capital management of DATC contributed to other enterprises.

Multi-task remuneration shall be funded by the actual remuneration sources that the enterprise receiving contribution from DATC pays the officers of DATC (including the manager of the enterprise) who are appointed to hold multiple positions at other enterprises which are sent to DATC and shall be paid as follows:

- Multi-task remuneration shall be paid in accordance with the performance and must not exceed 50% of the actual remuneration that the officers receive from their Company;

- The redundant amount of multi-task remuneration shall be retained for use in the following years.

Section IV. MANAGEMENT OF REVENUES, COST AND RESULTS OF BUSINESS OPERATION

Article 19. General principles

1. Revenue and spending of the Company shall be conformable to accounting standards; Operation charter, this Regulation, laws on taxation and other relevant law provisions.

2. For debt or asset purchase, sale or acceplance plans under the direction of competent authorities, DATC shall record the revenues and spending according to plans which have been approved by competent authorities.

3. For implementation of task according to the appointment of competent authorities where the receipts are insufficient to offset the spending, DATC shall request the Ministry of Finance to consider resolving within their competence or requesting the Government or the Prime Minister to consider and give instructions.

Article 20. Other revenues and proceeds

Other revenues and proceeds of DATC include:

1. Revenues from business operation, including:

a) Revenues from the handling of debts and assets:

- Revenues from the handling of debts and assets which are purchased under agreement or direction:

+ Revenues from the handling of purchased debts

(i) Debts collected from debtors;

(ii) Money collected from the sale of debts or collateral for the debts (including the land use right);

(iii) Money collected from the lease out or utilization of collateral;

+ Revenues from the handling of purchased assets

(i) Money collected from the sale of assets;

(ii) Money collected from the lease out or utilization of assets;

- Revenues from the handling of accepted debts and assets:

+ Revenues from the handling of accepted assets as prescribed in point b clause 3 Article 12.

+ Revenues from the handling of accepted debts as prescribed in point b clause 3 Article 15.

b) Revenues from the transfer of Company’s outward investments:

- Receipts from the transfer of the capital holding arising from the sale, purchase and handling of debts and assets and restructuring of enterprises;

c) Revenues from other activities

2. Revenues from financial activities, including interests of the purchase of bonds and drafts; interests of deposits; late payment interests, dividends (excluding dividends paid by bonds) and interest of contribution of share capitals, joint-venture or partnership contribution; possitive difference between the recovery value and the book value plus (+) the cost of transfer and relevant cost during the transfer of the Company’s outward investments (excluding investment formulated from the contribution using purchased or accepted assets or contribution converted from debts).

3. Other proceeds, including collection from the disposal or transfer of fixed assets, collection from the punishment for incompliance with contracts, collection of deposit left by customers; collection from irregular activities; possitive difference between the contributed value in record of assets and their book value.

Article 21. Spending of the Company

1. Spending on business operation:

a) Spending on the purchase of debts and assets

- The debt purchase basic price carried forward to spending in a period is specified as follows:

+ Where the debts are recovered once or are sold:

(i) If debts are sold or recovered once in cash, the whole spending (basis price) on purchase of such debts shall be carried forward to the spending in the period.

(ii) For case of sale of debt, if the revenues from the sale of debt is lower than the cost basis of purchase of the similar debt, the whole of cost of purchase of the debt shall be carried forward to the cost of the period.

+ Where the debts are recovered for many times:

(i) If the revenues from the handling of debts (collecting debts from debtors; developing or selling collateral for the debt) are higher than the cost basis for buying the debts at the time of recovery, the whole of cost basis of purchase of debts shall be carried forward to the spending in the period.

(ii) If the revenues from the handling of debts (collecting debts from debtors; developing or selling collateral for the debt) are lower than the cost basis for buying the debts at the time of recovery, a part of cost basis of purchase of debts that is equal to the actual amount collected from the handling of debts shall be carried forward to the spending in the period. The remaining amount of the cost basis of purchase of debts which is collected shall be carried forward to the spending as abovementioned principle.

- Spending on the purchase or sale of assets, including the cost basis of purchase of assets and other relevant costs (cost of transport of assets, repair, renovation of assets, land rents, etc.) shall be recorded in case of receipts from the handling of assets as follows:

+ For sale of assets: the whole of cost of purchase of such assets shall be carried forward to the spending in the period.

+ For lease out of assets: assets shall be depreciated and relevant spending shall be included in the spending in the period according to regulation.

- Spending directly for the handling of debts, assets and restructuring of enterprises:

+ Spending on making and reversal (if any) of provisions against debts or assets, provisions against losses in investment according to provisions of this Regulation;

+ Cost of services relevant to handling of debts and assets, including:

(i) Cost of asset security;

(ii) Cost of price assessment, cost of auction of debts and assets serving the sale, lease out, contribution, joint-venture or assciation involving debts or assets;

(iii) Cost of price assessment, cost of aution serving the transfer of financial investment;

(iv) Cost of independent audit;

(v) Cost of debt collection service;

(vi) Cost of judgement enforcement;

(vii) Cost of participation in proceeding (if any);

(viii) Cost of advertising and press services;

(ix) Cost of other services related to the handling of debts and assets.

+ Payment to officers that DATC appointed to work temporarily at enterprises having contributed capitals of DATC or enterprises being in restructuring progress (transport and accomodation expenses, etc.);

+ Other costs related to the handling of debts, assets and restructuring of enterprises.

+ Deposit costs; transaction costs during the transfer of financial investment.

b) Costs of handling of accepted debts and assets:

- Discount given to debtors to quickly recover debts;

- Cost of repair or renovation of assets (if any). When arising, such expense shall be recorded on the Balance sheet as asset and shall be carried forward to the expense of direct handling of accepted debts and assets when there are receipts from the repaired or renovated assets.

- Cost of services relevant to handling of debts and assets and divestment;

- Other costs related to the handling of accepted debts and assets.

c) Costs of divestment in the period:

- Value of contributed capitals which are transferred:

+ If the revenues from the sale of the whole or a part of the investment are larger than the corresponding investment on books, the whole of the financial investment shall be carried forward to the spending of the period.+ If the revenues from the sale of the whole or a part of the investment are lower than the corresponding investment on books, the remaining amount on books of the investment after using the provisions to offset the difference shall be recorded as the spending of the period.

d) Brokerage commission costs:

The Company shall pay the brokerage commission for the collection and/or sale of debts/assets in accordance with the following principles:

- The spending on brokerage commissions of the Company must ensure the economic efficiency brought by the brokerage. Pursuant to current regulations of the Government, specific characteristics of the Company, the Member assembly of the Company shall formulate and issue Regulation on brokerage commissions which shall be applied consistently and publicly in the Company. The Member assembly and the General Director of the Company shall take legal responsibility for decisions on payment of brokerage commission of the Company.

- Those eligible for brokerage commissions are domestic and foreign organizations and individuals which provide brokerage services to the Company.

- Brokerage commissions are not applied to entities being customers designated, titles of management or employees of the Company.

- The payment of brokerage commissions must be based on contracts or written certificates between the Company and the recipients of brokerage commissions which must contain the following basic contents: name, address, ID number of the representative of the commission recipient; content of spending (the result of handling of debts and assets contributed by the commission recipients); spending rate; payment method, implementation and end time; responsibilities of the parties.

2. Administrative expense:

Administrative expense of the Company shall be paid according to the Regulation on internal spending issued by the Member assembly of the Company which is in accordance with current regulations of the Government applicable to wholly state-owned enterprises, including:

- Payment of wage in accordance with regulations in Article 18 of this Regulation;

- Spending for employees: spending on compulsory insurance; spending on insurance for accidents and health; contribution to Voluntary pension fund, social security funds, purchase of voluntary pension insurance or life insurance;

- Payment for Inspectors;

- Spending for making of provisions according to regulations in Article 7 of this Regulation;

- Other spending according to law.

3. Spending on financial activities, including:

- Other spending related to the Company’s outward investments like expenses which the capital contributors must pay, losses (if any) shared under business cooperation contracts, losses within the responsibility of the Company in proportion to its capital holding at the enterprises.

- Negative difference between the recovery value and the book value plus (+) the transfer cost and relevant costs arising during the Company’s outward investments (excluding investment from the contribution with assets which are purchased, received or contributed capitals converted from debts at restructured enterprises).

- Exchange differences;

- Payment discounts;

- Provisions against the devaluation of long-term investment made according to provisions of this Regulation;

- Capital mobilization interests according to law;

- Expenses relevant to the purchase and sale of public debts and bonds;

- Other financial expenses.

4. Other expenses:

a) Expenses of transfer or disposal of immovable assets.

b) Spending on the recovery of debts eliminated from the accounting records: the Company may pay organizations with legal status, individuals contributing in the recovery of the eliminated debts on the basis of the contribution and the effectiveness of such organizations and individuals. Procedures and legal liability of payment of such spending shall comply with regulations on brokerage commission specified in Point 2.5 Clause 2 of this Article.

c) Remaining asset losses after offsetted by the sources prescribed in current regulations.

d) The negative difference between the contributed value in record of assets and their book value.

dd) Other reasonable and valid expenses.

5. Spending on payment of taxes, charges and land rents related to business operation according to law.

6. These mentioned below must not be included in operational expenses:

- Expenses of purchase, construction and instalment of tangible and intangible fixed assets;

- Interest on debts included in the expenses of investment and construction;

- Expenses paid without valid records;

- Expenses paid with offsetting sources;

- Fines for violations committed not under the name of the company but of an individual.

Article 22. Profits of the Company

Profits earned in any one year mean the business results of the Company, including profit from business activities, profit from financial investment activities and profit from other activities.

Article 23. Distribution of profit

DATC shall distribute profit and formulate Funds according to current regulations applicable to wholly state-owned enterprises.

Section V. PERFORMANCE SUPERVISION AND ASSESSMENT

Article 24. Performance supervision

The Company shall carry out internal supervision according to regulations for state-owned single-member limited liability companies and shall submit to the inspection and supervision of the owner and competent authorities for the performance according to regulations.

Article 25. Performance assessment and classification of enterprises

Every year, the Member assembly of the Company shall conduct performance assessment and request the Ministry of Finance to check and declare the classification of enterprises depending on assessment criteria in accordance with the peculiar opereation of the Company according to regulations on wholly state owned enteprises.

Section VI. FINANCIAL PLANS, ACCOUNTING, STATISTIC AND AUDIT ACTIVITIES

Article 26. Accounting

The Company shall record data into accounting entries according to the Accounting regime promulgated by competent authorities and particularly applied to DATC in accordance with Vietnam’s accounting standards, Vietnam’s accounting regime and provisions of this Regulation.

Article 27. Financial plans

1. Pursuant to the strategic orientation and business development planning which are approved by the owner, the Company shall formulate long-term business plans and financial plans in conformity with the orientation of the Company approved by the owner.

2. Every year, pursuant to the long-term business plans and the capacity of the company and the market demand, Member assembly shall decide the business plans for the following years.

3. Pursuant to business plans decided by the Member assembly, the Company shall assess the business situation of the year of report and formulate and send the Ministry of Finance a financial plan for the following before the 31st of every July.

Article 28. Financial statements, statistical and other reports

1. At the end of an accounting period (quarterly or annually), the Company shall formulate and send financial statements and statistical reports to regulatory agencies and perform financial disclosure according to current law. The Member assembly of the Company shall be responsible for the accuracy and the honesty of financial statements, statistical reports and financial disclosure.

2. Apart from financial statements and statistical reports which are periodically formulated and sent, the Company shall formulate and sent irregular reports on request of the Ministry of Finance and State management agencies; if the Company has owed debts from domestic or foreign entities under the guaranty of the Government, the Company shall formulate and send reports according to current law provisions on management of debts guaranteed by the Government.

Article 29. Audit

- Annual financial statements of the Company shall be audited by independent audit firms according to law.

- The Company shall conduct internal audit according to law.

Article 30. Apart from provisions of this Regulation, the Company shall comply with other guidelines of the Ministry of Finance on procedures for financial treatment for the sale, purchase, acceptance and handling of assets of enterprises when carrying out the ownership transfer of state-owned enterprises.

Chapter III.

IMPLEMENTARY CLAUSE

Article 31. Effect

This Regulation takes effect from November 01, 2016 and is applicable since the fiscal year of 2016. This Regulation replaces the Regulation enclosed with Decision No. 2857/QD-BTC dated November 9, 2012 by the Ministry of Finance.

Article 32. Relevant provisions

Where any legislative document which is referenced to in this Circular is modified, amended or replaced by a legislative document, the later one shall prevail./.