Circular No. 98/2000/TT-BTC dated December 12, 2000 of the Ministry of Finance guiding the application of financial regimes to the Central People’s Credit Fund

CIRCULAR

GUIDING THE APPLICATION OF FINANCIAL REGIMES TO THE CENTRAL PEOPLE’S CREDIT FUND

In furtherance of the Government’s Decree No.166/1999/ND-CP of November 19, 1999 on the financial regimes applicable to credit institutions; based on the scale and nature of operation of the People’s Credit Funds, the Finance Ministry hereby guides a number of contents on the financial regimes applicable to the Central People’s Credit Fund as follows:

Chapter I

GENERAL PROVISIONS

1. Subject to this Circular is the Central People’s Credit Fund, established, organized and operating under the Law on Credit Institutions, the Law on Cooperatives and other relevant legal documents.

2. The financial operation of the Central People’s Credit Fund is carried out under the provisions of the Law on Credit Institutions, the Law on Cooperatives, the Government’s Decree No. 166/1999/ND-CP of November 19, 1999 on the financial regimes applicable to credit institutions, the concrete guidance in this Circular and other relevant legal documents on financial management.

3. The Central People’s Credit Fund effects the financial publicity to the State management bodies, organizations and individuals having economic ties with the Fund and its capital-contributing members.

The Central People’s Credit Fund is financially independent, self-responsible for its business activities and obliged to fulfill its obligations and commitments under the provisions of law.

4. The Managing Board chairman and the general director of the Central People’s Credit Fund take responsibility before law, State management bodies and the members’ congress for the application of the financial regimes of the Central People’s Credit Fund.

Chapter II

SPECIFIC PROVISIONS

I. MANAGEMENT AND USE OF CAPITAL AND ASSETS

1. Management of capital.

1.1. The operation capital of the Central People’s Credit Fund shall include:

a) The charter capital: It is the capital amount inscribed in the Charter of the Central People’s Credit Fund, formulated from:

- Capital contributed by the State.

- Capital contributed by member people’s credit funds in the system.

- Capital contributed by other economic organizations and individuals.

b) The mobilized capital.

c) Capital borrowed from the State Bank and other credit institutions.

d) Capital entrusted by legal persons and individuals inside and outside the country.

e) Charter capital-supplementing reserve funds, professional development investment fund, financial reserve fund, severance allowance reserve fund, reward fund, welfare fund.

f) Profits left to the Fund but not yet divided.

g) Capital of other kinds.

1.2. In the course of operation, the Central People’s Credit Fund must maintain the charter capital at the level not lower than the legal capital level prescribed for the Fund by the Government.

1.3. The own capital of the Central People’s Credit Fund as prescribed by the State Bank Governor.

2. The use of capital: The Central People’s Credit Fund may use its operation capital for:

- Procuring its fixed assets on the principle that the residual value of the fixed assets shall not exceed 50% of its own capital. The Central People’s Credit Fund shall have to strictly abide by the State’s regulations on investment and construction management.

- Providing loans to customers according to the provisions of law.

- Contributing capital, purchasing stocks.

- Participating in capital regulation for the entire system.

- Using for other purposes prescribed by law.

3. The Central People’s Credit Fund shall have to monitor all its existing assets and capital, make accounting according to the current law provisions on accounting and statistics; to reflect fully, accurately and in time the situation on the use of as well as the changes in, the capital and assets, the amounts of loan and debts to be recovered in the course of business operation, clearly defining the responsibility of each section, each individual for any property damage or loss.

4. Periodically and at the end of the fiscal year, the Central People’s Credit Fund shall have to inventory and reevaluate all its existing assets and capital, accurately determining assets in deficit or surplus, the debt situation, overdue debts, bad debts and determining the cause thereof and the liability therefor for handling. For any property damage or loss, the responsibility of each section, individual must be clearly determined.

