Thông tư 43/2004/TT-BTC của Bộ Tài chính về việc hướng dẫn xử lý lỗ phát sinh từ thời điểm xác định giá trị doanh nghiệp đến thời điểm doanh nghiệp nhà nước chính thức chuyển thành công ty cổ phần

CIRCULAR

GUIDING THE HANDLING OF STATE ENTERPRISES' LOSSES ARISING IN THE PERIOD FROM THE TIME OF ENTERPRISE VALUATION TO THE TIME OF THEIR OFFICIAL TRANSFORMATION INTO JOINT-STOCK COMPANIES

In implementation of the Prime Minister's direction in the Government Office's Official Dispatch No. 280/VPCP-DMDN of January 15, 2004, the Ministry of Finance hereby guides the handling of equitized State enterprises' business losses arising in the period from the time of enterprise valuation to the time of their transformation into joint-stock companies as follows:

I. FOR ENTERPRISES CURRENTLY UNDERGOING EQUITIZATION

1. The directors of State enterprises and the Enterprise Renewal and Development Boards (called the Enterprise Renewal Boards for short) must expeditiously complete the transformation plans within 6 months as from the date the equitization plans are approved. In the course of implementing the equitization plans (before the enterprises make business registration to operate as joint-stock companies), if in the period from the time of enterprise valuation to the time of making of quarterly or annual financial statements, the enterprises suffer from business losses, then the enterprise directors and the Enterprise Renewal Boards must clearly identify the causes, responsibilities of the collectives as well as individuals, handle the compensation for material damage (if due to subjective causes), and at the same time coordinate with the finance agencies and commercial banks in considering the conditions and carrying out procedures to write off debts being tax arrears, State budget remittances and unpaid bank loan interests in order to handle the remaining losses (if any) as prescribed in the Finance Ministry's Circular No. 85/2002/TT-BTC of September 26, 2002 and Vietnam State Bank's Circular No. 05/2003/TT-NHNN of February 24, 2003.

2. After the losses have been handled as prescribed at Point 1 but there remain some losses, the enterprise directors and the Enterprise Renewal Boards shall have to report thereon to the agencies with equitization-deciding competence for consideration and handling as follows:

2.1. If the enterprises suffer from losses which are smaller than the actual value of the State's capital portions at the enterprises and do not fall into the subjects where the State holds dominant shares: To adjust the equitization plans on the basis of reducing the State's capital portions planned to be contributed to the enterprises corresponding to the remaining losses, if not enough, to further reduce the value of the State's capital portions used for implementation of preferential policies on sale prices of shares and plans on sale of preferential shares.

2.2. Where the enterprises suffer from losses which are smaller than the actual value of State's capital portions at the enterprises but they fall into the subjects where the State needs to hold dominant shares: To adjust the equitization plans by reducing the size of their charter capital and the plans on sale of preferential shares to laborers, raw-material producers and suppliers while still ensuring that the State still holds dominant shares.

2.3. Where the enterprises suffer from losses which are equal to or bigger than the actual value of the State's capital portions at the enterprises: To change to other reorganization forms such as enterprise assignment, sale or bankruptcy.

II. FOR ENTERPRISES WHICH HAVE BEEN EQUITIZED AND MADE BUSINESS REGISTRATION UNDER THE ENTERPRISE LAW

After having been equitized and made business registration under the Enterprise Law, the enterprises must make financial settlements at the time of being granted the business registration certificates for hand-over to the joint-stock companies. If they suffer from losses arising in the period from the time of valuation to the time of being granted the business registration certificates, the enterprise directors and the Enterprise Renewal Boards must clearly identify the causes, responsibilities of the collectives as well as individuals and report thereon to the agencies with equitization-deciding competence for examination and handling of the responsibility to compensate for material damage (if due to subjective causes), the remaining losses (after the material damage-compensating responsibility is fulfilled) of the enterprises shall be handled as follows:

1. For enterprises not falling into the subjects where the State needs to hold dominant shares:

1.1. If the losses are smaller than the proceeds from the sale of the State's capital portions at the enterprises, the enterprises shall be refunded by the funds in support of reorganization and equitization of State enterprises (the enterprise reorganization funds) part of the proceeds already remitted into the funds for offsetting such losses.

1.2. If the losses are bigger than the proceeds from the sale of the State's capital portions at the enterprises but smaller than the value of the State's capital portions prior to the time of equitization, then:

- The enterprises shall be refunded by the enterprise reorganization funds the whole of the proceeds from the sale of the State's capital portions at the enterprises.

