Joint Circular No. 64 TT-LB stipulates the payment and management of capital for electrical equipment and materials up to 35KV according to Decision No. 294-CT dated October 12, 1987, of the Council of Ministers' Chairman.

JOINT CIRCULAR

Regulations on payment and management of capital for electrical equipment, materials, and technical supplies up to 35KV according to Decision No. 294-CT dated October 12, 1987 of the Chairman of the Council of Ministers.

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- Pursuant to the Agreement signed on May 19, 1987 between the Government of the Socialist Republic of Vietnam and the Government of the Soviet Union regarding cooperation in the production of electrical equipment, materials, and technical supplies up to 35KV in Vietnam during the years 1986-1990.

- Based on Decision No. 294-CT dated October 12, 1987 of the Chairman of the Council of Ministers on the assignment of responsibilities for implementing the program of producing electrical equipment, materials, and technical supplies up to 35KV.

The Ministry of Finance and the Ministry of Energy hereby prescribe the methods of payment and management of capital for electrical equipment, materials, and technical supplies up to 35KV as follows:

1. Payment Objectives:

- Types of equipment and materials specified in the Agreement between the Soviet Union and Vietnam on cooperation in the production of electrical equipment, materials, and technical supplies up to 35KV, which have been announced annually by the State Planning Commission for import plans.

- Equipment produced domestically for synchronization.

- Technological equipment invested annually to increase the production capacity of electrical products for participating factories in the 35KV program in Vietnam, as listed in the Agreement, are all objects of payment and management under the current financial regime.

2. Method of Payment for Imported Goods:

2.1/ For import contracts through the General Import Company during the initial period before the establishment of Vinaelectro (contracts from number 4504170100 to 4504170500 and Appendix 1 of Contract 400 valued at 7,073,742 rubles), upon receipt of invoices and collection notices from Vinaelectro Foreign Trade, the contents of the documents must be checked and the payment figures determined, with confirmation from the Ministry of Energy to request the Ministry of Finance to make payments according to the "record income, record expenditure" method (record income as "debt" for the General Import Company, record expenditure as "reserve fund" for Vinaelectro) through the state budget.

2.2/ Apart from the six contracts mentioned above, goods imported from the Soviet Union and other third countries directly contracted and received by Vinaelectro, upon receipt of payment demand documents transferred by the Foreign Trade Bank, Vinaelectro must check the contents of the documents and determine the payment figures to recognize debt to the state budget for foreign loans.

In both cases "2.1" and "2.2," Vinaelectro must sign contracts with domestic production units to implement the program and pay according to the "buy outright" method. Vinaelectro must collect money from sales to submit to the state budget. If not all materials and equipment are delivered to domestic customers, Vinaelectro must borrow from the bank (equivalent to the value of remaining inventory) to fully pay the state budget for goods. Vinaelectro must immediately deposit the proceeds from sales into the state budget within five days of sale, without using this capital for any other activities.

3. Domestic Payment Prices:

3.1/ Prices for materials sold to production units apply according to general principles: the original currency converted to Vietnamese currency based on the official exchange rate, without loss compensation. Specifically:

a) For goods imported through foreign trade agencies: Material selling price = Original currency import material price converted to Vietnamese currency based on the official exchange rate + foreign trade fees included in the invoice + import tax (if applicable) + circulation fees (for receiving, transporting, and storing materials from the port to Vinaelectro warehouse) as decided by the competent authority.

b) For goods imported directly paid by Vinaelectro to foreign countries:

Material selling price = Original currency import material price converted to Vietnamese currency based on the official exchange rate + foreign trade fees + import tax (if applicable) + circulation fees (as in point a) as prescribed by the competent authority.

3.2/ Purchase prices of finished products from domestic production factories: purchase price of finished products = wholesale industrial price set by the state.

3.3/ During business operations, if there is a difference between the wholesale price of equipment and materials set by the state and the price of equipment and materials of Vinaelectro, the following procedures will be handled at Vinaelectro:

a) If the selling price of materials by Vinaelectro is lower than the wholesale price of materials set by the state, Vinaelectro is allowed to sell at the state-set wholesale price of materials. Vinaelectro must pay the difference to the state budget (price differential revenue).

b) If the selling price of materials by Vinaelectro is higher than the wholesale price of materials set by the state, Vinaelectro can sell at the price established by Vinaelectro according to the principle in point 3.1.

c) In case there is no wholesale price of materials set by the state, Vinaelectro can sell at the price prescribed in point 3.1.

3.4/ Selling price of synchronized products = Purchase price of finished products (as in point 3.2) + material price (as in points 3.1 and 3.3) + synchronization costs at Vinaelectro warehouse.

3.5/ Selling price of machinery for expanding production capacity of existing factories is applied similarly to the material selling price prescribed in points 3.1 and 3.3 above.

Based on the above principles for determining selling prices, Vinaelectro needs to calculate specific selling prices for each type of material and equipment according to the time of receipt and delivery of goods based on the official exchange rate, notify customers, and serve as the basis for signing contracts and calculating related financial income and expenditure plans.

4. Payment Capital Sources:

To ensure timely payment capital throughout the entire closed-loop production process from the initial stage (importing equipment and materials for production under the program) to the final stage (synchronizing electrical equipment), the payment capital sources are determined as follows:

- Enterprises use their own working capital, and if insufficient, enterprises borrow from banks according to the current regulations of the state to pay for imported materials (according to the Agreement) for production under contracts signed with Vinaelectro.

- Enterprises using basic depreciation funds, investment construction funds, or other sources such as bank loans as stipulated in Articles 21 and 39 of Decision No. 217-HĐBT dated November 14, 1987, of the Chairman of the Council of Ministers shall settle accounts with Vinaelectro for the purchase of technological equipment for deepening investment to increase production capacity of electrical engineering products.

- When purchasing synchronized products, industries and localities shall use investment construction funds or other funds from their respective industries and localities to settle accounts with Vinaelectro.

5. Tasks of Vinaelectro:

Based on the capital allocation plan for power grids up to 35KV issued by the State Planning Commission for localities (announced by the principal ministry) and contracts for product consumption with industries and localities, Vinaelectro shall develop long-term and annual plans for importing, producing, and synchronizing electrical engineering equipment up to 35KV, while establishing plans for foreign currency income and expenditure, product consumption, and financial income and expenditure (circulation fees plan, working capital and credit plan, profit and loss plan) to serve the aforementioned production and consumption processes.

- Vinaelectro must open accounts, organize clear and detailed accounting books for foreign currency and Vietnamese currency, fully reflecting these in the final reports on business results of the unit at each stage of importation, export of materials, synchronization, and product consumption.

- Annually, Vinaelectro is responsible for settling accounts with the Soviet Union regarding the situation of imports, usage, and installation of equipment and materials, and reporting to the Ministry of Energy - Finance to provide a basis for annual settlement of debts with the Soviet Union.

- To reduce circulation fees and product consumption costs for electrical engineering equipment and materials in this program, Vinaelectro guides units undertaking general contracting tasks to fulfill their responsibilities according to the current financial management system of the State and the provisions in this joint circular.

6. Implementation Provisions:

This circular applies to payment and management of capital, materials, and equipment including equipment and materials imported from the Soviet Union, third countries, and domestically produced to serve the 35KV and below power grid program.

Any difficulties encountered during implementation should be reported by units to the Joint Ministries for timely study and resolution.