Quyết định 04/2021/QĐ-TTg Điều lệ tổ chức và hoạt động của Quỹ Đổi mới công nghệ quốc gia

DECISION

ADOPTING THE CHARTER FOR ORGANIZATION AND OPERATION OF THE NATIONAL TECHNOLOGY INNOVATION FOUNDATION

Pursuant to the Law on Government Organization dated June 19, 2015; the Law on Amending and Supplementing certain Articles of the Law on Government Organization and the Law on Local Government Organization dated November 22, 2019;

Pursuant to the Law on Technology Transfer dated June 19, 2017;

Pursuant to the Law on State Budget dated June 25, 2015;

At the request of the Minister of Science and Technology;

The Prime Minister hereby issues the Decision on the Charter for organization and operation of the National Technology Innovation Foundation.

Article 1. Annexed hereto is the Charter for organization and operation of the National Technology Innovation Foundation.

Article 2. This Decision shall enter into force as of March 15, 2021 and replace the Prime Minister’s Decision No. 1051/QD-TTg dated July 3, 2013 on adopting the Charter for organization and operation of the National Technology Innovation Foundation.

Article 3. Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, Presidents of People’s Committees of centrally-affiliated cities and provinces, other organizations and individuals involved shall be responsible for implementing this Decision./.

CHARTER

FOR ORGANIZATION AND OPERATION OF THE NATIONAL TECHNOLOGY INNOVATION FOUNDATION
(Annexed to the Prime Minister’s Decision No. 04/2021/QD-TTg dated January 29, 2021)

Chapter I

GENERAL PROVISIONS

Article 1. Legal status, functions, legal personality of the National Technology Innovation Foundation

1. The National Technology Innovation Foundation (hereinafter referred to as Foundation) is a state-owned extra-budgetary financial fund directly controlled by the Ministry of Science and Technology, operating for non-profit purposes, performing such functions as preferential lending, offering interest rate subsidies, loan guarantees and grants (hereinafter referred to as financial support) in order for enterprises, organizations and individuals to research, apply, transfer, innovate and improve technologies.

2. The Foundation operates like a single-member limited liability company of which the charter capital is wholly held by the State.

3. The Foundation has legal personality, charter capital, a separate financial statement, a corporate seal, and accounts opened at the State Treasury and commercial banks legally operating in Vietnam under laws.

4. The Foundation’s headquarter is located in Hanoi city.

5. Its international transaction name is National Technology Innovation Foundation, abbreviated to NATIF.

Article 2. Operating principles

1. The Foundation nominates and grants financial support for technological research, application, transfer, innovation and improvement tasks and projects in an open, transparent and equal manner.

2. The Foundation grants financial support to beneficiaries covered by and meeting requirements set out in this Charter.

3. When offering financial support in the form of preferential lending and guarantee for loans, the Foundation must ensure that its charter capital is prudent.

Article 3. Operating purposes

1. Supporting enterprises in the process of transferring, innovating and improving technologies receiving transfer incentives as provided in the Law on Technology Transfer.

2. Promoting the transfer of technologies necessary for agricultural development activities at rural, mountainous and areas facing socio-economic disadvantage or extreme socio-economic disadvantage.

3. Supporting incubation of technologies, science and technology enterprises, and technology decoding.

4. Providing support for training of science and technology human resources necessary for technology transfer, innovation and improvement goals.

Article 4. Definition

For the purposes of this Charter, terms used herein shall be construed as follows:

1. Loan guarantee means a commitment of the Foundation (the guarantor) to the obligee to repay the debt on behalf of the obligor in the event that the obligor defaults or does not make full and timely payment on debt obligations. The obligor must be liable for the debt that the Foundation repays on their behalf.

2. Direct lending means the Foundation’s act of directly lending enterprises funds for implementation of technology transfer, innovation or improvement projects.

3. Indirect lending means the Foundation’s act of entrusting funds to commercial banks incorporated and operated under laws so that these banks lend enterprises these funds for implementation of technology transfer, innovation or improvement projects.

4. Lending interest rate subsidy means the Foundation’s act of offering partially non-refundable subsidies on interest rates to enterprises, organizations and individuals on their loans granted by credit institutions licensed to operate in Vietnam in order for them to execute technology research, application, transfer, innovation and improvement projects.

5. Funding support or grant means the Foundation’s act of offering partially non-refundable subsidies on interest rates to enterprises, organizations and individuals on their loans granted by credit institutions licensed to operate in Vietnam in order for them to execute technology research, application, transfer, innovation and improvement projects.

6. Risk acceptance ratio means the maximum rate of risk that the Foundation can bear in case of a loss occurring. The risk acceptance ratio is measured by dividing the value of the loss leading to the decrease of the charter capital by the charter capital that the Foundation actually has at the time of determination of the risk acceptance ratio.

Chapter II

DUTIES, POWERS AND ORGANIZATIONAL STRUCTURE OF THE FOUNDATION

Article 5. Duties and powers of the Foundation

1. Receiving, handling and using funds derived from the state budget, lawful sources of funding, voluntary contributions from domestic and foreign enterprises, organizations and individuals.

2. Formulating the Foundation's annual development strategies, action plans, medium-term plans; adopting specific regulations for the Foundation's operations.

3. Taking charge of nominating tasks and projects that qualify for the Foundation's financial support. Developing regulations on financial support and deciding the rate of financial support in a transparent manner; conducting financial appraisal; inspecting and controlling the process of implementing tasks and projects, and conducting the review of the results of execution of tasks and projects funded by the Foundation.

4. Suspending the financial support or recovering the offered funds when establishing that enterprises, organizations or individuals performing the tasks and/or projects violate the regulations on the use of funds granted by the Foundation; handling complaints; initiating lawsuits against enterprises, organizations and individuals that violate contracts and agreements with the Foundation in accordance with the law.

5. Managing and using capital and assets assigned by the State and other resources prescribed in this Charter and laws.

6. The Foundation’s operations shall be subject to regulations laid down herein. The Foundation may apply the financial, wage and public asset management mechanism like a single-member limited liability company whose charter capital is wholly owned by the State in accordance with laws.

7. Cooperating with foreign entities, individuals and international organizations on issues related to the Foundation’s functions and duties in accordance with the law.

8. Using the Foundation's idle funds as deposits at commercial banks.

9. Offering funds assigned by the Prime Minister or the Minister of Science and Technology to the Foundation for tasks performed by enterprises, organizations or individuals through science and technology programs and objectives by conforming to the principles that the State budget does not provide funding for national science and technology programs or tasks that are funded by the Foundation at the same time.

Article 6. Organizational structure

The Foundation’s organizational structure is composed of:

1. Foundation’s Executive Board.

2. Comptroller.

3. Foundation’s Director and assistant apparatus.

Article 7. Foundation’s Executive Board

1. The Foundation’s Executive Board shall act under the Foundation’s name to carry out its rights and obligations under this Charter and other relevant regulations of laws.

2. The Foundation’s Executive Board is composed of the President and members. The Board has 5 to 7 members working on a full-time or part-time basis, appointed, discharged from office, dismissed, rewarded or disciplined by the Minister of Science and Technology. The President and Members of the Foundation’s Executive Board hold a term of office of 05 years and can be reappointed.

3. Duties and powers of the Foundation’s Executive Board

a) Deciding the Foundation's 5-year and annual operations strategies and plans based on the State's priority orientations for socio-economic and scientific-technological development;

b) Issuing approval decisions on annual financial statements and reports on distribution of profits, setting-aside of amounts and annual reports to the Ministry of Science and Technology after receipt of audit opinions from the comptroller;

c) Reporting to the Ministry of Science and Technology to petition the Prime Minister to approve the needs for adjustment of the charter capital to meet the technological innovation and development needs;

d) Advising the leaders of the Ministry of Science and Technology on specific mechanisms, policies and measures to support enterprises, organizations and individuals according to the Foundation's functions and duties;

dd) Managing and using the Foundation's funds to serve stated right purposes, ensuring the safety of its charter capital and capital development;

e) Deciding the promulgation of operation regulations of the Foundation;

g) Deciding on, offering, suspending financial support or recovering funding for tasks and projects in accordance with this Charter;

h) Deciding the organizational plan of the Foundation's assistant apparatus according to the provisions of this Charter; planning for placement of, appointing, discharging, recruiting, evaluating, rewarding, disciplining, paying salaries, bonuses to, setting up the reward and welfare fund, and implementing other compensation package for the Foundation's assistant apparatus;

i) Deciding the plan to build, purchase, sell, manage and use property within its competence in accordance with law;

k) Adopting the regulations for the operation and management of the Foundation according to its competence; establishing a science and technology council, hiring independent consultants to advise and select, evaluate the results of implementation of financially supported tasks and projects and other related issues;

l) Bearing responsibility to the Minister of Science and Technology and the law for the decisions of the Foundation’s Executive Board.