The Central People’s Credit Fund may inventory, re-evaluate its assets and account as capital increase or decrease the difference amounts brought about by the asset reevaluation in the following cases:

- The asset inventory and reevaluation is made under the decisions of the competent State bodies.

- The assets are used for joint ventures, stock capital contribution or the assets are recovered after the joint ventures terminate their operation.

5. Capital preservation and development: The Central People’s Credit Fund shall apply measures to ensure safety of capital according to the following regulations:

a) Strictly abiding by the capital and asset management and use regime as prescribed by law.

b) Fully maintaining safety rates in operation under the guidance of the State Bank.

c) Buying the property insurance as prescribed by law.

d) Joining the deposit insurance organization or the system safety ensuring organization as prescribed by law.

e) Being entitled to account into its expenditure the following reserves:

e.1- For reserve against risks in the banking operation, the Central People’s Credit Fund shall make deduction for and use such reserve according to the regulations of the State Bank Governor.

e.2- For reserve against the securities price decrease and the reserve against the unsold goods price decrease:

- Objects of reserve establishment: Securities; goods in stock including supplies, valuable papers, gold, silver and gems being jewelry articles (if any) being held by the Central People’s Credit Fund.

- Principles for reserve establishment: The deduction for establishment of reserves against the decrease of securities prices and unsold goods prices shall be made when the market prices are lower than the prices being accounted in the accounting books.

- Conditions for reserve establishment: The deduction for establishment of reserves against the decrease of securities prices and unsold goods prices must not result in business loss for the Central People’s Credit Fund (after the previous year’s deducted reserves have been re-credited).

- Method of deduction for reserve establishment: The Central People’s Credit Fund shall base itself on the price decrease situation, the actual volume of unsold goods and the securities prices on market to determine the reserve levels according to the following formula:

- The actual market prices by December 31 are construed as:

+ For unsold goods: They are the prices set by the general director of the Central People’s Credit Fund, based on the actual sale prices of supplies and goods of the same types on the market or based on the price levels set by the State (for supplies and goods with prices set by the State).

+ For securities: They are the prices listed at the Securities Trading Centers for types of securities being traded on the securities market. For unlisted securities, the general director of the Central People’s Credit Fund shall set the price based on the actual sale price of the securities of the same type on the market.

- The reserve establishment deduction must be made separately for each kind of unsold goods and securities suffering from price decrease and summed up into the detailed list of reserves against the price decrease of unsold goods and reserves against the securities price decrease, which shall serve as basis for accounting them into the operation expenditures of the Central People’s Credit Fund.

- The time for reserve establishment deduction: The deduction for establishment of reserve for each kind of unsold goods and securities suffering price decrease shall be made at the time of closing the accounting books (December 31 of the calendar year) for making the annual financial reports.

- Handling of reserve amounts: The establishment of reserves aims to offset the loss amounts due to the price drop of unsold goods and investment securities. The loss amounts resulting from the unsold goods and securities price decreases shall be accounted into the business results, therefore the Central People’s Credit Fund shall have to re-credit all the above-mentioned reserves into its income, concretely: At the end of each year before closing the accounting books for making the financial settlement report, the Central People’s Credit Fund shall re-credit all the reserve amounts deducted at the end of the previous year into its income in the year in order to determine the business results and at the same time make new deductions for reserve establishment for the following year according to the current regulations.

6. All property losses incurred by the Central People’s Credit Fund must be recorded in writing for determining the extent, cause, responsibility and shall be handled according to the following principles:

- If the property losses are caused by collectives or individuals due to subjective reasons, the causers of such losses must make compensation therefor.

- The lost insured property shall be handled according to the insurance policies.

- Using the reserves deducted into expenditures to offset the losses as provided for at Point 5, Section I, Chapter II of this Circular.

- If the loss value, after being covered and offset by the above sources, remains deficit, it shall be made up for by the financial reserve fund of the Central People’s Credit Fund. Where such financial reserve fund is not enough, the deficit shall be accounted into the expenditure in the period.

