PEOPLE’S CREDIT FUND MUST HAVE PROVISION FOR RISKS OF 10% PROFIT
This is the regulation of the Ministry of Finance at the Circular No. 94/2013/TT-BTC guiding the financial regime for People’s Credit Funds.
Accordingly, the Ministry of Finance requires the People’s Credit Fund to have profit distribution after business income tax in the order as follows profits shall be used to offset against the previous years’ losses which are expired to be deducted from pre-tax profit of business income tax; deducting 5% from the additional reserve funds of charter capital of the People's Credit Fund. The maximum level of this fund shall not exceed the charter capital of the People's Credit Fund; deducting 5% from the financial provision fund. The maximum balance of the financial provision fund does not exceed 25% of the charter capital of the people's credit fund; deducting at least 20% from professional development investment fund and deducting from other funds decided by general meeting of members. And the remaining income after deducting funds shall be distributed
to the members of these funds based on the principle such as divided by contributed capital; divided according to the level of use of the product or service of People Credit Funds and the percentage and method of distribution are prescribed in the Charter of People Credit Funds.
During operations, the People Credit Funds have to maintain the limit of construction investment, fixed asset purchase to directly serve the business operation on the principle that the residual value of fixed assets does not exceed 50% of the charter capital and additional reserve funds of charter capital. For the provisions for decline in inventory, provisions for loss of long-term investments (including devaluation of stocks ), provisions for doubtful debts (other than provisions for credit risk in banking operation) (if any): People Credit Funds will set up provision under general regulations applicable to enterprises.
This Circular takes effect on September 01, 2013 and applies for the fiscal year 2013.