4. The President of the Foundation’s Executive Board is the direct representative of the ownership interests at the Foundation. The Foundation’s President of the Foundation’s Executive Board shall have the following rights and obligations:

a) Acting on behalf of the Foundation’s Executive Board to sign for capital and other resources entrusted to the Foundation by the State, enterprises, organizations and individuals;

b) Bearing responsibility for the activities of the Foundation’s Executive Board, organizing and assigning tasks to members to perform the tasks and powers delegated by the Foundation’s Executive Board;

c) Acting on behalf of the Foundation’s Executive Board to sign resolutions, decisions and documents under the jurisdiction of the Foundation's Executive Board;

d) Convening and chairing meetings of the Foundation's Executive Board and collecting opinions from members;

dd) Acting on behalf of the Foundation's Executive Board to seek the consent of the Minister of Science and Technology to appointment and discharge of its Director, Vice Director or Chief Accountant;

e) Organizing the implementation of the tasks of the Foundation’s Executive Board, monitoring and supervising the implementation of resolutions and decisions of the Ministry of Science and Technology and of the Foundation's Executive Board;

g) Taking charge of supervising, directly supervising and evaluating the performance of the Foundation's strategic objectives, operation plans, operation results, management and administration results of the Foundation's Director;

h) Where necessary, the President of the Foundation’s Executive Board authorizes one of the members of the Foundation’s Executive Board or the Director in writing to carry out its functions and duties. The delegatee shall be accountable to the President for delegated tasks;

i) Performing other tasks assigned by the Minister of Science and Technology.

5. Criteria and conditions for the President and members of the Foundation’s Executive Board:

a) The President must have an undergraduate or higher degree, acquire at least 5 years’ managerial or operational experience in one of the science, technology, finance, banking, law, economy, business administration, accounting and auditing domains;

b) Each member must have an undergraduate or higher degree, acquire managerial and operational experience in one of the science, technology, finance, banking, law, economy, business administration, accounting and auditing domains;

c) Not a wife or husband, natural father or mother, adoptive father or mother, natural or adoptive child, younger or older blood brother or sister, younger or older brother-in-law or sister-in-law of the Minister, the Deputy Minister of Science and Technology; Comptroller; Director, Vice Director and Chief Accountant.

6. Rights and responsibilities of the Foundation’s Executive Board:

a) Attending discussions, giving recommendations and votes on matters under the jurisdiction of the Foundation’s Executive Board;

b) Performing duties and activities assigned by the Foundation’s Executive Board and President;

c) Complying with resolutions of the Foundation’s Executive Board;

d) Implementing other rights and obligations as per this Charter.

7. Members of the Foundation’s Executive Board shall fully participate in operations under the regulations of the Foundation’s Executive Board; receiving wages and salaries or other remuneration and benefit packages under the regulations of the State.

8. The Foundation’s Executive Board shall use the Foundation’s assistant apparatus and corporate seal for implementing its duties and powers under this Charter. The budget for operations of the Foundation’s Executive Board shall be charged into operational costs of the Foundation’s machinery. The Foundation’s Director must satisfy eligibility conditions and be provided with equipment necessary for operations of the Executive Board.

Article 8. Comptroller

1. The Foundation shall have one Comptroller appointed by the Minister of Science and Technology. The Comptroller works on a full-time basis, hold 3 years’ term of office and can be re-appointed but not more than 02 consecutive terms of office.

2. Eligibility standards and requirements for appointment of the Comptroller

a) Have an undergraduate or higher degree, acquire at least 3 years’ managerial or operational experience in one of the science, technology, finance, banking, law, economy, business administration, accounting and auditing domains;

b) Not a wife or husband, natural father or mother, adoptive father or mother, natural or adoptive child, younger or older blood brother or sister, younger or older brother-in-law or sister-in-law of the Minister, the Deputy Minister of Science and Technology; members of the Foundation’s Executive Board; Director, Vice Director and Chief Accountant;

c) Do not hold dual office as a Director or Director General of another enterprise.

3. Rights and obligations of the Comptroller

a) Supervising the implementation of the Foundation’s operational strategies and plans;

b) Supervising the implementation of rights and obligations of the Foundation’s Executive Board and Director at the request of the Minister of Science and Technology;

c) Reviewing financial statements, reports on financial support activities, management evaluation reports and other reports before submitting them to the Ministry of Science and Technology;

d) Preparing assessment reports and recommendations about those prescribed in points a, b and c of this clause and submitting them to the Ministry of Science and Technology and the Foundation’s Executive Board.

4. Comptroller’s responsibilities

a) Complying with laws and decisions of the Ministry of Science and Technology, and professional ethics in the course of carrying out rights and obligations prescribed in this Charter;

b) Developing activity plans and sending task fulfillment reports to the Ministry of Science and Technology;

c) Carrying out assigned rights and obligations in an honest, discreet and due manner for the benefit of the State and in the interests of the Foundation’s stakeholders.

5. Comptroller’s compensation package

a) The Comptroller shall be entitled to wages, salaries and remuneration in proportion to his/her performance and the Foundation’s operations results;

b) The Ministry of Science and Technology shall decide the rates of wages, salaries, remuneration paid to the Comptroller, depending on his/her accomplishment of assigned tasks and laws;

c) Operational costs of the Comptroller shall be charged into the Foundation’s managerial costs and expenses in accordance with laws.

Article 9. Director

1. The Foundation’s Director is the Foundation’s legal representative, appointed and discharged by the Minister of Science and Technology at the request of the President of the Foundation’s Executive Board, working on a full-time basis, holding 5-year term of office, and may be reappointed.

2. Eligibility standards and requirements for being appointed as the Foundation’s Director shall be similar to those applied to the President of the Foundation’s Executive Board in accordance with point a and c of clause 5 of Article 7 herein.

3. Rights and obligations of the Foundation’s Director

a) Governing the Foundation's activities; performing and reporting on the performance results under the decision of the President of the Foundation’s Executive Board and the Minister of Science and Technology;

b) Seeking the Executive Board’s approval decision on the operational strategy, plan, financial plan and financial statement of the Foundation in accordance with the provisions of this Charter; taking charge of implementing them once approval is obtained;

c) Seeking the Executive Board’s decision on the Operations Regulations, Internal Expenditure Regulations, Regulations on receipt of grants, contributions and other internal governance regulations of the Foundation; issuing internal administrative documents according to its competence and other regulations related to the Foundation's operations in accordance with this Charter;

d) Seeking the Executive Board’s decision on the plan for operation, staffing, organization of the governance machinery of the Foundation, and the appointment, discharge, rewarding and disciplining of the Foundation's Deputy Director, Chief Accountant, and other officeholders in accordance with this Charter;

dd) Recruiting employees, appointing and discharging officers under his/her authority;

e) Carrying out other rights and obligations assigned and authorized by the President of the Foundation’s Executive Board and the Minister of Science and Technology according to the Foundation's functions and duties.

4. Responsibilities of the Foundation’s Director

a) Complying with laws, implementing other delegated rights and assigned obligations as per this Charter;

b) Complying with resolutions and decisions of the Foundation’s Executive Board;

c) Bearing responsibility to the Foundation’s Executive Board and the Minister of Science and Technology and the law for the implementation of the delegated rights and assigned duties.

Article 10. Relationship between the Executive Board, the Comptroller and the Director General in management and governance of the Foundation

1. In the course of implementing resolutions and decisions of the Executive Board, on seeing that the Foundation’s interests are likely to be adversely affected, the Director must report to the Executive Board to seek its consent to any amendment to such resolutions and decisions. In case where the Executive Board fails to make necessary amendments, the Director must execute them and then report to the Ministry of Science and Technology to seek its decision on possible actions to be taken under its delegated authority.

2. The Director shall be responsible for periodically reporting to the Executive Board on the Foundation’s business conditions. Where necessary, the President of the Executive Board may request the Director to directly report to the Executive Board or send a representative of the Executive Board to the Foundation’s meetings.

3. The Executive Board must authorize the Director to act on its behalf to perform its duties and shall be responsible for such authorization. The Director shall be responsible to the Executive Board and laws for duties that he/she is authorized to perform.

4. The relationship between the Comptroller and the Ministry of Science and Technology, or the Foundation’s Executive Board and the Director shall be subject to operational rules and regulations of the Comptroller, the Executive Board and laws.

Article 11. Assistant apparatus

The Foundation's assistant apparatus is composed of the Deputy Director, Chief Accountant, professional division, and representative office. The Foundation’s Vice Director and Chief Accountant are appointed and discharged under the decision of the Minister of Science and Technology at the request of the President of the Foundation’s Executive Board. The Foundation’s Vice Director and Chief Accountant work on a full-time basis during the 5-year term of office and may be reappointed. The number of Deputy Directors shall be restricted to 03 persons.

1. Deputy Directors shall be charged with assisting the Director to perform their duties assigned and their authority delegated by the Director; shall be accountable to the Director and laws for performing their assigned or entrusted tasks. The Foundation’s Vice Director must have an undergraduate or higher degree, acquire at least 3 years’ managerial or governance experience in one of the science, technology, finance, banking, law, economy, business administration, accounting and auditing domains, and must meet standards and conditions prescribed in laws.