7. Leasing, mortgaging, pledging, selling and/or liquidating assets.

a) Lease, mortgage, pledge of assets.

The Central People’s Credit Fund may lease, mortgage or pledge assets under its management and use rights in order to raise the use efficiency, increase its income, but must strictly comply with the order and procedures prescribed by law and ensure the principle of capital preservation and development.

b) Sale and liquidation of assets.

- The Central People’s Credit Fund may sell or liquidate its assets which are no longer in use, technically obsolete or qualitatively degenerated or irreparably damaged assets in order to recover capital for use for business purposes.

- When selling or liquidating assets, the Central People’s Credit Fund shall have to set up a council for evaluation of the real technical status and appraisal of the value of the assets.

- The difference between the proceed from the asset sale or liquidation plus the residual value and the sale or liquidation expense shall be accounted into the business results of the Central People’s Credit Fund.

c) When the Central People’s Credit Fund leases, mortgages, pledges, sells or liquidates assets belonging to the technology involved in the professional operation of the entire system, it must obtain the written consent of the State Bank.

8. For assets hired, taken as mortgage or pledge by the Central People’s Credit Fund, the Fund shall have to manage, preserve or use them according to the provisions of law and the agreement reached with the concerned customers.

II. MANAGEMENT OF TURNOVER, EXPENSES

1. Management of turnover.

1.1. The turnover of the Central People’s Credit Fund shall include collectible amounts prescribed in Article 16 of the Government’s Decree No.166/1999/ND-CP of November 19, 1999, including:

a) Revenue from professional operations: Loan interests, deposit interests, payment service charges, treasury service charges, discount operation, guarantee and other services related to professional banking operations.

b) Revenues from other activities: Interests on capital contributions, stock purchase; participation in the monetary market; gold, silver and foreign currency business; entrusted agency operation; consultancy service; debt purchasing and selling operations between credit institutions; property leasing and revenues from other services.

c) Remittance of all reserves already deducted for expenditures; recovery of capital already handled with reserves against risks; proceeds from sale or liquidation of fixed assets; revenue from exchange rate difference under the provisions of law.

d) Other revenues.

1.2. Principles for turnover determination:

a) Revenue from lending operations, revenue from deposit interests are the interest amounts to be collected in the period and determined according to the following principles:

- The Central People’s Credit Fund shall account the collectible interest amounts on undue debts into its income. For amounts of collectible interest on overdue debts which are not accounted into income, the Central People’s Credit Fund shall monitor them outside the table for urging the collection thereof; when collected, they shall be accounted into the professional revenue.

- For the amounts of collectible interest on undue loans, which have already been accounted into the income but not yet paid on time by customers, if after 90 days they are not paid by the customers or if before 90 days the loans are made the overdue debts, the Central People�s Credit Fund may account them as revenue decrease and monitor them outside the table in order to urge the collection thereof; when collected, they shall be accounted into the revenue from professional operations.

b) For revenues from capital contribution to joint ventures, cooperation, stock purchase, the arising turnover shall be the revenue amount collected in the year.

c) For revenues from remaining operations: The turnover shall be the whole sum of money earned from goods sale, service provision after subtracting (-) the price decrease amounts of sold goods, returned goods (if with valid vouchers), with payment accepted by the customers, regardless of whether or not the money is recovered.

2. Management of expenditure: The expenditure of the Central People’s Credit Fund is the amount to be spent in the period for business operations and other activities as prescribed in Article 17 of the Government’s Decree No.166/1999/ND-CP of November 19, 1999, a number of expenses made by the Central People’s Credit Fund under the following guidance:

2.1. Expense for business operations.

a) Expense for payment of interests on deposits, borrowings, expense for banking services.

b) Expense for depreciation of fixed assets used for business operations under the State’s regulations on fixed asset management, use and depreciation deduction, prescribed for State enterprises.

c) Expense for wages and allowances of wage nature, paid to cadres and employees working at the Fund under the State’s regime on wage and remuneration prescribed for State enterprises.

d) Expense for social insurance, health insurance and trade union fees for cadres and employees directly working at the Fund according to the current regulations of the State.

e) Expenses for purchase of services from outside.

