Contents of Supervision and Evaluation of Financials of State Capital-Utilizing Subsidiaries

Contents of Financial Supervision and Evaluation of State Capital Investment in Subsidiaries and Associates are as follows:

1. Business Situation: Evaluate fluctuations in revenue and profit of the reporting year compared to the previous year.

2. Investment Efficiency: Evaluate the capital recovery, profit, and dividends distributed from external investments outside the enterprise.

- Evaluate the capital recovery, profit, and dividends distributed compared to the plan at the beginning of the year. Profits and dividends distributed from external investments are determined according to the actual profits received by the enterprise.- In cases where the investment efficiency in subsidiaries and associates is low; or if subsidiaries and associates have post-tax profits but do not distribute profits or dividends to the enterprise, the enterprise must provide explanations and propose measures (divestment, enhanced supervision, or other measures).

3. Debt Repayment Capacity, Debt-to-Equity Ratio: Evaluate the debt repayment capacity, debt-to-equity ratio of subsidiaries and associates. Debt repayment capacity and debt-to-equity ratio.

4. Transfer of Invested Capital: Evaluate the results of the investment capital transfer compared to the plan. In cases where the transfer does not meet the plan, the enterprise must explain the reasons and propose solutions.

More details can be found in Circular 200/2015/TT-BTC effective from February 1, 2016.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE