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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No:
76/2002/TT-BTC
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Hanoi,
September 09, 2002
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CIRCULAR
GUIDING FINANCIAL MATTERS UPON THE TRANSFORMATION OF STATE
ENTERPRISES INTO JOINT-STOCK COMPANIES
In furtherance of the Government’s Decree No.
64/2002/ND-CP of June 19, 2002 on the transformation of State enterprises into
joint-stock companies (hereinafter referred to as Decree No. 64/2002/ND-CP for
short), the Ministry of Finance provides hereby the following guidance on
financial matters:
Part one
GENERAL PROVISIONS
1. The subjects of application of this Circular
are State enterprises and their dependent units prescribed in Article 2 of
Decree No. 64/2002/ND-CP, which are equitized under this Decree.
Enterprises defined in Section III, Part A of
the classification criteria and list of to be-classified State enterprise and
State corporations, issued together with the Prime Minister’s Decision No.
58/2002/QD-TTg of April 26, 2002 shall not be equitized.
2. A number of words and phrases in this
Circular are construed as follows:
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2.2. "Proceeds from the sale of the State
capital portions at enterprises" are the sums of money collected from the
sale of shares belonging to the State capital at enterprises, excluding the
value of preferences for laborers as well as producers and suppliers of raw
materials for the enterprises engaged in processing agricultural, forestry and
aquatic goods.
2.3. "The time of transformation of State
enterprises into joint-stock companies operating under the Enterprise Law"
means the time when the joint-stock companies are granted the business
registration certificates.
3. Depending on the capital size and practical
conditions of each enterprise, when determining their equitization plans, the
State enterprises may select and apply one of the equitization forms specified
in Article 3 of Decree No. 64/2002/ND-CP.
In cases where the enterprises are equitized in
the form specified in Clause 1, Article 3 of Decree No. 64/2002/ND-CP:
"Maintaining the existing State capital portion at the enterprises and
issuing share certificates to attract more capital," the value of the
State’s shares contributed to the companies shall be determined as the actual
value of the State capital portion at the enterprises minus (-) the
equitization expenses and the value of preferences for laborers in the
enterprises (including the value of shares sold on deferred payment to the
poor) and for the producers and suppliers of raw materials for the enterprises
engaged in processing agricultural, forest and/or aquatic products.
4. The State shall only hold dominant shares
(accounting for over 50% of the charter capital) of the equitized enterprises
operating in the conditional business lines specified at Point 1, Section II of
the classification criteria and list of to be-classified State enterprise and
State corporations, issued together with the Prime Minister’s Decision No.
58/2002/QD-TTg of April 26, 2002.
5. If, after being equitized, member enterprises
of State corporations still have over 50% of their charter capital held by the
State, they shall still be the corporations members but operate under the
Enterprise Law and shall not have to pay remittances to the higher level. The
corporations shall only be entitled to transfer the State capital portion
contributed to the joint-stock companies on the basis of compliance with the
provisions of law and the companies charters.
6. Upon receiving the equitization decisions of
competent bodies, the enterprises must expeditiously effect the tax settlement,
handle their unsettled financial matters, and proceed with the equitization
steps. The enterprise finance management agencies and the tax offices shall
have to coordinate with the enterprises in promptly effecting the financial
settlement and handling the enterprises unsettled financial matters according
to the State-prescribed regime.
Part two
FINANCIAL MATTERS UPON
THE TRANSFORMATION OF STATE ENTERP-RISES INTO JOINT-STOCK COMPANIES
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Upon receiving the equitization decisions of
competent bodies, the enterprises shall have to organize the inventory and
classification of assets which they are managing and using at the time of
making financial settlement reports of the quarter preceding the date of
issuance of the equitization decisions:
1. Inventorying to determine the accurate
quantities and quality of actually existing assets which the enterprises are
managing and using at the time of inventory. Identifying any surplus and/or
deficient assets as compared to the accounting books, clearly analyzing the
reasons therefor.
