Circular No. 110/2000/TT-BTC guides the management and use of state-owned enterprise (SOE) capital for investment and construction purposes.

CIRCULAR

Guidelines for managing and using state-owned enterprise capital

intended for investment and construction

Pursuant to the State-Owned Enterprise Law;

Pursuant to Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government onthe issuance of the Investment and Construction Management Regulations;

Pursuant to Decree No. 12/2000/NĐ-CP dated May 5, 2000 on amending andsupplementing certain provisions of the Investment and Construction ManagementRegulations issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999 ofthe Government;

Pursuant to Decree No. 59/CP dated October 3, 1996 of the Government on theissuance of Financial Management and Business Accounting Regulations forState-Owned Enterprises;

Pursuant to Decree No. 27/1999/NĐ-CP dated April 20, 1999 of the Governmentamending and supplementing the Financial Management and Business AccountingRegulations for State-Owned Enterprises issued together with Decree No. 59/CPdated October 3, 1996 of the Government;

After reaching consensus with the Ministry of Construction and the Ministry ofFinance, these guidelines for managing and using state-owned enterprise capitalintended for investment and construction are hereby provided as follows:

I. GENERAL PROVISIONS

Article 1. The subjects to which this Circular applies are projects utilizingdevelopment investment capital of state-owned enterprises (hereinafter referredto as SOEs), including SOEs operating in production and business activities andpublic utility activities as stipulated in the State-Owned Enterprise Law.

Article 2. Projects utilizing development investment capital of SOEs areprojects that use a portion of support capital from the state budget, capitalfrom budget sources, self-accumulated capital of the enterprise, commercialcredit capital, development funds, financial reserve funds (to offset assetlosses), welfare funds (for welfare facility investments), fixed assetdepreciation funds, and other state funds left for the enterprise to invest.

Article 3. For projects involving the repair of fixed assets, the managementand settlement of repair costs shall be carried out according to the currentfinancial management system of SOEs. In cases where SOEs use their owndevelopment investment capital to invest in repairing fixed assets, SOEs mustfollow the provisions of this Circular.

Article 4. Projects utilizing development investment capital of SOEs mustfully complete all investment and construction procedures and be included inthe annual basic construction investment plan of the enterprise. SOEs mayorganize payments themselves or select payment organizations to assist inmanaging the development investment capital.

SOEs must fully implement accounting and statistical systems and settleinvestment capital according to current regulations.

Article 5. Project sponsors utilizing development investment capital of SOEsshall be responsible for organizing project management and implementation, andshall bear responsibility for the preservation and effectiveness of theproject's investment based on the correct implementation of currentregulations and policies on investment and construction management and biddingrules.

Article 6. Financial management agencies of SOEs shall perform the functionof state financial management and supervise the use of capital to ensure itssecurity and efficiency in projects invested with SOE development investmentcapital. The State Treasury, Development Support Fund, commercial banks, andstate credit organizations (hereinafter collectively referred to as paymentorganizations) shall be responsible for assisting SOEs in strictly monitoringeach stage of the payment process to ensure timely, full, and accurate paymentsto the project in accordance with the regulations and consistent with theproject's progress, while promptly identifying and preventing improper use ofcapital for purposes other than those intended, which could lead to wastage andloss of capital.

Article 7. Ministries, ministerial-level agencies, government-affiliatedagencies, state-owned corporations, associations, and mass organizations(collectively referred to as ministries), provincial People's Committees undercentral jurisdiction (collectively referred to as provincial People'sCommittees) shall be responsible for managing and using investment capitalaccording to national regulations on investment and construction management andthe provisions of this Circular.

II. SPECIFIC PROVISIONS

Article 1. Development investment capital of SOEs shall be used for thefollowing purposes:

New investment and construction projects, renovation, and upgrading ofexisting projects.

Investment projects for purchasing assets, including equipment andmachinery not requiring installation, and new scientific and technologicalproducts.

