Chương IV Nghị định 45/2021/NĐ-CP: Chế độ tài chính, kế toán, kiểm toán, chế độ báo cáo và đánh giá hiệu quả hoạt động của quỹ hợp tác xã

Chapter IV

FINANCIAL POLICIES, ACCOUNTING, AUDITING, REPORTING AND ASSESSMENT OF PERFORMANCE OF COOPERATIVE FUNDS

Article 34. Financial, accounting and auditing policies

1. Cooperative funds shall comply with financial, accounting and reporting policies laid down herein and guidelines of the Ministry of Finance.

2. The financial year of the cooperative fund commences from January 01 to December 31 of every year.

3. Annual financial statements of the cooperative fund must be audited by an independent audit organization or the State Audit Office of Vietnam in accordance with regulations of law in force.

Article 35. Financial management principles

1. Cooperative funds shall exercise financial autonomy and be self-responsible for their performance of assigned tasks, obligations and commitments as prescribed by law.

2. Cooperative funds shall make financial disclosure in accordance with regulations of law in force. The fund’s Chairperson or Chairperson of the fund’s Board of Directors shall assume responsibility for the accuracy and truthfulness of the fund's financial statements, statistical reports and financial disclosure.

3. Cooperative funds shall fulfill tax obligations in accordance with regulations of the Law on taxation.

Article 36. Working capital of cooperative funds

The working capital of a cooperative fund is derived from the following sources:

1. Owner’s equity:

a) Charter capital;

b) Development investment fund and financial reserve funds;

c) Funds derived from non-refundable financing, aids and contributions of domestic and foreign entities;

d) Differences from revaluation of assets;

dd) Differences in undistributed expenses and revenues, and unrealized accumulated losses;

e) Other capital owned by the cooperative fund.

2. Capital raised from domestic entities in accordance with Article 32 hereof.

3. Any refundable aids given by the State to the cooperative fund that operates under the cooperative business model shall comply with regulations of the Law on Cooperatives.

4. Other lawful sources of capital as regulated by law (if any).

Article 37. Charter capital of cooperative funds

1. The charter capital of a cooperative fund that operates under the business model of a single-member limited liability company 100% of charter capital of which is held by the State shall include funding from state budget and other lawful funding sources. To be specific:

a) The charter capital of the central cooperative fund is VND 1.000 (one thousand) billion which is derived from the central-government budget for development investment expenditures. The change in the charter capital of the central cooperative fund shall be decided by the Prime Minister at the request of Vietnam Cooperative Alliance after obtaining the consent from Ministry of Finance and Ministry of Planning and Investment;

b) The minimum charter capital of a provincial cooperative fund is VND 20 (twenty) billion which is derived from the provincial-government budget for development investment expenditures. The change in the charter capital of the provincial cooperative fund shall be decided by the Chairperson of the provincial People’s Committee after obtaining approval from the same-level People’s Council and at the request of the provincial cooperative alliance after obtaining the consent from provincial Department of Finance and provincial Department of Planning and Investment.

2. For a provincial cooperative fund that operates under the cooperative business model:

a) The minimum charter capital of the cooperative fund is VND 20 billion which is contributed by the fund's members;

b) The change in the charter capital of the cooperative fund shall be decided by the fund’s general meeting of members.

Article 38. Principles for management and use of capital and assets of cooperative funds

1. Cooperative funds must manage and use their capital in a safe, proper and effective manner so as to perform their tasks as prescribed herein.

2. Management and use of idle capital:

a) Cooperative funds may deposit money at commercial banks that are duly established and operating under the law of Vietnam according to the capital preservation and growth principle;

b) Provincial cooperative funds may deposit their idle capital at the central cooperative fund and vice versa under agreements between the parties;

c) Cooperative funds shall formulate their own internal regulations on management and use of idle capital, which shall, inter alia, include the following contents: Criteria for selection of commercial banks receiving deposits to ensure capital preservation and growth principle; power to decide the selection of banks.

3. Acquisition, management and use of assets of cooperative funds:

a) For a cooperative fund that operates under the business model of a single-member limited liability company 100% of charter capital of which is held by the State: The cooperative fund is allowed to acquire and invest in fixed assets to directly serve its operations on the condition that the residual value of fixed assets does not exceed 10% of its existing charter capital at the time of issuance of investment or acquisition decision, and the cooperative fund must fully comply with law regulations on construction and investment management by single-member limited liability companies 100% of charter capital of which is held by the State;

b) For a cooperative fund that operates under the cooperative business model: The cooperative fund may acquire and invest in fixed assets to directly serve its operations in accordance with regulations of the Law on Cooperatives and the fund’s internal regulations which are promulgated by the fund’s Board of Directors after obtaining approval from its general meeting of members.

Article 39. Capital adequacy

Every cooperative fund is required to comply with the following regulations on capital adequacy:

1. Manage and use capital and assets, distribute financial outcomes, and implement financial management and accounting policies in accordance with regulations herein and relevant laws.