- Expenses for repair of hired fixed assets, transportation, electricity, water, telephone, materials, printed matters, stationery, working tools, fire-fighting devices, consultancy, auditing, the purchase of property insurance, payment of commission, brokerage agency, entrustment and other services.

- The above expenses must be fully evidenced with valid vouchers or invoices as prescribed by the Finance Ministry.

- Expense for repair of fixed assets so as to restore their capacity, which may be accounted directly or gradually distributed into the business expenditure in the year. For particular fixed assets with expenses for their repair arising unevenly between periods, years, if the Central People’s Credit Fund wishes to deduct in advance the expense for repair of the fixed assets into its business expenditure, it must work out plans for advance deduction of expense for repair of fixed assets and report them to the Finance Ministry for consideration and decision. After obtaining the written approval from the Finance Ministry, the Central People’s Credit Fund shall have to notify it to the tax office that directly manages it. The Central People’s Credit Fund must settle the actual repair expense against the previously deducted repair expense; if the actual repair expense is larger than the deducted amount, the difference may be accounted directly or gradually distributed to the expenses in the period; if the actual repair expense is smaller than the deducted amount, the difference shall be accounted into the income in the period.

- Expense for property hiring shall be accounted into business expenditure with the amount of money paid in the year under the renting contract. Where the property rent is paid in lump sum for many years, such rent shall be distributed into the business expenditure gradually according to the number of years for which the hired property is used.

- The expenses for payment of agency and entrustment commission must be reflected in the agency and entrustment contracts and only accounted as expenses according to the actually paid sum, with full valid vouchers.

- Expenses for brokerage commission:

+ The expense for brokerage commission by the Central People’s Credit Fund must be linked to the economic efficiency brought about by the brokerage. The Central People’s Credit Fund shall base itself on the Finance Ministry’s document guiding the brokerage commission payment as well as its own specific conditions and characters to elaborate the regulation on brokerage commission payment for unified and open application within the Central People’s Credit Fund. The Managing Board of the Central People’s Credit Fund shall approve the above-said regulation for application.

+ Basing him-/herself on the approved regulation and depending on each brokerage operation arising in activities, the general director of the Central People’s Credit Fund shall decide the payment of commission for each brokerage operation.

+ Subjects enjoying the brokerage commission shall be (domestic and foreign) organizations and individuals engaged in brokerage services for the Central People’s Credit Fund.

+ The brokerage commission must not apply to subjects being agents of the Central People�s Credit Fund, designated customers, managerial officials and employees of the Central People�s Credit Fund.

+ The brokerage commission payment must be based on contracts or written certifications of the Central People’s Credit Fund and the commission recipients, which contains the principal details: the name of the commission recipient; the spending content; the spending level; the payment mode; the time for performance and termination; the responsibilities of the parties.

+ For the payment of brokerage commission for sublease of property (including property seized for forcible debt repayment and debt-offsetting property): The level of payment of brokerage commission for property sublease of the Central People’s Credit Fund shall not exceed 3% of the total money amount earned in the year from the property sublease through such brokerage.

+ For the payment of brokerage commission for sale of mortgaged, pledged assets: The level of payment of brokerage commission for the sale of mortgaged or pledged assets of the Central People’s Credit Fund shall not exceed 1% of the actual value of the proceed from the sale of assets through brokerage, the level of payment of brokerage commission for the sale of one asset shall not exceed VND20 million.

f) The expense for payment of taxes, charges, land rents related to the business operations (excluding the enterprise income tax) shall cover the license tax, the land use tax or land rent, the resource tax, road and bridge tolls, airport fees, other taxes and fees.

g) Other expenses.

- Expense for advertisement, marketing, sale promotion, guest reception, festivities, transaction, public relations, conferences and other expenses must be evidenced with invoices or vouchers as prescribed by the Finance Ministry and linked to the business efficiency. The spending level shall not exceed 5% of the total expense.

- Expense for labor protection for subjects who need to be equipped with labor safety devices while working and the expense for uniforms of employees working at the Central People’s Credit Fund according to the prescribed regime.

- Expense for severance allowances paid to laborers under the Government’s Decree No. 198/CP of December 31, 1995 detailing and guiding the implementation of a number of articles of the Labor Code regarding the labor contracts as well as other current legal documents of the State.

- Payment to female laborers according to the prescribed regime.

- Expense for mid-shift meals for laborers shall be set by the Central People’s Credit Fund in compatibility to the business efficiency; the monthly expense level for each person in the year shall not exceed the minimum wage level set by the State for public employees.

- The payment of membership fees to professional associations which the Central People’s Credit Fund has joined in.

- Deduction for establishment of reserves in the operation of the Central People’s Credit Fund under the provisions at Point 5, Section I, Chapter II of this Circular.

- Expense for participation in the deposit insurance organization of the system safety-ensuring organi-zation according to the provisions of law.

- The Central People’s Credit Fund may spend on rewards for innovations, materials savings according to the actual efficiency brought about by such innovations and materials savings. The Managing Board of the Central People’s Credit Fund shall have to elaborate and publicize the reward regulations in the Fund.

- The Central People’s Credit Fund may account the expenses for scientific research and technological renovation research to raise the business efficiency of the Fund. The research subjects and research cost estimate for each subject must be approved by the Managing Board of the Fund which is self-responsible for the efficiency of such research subjects.

- The expenses for training and fostering course and classes to raise the professional skills and managerial capability shall only be accounted into the expenses for subjects being cadres and employees of the Fund. The Central People’s Credit Fund may account into its expenditure the difference after subtracting the amounts of State budget support ( if any). The maximum spending level shall not exceed 1.3 times the public-service expense norms prescribed for the above subjects by the State.

- The expense for educational support (if any) for educational organizations set up under the State’s regulations such as the educational promotion fund, schools for handicapped children, supportless children. The general director of the Central People’s Credit Fund shall base him-/herself on the prescribed regimes and financial capability to decide the support levels and take self-responsibility therefor.

- Expense for office security.

- Expense for warehouse and treasury operations.

- Expense for environmental protection. If the expense amount in the year is large and has effect for many years, it may be distributed to subsequent years.

- Payment of fines due to the breach of economic contracts.

2.2. Expenses for other activities.

a) Expense for gold, silver and/or foreign currency business activities.

b) Expense for securities trading activities.

c) Expense for property leasing activities.

d) Expense for sale and liquidation of fixed assets (including the remaining value of fixed assets when they are liquidated and sold).

e) Expense for joint-venture activities, capital contribution, stock purchase.

f) Expense for the recovery of already forgiven debts, overdue bad debts.

- The Central People’s Credit Fund may pay the organizations with legal person status, which have contributed to the recovery of already forgiven debts and overdue bad debts for the Central People’s Credit Fund on the basis of their contributions and efficiency brought about by such organizations.

- The Central People’s Credit Fund shall elaborate the regulation on expenses for the recovery of already forgiven debts and overdue bad debts and submit it to the Managing Board for approval and publication thereof. The general director of the Central People’s Credit Fund shall take responsibility for these expenses.

- The level of payment for organizations with legal person status, which have made contributions to the recovery of already forgiven debts and overdue bad debts in the year for the Central People�s Credit Fund shall not exceed 2% of the recovered debt amount. The maximum level of expense for the recovery of a debt shall not exceed VND 50 million.

g) The remaining property loss, after it is offset by various sources as prescribed at Point 6, Section I, Chapter II of this Circular.

h) Expense for the Party organization and mass organizations in the Central People’s Credit Fund, which shall be taken from these organizations’ funds. If their funds are not enough, the deficits shall be accounted into the expenditure of the Central People’s Credit Fund.

i) Other reasonable and valid expenses.