2. The Chief Accountant shall undertake the accounting work in accordance with the law on accounting, assisting the Director to supervise the Foundation's financial activities in accordance with the law on finance and accounting; shall be responsible to the Director, to the President of the Foundation’s Executive Board and to the law for the performance of assigned tasks and delegated powers. The Chief Accountant must satisfy eligibility standards and requirements stipulated in the Law on Accounting and other relevant regulations of laws.

3. The professional division and the representative office shall be decided by the Foundation’s Executive Board.

Article 12. Science and technology council

1. The Science and Technology Council (hereinafter referred to as the Council) is established according to the decision of the President of the Foundation’s Executive Board at the request of the Director to give counsels according to specific tasks. The Council has from 05 to 09 members, including science and technology experts, economic experts or managers with practical experience and profound expertise in the field covering the proposed tasks. The Foundation’s Executive Board must, based on specific tasks, decide the number of members and participants in the Council.

2. The Council shall take on the following duties:

a) Offering counsels on selection of tasks and projects; evaluating and testing the results of implementing tasks and projects funded by the Foundation;

b) Advising the Foundation’s Executive Board and the Director on formulating and implementing the Foundation’s long-term, midterm and annual strategies and plans.

3. The Council shall operate under the Regulations decided by the Foundation’s Executive Board at the Director’s request, receiving remuneration and other benefits according to the regulations of the Foundation’s Executive Board in accordance with the provisions of laws. The Council shall be automatically dissolved after fulfillment of its assigned tasks.

Chapter III

FOUNDATION’S FINANCIAL SUPPORT ACTIVITIES

Article 13. General principles

1. The Foundation's financial support activities shall be performed according to the agreements between the Foundation and enterprises, organizations or individuals in accordance with the regulations of this Charter.

2. Enterprises, organizations and individuals receiving the Foundation's financial support must use funds for the right purposes, in an efficient manner and in accordance with the provisions of law.

3. Enterprises, organizations and individuals may receive financial support from the Foundation in one of the forms: preferential loans, interest rate subsidies, loan guarantees and grants for specific scientific and technological tasks and projects.

Section 1. DIRECT LENDING

Article 14. Qualified borrowers and requirements

1. Qualified borrowers

Enterprises executing the following projects:

a) transfer, innovation and improvement of technologies receiving transfer incentives as provided in the Law on Technology Transfer;

b) Technology transfer, new product development and product commercialization in the high-technology agriculture and industry sectors approved by the Prime Minister;

c) Technological innovation, production of industrial products on the list of supporting industrial products prioritized for development approved by the Prime Minister;

d) Implementation of technology transfer contracts signed at technology exchanges, technology and equipment markets, technology supply-demand connection events and national startup festivals;

dd) Innovation and improvement of technologies, development of new products, production expansion for innovative startups and science and technology enterprises in accordance with the laws on science and technology;

e) Technology innovation activities for enterprises that win the National Quality Award, enterprises participating in the Production and Quality Improvement Program;

g) Receipt, transfer, innovation and improvement of technologies and especially commercialization of technologies after being developed in the National Product Program, the National Technology Innovation Program, the National Program for High Technology Development and other national-level science and technology programs.

2. Requirements

a) Loan applicants must be classified as qualified borrowers referred to in clause 1 of this Article;

b) Having the project of which objectives, contents and products meet the Foundation's operating purposes as prescribed in Article 3 of this Charter;

c) The project must be approved by the competent authority in accordance with laws, verified and evaluated by the Foundation as a feasible project capable of repaying the loan;

d) The enterprise applying for a loan is established in accordance with laws, has sufficient resources to implement projects and ensures that the equity participation makes up at least 20% of total investment capital in order for its project to be executed;

dd) Having financial capability to repay debts and meeting regulations on loan security under the provisions of this Decision and relevant laws;

e) At the time of application for a loan, the enterprise has no bad debts to credit institutions and outstanding tax liabilities for a period of 1 year or more in accordance with the Law on Tax Administration. In case of outstanding tax debts incurred due to objective reasons, the enterprise must obtain certification of this situation from the directly supervisory tax authority;

g) The currency unit used for lending and debt repayment transactions must be Vietnamese dong.

3. The Foundation shall consider granting direct loans for implementation of the tasks specified in Clause 1, Article 27 of this Charter when the requirements specified in Clause 2 of this Article are fully met.

Article 15. Lending interest rate, loan amount, loan term and loan guarantee

1. The Foundation's direct lending interest rate varying over periods of time shall be determined according to the principle of ensuring that the Foundation has sufficient revenues to exercise its financial autonomy, assuring capital prudence and development. Over periods of time, according to the principles of determining interest rates specified in this Clause, the President of the Foundation’s Executive Board shall announce the Foundation's lending interest rates.

2. The maximum direct loan amount for each project shall not exceed 80% of total project investment. The Foundation's total loan amount that an enterprise may take out must not exceed 15% of the Foundation's actual charter capital.

3. The direct loan term shall be determined in accordance with the enterprise's ability to recover capital, solvency and the specific conditions of each project, but must not exceed 07 years.

4. Loan guarantee

a) In order to be granted loans, enterprises must comply with loan security measures. Depending on projects, the Foundation must consider making the relevant decisions on specific loan security measures in line with the actual context and regulations of laws;

b) Formation and execution of secured transactions and disposal of collateral must be subject to the provisions of law on secured transactions and other relevant legislation.

Article 16. Documentation requirements and procedures for direct lending and direct loan agreements

1. Loan application must include the followings:

a) Loan application form;

b) Project documentation and documents or records proving that the loan applicant qualifies for a loan under the provisions of Article 14 herein.

2. Enterprises submit the application package for loans at the Foundation’s main office or on its website (if any).

3. The Foundation receives and reviews the completeness of loan application documents; establishes the Review Council to consider whether a direct loan approval decision is issued. Where necessary, the Foundation hires an independent consultant or establishes the Science and Technology Council advising the Foundation on loan applications. In case of refusal to grant a loan, the Foundation shall inform the applicant enterprise of clear reasons for such refusal.

4. The Foundation shall be responsible for adopting regulations on nomination, selection, review and assessment procedures, processing duration, and making its decision on whether a loan application is approved, and making disbursement according to the principles of clear distinction of responsibilities and obligations of individuals or organizations involved in the process of reviewing and deciding loans and disbursing borrowed funds.

5. The loan agreement between the Foundation and the borrowing enterprise must be made in writing, must comply with the provisions laid down herein, and must contain the following main information:

a) Information about the legal personalities of the Foundation and the borrowing enterprise, the place and time of entry into such agreement;

b) Terms and conditions of loan amount, purposes, term, currency unit, lending approach, loan disbursement method, lending interest rate, loan transition, interest recovery, loan principal, loan security and risk provision and management (if any), validity of the loan agreement;

c) Rights, duties and liabilities of each party involved in the indirect lending process; method for resolving disputes or difficulties arising from the process of implementation of the agreement and other arrangements in conformity with the Foundation’s managerial requirements;

d) In addition to those prescribed in point a, b and c of this clause, contracting parties may reach other agreements in compliance with the provisions laid down herein and other relevant laws.

Section 2. INDIRECT LENDING

Article 17. Principles and requirements

1. Principles

a) The Foundation’s Executive Board should issue the criteria for selection of and decides on a number of commercial banks (hereinafter referred to as banks) to sign the indirect loan agreements at the request of the Foundation’s Director;

b) Banks shall apply laws on borrowing of funds by credit institutions and financial organizations in order to receive funds from the Foundation;

c) Banks shall have autonomy in conducting the review before deciding whether lending is approved as defined in clause 1, point a and b of clause 2 of Article 14 herein, shall bear responsibility for any risk incurred from their lending approval decisions;

d) Banks shall be held responsible for repaying principal and interest in full to the Foundation by the maturity date agreed upon with the Foundation;

dd) The currency unit used for lending and debt repayment transactions must be Vietnamese dong.

2. Requirements

a) Enterprises must meet the provisions laid down in clause 1, point a and point b of clause 2 of Article 14 herein;

b) Banks agree to grant loans and meet agreements with the Foundation.

Article 18. Lending interest rate, loan amount, term and fees

1. The indirect lending interest rate shall be equal to the direct loan interest rate specified in Clause 1, Article 15 of this Charter.

2. The indirect loan amount for each project shall not exceed the direct loan amount specified in clause 2 of Article 15 herein.

3. The loan term shall be subject to the provisions of clause 3 of Article 15 herein.

4. Indirect lending fee is an amount that the Foundation must pay to banks to serve lending purposes as agreed upon by both contracting parties. The Foundation’s Executive Board shall regulate the maximum fees charged in specific sectors and over periods of time.

Article 19. Documentation requirements and procedures for indirect lending and indirect loan agreements

1. Application documentation for borrowing of funds shall include:

a) Loan application form;

b) Project documentation of the borrowing enterprise and documents or records proving that the loan applicant qualifies for a loan under the provisions of clause 1, point a and b of clause 2 of Article 14 herein.

2. The designated bank’s application package for an indirect loan shall be composed of the followings:

a) Application form;

b) Documents defined in point b of clause 1 of this Article and other relevant ones.

3. Enterprises submit the application package for loans at the Foundation’s transaction offices or by post or on its website (if any).

4. Banks shall be responsible for receiving loan applications, reviewing them before making decisions on approval of the loans to requesting enterprises, and sending indirect loan requests to the Foundation’s main office or by post or on its website (if any). In case of refusal to grant loans, banks shall inform the applicant enterprise of clear reasons for such refusal.

5. The Foundation shall be held responsible for receiving and reviewing indirect loan requests and deciding whether funds used as indirect loans are transmitted to requesting banks. Where necessary, the Foundation may hire an independent consultant or establish the Science and Technology Council advising the Foundation on indirect loan requests. In case of refusal to transmit such funds, the Foundation must inform the requesting banks in writing of clear reasons for such refusal.

6. Banks shall assume responsibility for adopting procedures for review and grant of decisions on indirect lending according to the public disclosure and transparency principles.

7. The Foundation shall be held responsible for issuing regulations on review procedures, processing duration and making decisions on transmission of indirect loans according to the principles of the clear distinction of responsibilities and obligations of parties involved in the indirect lending process.

8. Indirect loan agreement between the Foundation and banks shall be made in writing, must comply with the provisions laid down herein, and must contain the following basic information:

a) Information about the legal personalities of the Foundation and the requesting bank, place and time of entry into the loan agreement;

b) Agreement on loan amount, purposes, term, currency unit, interest rate, method for receiving funds, repaying loans, recovery of principal and interest, transformation of overdue debts, rescheduling of debt repayment term and effect of indirect loan agreement;

c) Rights, obligations and liabilities of each party involved in the indirect lending process; method for resolving disputes or issues arising from the process of implementation of the loan agreement and other arrangements in conformity with the Foundation’s managerial requirements;

d) In addition to those prescribed in point a, b and c of this clause, contracting parties may reach other agreements in compliance with the provisions laid down herein and other relevant laws.

9. The loan agreements between banks and enterprises must be made in writing and must be consistent with the indirect loan agreements between the Foundation and banks as provided in clause 8 of this Article.

Section 3. INTEREST RATE SUBSIDY

Article 20. Qualified beneficiaries and requirements

1. Qualified beneficiaries: Meeting the regulations laid down in clause 1 of Article 14; clause 1 of Article 27 herein.

2. Requirements

a) Candidates for such subsidy must be classified as those referred to in clause 1 of this Article;

b) Enterprises, organizations and individuals are investors in projects, and have been assessed as qualified for loans as per laws and capable of repaying loans;

c) Having projects of which objectives, contents and products meet the Foundation's operating purposes as prescribed in Article 3 of this Charter;

d) Projects have not yet obtained financial support from the Foundation's funding sources or the state budget.

Article 21. Methods or approaches and subsidy rate

1. Methods or approaches for offering lending interest rate subsidy: The Foundation may provide interest rate subsidies for projects that have been completed, put to use, or have partially or wholly repaid loans to credit institutions.

2. The interest rate subsidy rate shall be determined by the positive interest rate difference between the interest rate at which the investor must repay the loan to the credit institution and the interest rate the Foundation applies at the same time. Over periods of time, according to the principles of determining interest rate subsidy rates specified in this Clause, the Foundation’s Executive Board shall announce the Foundation's lending interest rate subsidy rates.

Article 22. Documentation requirements and procedures for offer of interest rate subsidies

1. Application package for interest rate subsidy shall comprise the followings:

a) Application form;

b) Project documentation of the applicant investor and documents or records proving that the applicant enterprise meets requirements stated in the provisions of Article 20 herein.

2. Investors submit their application package for interest rate subsidies at the Foundation’s main office or by post or on its website (if any).

3. The Foundation receives and checks whether all of required documents are submitted; establishes the Review Council to consider whether the interest rate subsidy is approved. Where necessary, the Foundation may hire an independent consultant or establish the Science and Technology Council advising the Foundation on application packages for interest rate subsidies. In case of refusal, the Foundation shall inform the applicant investor of clear reasons for such refusal.

4. The Foundation shall be responsible for adopting regulations on nomination, selection, review and assessment procedures, processing duration, and making its decision on whether a interest rate subsidy is approved, and making disbursement on such subsidy according to the principles of clear distinction of responsibilities and obligations of individuals or organizations involved in the process of reviewing and deciding interest rate subsidies and disbursing such subsidies.

5. The subsidy agreement between the Foundation and the investor must be made in writing, must comply with the provisions laid down herein, and must contain the following main information:

a) Information about the legal personalities of the Foundation and the investor, place and time of entry into the subsidy agreement;

b) Agreements on the form of loan interest rate subsidies, subsidy amount, disbursement, effectiveness of the interest rate subsidy agreement;

c) Rights, obligations and liabilities of each party involved; method for dealing with disputes or issues arising from the process of implementation of the agreement and other arrangements according to the Foundation’s managerial requirements;

d) In addition to those prescribed in point a, b and c of this clause, contracting parties may reach other agreements in compliance with the provisions laid down herein and other relevant laws.

6. Disbursement on the interest rate subsidy must be made once a year, depending on the amount of principal that the borrowing investor pays to the lending credit institution within the contractual year according to the loan agreement. Disbursement documents shall include the followings:

a) 01 principal copy of the report on the pre-commissioning testing of the contractually completed project or project item completed and put to use;

b) 01 duplicate copy of the interest rate subsidy agreement; debt covenant between the borrowing investor and the lending credit institution;

c) 01 duplicate copy of the certificate of repayment of debts in the year in question by the investor to the lending credit institution.

Section 4. LOAN GUARANTEE

Article 23. Qualified obligors and requirements

1. Qualified obligors to loans, including: Enterprises, organizations and individuals that are investors implementing technology commercialization projects after these projects are developed in the National Product Program, the National Technology Innovation Program, the National Program for High Technology Development and other scientific and technological programs and tasks serving the needs of the programs obtaining socio-economic development incentives.

2. Requirements

a) Applicants for loan guarantees must be classified as qualified obligors referred to in clause 1 of this Article;

b) Having the projects of which objectives, contents, technological documents and products meet the Foundation's operating purposes prescribed in Article 3 of this Charter;

c) Having sufficient resources for execution of projects;

d) Ensuring the equity participation in a project making up at least 20% of total investment capital at the time of the Foundation’s review of application before grant of approval for the loan guarantee;

dd) At the time of application for a loan guarantee, the investor has no tax debts for a period of 1 year or more in accordance with the Law on Tax Administration, and no bad debts to any credit institution.

Article 24. Loan guarantee rate and fee

1. The Foundation provides guarantee for a part or the whole of the investor's loan granted by the bank on condition that the value of such guarantee does not exceed 80% of total investment in a project.

2. Loan guarantee fee is calculated on the basis of guaranteed loan amount (including principal and interest).

Article 25. Loan guarantee limit

1. The proportion of the Foundation’s total credit guarantee rate to its actual charter capital shall not exceed 02% per each customer and 05% per each customer and person related to that customer.

2. The Foundation's total loan guarantee rate must not exceed 30% of the Foundation's actual charter capital.

Article 26. Documentation requirements, procedures and processes for provision of loan guarantees

1. Loan guarantee application package must comprise the followings:

a) Application form;

b) Documents and records proving that the investor (the obligor) meets the conditions for eligibility for loan guarantee as prescribed in Article 23 of this Charter and other relevant ones in accordance with the Foundation's regulations.

2. Investors submit their application package for loan guarantee at the Foundation’s main office or by post or on its website (if any).

3. The Foundation receives and reviews the completeness of loan guarantee application documents; establishes the Review Council to consider whether an approval decision on loan guarantee is issued. Where necessary, the Foundation may hire an independent consultant or establish the Science and Technology Council advising the Foundation on loan guarantee application documents. In case of refusal, the Foundation shall inform the applicant investor of clear reasons for such refusal.

4. The loan guarantee decision issued to the investor is made in writing in the form of a loan guarantee agreement between the Foundation, the investor and the obligee. The loan guarantee agreement contains the following basic information:

a) Information about the legal personalities of the Foundation, the investor, the obligee, the place and time of conclusion of the agreement;

b) Agreements on the loan guarantee form, amount, disbursement, effectiveness of the loan guarantee agreement;

c) Rights, obligations and liabilities of each party involved; method for dealing with disputes or issues arising from the process of implementation of the agreement and other arrangements according to the Foundation’s managerial requirements;

d) In addition to those prescribed in point a, b and c of this clause, contracting parties may reach other agreements in compliance with the provisions laid down herein and other relevant laws.