2. Comply with regulations on loan limits as prescribed herein.

3. Buy mandatory property insurance as prescribed by law.

4. Record loan loss provisions set aside as prescribed herein as operating expenses.

5. Adopt other measures for ensuring capital adequacy as prescribed by law.

Article 40. Salaries and allowances of cooperative funds

1. For a cooperative fund that operates under the business model of a single-member limited liability company 100% of charter capital of which is held by the State: The cooperative fund shall manage its employees, salaries, remunerations and bonuses of its employees and managers in the same manner as a single-member limited liability company 100% of charter capital of which is held by the State, and as appropriate to the fund’s characteristics and business model as prescribed herein.

2. For a cooperative fund that operates under the cooperative business model: The cooperative fund shall manage its employees, salaries, remunerations and bonuses of its employees and managers in the same manner as a cooperative as prescribed in the Law on Cooperatives.

Article 41. Incomes of cooperative funds

1. Incomes of a cooperative fund are determined in conformity with accounting standards of Vietnam and relevant laws and supported by lawful invoices or receipts, and must be fully recorded as its revenues.

2. Incomes of a cooperative fund include:

a) Interest income and similar incomes;

b) Income earned from service provision;

c) Income from other activities;

d) Other incomes as prescribed by law.

3. The Ministry of Finance shall provide specific guidance on incomes of cooperative funds as prescribed in Clause 2 of this Article.

Article 42. Expenses of cooperative funds

1. Expenses of a cooperative fund are expenses actually incurred during the fund’s operation; comply with the matching principle between incomes and expenses; and must be proved by lawful invoices and receipts in accordance with regulations of law. The cooperative fund shall not record expenses which are covered by other funding sources as its expenses. Expenses shall be determined and recorded in accordance with Vietnam’s accounting standards and relevant laws. Deductible expenses upon determination of tax liabilities shall comply with regulations of the Law on taxation.

2. Expenses of a cooperative fund include:

a) Interest payments and other similar expenses;

b) Costs of service provision;

c) Costs of other activities;

d) Payments of taxes and other fees and charges;

dd) Payments made to employees of the cooperative fund;

e) Management and administration costs;

g) Asset-related costs;

h) Contributions to loan loss provisions;

i) Costs for participation in activities organized by cooperative alliances at all levels and related to operation of the cooperative fund;

k) Other expenses.

3. The Ministry of Finance shall provide specific guidance on expenses of cooperative funds as prescribed in Clause 2 of this Article.

Article 43. Financial outcomes and distribution of financial outcomes

1. Financial outcomes mean the difference between total incomes and total expenses incurred in a financial year:

a) The cooperative fund has surplus financial outcomes if the difference between total incomes and total expenses in the financial year is a positive number;

b) The cooperative fund has financial deficit if the difference between total incomes and total expenses in the financial year is a negative number.

2. After paying fines for violations against law and offsetting its deficits in previous years (if any), the financial surplus of a cooperative fund that operates under the business model of a single-member limited liability company 100% of charter capital of which is held by the State shall be distributed as follows:

a) Contribute not more than 30% of the surplus to the development investment fund.

b) Contribute 10% of the surplus to the financial reserve fund.

c) Make contributions to reward and welfare funds for employees as follows:

A cooperative fund rated A may set aside an amount equivalent to 3 months’ earned income of employees for two reward and welfare funds;

A cooperative fund rated B may set aside an amount equivalent to 1,5 months’ earned income of employees for two reward and welfare funds;

A cooperative fund rated C may set aside an amount equivalent to 01 month’s earned income of employees for two reward and welfare funds.

d) Make contributions to the reward fund for managers and controllers:

A cooperative fund rated A may set aside an amount equivalent to 1,5 months’ earned income of managers and controllers for this fund;

A cooperative fund rated B may set aside an amount equivalent to 01 months’ earned income of managers and controllers for this fund;

A cooperative fund rated C is not allowed to set aside the reward fund for managers and controllers.

d) Id the difference between revenues and expenses that remains after setting aside the funds specified in Points a and b of this Clause is not enough for setting aside reward and welfare funds for employees, and the reward fund for managers and controllers as regulated, the cooperative fund may reduce the amount used to set aside the development investment fund but must ensure the minimum amount contributed to the development investment fund in the financial year as prescribed;

e) The remaining amount (if any) after setting aside the abovementioned funds shall be contributed to the development investment fund of the cooperative fund.

3. For a cooperative fund that operates under the cooperative business model:

a) The difference between incomes and expenses shall be distributed according to Clause 1, Clause 2 Article 46 of the Law on Cooperatives;

b) The remaining amount (if any) after setting aside the funds specified in Point a of this Clause shall be contributed to the development investment fund of the cooperative fund.