When SOEs use development investment capital for the following purposes,they must manage and utilize it in accordance with the current regulations ofthe State:

Purchasing shares, contributing to joint stock companies, joint ventures, andother forms of investment.

Joint ventures with foreign entities.

Article 2. Development investment capital of SOEs is formed from the followingsources:

2.1. Capital of SOEs:

Development investment fund;

Fixed asset depreciation capital;

Capital from the state budget;

Initial state budget capital;

Welfare fund (used for welfare facility investments);

Other state revenues retained by the enterprise for investment.

The use of the financial reserve fund is only for compensating asset lossescaused by the enterprise due to loss, damage, or depreciation caused byobjective and subjective reasons.

For state-owned corporations established pursuant to Decision No. 91/TTg andDecision No. 90/TTg dated March 7, 1994 of the Prime Minister (hereinafterreferred to as Corporation 91/TTg and Corporation 90/TTg); the General Director,authorized by the Board of Directors, decides on mobilizing a portion of thedevelopment investment capital of independent-accounting member enterprises toserve the concentrated investment needs of the corporation according to thecurrent financial management regulations.

2.2. Development investment capital mobilized by SOEs:

Development investment capital supported by the state budget: projects ofSOEs using development investment capital supported by the state budget shallbe implemented in accordance with the State Budget Law and the Investment andConstruction Management Regulations issued together with Decree No. 52/1999/NĐ-CP dated July 8, 1999, and Decree No. 12/2000/NĐ-CP dated May 5, 2000 of theGovernment on amending and supplementing certain provisions of the Investmentand Construction Management Regulations.

State development investment credit capital, state-guaranteed credit capital:projects of SOEs using these sources of development investment capital shallbe implemented in accordance with Decree No. 43/1999/NĐ-CP dated June 24, 1999of the Government on state development investment credit and state regulationson investment and construction management.

Commercial credit funds: State-owned enterprises' projects utilizing commercialcredit funds must comply with current state regulations and usage guidelinesprovided by lending organizations based on loan contracts.

Funds raised from other sources such as corporate bond issuance, joint ventures,associations... when State-owned enterprises' investment projects utilize thesefunds, they must adhere to current state regulations.

3. The authority to decide on and implement investment for projects using State-ownedenterprises' development capital shall be regulated as follows:

3.1. For group A projects under all aforementioned sources of capital (as mentionedin Part II.2), the authority to decide on and implement investment shall beapplied according to the regulations for projects using state budget funds asprescribed in the Investment Management and Construction Regulation issued alongwith Decree No. 52/1999/NĐ-CP dated July 8, 1999, and Decree No. 12/2000/NĐ-CPdated May 5, 2000, of the Government.

3.2. For group B and C projects utilizing State-owned enterprises' own capital (asmentioned in Point 2.1 of Part II.2), State-owned enterprises shall base theirinvestment decisions on industry development plans or programs that have beenapproved by competent authorities; if the project involves land use, it must bereviewed and approved by the provincial People's Committee regarding thelocation and area of the project, and procedures for land allocation or leasingmust be carried out in accordance with laws on land. The authority to decidestarting investment for group B and C projects utilizing State-owned enterprises'own capital is as follows:

For State-owned enterprises that are subsidiaries within the 91/TTg Holding Companyand the 90/TTg Holding Company, approval by the Board of Directors is required.

For independent State-owned enterprises with a Board of Directors, the authorityto decide on investment is approved by the Board of Directors.

For independent State-owned enterprises without a Board of Directors, the authorityto decide on investment is approved by the General Director (or Director) of theenterprise.

For investment projects of State-owned enterprises operating in public utilityfields, the establishment decision-making body decides on investment or delegatesauthority to the enterprise to make investment decisions.

During the implementation of investment projects, enterprises bear fullresponsibility based on compliance with current state regulations on investmentmanagement and construction, and tendering rules.