5. The Foundation’s loan guarantee shall be expressed in writing in the form of guarantee certificate. The guarantee certificate shall be comprised of the following basic information:

a) Names, addresses of the Foundation, the obligee and the investor;

b) Date of issuance of the guarantee certificate, obligations to repay principal and interest;

c) Specific conditions for discharge of guarantee obligations;

d) Validity period of the guarantee certificate;

dd) Documents pertaining to the request for the Foundation's payment of guarantee obligations to the obligee;

e) Rights, obligations and responsibilities of the parties involved in the process of carrying out clauses prescribed in the guarantee certificate; stipulations about disputes and handling of disputes that may arise;

g) Debt recovery measures that the obligee must take after the investor fails to repay debts or has not fully repaid debts to the obligee, and the method of proving that such measures have been taken before notifying the Foundation to request it to fulfill its loan guarantee obligations under this Charter;

h) Other matters as agreed upon between involved parties;

i) Guarantee certificate that is amended, supplemented or abolished if involved parties enter into specific agreements.

6. The Foundation shall be responsible for adopting the procedures for review of application for and issuance of decisions to provide loan guarantees according to the principle of ensuring clear separation of responsibilities and obligations of individuals and organizations involved in the process of reviewing application for and deciding to provide loan guarantees, and issuing the Regulations on security measures, authority to decide specific security measures of the Foundation.

Section 5. FUNDING SUPPORT

Article 27. Qualified grantees and requirements

1. Qualified grantees: Enterprises, organizations and individuals performing scientific and technological tasks:

a) Developing new technologies, advanced technologies and high technologies on the basis of source technologies and integration into technological combinations serving the production of key, main and national products;

b) Decoding technologies, mastering technological know-how originated from inventions; acquiring and implementing pilot production projects through national science and technology programs;

c) Developing new technologies by young research groups and applying them to trial production of new products, applications and services;

d) Applying and developing new technologies to adapt to the manufacturing value chain: Serving the manufacturing of national, key and main products (at the industry or local scale);

dd) Innovating, perfecting and creating technologies meeting advanced and outstanding technical standards and regulations to manufacture high value-added products to join the global production chain;

e) Training science and technology officers necessary for technology transfer, application and development purposes; hiring national and international technical consultants;

g) Multiplying, disseminating, introducing and transferring technologies necessary for development purposes in rural, mountainous, island areas, etc. in accordance with the Law on Technology Transfer.

2. Requirements

a) Candidates for such funding must be classified as qualified grantees referred to in clause 1 of this Article;

b) Research contents and products that directly serve the demands of innovation and improvement of technology, productivity, quality and competitiveness of products and goods of enterprises must meet the Foundation's operating purposes stated in Article 3 of this Charter;

c) Products obtained from performing science and technology tasks are capable of being applied to production and business activities;

d) Enterprises, organizations and individuals must have sufficient resources to perform scientific and technological tasks.

Article 28. Funding approaches and grant rates

1. Funding approaches:

The Foundation shall fund scientific and technological tasks meeting the conditions prescribed in Article 27 herein in the form of partially or wholly non-refundable grants.

2. Grant rates

a) The Foundation shall offer a grant equaling up to 30% of total fund for scientific and technological tasks meeting the conditions prescribed in clause 2 of Article 27 herein;

b) The Foundation shall offer a grant equaling up to 50% of total fund for scientific and technological tasks meeting the conditions prescribed in clause 2 of Article 27 herein and performed in areas facing socio-economic disadvantage or extreme socio-economic disadvantage;

c) The Foundation shall offer a grant equaling up to 70% of total fund for scientific and technological tasks meeting the conditions prescribed in clause 2 of Article 27 herein and for national-level scientific and technological tasks classified as prioritized or key ones by the State;

d) The Foundation shall offer a grant equaling up to 100% of total fund for national-level scientific and technological tasks classified as prioritized or key ones by the State and performed in areas facing socio-economic disadvantage or extreme socio-economic disadvantage provided that they meet regulations laid down in clause 2 of Article 27 herein;

dd) The particular grant for a and technological task shall be decided by the President of the Foundation’s Executive Board at the request of the Director.

3. The Foundation shall offer enterprises, organizations and individuals the grants that the Prime Minister or the Minister of Science and Technology assigns through scientific and technological programs and tasks in accordance with regulations and instructions of the Ministry of Science and Technology and other relevant legislative documents.

Article 29. Documentation requirements, processes and procedures for offer of grants

1. Application documentation for funding support shall be composed of the followings:

a) Application form submitted by enterprises, entities or persons;

b) Documentation on scientific and technological tasks and other documents or records proving that the applicant enterprise, entity or person meets the funding support requirements prescribed in Article 27 herein.

2. Applicant enterprises, entities or persons submit application packages for funding support at the Foundation’s main office or by post or on its website (if any).

3. The Foundation receives and checks the adequacy of application documentation for funding support; establishes the Review Council to assess and inspect the feasibility of the scientific and technological task and the funding support conditions prescribed herein; issues a decision on approval of funding support and informs the applicant enterprise, entity or person of this. Where necessary, the Foundation may hire an independent consultant or establish the Science and Technology Council advising the Foundation on funding support application documents. In case of refusal, the Foundation shall inform the applicant enterprise, entity or person of clear reasons for such refusal.

4. The funding support agreement between the Foundation and the grantee enterprise, entity or person must be made in writing, must comply with the provisions laid down herein, and must contain the following main information:

a) Information about the legal personalities of the Foundation and the grantee enterprise, entity or person, the place and time of conclusion of such agreement;

b) Contractual arrangements regarding funding support form, amount, purposes of the grant and grant disbursement and effect of the funding support agreement;

c) Rights, obligations and liabilities of each party involved; method for dealing with disputes or issues arising from the process of implementation of the agreement and other arrangements according to the Foundation’s managerial requirements;

d) In addition to those prescribed in point a, b and c of this clause, contracting parties may reach other agreements in compliance with the provisions laid down herein and other relevant laws.

5. Assessing and testing the accomplishment of a scientific and technological tasks

a) Task accomplishment assessment and testing documentation shall comprise the followings:

- Application form submitted by enterprises, entities or persons;

- Documents, records evidencing relevant payments.

b) The Foundation receives and checks the adequacy of task accomplishment testing documents; conducts the assessment and testing of accomplishment of the scientific and technological task.

6. The Foundation shall be responsible for adopting regulations on nomination, selection procedures, implementation, processing duration, and grant of decision on whether a funding support application is approved, and processes for review and testing of accomplishment of the scientific and technological tasks according to the principles of ensuring equality, transparency and clear separation of responsibilities and obligations of persons and entities involved in the funding support process.

Chapter IV

DEBT CLASSIFICATION, CREATION OF RISK PROVISIONS AND RISK MANAGEMENT

Article 30. Debt classification and creation of risk provisions

1. The Foundation shall classify all outstanding debts incurred from direct lending or loan guarantee transactions in accordance with regulations of the State Bank of Vietnam on debt classification towards credit institutions.

2. Banks shall be responsible for classifying all outstanding debts incurred from indirect lending transactions in accordance with regulations of the State Bank of Vietnam on debt classification towards credit institutions.

3. The Foundation shall set aside funds as provisions for risks incurred from direct lending or loan guarantee transactions which should be charged into the Foundation’s operating costs and expenses as follows:

a) Creating a general risk provision equaling 0.75%/year as much as total outstanding debt arising from indirect lending or loan guarantee transactions that accrues till the risk provisioning time;

b) Creating provisions for specific direct lending risks: Based on the results of debt classification, the Foundation shall create specific provisions for risks arising from outstanding direct loan balances, risk provisioning rates relevant to specific groups of debts in accordance with the regulations of credit institutions;

c) Creating risk provisions for specific loan guarantees: Based on debt classification results, annual revenues and spending of the Foundation, the Foundation providing loan guarantees shall create specific provisions for risks arising from debts that the Foundation pays on behalf of the obligors at the rates which do not exceed the maximum provisioning rates relevant to specific groups of debts in accordance with the regulations of credit institutions;

4. Banks shall set aside funds for provisions for risks arising from outstanding debts incurred from indirect lending transactions in accordance with regulations of the State Bank of Vietnam regarding the creation of provisions for risks of credit institutions.

Article 31. Risk management

1. Principles

a) The Foundation’s management of risks must ensure conformance to regulations of laws;

b) The risk management must be considered based on the causes of risks, risk levels, production and business condition, financial condition, debt repayment capabilities of enterprises, and must adhere to the principles of ensuring conformance to documentation requirements, procedures and processes prescribed herein;

c) The risk management shall be carried out in the direction of minimizing damage to the State, and relating responsibilities of the Foundation, borrowers and related organizations to the recovery of debts;

d) Risk management measures shall be selected according to the order of priority in which those that do not lead to loss of funds or result in loss of a small amount of funds would be preferred;

dd) A debt may be managed by applying multiple measures prescribed herein;

e) Risk acceptance ratio of the Foundation must be less than 05% by the end of the financial year in question.

2. Risk management measures against outstanding debts arising from the Foundation’s direct lending transactions, including:

a) Rescheduling of debt repayment term/debt repayment amount;

b) Debt maturity extension;

c) Debt relief;

d) Loan interest cancellation;

dd) Loan principal cancellation;

e) Debt sale;

g) Disposal of property put up as collateral for debts;

h) Other risk management measures prescribed in laws.

3. Risk management measures against outstanding debts arising from indirect loans shall be subject to the regulations of the State Bank of Vietnam on measures for management of risks arising from credit operations.

4. Authority over management of direct loan risks

a) The Prime Minister shall consider deciding on the measures to manage risks in accordance with the provisions of Points dd, e, and g, Clause 2 of this Article if these risks inflict any reduction in the Foundation's charter capital;

b) The Minister of Science and Technology shall consider deciding on the measures to manage risks in accordance with the provisions of Points c, d and dd of Clause 2 of this Article if these risks do not result in any reduction in the Foundation's charter capital;

c) The Foundation shall consider deciding on the measures to manage risks in accordance with the provisions of Points a, b, e, g and h of Clause 2 of this Article if these risks do not inflict any reduction in the Foundation's charter capital;

d) If the risk acceptance ratio is at least 05% at the end of the financial year in question, the Ministry of Science and Technology shall take charge of cooperating with the Ministry of Finance in reporting to the Prime Minister to seek his decision.

5. Authority over management of indirect loan risks

Authority to decide risk management measures against outstanding debts arising from indirect loans shall be subject to the regulations of the State Bank of Vietnam on authority to manage risks arising from operations of credit institutions and those of relevant laws.

6. Use of provisions against lending risks

a) The Foundation may use provisions against direct lending or loan guarantee risks. In case where the amount of a risk provision is not enough to manage all lending or loan guarantee risks with respect to debts that need to be disposed of, the Foundation can take additional money from the financial reserve fund as prescribed in Clause 5, Article 40 of this Charter. If the provision amount is insufficient even after using the financial reserve fund up, the Foundation shall directly record the deficit of such provision amount into its operating expenses; in case where the set-aside provision amount is greater than the provision amount to be set aside, the Foundation shall reversely record the surplus;

b) Banks shall use provisions for management of risks arising from outstanding indirect loan debts in accordance with regulations of the State Bank of Vietnam regarding the use of provisions for risks arising from credit operations.

7. The Ministry of Science and Technology shall provide specific instructions about the Foundation’s risk management mechanism.

Chapter V

FINANCIAL, ACCOUNTING, AUDITING AND REPORTING REGIMES

Article 32. Financial and accounting regimes

1. The Foundation shall be responsible for performing accounting duties prescribed in law and according to the instructions given by the Ministry of Finance.

2. The Foundation’s financial year starts on January 1 and ends on December 31 each year.

3. The Foundation’s accounting machinery must be organized under laws on accounting.

Article 33. Annual financial planning

1. Every year, at the time of making the State budget revenue and expenditure estimate, based on the accomplishment of the previous year's tasks, and the plan year’s operational plan, objectives and purposes of the Foundation, the Foundation’s Director shall make its operational and financial plan, including the following information:

a) Plan to perform financial support activities by using financial support from the Foundation's charter capital;

b) Plan to carry out funding support for enterprises, organizations and individuals executing science and technology programs and tasks assigned by the Prime Minister, the Ministry of Science and Technology to the Foundation by using the state budget funds for the development of science and technology;

c) Plan to perform financial support activities by using other capital sources;

d) Plan for regular spending of the Foundation's governance machinery;

dd) Proposed plan for mobilization of funds from other sources.

2. The Foundation’s Director shall consolidate demands for funds for execution of scientific and technological programs and tasks prescribed in point b of clause 1 of this Article and submitting them to the President of the Foundation’s Executive Board to seek his/her approval, and to the Ministry of Science and Technology in order for them to be integrated into the annual state budget estimates.

3. The President of the Foundation’s Executive Board shall approve the Foundation's annual operational plan and financial plan in order for them to come in use and submit them to the Ministry of Science and Technology to serve the purposes of management, monitoring and evaluation of the effectiveness of the Foundation's operations.

Article 34. Operating budget

1. The Foundation’s minimum charter capital is VND 2,000,000,000,000 (Two thousand billion dong) allocated by the state budget. Based on the specific operational conditions of the Foundation, the Minister of Science and Technology shall petition the Prime Minister to consider issuing the decision on the adjustment of the Foundation's charter capital after consulting the Ministry of Finance and the Ministry of Planning and Investment.

2. Other funding sources

a) Funds for funding support for scientific and technological programs and tasks assigned by the Prime Minister and the Minister of Science and Technology to the Foundation. Each year, the Ministry of Science and Technology shall consider deciding the needs for the Foundation's capital from the state budget for scientific and technological development activities according to regulations;

b) Additional funds derived from the Foundation’s income;

c) Funds obtained from legitimate grants, aids, voluntary contributions of domestic and foreign enterprises, organizations and individuals;

d) Other legitimate funding sources prescribed in laws.

Article 35. Principles of management and usage of the operating budget

1. The charter capital must be developed, ensuring capital safety in accordance with the regulations applicable to extra-budgetary financial funds.

2. Using the funding sources specified at Points b, c and d, Clause 2, Article 34 of this Charter as funding support for the tasks qualifying the support according to the provisions of Articles 27 and 28 of this Charter.

3. Using the funding sources specified in Clause 1, point b, c and d of clause 2 of Article 34 of this Charter as preferential loans or loan guarantees.

4. Using the funding sources prescribed in point a of clause 2 of Article 34 herein as funding support for scientific and technological programs and tasks assigned by the Prime Minister and the Minister of Science and Technology. Using these funds for the Foundation’s operations shall be prohibited.

5. Using the funding sources specified in point b, c and d of clause 2 of Article 34 of this Charter as funding support or lending interest rate subsidies.

6. Using the funding sources specified at Points b, c and d, Clause 2, Article 34 of this Charter as operating costs and expenses of the Foundation; costs and expenses for renting of working offices, investment and purchase of fixed assets and means or tools under the provisions of Article 36 herein for the Foundation's operations.

7. Using idle funds belonging to the operating budget as prescribed in Article 34 of this Charter as saving deposits at commercial banks provided that capital prudence must be ensured.

8. Prohibiting the use of the operating budget for the purposes of currency trades, securities investment, real estate business and financial investment (except for using the charter capital and idle funds as deposits at banks) and other unpermitted business activities.

9. Prohibiting the mobilization of operating funds in the form of receiving deposits from organizations and individuals; the issuance of promissory notes, bonds and commercial bills of domestic and foreign organizations and individuals.

Article 36. Asset management

1. The Foundation shall develop the Regulations on the management of the purchase and management of fixed assets and submit them to the President of the Foundation’s Executive Board to seek his/her approval in accordance with this Charter and relevant laws. The Regulations must clearly define the coordination of each managerial division of the Foundation, clearly prescribing the compensation responsibility of each division or individual for damage, loss of property or damage to the Foundation.

2. Fixed asset purchases

a) Authority to decide the investment and purchase of fixed assets, standards, norms, order and procedures for investment, procurement and repair of fixed assets shall be subject to regulations covering that of single-member limited liability companies of which the charter capital is wholly held by the State, ensuring public disclosure, transparency, cost efficiency and effectiveness;

b) The purchase of fixed assets serving the purposes of the Foundation's operations shall comply with the principles that the residual value of total fixed assets does not exceed 05% of the actual charter capital of the Foundation at the time of purchase.

3. Principles of depreciation, regulations on management, use and period of depreciation of fixed assets: The Foundation shall carry out these activities in compliance with regulations on depreciation of fixed assets applicable to enterprises.

4. Leasing and renting fixed assets

a) The Foundation shall be entitled to rent and lease fixed assets on the principles of ensuring efficiency, conservation and development of capital in accordance with the laws on enterprises;

b) Authority to decide the leasing and renting of fixed assets shall be subject to regulations applied to single-member limited liability companies of which the charter capital is wholly held by the State.

5. Disposing of, transferring and selling fixed assets

a) The Foundation shall have the autonomy in disposing of, transferring, or selling fixed assets that are technically out of date, are not needed any more, cannot be used or are used ineffectively to recover capital according to the principles of ensuring public disclosure, transparency and capital prudence;

b) Authority to decide the disposal, transfer or sale of fixed assets shall be subject to the regulations applied to single-member limited liability companies of which the charter capital is wholly held by the State;

c) Procedures and processes for disposal, transfer or sale of the Foundation‘s fixed assets shall be subject to regulations on of laws on enterprises.

6. Inventorying and re-evaluating fixed assets

a) The Foundation must make periodic or ad-hoc inventories to determine the number of fixed assets When closing accounting books before preparation of annual financial statements; after natural disasters, hostility or other events cause variation in the Foundation’s assets; in compliance with regulations adopted by competent authorities;

b) If there is any deficit or surplus in assets, it shall be obliged to define clear causes, responsibilities of organizations or individuals involved and the rate of compensation for such physical damage under laws;

c) The Foundation must make a revaluation of assets under laws on enterprises. Any increase or decrease in the value of assets after revaluation must be subject to the regulations applied in specific cases.