2. Classifying the inventoried assets into the
following groups:
2.1 Assets which the enterprises need to use.
2.2. Assets which the enterprises do not need,
unsold assets, assets awaiting liquidation, assets irrestorable for the
production and business process.
2.3. Assets formed from the reward and welfare
funds (if any).
2.4. Assets leased from outside, supplies and
merchandise accepted for custody, processing, sale and/or consignment.
3. Comparing, acknowledging and classifying
assorted debts, making detailed lists of debts of each type according to the
following regulations:
3.1. Payable debts, including:
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b/ Payable debts which need not be repaid are
debts of the creditors that no longer exist (dissolved or bankrupted
enterprises, dead creditors) or do not come to compare and claim though the
enterprises have notified the creditors in writing or on the mass media.
3.2. Receivable debts, including: receivable debts
recoverable, receivable debts irrecoverable. Clearly analyzing the receivable
debts irrecoverable whether they are overdue or undue, and classifying them
into one of the following cases:
- Debtors are enterprises or organizations which
have been dissolved, bankrupted or inoperative being unable to repay debts.
- Debtors are individuals who are dead, missed,
serving imprisonment sentences, or whose heirs by court judgment are unable to
repay debts. Debtors who are being prosecuted, detained or tried by law bodies
and there are sufficient evidences to prove that their debts are irrecoverable.
- Receivable debts of debtors, which are written
off under decisions of competent bodies according to law provisions.
- Receivable debts with the estimated expenses
for their recovery being larger than their value.
- Receivable debts which have been overdue for
three years or more and the debtors, though still existing and operating, are
doing business at a loss or meet with so great difficulties that they are
unable to repay debts, or the enterprises cannot recover such debts though they
have actively applied many measures.
4. Organizing the evaluation and determination
of the value of assets which the enterprises need to use according to the
State-prescribed regime.
5. Inventorying the cash fund, comparing the
bank deposit balance at the time of determining the value of the enterprises to
be equitized.
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1. Handling of assets
On the basis of the asset inventory and
classification results, the enterprises shall handle assets according to the
provisions in Article 9 of Decree No. 64/2002/ND-CP, including:
1.1. For assets found to be surplus and/or
deficient through inventory, the enterprises must analyze and identify clearly
the reasons therefor and handle these assets as follows:
- For deficient assets, the enterprises must
determine the compensation responsibilities of concerned organizations and/or
individuals as well as administrative handling measures according to current
regulations; for the value of deficient assets, after subtracting the
compensated amounts, the enterprises shall account it into their business
results.
- For surplus assets, if reasons therefor and
their owners cannot be identified, they shall be accounted into the enterprises
business results.
1.2. Assets which the enterprises do not need,
unsold assets, and assets awaiting liquidation shall be handled as follows;
a/ The enterprises must report them to competent
bodies for the latter to transfer them to other units for management and use.
Specifically:
- For the transfer of assets to units within the
branches managed by ministries, the ministries shall issue decisions thereon;
for the transfer of assets to units managed by provinces or cities, the
presidents of the provincial/municipal People’s Committees shall issue
decisions thereon.
- For the transfer of assets to units outside
the branches or localities, the branch-managing ministries or the
provincial/municipal People’s Committee presidents shall submit it to the Prime
Minister for consideration and decision.
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b/ Where no units receive the assets, the
enterprises shall take initiative in liquidating or selling such assets
according to the State-prescribed regime. The sale of assets shall be effected
through public auctions according to the State’s current regulations. The
enterprises must set up asset liquidation or sale councils headed by the
enterprise directors.
Revenues from and expenses for asset liquidation
and/or sale activities of the enterprises at this stage shall be accounted into
the enterprises irregular revenues and expenses according to the
State-prescribed regime.
c/ Where the assets have not yet been handled by
the time of valuation, the value of assets no longer needed for use shall be
excluded from the enterprises value for equitization. The enterprises shall
have to continue monitoring and handling such assets pending their official
transformation into joint-stock companies.