4. Preparation and reporting of State-owned enterprises' annual investment capitalplans:

4.1. Based on the progress of ongoing projects, completed preparatory stages ofprojects, and plans for raising and utilizing investment capital of State-ownedenterprises, member enterprises, independent State-owned enterprises, or holdingcompanies shall prepare the annual investment capital plan of State-ownedenterprises.

For State-owned enterprises that are subsidiaries within the 91/TTg HoldingCompany and the 90/TTg Holding Company or those with a Board of Directors, theinvestment capital utilization plan must be approved by the Board of Directors.Independent State-owned enterprises without a Board of Directors shall have theplan approved by the General Director (or Director).

4.2. After being approved by competent authorities, the enterprise shall notify thefinancial management agency of the enterprise to establish a basis for monitoring,inspection, and supervision, while the approved investment capital plan must berported to the Holding Company (if applicable), Ministry, or ProvincialPeople's Committee (for projects under their jurisdiction).

4.3. Ministries, provincial People's Committees, and Boards of Directors of the 91/TTgHolding Companies shall consolidate and submit the annual investment capitalplan to the Ministry of Finance and the Ministry of Planning and Investment.

5. Conditions for payment of State-owned enterprises' investment capital:

5.1. For investment projects:

Investment preparation: an authorized document according to the分级授权规定于《投资和建设管理规定》允许进行投资准备；相应的投资准备费用预算。

Project implementation preparation: an investment report or feasibility studyreport and an investment decision made by the authorized entity according to the分级授权规定于《投资和建设管理规定》；相应的项目实施准备费用预算。

Implementation of investment projects: having technical design and total budgetapproved by the authorized entity. For group A and B projects, if there is nochosen technical design and total budget, the investment decision must specify thecapital amount for each sub-project, with corresponding technical design andsub-project budget for construction work approved in the year.

5.2. Projects that have been balanced in the enterprise's investment capital plancorresponding to the construction progress of the project in the planning year,with a decision to establish a project management board (if necessary), appointa board leader, chief accountant, or accounting officer to assist State-ownedenterprises in managing the project according to regulations.

5.3. Projects that have completed designated bidding, competitive bidding forconsultants, equipment procurement, and construction installation according tothe Tendering Regulation; a decision approving the bidding results by theauthorized entity; economic contracts between State-owned enterprises andcontractors.

5.4. There must be construction and installation volumes, equipment procurement,volume of consulting services that State-owned enterprises agree to pay,regardless of whether it is self-executed or contracted through tendering.

Each time investment capital is paid, the contractor must transfer the followingdocuments to the State-owned enterprise:

For completed construction and installation volume:

Acceptance certificate for completed construction and installation volumeaccompanied by a calculation of the accepted volume value.

Invoice and payment vouchers.

For completed equipment volume:

Invoice and warehouse release form (for domestically purchased equipment);import documentation set (for imported equipment).

Warehouse receipt (for non-installation equipment) or acceptance certificate forcompleted equipment installation volume (for installation equipment).

Transportation, insurance, storage tax, and fee documents.

Invoice and payment vouchers.

For completed consulting service volume:

Acceptance certificate for completed consulting service volume.

Payment voucher.

For other expenses, apart from consulting services hired for the project, paymentwill be made once sufficient evidence proves the completion of the work.

Based on the files mentioned in Points 5.1; 5.2; 5.3 (files submitted once) and the payment request files mentioned in Point 5.4 (files submitted for each payment request), SOEs accept payment when the volume and completed work in the payment request files comply with the aforementioned files and the current investment construction management policies.

6. Payment Organization: SOEs base their payments on the annual investment construction plans of the enterprise, approved projects, and contracts signed with contractors (or self-execution), ensuring sufficient funds to meet the payment schedule for receiving units. The payment of investment capital by enterprises is carried out in the following forms:

SOEs themselves carry out the payment: In this case, SOEs bear responsibility for controlling the payment of investment capital to contractors and suppliers.