2.3. The Central People’s Credit Fund must not account into its expenditure the following:

- Amounts of fine for violations of such laws as traffic law, tax laws, environment law, labor law, the violations of statistical, accountancy and financial regime as well as other laws. If collectives or individuals violate laws, the violators shall have to pay the fines. Apart from the above-said compensation amount, the remaining fine payment shall be taken from after-tax profits.

- The amounts for investment in capital construction, procurement of tangible and intangible fixed assets and financial support for organizations and individuals.

- The expense for overseas working trips in excess of the levels prescribed by the State for State employees and officials of State enterprises who travel abroad on working missions.

- The amounts covered by other funding sources such as the public-service expenses already paid by the State budget, superior bodies or other organizations; the payment of interests on borrowed capital for capital construction during the period the project has not yet been completed; such interest amount may be accounted into the expense for investment in the capital construction.

- Other unreasonable expenses.

3. The Central People’s Credit Fund, when having economic activities arising in foreign currency(ies), shall have to convert such foreign currency(ies) into Vietnam dong under the guidance of the Finance Ministry.

III. PROFIT DISTRIBUTION AND DEDUCTION FOR ESTABLISHMENT OF FUNDS

1. Profit distribution

The profits of the Central People’s Credit Fund, after the payment of enterprise income tax according to the provisions of law, shall be distributed as follows:

a) Deducting 5% for setting up the reserve fund for supplementing the charter capital, the maximum level of this fund shall not exceed the charter capital level of the Central People’s Credit Fund.

b) Offsetting the loss amounts incurred in the preceding year and the fines for law violations, which are not calculated into before-tax profits.

c) 100% of the remaining profits after subtracting all above amounts shall be further distributed as follows:

- Deducting 10% for setting up the financial reserve fund; this fund’s balance shall not exceed 25% of the charter capital of the Central People’s Credit Fund.

- Deducting at least 30% for setting up the operation development investment fund.

- Deducting 5% for setting up severance allowance reserve fund for employees working at the Fund; the balance of this fund shall not exceed 6 months’ salary paid in the year by the Central People’s Credit Fund.

- Deduction for setting up the reward fund and welfare fund; the maximum deduction level for setting up these two funds shall not exceed three months’ salary paid in the year by the Central People’s Credit Fund. The specific annual deduction level for the reward and welfare funds shall be considered and decided by the Managing Board of the Central People’s Credit Fund.

- The dividends paid to members, organizations and individuals that have contributed capital to the Central People’s Credit Fund. The dividend amounts paid to members shall be based on their contributed capital amounts and submitted by the Managing Board of the Central People’s Credit Fund to the members’ congress for consideration and decision annually.

- The remainder (if any) shall be used for supplementing the operation development investment fund.

2. The principles for using funds.

a) The charter capital- supplementing reserve fund is used for supplementing the charter capital.

b) The professional development investment fund is used for investment in expanding business operation scope and renovating equipment and working conditions of the Central People’s Credit Fund.

Depending on the investment demand and capability of the fund, the Managing Board of the Central People’s Credit Fund shall decide the investment forms and measures on the principle of efficiency, safety and development of the capital.

c) The financial reserve fund is used to offset the remainder of property losses or damage incurred during the business course after they have been made up for with compensation money of the causing organizations or individuals and insurance organizations as well as with the use of reserve against risks, already deducted into expenditures.

d) The severance allowance reserve fund is used to provide allowance for laborers who have worked at the Central People’s Credit Fund for one year or more and temporarily lost their jobs under the provisions of law; to cover expenses for professional and technical retraining for laborers who, due to technological changes, have to move to other jobs; for sideline training for female laborers and fostering to raise the professional levels for employees working in the Central People’s Credit Fund.