1.3. For assets being welfare facilities like
creches, kindergartens, health stations, and dwelling houses of officials and
employees, which were invested with the welfare and/or reward funds, they shall
not be calculated into the enterprises value for equitization; instead, they
shall be transferred to the laborers collectives for management and use through
trade union organizations.
Particularly for dwelling houses of employees
and workers (including those invested with the State budget capital), the
enterprises shall have to compile dossiers thereof and fill in the procedures
to transfer them to the local land and house management agencies for management
or sale to the dwellers according to current regulations.
1.4. For assets invested with the reward and/or
welfare funds of the enterprises but currently used in production and business,
they shall be calculated into the value of the to be-equitized enterprises
according to their re-assessed value. The value of these assets shall be
converted into shares under the ownership of laborers on the enterprises lists
of regular laborers at the time of equitization and shall be distributed
according to the actual working time of each laborer in the enterprises.
2. Handling of bad receivable debts
Bad receivable debts shall be handled according
to the provisions in Article 10 of Decree No. 64/2002/ND-CP, including:
2.1. For receivable debts which are
irrecoverable, the enterprises must produce concrete evidences to prove their
irrecoverability, such as:
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- For the dissolved or bankrupted enterprises,
there must be the dissolution decisions of the agencies that have decided on
their establishments, or the court’s decisions to handle bankrupted units.
- The written certifications of local
authorities, for debtors being individuals who have been dead, missed, have no
inherited properties for debt repayment, or are serving sentences, prosecuted,
detained or tried and unable to repay their debts.
- Hunt orders or certifications of law bodies,
for debtors being individuals who have fled away.
- Decisions of competent authorities on writing
off the enterprises irrecoverable debts.
- For receivable debts which have been overdue
for over 3 years and the debtors still exist but are unable to repay such
debts, the enterprises have applied many measures but they cannot recover them,
the enterprises must produce such evidences as: records on debt comparison with
the debtors, debt-claiming official dispatches, official dispatches requesting
the court to declare bankruptcy according to law provisions.
For receivable debts with adequate evidences
proving their irrecoverability, the enterprises shall handle them according to
the provisions in Clauses 1, 2 and 3, Article 10 of Decree No. 64/2002/ND-CP.
2.2. For other overdue receivable debts, the
enterprises must continue claiming them or sell them to economic organizations
with the debt sale and purchase function at negotiated prices, must not sell
them directly to the debtors. Any loss incurred from the debt sale shall be
handled according to the provisions in Clause 1, Article 10 of Decree No.
64/2002/ND-CP.
2.3. Pending their official transformation into
joint-stock companies, the enterprises shall have to continue supervising, and
organizing the collection of, debts already excluded from their value.
3. Handling of payable debts
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3.1. For payable debts which need not be repaid,
they shall be accounted into the enterprises irregular incomes.
3.2. For tax debts and remittances payable into
the State budget: After handling the receivable debts according to the
provisions in Item 2 above, if the enterprises are still unable to repay tax
debts and remittances payable into the State budget, they shall, on the basis
of their practical financial situation and the reasons for outstanding debts, compile
dossiers reporting them to the Tax Department for inspection before submission
to the Ministry of Finance for consideration and decision on the applicable
measures to freeze and/or reschedule debts, support investment capital or write
off outstanding tax debts as well as remittances payable into the budget, which
must not exceed the accumulated loss at the time of valuation. The order and
procedures therefor shall comply with the guidance in Part B, Section IV of
Circular No. 32/2002/TT-BTC of April 10, 2002 of the Ministry of Finance on
rescheduling, freezing and writing off tax debts and remittances payable into
the State budget for enterprises as well as production and business
establishments meeting with difficulties due to objective causes.
3.3. For outstanding debts owed to State-run
commercial banks: Where the enterprises meet with difficulties in balancing
their capital sources to repay overdue debts, the general directors of
State-run commercial banks shall consider and decide to freeze and/or
reschedule the enterprises overdue debts by the time of issuance of the
equitization decisions within a time limit of between 3 and 5 years. Where
these enterprises suffer from business losses and are unable to repay debts,
they shall have their interest debts, including interests already added to the
loan principals, written off with the amounts not exceeding the remaining
losses.