SOEs implement payments through a payment organization: In this case, SOEs transfer the development investment capital of the enterprise to payment organizations where the enterprise implements the investment project. Payment organizations perform control and payment according to SOEs' requirements.

To receive and manage the payment of investment capital from SOEs for investment projects at payment organizations, the project owner must complete procedures to open a separate account for the investment project at the payment organization. Account opening registration procedures follow the guidelines of the payment organizations. Payment organizations must facilitate the opening and use of accounts by project owners at service units.

SOEs base their capital transfers on the progress of implementing the investment project, the SOEs' investment capital plan for the investment projects, the balance of the enterprise's capital sources at the payment organization, and the capital needs at the time of payment to transfer investment capital to the payment organization.

7. Selection of advance payment, capital payment, and prompt payment methods: Investment capital by SOEs (project owners) agreeing with contractors (construction, equipment procurement, consulting) is based on the annual capital mobilization plan of SOEs and current state policies through contracts.

8. Final Settlement of Investment Capital: When the construction project or investment project is completed, the project owner is responsible for settling the entire investment capital of the project according to the Ministry of Finance's regulations on final settlement of investment capital.

The Ministry of Finance is responsible for reviewing and approving the final settlement of investment capital for Group A projects; the competent authority deciding on SOEs' investments is responsible for reviewing and approving the final settlement of investment capital for Group B and C projects.

9. Quarterly and annually, project owners must report on the use of investment capital for SOEs to the respective State-owned Holding Companies (if applicable), Ministries, Provincial People's Committees directly managing them, and financial management agencies of the enterprises. The agency deciding on the establishment of the enterprise, Ministries, Provincial People's Committees, and the Board of Directors of State-owned Holding Companies 91/TTg are responsible for compiling reports to the Ministry of Finance and the Ministry of Planning and Investment.

III. RESPONSIBILITIES OF RELATED AUTHORITIES

1. Ministries, Provincial People's Committees:

Guide the management and use of SOEs' development investment capital according to the financial management functions of SOEs assigned by the Government.

Direct the management, supervision of the capital management process, and organize the consolidation of the situation of using various sources of SOEs' investment capital according to current regulations and this Circular.

2. Board of Directors of State-owned Holding Companies 91/TTg and 90/TTg, Boards of Directors of independent enterprises, General Managers (or Directors) of SOEs are responsible for managing, preserving, and effectively utilizing the capital sources allocated by the State to the enterprise; they are responsible for investment decisions and the effectiveness of investment projects.

Direct SOEs (project owners) in the management, supervision of the capital management process, and organizing the consolidation of the situation of using various sources of SOEs' investment capital according to current regulations and this Circular.

3. Project Owner:

Is responsible for organizing the management and implementation of the investment project, preserving and effectively utilizing the project's investment capital based on strictly adhering to current investment and construction policies and tendering regulations.

Provide necessary documents and files for the enterprise's financial management agency; payment organizations, and other related agencies according to current state regulations.

Use investment capital for its intended purpose, for the designated recipients, economically, efficiently, and in compliance with current investment and construction management regulations.

Implement regular reporting and final settlement of investment capital according to this Circular.

4. Payment Organizations:

Organize the work of supervising, paying, and accounting for investment capital according to prescribed regulations.

Confirm the amount of paid capital for each project during final settlement.

Are responsible for strictly supervising payment request documents to ensure funding according to the contract and approved project.

Are accountable to the project owner and state laws in the management and payment of SOEs' investment capital.

5. Enterprise Financial Management Agency: Is responsible for checking the implementation of investment decisions and the final settlement of investment capital by SOEs.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect from the date of signature. All previous regulations regarding the management and use of SOEs' capital for construction investment that conflict with this Circular are abolished.

2. During implementation, if there are difficulties, please promptly reflect them to the Ministry of Finance for study and appropriate amendments./.