Chương 3 Nghị định 59/2011/NĐ-CP chuyển doanh nghiệp 100% vốn nhà nước: Xác định giá trị doanh nghiệp cổ phần hóa

Chapter III

VALUATION OF EQUITIZED ENTERPRISES

Section 1. ENTERPRISE VALUATION ORGANIZATIONS

Article 22. Enterprise valuation consultancy

1. An equitized enterprise having a total book asset value of VND 30 billion or more or a book value of the state capital portion of VND 10 billion or more shall hire an organization with the valuation function, such as domestic or foreign audit company, securities company, price appraisal enterprise (below referred to as a valuation consultancy organization) to provide enterprise valuation consultancy.

2. An equitized enterprise other than those specified in Clause 1 of this Article is not compulsory to hire a valuation consultancy organization to conduct its valuation. If not hiring a valuation consultancy organization, the enterprise shall determine its value by itself and report it to the agency competent to decide on the enterprise value.

3. The agency competent to decide on the equitization plan shall select a valuation consultancy organization to provide consultancy on the enterprise valuation. If two or more valuation consultancy organizations register to participate in providing valuation consultancy services, a bidding shall be organized to select an organization under current regulations.

4. The valuation consultancy organization may select appropriate enterprise valuation methods, ensuring the principles set out in this Decree, and shall complete the valuation on schedule and in accordance with its commitments in the signed contract. An equitized enterprise shall provide adequate and truthful information relevant to it to the valuation consultancy organization in the course of valuation.

The valuation consultancy organization shall take responsibility for enterprise valuation results. If the enterprise valuation results are incompliant with the State’s regulations, the agency competent to decide on the equitization plan may refuse to pay valuation service charges. If causing damage to the State, the valuation consultancy organization shall pay compensations and be removed from the list of organizations eligible for providing valuation consultancy.

5. A domestic or foreign valuation consultancy organization that registers to provide valuation consultancy services for equitized enterprises must fully meet the following criteria and conditions:

a/ Being an audit company, a securities company or a price appraisal enterprise with the valuation function satisfying the organization and operation conditions for each type of enterprise under the Vietnamese law.

b/ Having a professional process for enterprise valuation compliant with the Government’s current regulations on transformation of enterprises with 100% state capital into joint-stock companies.

c/ Having at least 5 years’ experience in any of the following fields: price appraisal, audit, accounting, financial consultancy, enterprise ownership transformation consultancy. For each year during the period of three 3 preceding the time of submission of a dossier for provision of enterprise valuation services, it must perform at least 30 contracts on service provision in the above-said fields.

d/ Having at least 3 price appraisers licensed by the Ministry of Finance.

e/ Satisfying the criteria on quantity and quality of its staff members working in the fields and sectors in which it is operating.

f/ Committing no violation of regulations concerning its business lines and sectors in 5 consecutive years preceding the year of registration.

The Ministry of Finance shall guide in detail Clause 5 of this Article.

Article 23. Methods of enterprise valuation

Methods of enterprise valuation include: asset method, discount cash flow method, and other methods.

The determined and disclosed value of an enterprise must not be lower than the value of the enterprise determined by the asset method provided in Section 2 of this Chapter.

Article 24. Disclosure of enterprise value

1. Based on the enterprise valuation dossier compiled by the valuation consultancy organization (or by the equitized enterprise itself), the enterprise equitization steering committee shall verify the process, procedures and compliance with the law on enterprise valuation, and submit its value to the agency competent to decide on the enterprise value for decision.

2. The agency competent to decide on the enterprise value shall consider, decide and disclose the enterprise value within 10 working days after receiving a complete dossier, except for the enterprises specified in Clause 1, Article 27 of this Decree.

Article 25. Use of enterprise valuation results

Enterprise valuation results disclosed by competent agencies serve as a basis for determining the charter capital amount, the structure of shares for initial offering, and the reserve price for share auction.

Article 26. Adjustment of enterprise value

1. An equitized enterprise may adjust its disclosed value in the following cases:

a/ There appear objective causes (natural disaster, enemy sabotage, state policy change or other force majeure circumstances) affecting the value of its assets.

b/ It is unable to organize the sale of its shares within 12 months from the time of enterprise valuation, except for particular cases decided by the Prime Minister.