The equitized enterprises shall take initiative
in coordinating with the creditor-banks and the organizations with the debt purchase
and sale function in handling the residual overdue loan principals along the
direction of purchasing or re-selling such debts or converting them into the
banks� capital
contributed to the equitized enterprises according to the law provisions on the
percentage of contributed capital.
3.4. For overdue debts payable to foreign
countries, which have been guaranteed, the enterprises and the guarantors must
negotiate with the creditors so as to write off the interests thereon, freeze
debts or reduce the loan principals, then arrange capital sources for debt
repayment. Where the enterprises cannot arrange capital sources for debt
repayment, the guarantors shall have to arrange capital sources for repaying
the debts for the enterprises according to the committed schedule. The
enterprises shall have to repay the debts to the guarantors or convert them
into the guarantors capital contributed to the joint-stock companies.
3.5. For social insurance debts and debts owed
to officials and employees: The enterprises shall have to repay them definitely
before being equitized so as to ensure the laborers interests.
3.6. The conversion of payable debts into
equities in the equitized enterprises must ensure the following requirements:
a/ Being effected through the results of the
auctions to sell shares.
Where the creditors have no conditions to
participate directly in the auctions, the enterprises and the creditors shall
sign agreements on the prices for converting debts into equities before the
auctions take place, which shall be the creditors prices for participation in
the auctions. Where the participants offer the same auction prices, the
creditors shall have the pre-emptive right to convert debts into equities at
the negotiated prices. Particularly for the conversion of debts payable to the
laborers in the enterprises into equities, it shall be effected at the
"floor" price prescribed in Article 21 of Decree No. 64/2002/ND-CP.
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4. Reserves and undistributed profits
Before determining the enterprises value, the
stock price decrease reserve, the bad debt reserve, the securities price
decrease reserve, exchange rate difference, job-loss allowance reserve,
financial reserve and undistributed profits shall be handled as follows:
a/ The balance of the reserves for stock price
decrease, bad debts, securities price decrease (after offsetting losses in
stock price decrease, securities price decrease and handling bad debts at the
time of determining the enterprises value according to the State-prescribed
regime) shall be incorporated into the enterprises incomes.
b/ The balance of exchange rate difference shall
be handled as follows:
- For the value of incomplete construction
works, if the exchange rate difference arises, after balancing the increased
and decreased amounts, it must be calculated into the value of the works when
determining the enterprises value.
- For exchange rate difference arising in other
foreign currency operations, after balancing the increased and decreased
amounts, it shall be accounted into the enterprises financial expenditures and
revenues according to the State-prescribed regime.
c/ The balance of the job-loss allowance reserve
fund: The job-loss allowance reserve fund shall be retained to settle the
policies for redundant laborers according to the current regime. If the fund is
not needed or not used up, the remainder must be incorporated into the
enterprises after-tax incomes.
d/ The balance of the financial reserve fund:
The financial reserve fund shall be used to offset the rest of the property
damage and losses (if any) suffered by the enterprises in the course of
business till the time of determining the enterprises value. The remainder
shall be incorporated into the enterprises after-tax incomes.
e/ Where the enterprises have the previous years
accumulated losses, they may use the pre-tax incomes earned up to the
equitization time to offset such losses before applying measures to write off
tax debts and remittances payable into the budget as well as outstanding debts
owed to State-run commercial banks. Post-enterprise income tax incomes shall be
distributed according to current regulations.
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Assets contributed as capital to joint ventures
with foreign countries shall be handled according to the provisions in Article
13 of Decree No. 64/2002/ND-CP, including:
5.1. Where the equitized enterprises take over
joint-venture activities, they must calculate the value of assets contributed
as joint-venture capital into their value.
5.2. Where the equitized enterprises do not take
over joint-venture activities, they shall compile dossiers for reporting to the
bodies competent to decide on equitization for consideration and decision and
handling of assets contributed as joint-venture capital as follows:
+ Negotiating to buy or resell the contributed
joint-venture capital.