7. Handling loss or damage to the Foundation’s assets

In case of loss or damage to the Foundation’s assets, the Foundation must valuate the assets that are lost or damaged, causes, responsibilities and actions to be taken as follows:

a) Clarifying objective causes (e.g. natural disasters, fire, sudden accidents) and subjective causes;

b) If loss or damage occurs due to subjective causes, enterprises, organizations and individuals at fault must compensate and provide remedies under laws. The Foundation shall adopt specific regulations on compensation and decide the compensation rate according to regulations of laws; bear responsibility for its decision;

c) If the lost or damaged asset is insured as per laws, actions prescribed in insurance contracts must be taken;

d) The value of lost or damaged asset offset by using compensation paid by enterprises, organizations or individuals at fault, insurance companies and by using provisions shall be charged into costs and expenses incurred within the accounting period;

dd) In special cases where serious damage or loss occurs due to natural calamity or force majeure, and the Foundation cannot remedy that damage by itself, the Director of the Fund shall report to the President of the Foundation’s Executive Board on the plan to deal with such loss or damage so that he/she seeks the decision from the Minister of Science and Technology.

Article 37. The Foundation’s revenue

The Foundation’s revenue is the amounts that must be collected within the accounting period, including:

1. Revenue earned from its operations

a) Revenue generated from lending operations, including: Direct loan interest, indirect loan interest and others;

b) Revenue generated from loan guarantee operations;

c) Revenue generated from management of grants, aids, voluntary and legitimate contributions of domestic and foreign enterprises, organizations and individuals;

d) Other revenue generated from its operations.

2. Revenue earned from interest on deposits.

3. Revenue earned from renting, disposal, transfer, sale of its assets; insurance coverage (the amount remaining after offsetting loss or damage); monetary penalty and compensation for any breach of economic contracts; exchange rate difference (if any).

4. Revenue earned from other activities stipulated in laws.

Article 38. The Foundation’s costs and expenses

The Foundation’s costs and expenses are those incurred within the accounting period which are necessary for its operations, including:

1. Costs and expenses for its operations

a) Costs and expenses for financial support activities, including: indirect lending fee, spending on funding support, interest rate subsidies and loan guarantees; spending on review and verification of documents; fee for review and inspection of property put up as collateral; spending on nomination, selection, assessment, testing of amounts of funding support; spending on disposal of assets that are acquired or provided and other costs or expenses relating to financial support activities;

b) Costs and expenses for acquisition and management of grants, aids, voluntary and legitimate contributions of domestic and foreign enterprises, organizations and individuals;

c) Costs and expenses for creating risk-related or other provisions (if any);

d) Costs and expenses relating to debt management activities;

dd) Insurance costs and expenses; costs and expenses for the authorized idle fund custody services and those relating to exchange rate differences;

e) Other costs and expenses relating to other operations.

2. Costs and expenses for its operating machinery

a) Payments to workers, employees and officeholders, including: Wages, salaries, remunerations, bonuses, allowances and other salary-associated package; salary-based contributions (e.g. social insurance, health insurance, unemployment insurance, trade union); reward and welfare benefits; spending on customer service uniforms; benefit packages; shift meals; healthcare services; payments to female workers that are prescribed in laws; other payments to public officials, public servants and public employees and officeholders prescribed in laws;

b) Overhead costs and expenses, including: Daily allowances for business trips; spending on training; spending on scientific and technological research and application; spending on propaganda, advertising and marketing; spending on information technology; spending on Party, union activities; spending on stationery, documents, books and newspapers; spending on electricity, water, telephone bills, postage and telecommunications, and office cleaning; spending on conferences, seminars, training sessions, document printing and guest reception; spending on purchase of goods and services; spending on public or external relations, participation in forums and networks; spending on international cooperation; spending on inspection, control and audit; spending on hiring domestic and foreign experts and consultants; shipping costs and other costs and expenses for administrative purposes;

c) Costs and expenses for investment in construction, procurement, maintenance and repair of property; fixed asset depreciation; renting of property under lease contracts; disposal and liquidation of assets; property insurance; procurement of means and equipment; management and use of assets.

3. Costs and expenses incurred from payment of taxes, fees and charges prescribed in laws.

4. Revenues that have been accounted for, but not actually collected yet; debts that must be paid, or debts falling in the case where creditors that are declared unfound, these debts are recorded as income but then creditors are found; spending on the recovery of written-off debts, bad debts; spending on payment of penalty and compensation for the Foundation’s breach of economic contracts; spending on remedies for property damage or loss in accordance with laws; spending on social and charity activities; court costs and judgment execution fees.

5. Other costs and expenses.

6. Limits on the costs and expenses prescribed in clause 1, 2, 3, 4 and 5 of this Article shall be subject to laws applied to single-member limited liability companies of which the charter capital is wholly owned by the State. In the absence of regulations of laws on this matter, the Foundation shall, based on its financial capacity, set limits and decide the efficient and effective spending budget.

Article 39. Wages, salaries and benefits package

The Foundation shall regulate wages, salaries, remuneration packages and rewards to officeholders, public servants, employees and collaborators in accordance with the regulations applicable to single-member limited liability companies of which the charter capital is wholly held by the State, ensuring that its characteristics, operational model and scope are taken into consideration.

Article 40. Profits, distribution of profits

1. The Foundation’s annual profit is the difference between total income and total cost or expense incurred in a fiscal year.

2. After payment of taxes, other remittances to the state budget (if any), penalties for any violation against laws and offset against losses from previous years that have not yet been subtracted from assessable income, if total income is greater than total cost or expense, the difference shall be deemed 100% and distributed to funds as follows:

a) Setting aside 30% of the difference for the capital investment fund;

b) Setting aside 20% of the difference at maximum for the financial reserve fund on condition that the maximum amount available in this fund does not exceed 25% of the Foundation’s actual charter capital;

c) Setting aside a part of the difference which is equal to 03 months' realized wages and salaries of public servants and employees at maximum in the fiscal year for the reward fund or the welfare fund, and which is equal to 1.5 month’s wages and salaries of officeholders (including President, members of the Foundation’s Executive Board, Director, Vice Director, Chief Accountant, Comptroller) at maximum in the fiscal year for the officeholder reward fund;

d) Amounts remaining after a part of them is set aside to set up the aforesaid funds (if any) shall be used as supplements to the capital investment fund;

dd) If the revenue-expense difference existing after setting up the capital investment fund is not adequate to be set aside for the reward fund, the welfare fund and the manager's reward fund that meet the limits prescribed by regulations in force, the Fund may be entitled to reduction in amounts set aside for the capital investment fund to supplement the available funds to be adequate to set up the reward fund, the welfare fund and the manager’s reward fund meeting the limits prescribed by regulations in force, and the maximum reduction must not exceed the amount set aside for the capital investment fund in a fiscal year;

e) The Foundation’s Executive Board shall decide the amount set aside for the capital investment fund, the financial reserve fund, the reward and welfare fund and the officeholder reward fund.

3. Setting aside the Foundation’s profits for the reward and welfare fund:

a) The A-rated Foundation may be allowed to set aside 03 months’ earned salary paid to public servants and employees for the reward and welfare funds;

b) The B-rated Foundation may be allowed to set aside 1.5 months’ earned salary paid to public servants and employees for the reward and welfare funds;

c) The C-rated Foundation may be allowed to set aside 01 months’ earned salary paid to public officials, public servants and employees for the reward and welfare funds.

4. Setting aside the Foundation’s profits for the manager’s reward fund:

a) The A-rated Foundation may be entitled to set aside 1.5 month's earned salaries paid to officeholders for this fund;

a) The B-rated Foundation may be entitled to set aside 01 month's earned salaries paid to officeholders for this fund;

c) The C-rated Foundation shall not be entitled to set aside any part of its profits for this fund.

5. Management and utilization of funds

a) The capital investment fund shall be used for:

- Implementing the Foundation’s capital development projects such as: Investment in, expansion and development of the Foundation’s support activities; new construction programs and projects, projects for refurbishment, innovation and expansion of construction projects, projects for purchase of assets, even including non-installed equipment and machinery, projects for repair and improvement of assets and equipment; projects and proposals for scientific research, technological development, application, technical assistance and basic investigation; training and improvement of professional, technical and administrative qualification for the Foundation’s officeholders, public servants and employees; other capital investment programs, projects and proposals;

- Providing loan interest rate subsidies, funding support for enterprises performing the tasks prescribed in Section 3 and 5 of Chapter III herein;

- Supplementing the Foundation’s charter capital;

b) The financial reserve fund may be used in the following order of priority:

- Compensating for losses or damage to assets or unrecoverable debts arising from operations after these losses or damage have been offset by using indemnities from persons or entities at fault or insurance agencies, and using provisions recorded in the cost and expense account existing within the accounting period;

- Dealing with lending or loan guarantee risks after using up all of lending or loan guarantee risk provisions created from the cost or expense account under the decision of the Foundation’s Executive Board;

- At the end of a fiscal year, if the financial reserve fund has not been used up, the residual amount shall be brought forward to the subsequent year, and the amounts collected from accounts to which risks have already been managed shall be recorded as other revenues of the Foundation;

c) The reward fund may be used for giving rewards at end of a fiscal year, periodic rewards and spontaneous rewards and those prescribed in law on emulation and rewards to the Foundation’s employees and collectives; giving officeholders the rewards prescribed in laws on emulation and rewards; giving rewards to external persons or units that make significant contributions to the Foundation’s activities;

d) The officeholder reward fund may be used for offering rewards at year end, periodic rewards, spontaneous rewards and rewards at end of term in office. The reward rate shall be decided by the Ministry of Science and Technology, depending on the accomplishment of assigned tasks and the Foundation’s performance, upon the request of the President of the Foundation’s Executive Board;

dd) The welfare fund may be used for spending on sports, culture and well-being activities for employees and officeholders; spending on public assistance and charity activities; spending on subsidies for regular, sudden hardship or spending on payment of allowance for employees and managers in public holidays or lunar new year’s holidays; spending on investment in construction or repair of welfare facilities and others of the Foundation.

