Circular No. 35 TC/NLTL guiding the implementation of certain financial issues pursuant to Decision No. 88/CT dated March 19, 1987 of the Chairman of the Council of Ministers.

CIRCULAR

Guidelines for implementing certain financial issues pursuant to Decision No. 88/CT dated March 19, 1987 of the Chairman of the Council of Ministers.

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Implementing Decision No. 88/CT dated March 19, 1987 of the Chairman of the Council of Ministers regarding the provision of construction investment capital for the Rubber General Department. After discussing with relevant sectors, the Ministry of Finance provides guidelines for implementing certain financial policies as follows:

I- GENERAL PROVISIONS:

1/ The Rubber General Department shall be responsible for mobilizing, managing, and allocating various sources of capital (as specified in Section II below) among its subordinate units in accordance with the provisions of this circular.

2/ Independent accounting units subordinate to the Rubber General Department (hereinafter referred to as enterprises) shall be directly responsible for using state-provided capital effectively to supplement construction investment capital according to the annual plan approved and must comply with current regulations on state management of investment capital.

3/ The implementation of selling materials, equipment, and consumer goods (as stipulated in Article 2 of Decision No. 88/CT dated March 19, 1987 of the Chairman of the Council of Ministers) must ensure the principle that it does not affect the quality and progress of cooperative projects, does not contravene international commitments, and does not increase expenditures or reduce state budget revenues.

II - SOURCES OF INVESTMENT CAPITAL.

1/ State Budget Capital:

a) First, the capital from loans under agreements signed with the Soviet Union and other socialist countries for rubber planting, which is determined based on the face value of imported materials, equipment, machinery, and goods converted to Vietnamese currency according to the internal settlement rate.

Loan Value = Face Value x Internal Settlement Rate

b) Additional state budget capital allocated according to the approved annual investment plan after fully utilizing loan values, self-owned capital, joint venture capital, credit capital, and other state-allowed retained capital as specified in Point 2, Section II below.

2/ Sources of Retained Capital to Supplement Investment Capital.

a) Basic Depreciation Capital.

All basic depreciation capital extracted from fixed assets invested with state budget funds, enterprise-owned capital, or bank-invested fixed assets after repaying all bank debts (as stipulated in Points 1 and 2 of Circular No. 13 TC/DTXD dated March 10, 1985 and Article 22, Section IV of Decision No. 507-TC/DTXD dated July 22, 1986 of the Ministry of Finance) may be retained to supplement construction investment capital.

b) Production and Service Interest.

All interest income from affiliated production and service organizations (subsidiaries) of Rubber Companies (under the Rubber General Department) may be retained to supplement the investment capital of their respective units.

c) Price Preference.

The price preference amount is formed due to rewards from socialist countries when the rubber industry exports sufficient and exceeds planned quantities of high-quality rubber.

Price Preference Amount = Face Value of Preferential Price x Internal Settlement Rate

d) Export and Import Interest from Intercropping.

All interest difference income from exporting intercropping products and importing consumer goods, or through joint venture exchanges with units outside the general department, may be retained to supplement construction investment capital. The implementation of exporting intercropping products and importing consumer goods must comply with current state regulations.

e) Price Difference.

e.1 - The difference between the price (materials, raw materials) included in the project cost at wholesale prices and the price (materials, raw materials) that the Rubber General Department must pay to foreign trade agencies.

e.2 - The price difference (between trading price and import cost and wholesale selling expenses) of unused materials, machinery, equipment, and consumer goods in import orders may be sold to external agencies.

III - ANNUAL PLANNING AND SOURCES OF INVESTMENT CAPITAL FOR CONSTRUCTION.

Due to the characteristics of the rubber industry having multiple investors implementing a cooperative program and the state allowing the Rubber General Department to sell some materials, machinery, equipment, and consumer goods at trading prices to create additional investment capital, the planning of investment capital and sources of investment capital (as specified in Section II of this circular) must comply with current regulations and note the following points:

At the beginning of the planning year, the Rubber General Department needs to clearly determine the quantity and foreign currency value of materials, machinery, equipment, and consumer goods expected to arrive during the year, the allocation plan for investors (with details for each investor), reserve for the next year, and those permitted to be sold at trading prices to generate investment capital.

Based on this, the Rubber General Department will prepare plans for new loan values generated in the year, loan values put into use, amounts carried over to the next year, and plans to supplement investment capital from the sale of materials, equipment, and consumer goods mentioned above (including price differences obtained).

Annually, along with preparing the construction investment plan and investment capital plan, the Rubber General Department will prepare plans for these sources of investment capital (according to Form No. 01 KH/DT) and submit them to the Ministry of Finance.

IV - MANAGEMENT, SETTLEMENT, AND ACCOUNTING OF SOURCES OF RETAINED INVESTMENT CAPITAL.

1/ For sources of capital (in Section II of this circular) except loan capital, management and accounting shall be implemented according to current regulations.

2/ Regarding loan capital:

a) For materials and equipment put into use in the planning year, to reduce intermediary steps, the Rubber General Department should direct investors to sign contracts with the Equipment Import-Export Company to directly receive materials and equipment. The state budget will record receipts and payments directly for investors through the Investment Construction Bank (or the Rubber Bank in the future).

b- For materials, equipment, and consumer goods that cannot be directly received by each project owner, or if the Rubber General Department must retain them for sale at trading prices to supplement construction investment capital, the Rubber General Department must transfer them to the Rubber Materials and Equipment Company (representing the project owners) with the function of receiving, storing, and implementing the aforementioned sales tasks. In this case, when settling accounts, the basis will be the invoice combined with the warehouse dispatch order to record revenue for the State budget and record expenditure from the reserve fund for the Rubber Materials and Equipment Company.

When materials, equipment, and goods are mobilized for use by rubber companies, the basis will be the delivery order and the warehouse dispatch slip to record revenue from the reserve fund and record expenditure from construction investment capital through the investment bank system (as in case a).

Specifically, for the portion of materials, equipment, and consumer goods sold at trading prices, when the sales operation is completed, the Rubber Materials and Equipment Company must separately account for the price difference. The Rubber General Department is responsible for managing (through the Rubber Materials and Equipment Company) the entire source of price differences and cost prices (calculated according to internal settlement rates) of the materials, equipment, and consumer goods sold to supplement the construction investment capital for rubber companies (project owners) according to the annual construction investment plan approved by the State.

3/ The provision of capital and settlement of construction investment capital for goods imported within the borrowing capital of the Rubber General Department shall be implemented in accordance with the provisions set out in Directive No. 13/CT dated January 14, 1987, of the Chairman of the Council of Ministers and further detailed in Circular No. 236 TC/DT dated April 9, 1987, of the Ministry of Finance.

V- SETTLEMENT.

1/ All sources of state capital allowed to remain for construction investment, enterprises must settle accounts with the State in accordance with the prescribed regulations.

2/ The investment management authority shall examine, consolidate, and report all amounts of capital, sources of capital, and the situation of using construction investment capital to the Ministry of Finance quarterly and annually in accordance with the current reporting system on construction investment by the State.

3/ During the process of presenting income sources (as mentioned above) to serve as capital for rubber plantation construction investment, financial management staff of the Department of Finance or the State-owned Enterprise Revenue Collection Division have the responsibility to closely monitor the situation, assist enterprises in presenting accurately and completely, and promptly reflect difficulties to the Ministry of Finance.

VI- IMPLEMENTATION

This circular takes effect from March 19, 1987. Previous regulations contrary to this circular are no longer effective.

During the implementation process, any issues encountered should be promptly reported by the Rubber General Department to the Ministry of Finance for joint research and resolution./.