+ Negotiating between the joint-venture
capital-contributing partners and the enterprises on transferring their
contributed capital to other partner enterprises under decisions of competent
bodies.
+ Where the equitized enterprises and the
foreign partners agree to terminate their joint-venture contracts, they shall
handle their contributed capital according to the provisions in the Finance
Ministry’s Circular No. 22/2002/TT-BTC of March 11, 2002 guiding the handling
of financial matters and accounting for Vietnamese State enterprises which have
contributed capital for the setting up of joint-venture enterprises under the
Law on Foreign Investment in Vietnam when such joint-venture enterprises
terminate their operation.
6. The cash balance of the reward and welfare
funds shall be distributed to the laborers on the enterprises lists of regular
laborers at the time of the equitization decision for the purchase of shares.
The distribution mode shall be decided by the enterprise directors after
consulting the trade union organizations on the basis of the level of
contribution of each laborer. Laborers shall not have to pay income tax on
these incomes.
If, before being equitized, the enterprises have
overspent the reward and welfare funds, the overspent amount shall be handled
as an outstanding receivable amount. Specifically:
- For amounts spent for the laborers still
working in the enterprises before being equitized, they shall be deducted from
the value of assets used for distributing shares to the laborers in the
enterprises according to the provisions at Item 1.4, Point 1, Section II of
this Circular (if any). For any deficits, the enterprises shall have to collect
them from the laborers before implementing the preferential policies to reduce
the selling prices of shares or the policies on job-severance or -loss
allowances.
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III. FINANCIAL HANDLING FROM
THE TIME OF DETERMINING THE ENTERPRISES� VALUE TO THE TIME THE ENTERPRISES ARE
OFFICIALLY TRANSFORMED INTO JOINT-STOCK COMPANIES
1. On the basis of the competent authorities
decisions to announce the enterprises value, the enterprises must adjust their
accounting books and the accounting balance sheets according to the
State-prescribed accounting regime, and shall, at the same time, have to
continue monitoring and handling debts and assets already excluded when
determining the value of the equitized enterprises; fully account the
equitization-related expenses arising in the period.
2. By the time the joint-stock companies are
granted the business registration certificates, the enterprises shall take
initiative in making financial reports, continue handling financial matters
under the provisions in Section II of this Circular and effect the tax
settlement with the tax agencies so as to re-determine the actual value of the
State capital portion at the time of equitization, and carry out the hand-over
thereof to the joint-stock companies.
3. The difference between the actual value of
the State capital portion at the time the enterprises are transformed into
joint-stock companies and the actual value of the State capital portion at the
time of determining the enterprises value shall be handled as follows:
a/ Where the difference is positive, it shall be
remitted into the same-level Fund for support of State enterprise arrangement
and equitization.
b/ Where the difference is negative, the
enterprises must clearly identify the reasons as well as responsibilities
therefor and handle it as follows:
- Claiming material compensations according to
current regulations for the negative difference due to individual or collective
responsibility.
- If there remains any negative difference (if
any) after material compensations have been paid, the agencies competent to
decide on equitization shall decide to reduce the enterprises value and notify
such to the same-level agencies that manage the Fund for support of State
enterprise arrangement and equitization so that the latter allocates additional
capital to ensure the percentage of shares the State needs to hold in the
structure of the charter capital of the joint-stock companies.
4. For debts and assets excluded from the
enterprises value:
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b/ If, by the time the enterprises have
officially been transformed into joint-stock companies, they have not yet
completely handled the above-said debts and assets, the equitization-deciding
agencies shall consider and decide to transfer the handling of debts and assets
excluded when determining the enterprises value to other enterprises or to
authorize the joint-stock companies to continue preserving and handling them.
The joint-stock companies shall enjoy 10% of the total proceeds from the sale
or liquidation of assets and collection of debts to offset expenses, and shall
have to remit the remaining amounts into the Fund for support of State
enterprise arrangement an equitization.