6. Funds must be used in compliance with regulations and for correct purposes and must benefit right persons with the aim of ensuring public communication and transparency.

a) The Foundation must design and issue regulations on management and use of funds in accordance with law and according to the principles of democracy, transparency and involvement of the Executive Committee of the Foundation's trade union and internal circulation within the Foundation before bringing them into effect;

b) In a fiscal year, the Foundation may, at its discretion, temporarily set aside amounts for the aforesaid funds depending on its profits in order for these funds to be able to spend on accomplishing predetermined goals;

c) Limits on rewards offered to public servants and employees and limits on spending on welfare benefits shall be decided by the Foundation’s Executive Board.

7. The President of the Foundation’s Executive Board or the authorized person shall make the decision on setting aside or temporarily setting aside a part of the Foundation’s profits for the reward fund, the welfare fund, the officeholder reward fund, the capital investment fund and the financial reserve fund in accordance with clause 2 of this Article.

8. In case where the Foundation incurs losses, the Foundation may bring forward such losses to the following fiscal year and the permissible period during which losses are brought forward shall not be longer than 05 years from the year subsequent to the year in which these losses are incurred. After such 5-year period, if the Foundation fails to bring forward all of its losses, the Ministry of Science and Technology shall preside over and cooperate with the Ministry of Finance in reporting to the Prime Minister to seek his decision.

Article 41. Communication regime

1. The Foundation must periodically announce the following information:

a) Its basic information;

b) General objectives, specific objectives and targets of the annual action plan;

c) Evaluation report on the results of the implementation of the annual action plan and the list of tasks financially supported by the Foundation;

d) Report on the current state of the Foundation’s governance and organizational structure.

2. The Foundation must publish extraordinary information on its website and publication (if any) and at the Foundation’s headquarter within 36 hours from the time of occurrence of one of the following events:

a) The Foundation's accounts at banks are frozen or are allowed to be reactivated after they are de-frozen;

b) There is any partial or complete suspension of the Foundation’s operations;

c) The Foundation’s managers are changed;

d) Sanctioning, proceedings initiation decisions, judgements or decisions of the Courts against the Foundation’s managers are issued;

dd) Conclusions of inspection agencies or tax authorities regarding the Foundation’s violations against laws are made;

e) Decisions on change of independent audit organizations are issued or auditing of its financial statements is rejected.

3. The Foundation’s Director or the authorized person shall undertake the disclosure of information and must be responsible for the adequacy, accuracy, authenticity and timeliness of the disclosed information.

Article 42. Audits and public disclosure of financial statements

1. The Foundation’s annual financial statements shall be audited by independent audit bodies on the list of enterprises endorsed by the Ministry of Finance as those eligible to provide audit services. Simultaneously, they shall be audited by the State Audit according to plans (if any).

2. After obtaining the comptroller’s opinions, the Director shall seek the approval of financial statements from the President of the Foundation's Executive Board before they are sent to the Ministry of Science and Technology, and the Ministry of Finance.

3. Within 120 days from the end date of the fiscal year, the Foundation must make its financial statements known to the public under the accounting legislation.

Chapter VI

SUPERINTENDENCE AND ASSESSMENT OF THE FOUNDATION’S OPERATIONS

Article 43. Superintendence of the Foundation’s operations

1. The Ministry of Science and Technology shall undertake the superintendence and assessment of the Foundation’s operations as follows:

a) Managing and using the charter capital, other capital sources, annual operating budgets and assets of the Foundation;

b) The Foundation’s profits;

c) Implementation of regulations on the Foundation’s payroll, bonuses and remuneration packages;

d) Other matters as requested by the Ministry of Science and Technology.

2. The Ministry of Science and Technology shall take charge of direct or indirect supervision through the Foundation's reports to detect financial risks, issues arising from the Foundation's management, the Foundation's performance, and giving warnings and taking timely actions in accordance with the laws on financial supervision, performance evaluation and public disclosure of financial information of state-owned enterprises.

3. The Ministry of Science and Technology shall adopt regulations and instructions for evaluation of the performance and ranking of the Foundation.

Article 44. Evaluation of the Foundation's performance and ranking

1. The Ministry of Science and Technology shall evaluate the Foundation's performance and rank the Foundation on an annual basis under regulations and instructions of clause 3 of Article 43 herein.

2. Criteria for the annual evaluation of the Foundation’s performance, including:

a) 1^st Criterion: Completion level in terms of the quantity, scale, sectors and efficiency of the tasks and projects financially supported by the Foundation;

b) 2^nd Criterion: Growth in outstanding loans and loan guarantees, funding support or loan interest rate subsidy amounts granted to enterprises, organizations and individuals through tasks and projects;

c) 3^rd Criterion: Bad debt ratio;

d) 4^th Criterion: Compliance with laws on management and use of the charter capital, operating budget, assets of the Foundation and reporting regime.

3. Objective elements shall be taken into consideration and eliminated from the evaluation of the Foundation’s performance:

a) Natural disasters, fires, epidemics, economic and political upheavals, wars and other force majeure events;

b) Changes in relevant policies that affect the financial support beneficiaries and the Foundation's performance.

Chapter VII

IMPLEMENTATION

Article 45. Responsibilities of the Ministry of Science and Technology

1. Exercising the state authority over the Foundation. Taking charge of, and cooperating with concerned ministries and sectoral authorities in, completing, amending and supplementing legislative documents on the Foundation's organization and operation before seeking approval from competent agencies or adopting them under its jurisdiction.

2. Issuing guidelines for the management of the Foundation's financial support activities; stipulations and guidance for the evaluation of the Foundation’s performance and ranking in accordance with this Charter.

3. Assigning tasks and allocating funds to the Foundation to give funding support to enterprises, organizations and individuals to carry out programs and tasks through the annual budget estimate of the Ministry of Science and Technology.

4. Taking charge of and collaborating with relevant ministries, sectoral administrations in enforcing regulations related to the organization and operation of the Foundation.

5. Comprehensively managing, organizing, monitoring, inspecting, supervising, and evaluating the Foundation's operations in accordance with laws, instructional documents and this Charter.

6. Appointing, discharging titleholders of the Foundation’s Executive Board, Comptroller, Director, Vice Director and Chief Accountant.

7. Implementing other duties and powers of the representative of state ownership over the Foundation in accordance with regulations of this Charter and other relevant legislative documents.

Article 46. Responsibilities of the Ministry of Finance

1. Providing instructions about the Foundation’s accounting system.

2. Taking charge of and cooperating with the Ministry of Science and Technology in allocating funds to the Foundation’s charter capital and budget as per clause 1 and 2 of Article 34 herein.

Article 47. Responsibilities of the Ministry of Planning and Investment

Taking charge of and cooperating with the Ministry of Science and Technology, the Ministry of Finance in allocating funds available in its public investment budget to the Foundation’s charter capital and budget under the provisions of this Charter.

Article 48. Responsibilities of the Ministry of Labor, War Invalids and Social Affairs

Providing guidance on the mechanism for management of labor, payroll, remuneration and bonus packages for the Foundation's officeholders, public servants and employees in accordance with the provisions of this Charter and in line with the Foundation’s characteristics, model and operations.

Article 49. Responsibilities of Ministries, sectoral authorities and all-level People’s Committees

1. Cooperating in organizing the Foundation’s operations as per this Charter.

2. Enabling the Foundation to carry out the tasks relating to ministries, sectoral authorities and local authorities.

Article 50. Responsibilities of enterprises, entities and persons using the Foundation’s funds

1. Using the Foundation’s funds in an effective manner and for the purposes approved by the Foundation.

2. Fully implementing commitments to the Foundation and its regulations.

3. Results of implementation of tasks and projects must be declared according to the Foundation’s regulations.

4. Enterprises, entities and persons receiving the Foundation's financial support must comply with regulations of relevant laws.

Article 51. Transitional provisions

The tasks and projects that have already been approved by competent authorities and are being funded by the Foundation before this Charter takes effect will be continued in accordance with the Prime Minister’s Decision 1051/QD-TTg dated July 3, 2013 and documents guiding the implementation from the Foundation's balance at the State Treasury till the date of project commissioning, testing and contract termination.

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