The level of allowance for each specific case shall be decided by the chairman of the Managing Board of the Central People’s Credit Fund.

e) The reward fund is used for:

Year-end or periodical rewards for officials and employees in the Central People’s Credit Fund. The reward levels shall be decided by the Fund’s Managing Board at the proposal of the general director and trade union on the basis of labor productivity or work achievement of each official and employee of the Central People’s Credit Fund.

Extraordinary rewards for individuals and collectives in the Central People’s Credit Fund, that have made technical innovations and improved the professional process, thus bringing about business efficiency. The reward levels shall be decided by the Managing Board of the Central People’s Credit Fund.

Rewards for the Fund’s members; outside units and individuals that have business ties with the Fund and well fulfilled the contractual terms, thus efficiently contributing to the business activities of the Central People’s Credit Fund. The reward level shall be decided by the Managing Board of the Central People’s Credit Fund.

f) The welfare fund is used for:

Investment in construction or repair, addition to capital for construction of welfare projects of the Central People’s Credit Fund, contribution of capital for investment in the construction of welfare projects of the entire service (if any) or to other units under mutually agreed contracts.

Expenses for sport, cultural and public welfare activities of collectives of officials and employees of the Central People’s Credit Fund.

Contribution to social welfare fund.

The provision of irregular and regular difficulty allowances for officials and employees of the Central People’s Credit Fund.

Expenses for other welfare activities.

The general director of the Central People’s Credit Fund shall coordinate with the Executive Committee of the Trade Union of the Central People’s Credit Fund in managing and using this fund.

IV. THE ACCOUNTING, STATISTICAL, AUDITING, REPORTING AND FINANCIAL PUBLICITY REGIMES

1. The Central People’s Credit Fund observes the accounting and statistical regimes according to the provisions of law, fully recording initial vouchers, updating accounting books and reflecting fully, promptly, truthfully, accurately and objectively the financial activities.

2. The fiscal year of the Central People’s Credit Fund commences on January 1 and ends on December 31 of the calendar year.

3. The Central People’s Credit Fund makes the financial settlement and fully abide by the provisions on making and sending financial reports to the State finance bodies, the statistical bodies, tax bodies and the State Bank according to the law provisions on accounting and statistics and the provisions of this Circular.

3.1. The contents of a financial report.

a) The financial plan report: The Central People’s Credit Fund draws up the annual financial plans including:

- The plan on capital sources and use.

- The plan on revenue, expenditure, business results and State budget remittance norms.

- The plan on labor and wage.

b) The financial report: The Central People’s Credit Fund shall have to fully make and submit the following financial reports:

- The balance sheet of grade III accounting accounts of the Central People’s Credit Fund including accounts outside the sheet.

- The balance sheet (the financial balance sheet) of the Central People’s Credit Fund.

- The exposition of the financial report, detailing a number of contents:

+ The business results, the situation on State budget collection and remittance.

+ The labor and wage regime implementation by the Central People’s Credit Fund.

+ The increase, decrease in capital sources, the use of capital.

+ The situation on overdue debts, hardly recoverable debts, unrecoverable debts, the situation on mortgaged assets still lying in stock.

- The independent audit organization’s report on results of auditing the annual financial reports of the Central People’s Credit Fund.

3.2. The chairman of the Managing Board and the general director of the Central People�s Credit Fund shall bear responsibility for the accuracy and truthfulness of these reports.

3.3. Time limits for sending reports.

a) The time limit for sending financial plans

The financial plans drawn up by the Central People’s Credit Fund must be considered and approved by its Managing Board and sent to finance bodies before November 15 of the year preceding the plan year.

b) The time limit for sending financial reports

- The quarterly reports must be sent within 45 days at most after the end of the quarter.

- The annual reports must be sent within 60 days at most after the end of the fiscal year.

3.4. Report addressees.

The Central People’s Credit Fund shall address its financial plans and financial reports to the Finance Ministry, tax offices and statistical offices which directly manage it and to the State Bank.