The joint-stock companies shall have to organize
the liquidation or sale of these assets within 6 months; if they fail to do so
within this time limit, they must report such to the equitization-deciding
agencies for handling. If the joint-stock companies have the demand to re-use
such assets, they must report such to the equitization-deciding agencies so as
to rent or buy them at market prices.
IV. SALE OF SHARES
1. The enterprises shall have to formulate the
plans on sale of shares in the priority order and with the share structure as
prescribed in Article 23 of Decree No. 64/2002/ND-CP, including:
1.1. The plans on sale of shares at preferential
prices to the producers and suppliers of raw materials to the enterprises
engaged in processing agricultural, forest and/or aquatic products, as
determined under the guidance in the Finance Ministry’s Circular No.
96/2001/TT-BTC of November 23, 2001. Under this guidance, the plans on sale of
shares at preferential prices to the producers and suppliers of aquatic
products shall be determined on the basis of the aquaculture areas and amounts
of aquatic products supplied to the processing enterprises to be equitized as
well as the total value of shares sold at preferential prices.
1.2. On the basis of the quantities of shares
actually sold to the outside and the enterprises demands in the absorption of
new technology and managerial experiences and in the market expansion, the
equitized enterprises shall calculate the quantities of shares to be sold to
the outside so as to formulate the plans of first-time sale of shares, then
submit them to competent authorities for consideration and approval. The
expected minimum quantities of shares to be sold to the outside shall be
determined according to the following formula:
The The total The The quantity The expected
expected quantity of quantity of shares quantity of minimum the company’s of
the sold at shares to be quantity of = shares State’s preferential sold to the
x 30% shares to (corresponding shares at the prices to raw-material be sold to
to its charter joint-stock laborers in the producers and the outside capital)
company enterprise suppliers
For the equitized enterprises having the
financial situation eligible for listing on the securities market, the plans on
sale of shares to the outside must ensure the conditions for listing on the
securities market as prescribed by the securities legislation.
1.3. Apart from the quantity of shares bought at
preferential prices, the laborers in the equitized enterprises shall be entitled
to register to buy other shares (after the quantity of shares to be sold to the
outside has been determined) at the floor price.
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2. The first-time sale of shares by the
equitized enterprises shall comply with the provisions in Article 24 of Decree
No. 64/2002/ND-CP.
Where the equitized enterprises have the
quantity of shares to be sold to the outside with the share value of under VND
500 million or the equitized enterprises located in deep-lying or remote areas
meet with difficulties in the sale thereof through intermediary financial
institutions or the estimated expenses for the sale of shares through
intermediary institutions exceed the permitted commission level, the
equitization-deciding agencies shall assign the enterprises to organize the
sale of shares to the outside in the form of auction.
V. MANAGEMENT AND USE OF
PROCEEDS FROM THE SALE OF SHARES
1. The proceeds from the sale of shares
belonging to the State capital portion (including the difference in the selling
price of shares, resulting from auctions) at the enterprises equitized as from
July 5, 2002 onwards shall be managed and used according to the provisions in
Article 25 of Decree No. 64/2002/ND-CP and the Finance Ministry’s Regulation on
the management and use of revenues and proceeds from the sale of shares. The
proceeds from the sale of the State capital portion at the enterprises
equitized before July 5, 2002 shall be managed and used according to the
provisions in the Prime Minister’s Decision No. 177/1999/QD-TTg of August 30,
1999 and the Finance Minister’s Decision No. 95/2000/QD-BTC of June 9, 2000.
2. The proceeds from the sale of shares issued
by the enterprises so as to additionally mobilize capital shall be retained,
managed and used by the joint-stock companies according to law provisions and
their organization and operation charters.