4. Purposes of funds:

a) The development investment fund is used for investing in expansion of the business scale and renovation of technologies, equipment and working conditions of the cooperative fund and for supplementation of the charter capital of the cooperative fund. The fund’s Chairperson shall decide investment form and method in conformity with regulations applicable to single-member limited liability companies 100% of charter capital of which is held by the State. Chairperson of the fund’s Board of Directors shall decide investment form and method in conformity with regulations of the Law on Cooperatives;

b) The financial reserve fund is used for covering the remaining losses, asset damage, and uncollectible debts during the fund’s operation after they are offset by compensation paid by the entities at fault, insurers and provisions recorded in the fund’s expenses;

c) The reward fund for managers and controllers shall be used for managers and controller(s) of the cooperative fund. The reward rates shall be determined by the Chairperson of the cooperative alliance of the same level (for a cooperative fund that operates under the business model of a single-member limited liability company 100% of charter capital of which is held by the State) or general meeting of members (for a cooperative fund that operates under the cooperative business model), depending on the performance of assigned tasks and business results of the cooperative fund at the request of its Chairperson or Chairperson of the Board of Directors.

d) The reward fund is used for periodically or spontaneously rewarding individuals or teams of the cooperative fund, depending on their productivity or working achievements;

dd) The welfare fund is used for spending on sports, cultural activities and social welfare works for officials of the cooperative fund; spending on subsidies for regular or sudden hardships for officials of the cooperative fund; spending on other welfare activities of the cooperative fund.

Director of the cooperative fund shall cooperate with its trade union to manage and use this fund in a public and transparent manner.

5. In case of financial deficit, the cooperative fund may carry the negative difference between incomes and expenses forward to the following years. If this negative difference is still not yet fully carried forward within a maximum period of 05 years, the cooperative fund shall request the Prime Minister (if it is the central cooperative fund) or Chairperson of the provincial People’s Committee (if it is a provincial cooperative fund that operates under the business model of a limited liability company 100% of charter capital of which is held by the State) or general meeting of members (if it is a cooperative fund that operates under the cooperative business model) to consider deciding to reduce or supplement capital, re-structure, dissolve or declare the cooperative fund bankrupt.

Article 44. Reporting

1. The central cooperative fund shall:

a) Prepare and submit biannual and annual reports to Vietnam Cooperative Alliance, Ministry of Finance, State Bank of Vietnam and Ministry of Planning and Investment for monitoring and inspection;

b) Consolidate biannual and annual reports submitted by provincial cooperative funds. Consolidated reports shall be sent to Vietnam Cooperative Alliance, Ministry of Finance, State Bank of Vietnam and Ministry of Planning and Investment for monitoring and inspection.

2. Each provincial cooperative fund shall:

Prepare and submit biannual and annual reports to the provincial People’s Committee, provincial cooperative alliance, provincial Department of Finance, and branch of State Bank of Vietnam in the province where the cooperative fund is established, and sent to the central cooperative fund for consolidating as prescribed in Point b Clause 1 of this Article.

3. Biannual and annual reports specified in Clause 1 of this Article include:

a) Financial statements, including: balance sheet; income statement; cash flow statement; statement of changes in equity; financial statements as prescribed by law; statement of financial revenues and expenses; reports on distribution of difference between revenues and expenses, and use of funds according to guidelines given by the Ministry of Finance;

b) Consolidated reports on the fund's operations;

c) Reports on the fund’s lending activities;

d) Auditor’s report on annual financial statements.

4. Deadline for submission of reports:

a) Biannual report shall be submitted by July 31 every year;

b) Annual report shall be submitted within 90 days from the end of the financial year. The auditor’s report on annual financial statements of the cooperative fund prepared by an independent audit organization shall be submitted within 120 days from the end of the financial year.

5. Methods for submitting reports: The cooperative fund shall submit reports directly or by post.

6. Cooperative funds must also provide information and/or ad hoc reports to competent authorities at their request.

7. Cooperative alliances at all levels shall submit annual reports as prescribed in Article 12 of the Government’s Decree No. 163/2016/ND-CP dated December 21, 2016 and its amending documents (if any).

8. Cooperative funds shall implement reporting regime in accordance with law regulations on inspection and auditing.

Article 45. Evaluation of performance of cooperative funds

1. The annual performance of a cooperative fund shall be evaluated according to the following criteria:

a) Criterion 1: Growth of loan outstanding balance;

b) Criterion 2: Bad debt ratio (including group-3, group-4 and group-5 outstanding debts according to the fund’s debt classification results);

c) Criterion 3: Annual financial outcomes;

d) Criterion 4: Compliance with regulations on investment, management and use of capital of the fund, fulfillment of obligations to state budget, and compliance with regulations on financial statements.

2. When calculating the criteria for evaluation of performance of the cooperative fund specified in Clause 1 of this Article, the cooperative fund may exclude the objective reasons in terms of:

a) Disasters, fire, epidemics, wars and other force majeure events;

b) Changes in State’s policies that affect operations of the cooperative fund.

3. The Ministry of Finance shall provide guidance on methods of calculation of performance evaluation criteria and rating of cooperative funds in conformity with specific operations of cooperative funds.

4. The cooperative alliance of the same level shall set evaluation criteria and carry out evaluation of annual performance of the cooperative funds that operate under the business model of a single-member limited liability company 100% of charter capital of which is held by the State in accordance with regulations of this Article. General meeting of members shall set evaluation criteria and carry out evaluation of annual performance of the cooperative fund that operates under the cooperative business model.