2. The provisions of Clause 1 of this Article apply only to equitized enterprises that have not sold their shares.

3. The competent agency shall consider and decide on the adjustment and re-disclosure of the value of the equitized enterprise. The enterprise value adjustment decision serves as a basis for elaborating an equitization plan.

Article 27. State audit of equitized enterprises

1. Objects and scope of audit:

Based on enterprise valuation results for equitization determined by the consultancy organization and opinions of the agency competent to decide on the enterprise value, the State Audit shall audit these results and settle financial matters prior to the valuation, for large enterprises with a state capital portion of over VND 500 billion each operating specific fields or sectors (insurance, banking, post and telecommunications, aviation, coal mining, petroleum exploitation and mining of other precious and rare minerals); parent companies of state economic groups or corporations, and other enterprises, as requested by the Prime Minister.

2. Responsibilities of the State Audit and related agencies:

a/ After obtaining valuation consultancy results, the agency competent to decide on the enterprise value shall send a dossier enclosed with a written request for audit by the State Audit of these results and handling of financial matters before the official disclosure of the equitized enterprise value.

b/ Within 15 working days after receiving the request of the competent agency, the State Audit shall organize the audit of valuation consultancy results and handling of financial matters of the equitized enterprise. The time limit for completing and disclosing audit results is 60 working days after the audit commences. The State Audit shall take responsibility for audit results under law.

c/ The equitized enterprise and the valuation consultancy organization shall provide adequate dossiers and documents relevant to the determination of the enterprise value and handling of financial matters prior to the valuation at the request of the State Audit.

3. Processing of audit results:

Based on the State Audit’s audit results, the competent agency shall consider and decide to disclose the enterprise value and organize subsequent steps of the prescribed equitization process.

In case the agency competent to decide on the equitized enterprise value disagrees with audit results disclosed by the State Audit, it shall organize according to its competence an exchange of opinions for reaching agreement or report the disagreement to the Prime Minister for consideration and decision before the disclosure of the enterprise value.

Section 2. ENTERPRISE VALUATION BY THE ASSET METHOD

Article 28. Value of equitized enterprises by the asset method

1. The actual value of an equitized enterprise is the value of all existing assets of the enterprise at the time of equitization, taking into account its profitability which is acceptable to both share purchasers and sellers.

The actual value of the state capital portion in an equitized enterprise is the enterprise’s actual value after subtracting payable debts, the reward fund and welfare fund balances and the non-business budget balance (if any).

2. When equitizing the parent company of a state economic group or corporation or the parent company in a parent company - affiliated company conglomerate, the value of the state capital portion in the equitized company is the actual value of the state capital portion in this parent company.

3. For a financial institution or credit institution, when conducting its valuation by the asset method, financial statement audit results may be used for determining its assets in money and liabilities but its fixed assets, long-term investments, uncompleted work expenses related to compensations and ground clearance and leveling expenses, and land use right value must be inventoried and assessed under the State’s regulations.

Article 29. Amounts excluded from the enterprise value for equitization

1. The value of the assets specified in Clauses 1, 2 and 4, Article 14 of this Decree.

2. Receivable debts which are irrecoverable.

3. Long-term investments in other enterprises, specified at Points a and b, Clause 2, Article 18 of this Decree.

4. Persons competent to decide on the enterprise value shall consider and decide on the exclusion from the enterprise value for equitization of the amounts specified in Clauses 1, 2 and 3 of this Article, and take responsibility before law for their decision.

Article 30. Bases for determination of actual value of an enterprise

1. Figures in the enterprise’s accounting books at the time of enterprise valuation.

2. Documents on inventory, classification and quality assessment of the enterprise’s assets at the time of enterprise valuation.

3. Market prices of assets at the time of valuation.

4. Re-determined value of the use rights of allocated or leased land in case the enterprise has paid the land rent in lump sum for the whole rent term, and the value of the business advantages of the enterprise.

Article 31. Value of land use rights

1. For all land areas which an equitized enterprise is managing and using as grounds for building its working offices and transaction offices; building production and business establishments; land for agricultural production, forestry, aquaculture or salt making (including land allocated by the State with or without collection of land use levy), the equitized enterprise may make a land use plan and submit it to a competent agency for consideration and decision. Such land use plan must comply with regulations on rearrangement or handling of houses and land under the Prime Minister’s decisions and be sent to the local provincial-level

People’s Committee prior to the enterprise valuation. The enterprise may opt for the form of land lease or land allocation in accordance with the Land Law.

2. If an equitized enterprise chooses to be allocated land (including land areas allocated by the State to it for building houses for sale or lease for hotel business, trade and services; for building infrastructure for transfer or lease), it shall include the value of land use rights in its value under the following provisions:

a/ For equitized enterprises which are currently renting land and wish to be allocated land and pay land use levy, the land price used for determining the land use right value to be included in the equitized enterprise value is the land price set and announced by the provincial-level People’s Committee (in the locality in which the enterprise has the allocated land area) at the time of inclusion of the land price in the equitized enterprise value under the land law. If the land price are not match the market land use right transfer price in normal circumstances, the provincial-level People’s Committee shall base itself on the actual market transfer price of the rights to use land for similar purposes to re-determine a specific land price as appropriate.

b/ For equitized enterprises which have been allocated land and paid land use levy into the state budget or received transferred lawful land use rights (for also land areas already allocated to them for building houses for sale or leased to them for hotel business, trade or service provision; for building infrastructure facilities for transfer or lease), the land price shall be determined under Point a, Clause 2 of this Article.

Land areas allocated to an enterprise, including also land areas for production of public-utility products or provision of public-utility services or for public welfare purposes (parks, greeneries, urban environment, passenger car terminals, irrigation works, etc.), which are exempt from land use levy under the land law, may be excluded upon determining the land use right value to be included in the equitized enterprise value. Land areas used for public works with a safety protection corridor under the land law may also be considered and excluded under the Prime Minister’s decisions. Equitized enterprises shall manage and use these land areas under decisions of competent agencies in line with the land planning and the land law.

The Ministry of Natural Resources and Environment shall specifically guide the determination of land areas to be excluded from the enterprise value under this Article.

c/ The determined land use right value to be included in the enterprise value under Point a, Clause 2 of this Article shall be accounted as an amount remittable into the state budget. Equitized enterprises shall remit this amount into the state budget for being granted land use right certificates. The order and procedures for land allocation, payment of land use levy and grant of land use right certificates comply with the Land Law and guiding documents.

d/ The positive difference between the re-determined land use right value specified at Point b, Clause 2 of this Article and that recorded in accounting books (if any) shall be accounted as an increase in the state capital portion in an equitized enterprise.

In case the re-determined land use right value is lower than actual expenses for land use rights recorded in accounting books, the land price currently accounted by the enterprise shall be used.

In case an enterprise changes the use purpose of its allocated land, it shall additionally pay the difference between the land use right value before and after the use purpose change under the land law.

3. In case an equitized enterprise chooses to be leased land, it shall sign a land rent contract of a term prescribed by the land law and is not required to additionally calculate the value of the geographical location advantage upon the enterprise valuation under the following specific provisions:

a/ For leased land areas for which it pays annual land rent, it shall pay land rent under the current laws and shall not include land rent into its value.

b/ Enterprises that had paid land rents in lump sum for the whole land rent term before the effective date of the 2003 Land Law shall re-determine the value of land rents at the land rent rate at the time of equitization for the remaining land rent term for inclusion in their value. The positive difference arising due to the re-determination of the land rent value shall be accounted as an increase in the state capital portion in the equitized enterprise.

c/ Enterprises that have been allocated land and now choose to be leased land shall complete formalities for switching to land lease and send them to the equitization-deciding agency and the local house and land administration before their official transformation into joint-stock companies.

4. Provincial-level People’s Committees:

a/ Within 30 working days after receiving complete dossiers, they shall give their official opinions on land plots which enterprises will further use after the equitization and the land price to serve as a basis for the value determination under Point a, Clause 2 of this Article.

b/ In case the enterprise’s land use proposal is not in line with the local master plan and not for a proper land use purpose decided by a competent state agency in charge of rearrangement and handling of state-owned houses and land, the enterprise shall return the land to the State for use for other purposes and the provincial-level People’s Committee shall coordinate with the agency competent to decide on the equitization plan in handling such land under regulations.

c/ If provincial-level People’s Committees give no official opinions on the land price under Point a, Clause 2 of this Article after 30 working days from the receipt of complete dossiers, the agency competent to decide on the equitized enterprise value shall use the latest land price announced by provincial-level People’s Committees under the land law for calculating and determining the equitized enterprise value; and concurrently publicize in the equitization plan the temporary calculation of this land use right value.