VI. EQUITIZATION EXPENSES
1. The expenses for equitization of State
enterprises shall include:
- Expenses for printing materials and
professional training on enterprise equitization;
- Expenses for inventorying assets and
determining the value thereof;
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- Costs of hiring consultants and auditors (if
any);
- Expenses for organizing the extraordinary
congress of the enterprise’s employees and workers to deploy the equitization;
- Expenses for propaganda activities to
disseminate information prospectuses on equitization;
- Expenses for organizing the share sale
(including expenses for auctioning activities;
- Expenses for organizing the first congress of
shareholders;
- Other expenses related to enterprise
equitization.
2. The maximum spending levels for the
transformation of State enterprises into joint-stock companies shall be
determined as follows:
+ Enterprises with their respective actual
values of under VND 5 billion may spend VND 100 million at most;
+ Enterprises with their respective actual
values of between VND 5 billion and 10 billion may spend VND 150 million at
most;
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+ Enterprises with their respective actual
values of between over VND 20 billion and 30 billion may spend VND 250 million
at most;
+ Enterprises with their respective actual
values of between over VND 30 billion and 40 billion may spend VND 350 million
at most;
+ Enterprises with their respective actual
values of between over VND 40 billion and 50 billion may spend VND 400 million
at most;
+ Enterprises with their respective actual values
of between over VND 50 billion and 60 billion may spend VND 450 million at
most;
+ Enterprises with their respective actual
values of over VND 60 billion may spend VND 500 million at most;
The directors of the equitized enterprises shall
decide on the expenses actually necessary for the equitization process on the
principles of rationality, validity, economy and adequate vouchers. Where the
enterprises overspend the above-said limits, they must send reports thereon to
the Ministry of Finance for consideration and decision.
At the end of the equitization process, the
enterprises must report on and settle the equitization expenses with the
equitization-deciding agencies. The total equitization expenses shall be
deducted from the proceeds from the sale of shares belonging to the State
capital portion at the enterprises.
VII. HAND-OVER OF ASSETS AND
CAPITAL TO JOINT-STOCK COMPANIES
1. An asset and capital hand-over dossier
consists of:
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- The competent body’s decision on the
enterprise’s value at the time the enterprise is transformed into a joint-stock
company.
- The record on the asset and capital hand-over,
made at the time of hand-over.
2. The hand-over records must contain all the
signatures of the representative of the equitization-deciding agency, the State
enterprise’s representatives (including the director and chief accountant), the
joint-stock company’s representatives (the Management Board, director and chief
accountant), and the representative of the trade union organization in the
company. The hand-over record between the two parties must clearly reflect:
- The situation of assets, capital and labor at
the hand-over time.
- Interests and obligations taken over by the
joint-stock company.
- Unsettled matters to be further settled by the
joint-stock company (including the continued monitoring and recovery of
excluded debts and assets, collection of money from the sale of shares on
deferred payment)
VIII. PREFERENTIAL REGIMES
FOR STATE ENTERPRISES TRANSFORMED INTO JOINT-STOCK COMPANIES AND LABORERS
THEREIN
1. For State enterprises transformed into
joint-stock companies
The preferential regimes for State enterprises
transformed into joint-stock companies shall comply with the provisions in
Article 26 of Decree No. 64/2002/ND-CP and the guidance of the ministries and
branches, including:
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On the basis of their own conditions and the
criteria for determining the tax reduction and exemption levels, the
enterprises shall take initiative in determining and registering the tax
reduction and exemption levels with the tax offices for realizing the tax
preference policies. They shall, at the same time, have to send the copies of
the equitization plan-approving decisions and the business registration
certificates to the tax offices as basis for determining the preference levels.
1.2. The joint-stock companies shall have to
manage, preserve and develop the welfare funds in kind handed over by the State
enterprises so as to ensure welfare for the laborers in the joint-stock
companies. Where the laborers have no demand but the joint-stock companies have
the demand to use such funds for production and business purposes, the
joint-stock companies shall re-purchase them or sell them to other subjects,
then remit the proceeds therefrom into the companies welfare funds.
2. For laborers in the enterprises
The preference regimes for laborers in the
enterprises shall comply with the provisions in Article 27 of Decree No.