- The remaining losses (the difference between the loss amounts proposed for handling and the amounts refunded by the enterprise reorganization funds) must be reported by the enterprises to the agencies with equitization-deciding competence for consideration and decision on the reduction of the State's capital portions contributed to the enterprises and the quantity of preferential shares sold at a lowered price (if the State's capital amounts contributed to the joint-stock companies are smaller than the remaining losses); and at the same time an extraordinary shareholders' meeting shall be convened in order to decide on the issuance of additional shares to offset the reduced quantity of the State's shares or to adjust the size and structure of the charter capital, to re-elect the managing boards and adjust the business registration certificates.

1.3. If the losses are bigger than or equal to the value of the State's capital portions at the enterprises prior to the time of equitization:

- The enterprises shall be refunded by the enterprise reorganization funds the remitted money amounts collected from the sale of the State's capital portions at the enterprises.

- The State's capital portions contributed to the enterprises shall be reduced to zero and the value of the State's capital amounts already used to offer price reductions and deferred payment preferences in order to reduce the losses shall be recovered.

Where there remain some losses even after the State's contributed capital amounts have been reduced to zero, the companies must convene an extraordinary shareholders' meeting to notify the enterprises' actual conditions and vote on matters related to the enterprises' existence along the direction of:

+ Accepting to inherit the remaining losses and continuing operation;

+ Selling the enterprises provided that the purchasers inherit all debts and losses;

+ Declaring the companies bankrupt, liquidating their assets for payment of debts to creditors and refund of contributed money to shareholders.

2. For enterprises falling into the subjects where the State needs to hold dominant shares, they may use the supports from the Enterprise Renewal Funds to offset and maintain the percentage of the State's capital portions contributed to the joint-stock companies.

III. ORDER AND PROCEDURES

1. In order to have grounds for examining and handling losses in time, the enterprises must take initiative in working out handling plans (according to the provisions of Section I and Section II of this Circular) and compile dossiers to propose the loss handling to the agencies with equitization-deciding competence, the Ministry of Finance (for enterprises which belong to the provinces, centrally-run cities and State corporations and suffer from losses which reduce the State's capital portions at the enterprises by VND 500 million or more), to State corporations (if enterprises are members of such corporations), and the agencies managing the enterprise reorganization funds.

2. A dossier of proposal for handling losses of an enterprise consists of:

- An written request for handling losses of the enterprise and the State corporation (if the enterprise is a member of the corporation).

- The financial statement for the period from the time of valuation to the end of the quarter or year when losses arise (for enterprises currently undergoing equitization) or the financial statement for the period from the time of valuation to the time of being granted the business registration certificate (for enterprises having completed equitization).

For equitized enterprises being corporation members, their financial statements must contain evaluation opinions of the corporations.

- The written record identifying the causes of the losses, the responsibilities of the collectives as well as individuals and the enterprise's loss-handling plan.

- The competent agencies' decision stating the value of the equitized enterprise and decision approving the equitization plan.

- The dossier of valuation of the equitized enterprise.

3. Within 15 days as from the date of receiving the complete dossiers, the agencies with equitization-deciding competence shall have to examine and identify the causes of losses at the enterprises and coordinate with the agencies managing the enterprise reorganization funds in handling them according to the current regime and the provisions of this Circular.

For equitized State enterprises being members of State corporations, such corporations shall have to coordinate with the agencies which have decided on the equitization in examining and handling losses of such member enterprises.

For equitized enterprises each suffering from losses of VND 500 million or more, written agreements of the Minister of Finance must be obtained before such losses are handled.

4. The use of the enterprise reorganization funds for handling losses arising from the time of valuation of State enterprises for equitization to the time of their official transformation into joint-stock companies is prescribed as follows:

4.1. The funds into which the enterprises remit the proceeds from the sale of the State's capital portions shall have to coordinate with the agencies which have decided on the equitization and the Ministry of Finance in handling the losses according to the provisions above.

4.2. Where the enterprise reorganization funds of corporations or localities are not enough to offset the losses: The provincial/municipal People's Committees and the managing boards of the corporations shall report thereon to the Minister of Finance for regulating the funds as prescribed in the Prime Minister's Decision No. 174/2002/QD-TTg of December 2, 2002.

IV. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in the Official Gazette.

2. The agencies with equitization-deciding competence shall have to coordinate with the enterprise finance agencies and the agency in charge of the enterprise reorganization funds in guiding, examining and supervising equitized enterprises in handling losses arising in the period from the time of enterprise valuation to the time of their transformation into joint-stock companies according to the provisions of this Circular.

3. Any problems arising in the course of implementation should be promptly reported to the Ministry of Finance for study and settlement.