Upon allocating land, provincial-level People’s Committees shall review and officially determine the obligation to pay land use levy for the allocated land at the price close to the actual market transfer price of rights to use land for similar purposes at the time of land allocation. Equitized enterprises shall remit into the state budget this levy amount (including also the difference between the officially determined amount and the temporarily calculated one, if any) in order to be granted land use right certificates or to sign land rent contracts under the current land law.

d/ They shall direct functional agencies in guiding equitized enterprises in adequately carrying out the procedures to apply for land use right certificates or sign land rent contracts under the current land law before their official transformation into joint-stock companies.

5. Enterprises that have completed their equitization or are undergoing equitization (their equitized value has been determined and disclosed by competent authorities) before the effective date of this Decree shall continue being allocated or leased land and calculate the land use right value under approved plans and are not required to make adjustments under Clauses 2 and 3 of this Article.

Article 32. Value of business advantages of enterprises

1. The value of business advantages of an equitized enterprise covers the value of its brand and its development potential.

2. The value of business advantages of an equitized enterprise shall be considered and decided by the agency competent to decide on the equitized enterprise value but must not be lower than the value of business advantages determined under the guidance of the Ministry of Finance.

Article 33. Valuation of long-term investment capital of equitized enterprises in other enterprises

1. The value of an equitized enterprise’s long-term investment capital in other enterprises shall be determined on the basis of:

a/ The ratio between the equitized enterprise’s investment capital in another enterprise and the charter capital of or total actually contributed capital amount in such enterprise.

b/ The value of the equity capital in another enterprise indicated in the audited financial statement. If no audited financial statement is available, the value of the equity capital indicated in the latest financial statement of the enterprise concerned is used for determination.

c/ For investment capital in a foreign currency, it shall be converted into Vietnam dong at the average exchange rate on the inter-bank foreign- currency market announced by the State Bank of Vietnam at the time of valuation.

d/ If the long-term investment capital value of an equitized enterprise in another enterprise is determined to be lower than the book value, it shall be determined according to the book value of the equitized enterprise.

2. The value of capital contributed by an equitized enterprise to a joint-stock company already listed on the securities market shall be determined on the basis of the closing price of its stocks traded on the securities market at the time closest to the time of enterprise valuation. For the value of capital contributed to a joint-stock company not yet listed or registered for trading on the securities market, the enterprise equitization steering committee shall consider and submit valuation results of the consultancy agency to the agency competent to decide on the enterprise value for decision.

3. In case an equitized enterprise has contributed to an affiliated company 100% of the latter’s capital, the enterprise value of such affiliated company shall be re-determined under Chapters II and III of this Decree

Section 3. ENTERPRISE VALUATION BY THE DISCOUNT CASH FLOW METHOD

Article 34. Value of equitized enterprises by the discount cash flow method

1. The actual value of the state capital portion in an enterprise shall be determined by the discount cash flow method based on the future profitability of the enterprise.

For an enterprise investing capital in another enterprise, profits brought about by such investment may also serve as a basis for its valuation.

2. The actual value of an enterprise consists of the actual value of the state capital portion, payable debts, cash balances of reward and welfare funds, and non-business fund balance (if any).

When an enterprise chooses the form of land allocation or land lease with lump-sum payment of land rent, the land use right value or land rent shall be additionally included in the enterprise value under Article 31 of this Decree.

Article 35. Bases for enterprise valuation by the discount cash flow method

1. The enterprise’s financial statements of the last 5 years preceding the time of enterprise valuation.

2. The enterprise’s production or business plan for between 3 and 5 years after the enterprise’s transformation into a joint-stock company.

3. The interest rates of five-year government bonds at the time closest to the time of enterprise valuation and the discount cash flow co-efficient of the valued enterprise.