64/2002/ND-CP, including:
2.1. For laborers on the enterprises lists of
regular laborers at the time of equitization decision, for each year’s working
for the State they shall be sold by the State up to 10 shares (the par value of
a share is VND 100,000) with the reduction of 30% of the par value. According
to this provision the laborers shall have to pay only VND 70,000 for each
preferred share; the remainder of VND 30,000 is the preferential value offered
by the State to the laborers.
2.2. Poor laborers in the equitized enterprises
may buy shares at the preferential prices by deferred payment in 10 years,
including 3 grace years. They shall make payment gradually in the 7 subsequent
years without having to pay any interest. The total quantity of shares sold to
poor laborers by mode of deferred payment must not exceed 20% of the total
quantity of shares sold by the State at preferential prices to the laborers in
the enterprises.
2.3. The total value of preference for laborers
and preferences for the producers and suppliers of raw materials to the
enterprises engaged in processing agricultural, forest and aquatic products,
and the value of preferential shares sold by deferred payment to poor laborers
shall be deducted from the State capital portion at the enterprises and must
not exceed the actual value of the State capital portion at the enterprises
after subtracting the capital amounts the State needs to hold and the
equitization expenses.
The sale of preferential shares to the producers
and suppliers of raw materials for the enterprises engaged in processing
agricultural, forest and aquatic products shall be effected only after the
plans on sale of preferential shares to laborers in the enterprises have been
realized.
(The method of determining the quantities of
shares sold at preferential prices to the laborers as well as producers and
suppliers of raw materials in the equitized State enterprises is described in
the appendix attached herewith (not printed here)).
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2.4. The certificates of shares sold at
preferential prices are registered ones which their owners can transfer only
after three years as from the time of purchasing them. For shares sold by mode
of deferred payment to the poor, their owners can sell them only after they
have paid all debts to the State. Where the share owners have the demand to
transfer their shares before this time limit, the approval of the Management
Boards is required. The joint-stock companies shall give priority to repurchase
these shares at the market prices and account them into the share funds for
management and use according to the State-prescribed regime.
2.5. If the laborers who were recruited before
April 21, 1998 lose their jobs or retire prematurely at the time of
equitization or within 12 months after the enterprises are officially
transformed into joint-stock companies, they shall enjoy allowances prescribed
in the Government’s Decree No. 41/2002/ND-CP of April 11, 2002 on the policies
towards redundant laborers due to re-arrangement of State enterprises, Circular
No. 11/2002/TT-BLDTBXH of June 12, 2002 guiding the implementation of a number
of articles of Decree No. 41/2002/ND-CP, which are paid by the Fund for support
of redundant laborers in the enterprises.
The laborers who are dismissed or lose their
jobs and do not fall into the subjects entitled to allowances under the
provisions of Decree No. 41/2002/ND-CP and the above-said documents shall enjoy
allowances as prescribed by the Labor Code, which are paid by the Fund for
enterprise rearrangement as prescribed in Clauses 5 and 6, Article 27 of the
Government’s Decree No. 64/2002/ND-CP of June 19, 2002 on the transformation of
State enterprises into joint-stock companies.
Part three
ORGANIZATION OF
IMPLEMENTATION
1. Enterprises may take initiative in handling
financial matters according to the current financial regime and the guidance in
this Circular before determining the enterprises value.
2. The equitization-deciding agencies shall have
to urge the equitized enterprises to handle financial matters before
determining their value.
3. The enterprise finance agencies of the same
level shall have to guide and supervise the enterprises in handling the financial
matters for the equitized enterprises strictly according to the State�s regulations. Problems, if
any, should be promptly reported to competent authorities for consideration and
handling.
4. This Circular replaces Circular No.
104/1998/TT-BTC of July 18, 1998 of the Ministry of Finance and takes effect as
from July 4, 2002.
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Should any problems arise in the course of
implementation, the ministries, branches, localities and equitized enterprises
are requested to report them to the Ministry of Finance for study and
settlement.
FOR THE MINISTER OF FINANCE
VICE MINISTER
Tran Van Ta