4. Auditing work

The Central People’s Credit Fund shall organize by itself the internal auditing in order to audit its financial reports in accordance with the provisions of the Law on Credit Institutions, its operation scope and scale.

Within 30 days at most before the end of the fiscal year, the Central People’s Credit Fund shall have to hire an independent audit organization operating lawfully in Vietnam to audit its financial reports; the hired audit organization must be approved by the State Bank.

The results of auditing the financial reports of the Central People’s Credit Fund made by the independent audit organization shall be addressed to the Finance Ministry and the State Bank within 15 days after the auditing results are made available.

5. Financial publicity by the Central People’s Credit Fund

The Central People’s Credit Fund shall observe the financial publicity regime according to the following regulations:

5.1. Form of publicity

a) Publicity to the State:

Quarterly and annually, the Central People’s Credit Fund shall have to make and send financial reports to the State management bodies as prescribed at Point 3, Section IV of Chapter II above. The Managing Board and the general director of the Central People’s Credit Fund shall have to explain the relevant financial matters at the request of the State management bodies which perform the State management functions under the Government’s regulations.

b) Publicity to the Party organization, mass organizations, the laborers and capital-contributing members of the Central People’s Credit Fund.

- At the end of the fiscal year, the Managing Board or the general director of the Central People’s Credit Fund shall be obliged to make public the financial situation of the unit. The publicity shall cover:

+ The situation on capital sources: The State capital, shareholders’ capital, funds, mobilized capital, payable debts….

+ The situation on the use of capital: Fixed assets, loan debit balance, the recovery of debts….

+ The situation on revenue, expenditure: Turnovers, expenses for business activities, business results, the State budget remittance, the payment of social insurance and health insurance premiums, trade union fund.

+ The situation on labor and income of officials and employees in the Central People’s Credit Fund, the application of measures for thrift practice, combat against wastefulness and corruption in the Central People’s Credit Fund.

- The Managing Board and the general director shall coordinate with the trade union organization in opting for the publicity form suitable to each information- receiving subject; the financial publicity may be made at the members’ annual congress, the employees’ congress, notified at meetings of the Central People’s Credit Fund, meetings of trade union organization and mass organizations in the Central People’s Credit Fund or notified in writing to officials and employees in the Central People’s Credit Fund.

c) Publicity to outside the Central People’s Credit Fund so that the investors and customers have grounds to decide their economic ties and transactions with the Central People’s Credit Fund.

- The contents which should be made public include the charter capital actually available at the time of publicity, payable debt amounts, the structure of capital sources and the use of capital, the business results of the Central People’s Credit Fund. Besides, the Central People’s Credit Fund shall have to reply other inquiries depending on its ties with creditors, investors and customers.

5.2. The time for financial publicity: Within 120 days from the year-end the Central People’s Credit Fund shall have to make public its annual financial situation to the above-mentioned subjects.

V. FINANCIAL EXAMINATION AND INSPECTION AND HANDLING OF VIOLATIONS BY THE CENTRAL PEOPLE’S CREDIT FUND

1. The Central People’s Credit Fund shall take self-responsibility for the accuracy and truthfulness of its financial reports; the finance bodies shall have to inspect the observance of financial regimes. The financial examination shall be conducted in the following forms:

- Regular or irregular financial examination.

- Examination according to specialized subjects as required by the financial management work.

2. Handling of violations.

- The Central People’s Credit Fund, when breaching the financial regime of the State, shall be sanctioned according to the provisions of law.

- Where the Central People’s Credit Fund fails to implement or has implemented improperly the provisions of the financial reporting regime stated at Point 3, Section IV, Chapter II of this Circular, it shall be sanctioned according to the provisions in the Government’s Decree No. 49/1999/ND-CP of July 8, 1999 on sanctioning administrative violations in the field of accounting.

Chapter III

ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its signing; all previous regulations on financial management applicable to the Central People’s Credit Fund, which are contrary to this Circular, are annulled.

Any problems arising in the course of implementation should be reported to the Finance Ministry of study, consideration and solution.